Stark Ceramics, Inc. v. NLRB

• Decision Date: 06 April 1967
• Docket Number: No. 17008.,17008.
• Citation: 375 F.2d 202
• Parties: STARK CERAMICS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

375 F.2d 202 (1967)

STARK CERAMICS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 17008.

United States Court of Appeals Sixth Circuit.

April 6, 1967.

Charles R. Iden, Akron, Ohio, for petitioner.

Alan D. Eisenburg, National Labor Relations Board, Washington, D.C., for respondent, Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Marcel Mellet-Prevost, Asst. Gen. Counsel, Bernard Cushman, Anthony J. Obadal, Attys., National Labor Relations Board, Washington, D. C., on the brief.

Before PHILLIPS, Circuit Judge, CECIL, Senior Circuit Judge, and HOGAN, District Judge.^*

HOGAN, District Judge.

This cause is before this Court upon petition of Stark Ceramics, Inc. (Stark) to review and set aside an Order of the National Labor Relations Board (Board) and upon the Board's cross-petition to enforce the Order. The Board's Decision and Order were issued November 30, 1965, and are reported at 155 NLRB No. 120. The Court has jurisdiction, the alleged unfair labor practices having occurred in East Canton, Ohio, within this judicial circuit. Section 160(e), Title 29 U.S.C.

The Board found that the Company violated Section 8(a) (1) (§ 158(a) (1), Title 29 U.S.C.) of the Act by threatening its employees with loss of benefits or loss of employment if they selected the Union (United Brick and Clay Workers of America, AFL-CIO) as their bargaining representative, by interrogating applicants for employment and newly hired employees about their union affiliations, by assaulting an employee who was engaged in peaceful picketing of Stark's premises, and by dealing with individual strikers rather than through their Union in an effort to persuade them to abandon an "unfair labor practice" strike and return to work. The Board also found that the Company violated Section 8(a) (3) and (1) (§ 158(a) (3) and (1), Title 29 U.S.C.) of the Act by withholding the annual Christmas bonus and length of service bonus from its employees because they selected the Union as their collective bargaining representative. Additionally, the Board found that Stark violated Section 8(a) (5) and (1) (§ 158(a) (5) and (1), Title 29 U.S.C.) of the Act by withholding those bonuses from its employees without bargaining on the matter beforehand with the Union; by entering into negotiations with the Union with a preconceived determination not to reach agreement; and by conditioning its proposals upon the Union's dropping the unfair labor practice charges that had been filed with the Board.

The Board's Order of November 30, 1965, directed the cessation by petitioner of nine practices and mandated affirmative action in six respects. Since that time Stark has bargained with and entered into a contract with the Union and has otherwise fully complied with the Board's Order in all respects, save one, i. e., the Order for payment in full of the above bonuses for the year 1964; so that Stark's review is limited to that part of the Board's Order directing the payment of the bonuses and interest for 1964 and poses the single question of the validity of the Board's Order in that respect. However, and preliminarily, the Board is entitled to a decree enforcing the remainder of its Order, even though the remaining parts of the Order have been complied with. NLRB v. Heck's Inc., 369 F.2d 370 (C.A. 6th 1966); NLRB v. Toledo Desk & Fixture Co., 158 F.2d 426 (6th Cir. 1946); NLRB v. Oertel Brewing Co., 197 F.2d 59 (6th Cir. 1952); NLRB v. Globe Wernicke, etc., Inc., 336 F.2d 589 (6th Cir. 1964). We do note from the Board's Order that the question before this Court concerning the bonuses arose not as an isolated one, but in an aura of substantial anti-union activity.

Beginning in December, 1944, with respect to the Christmas bonus, and in December, 1950, with respect to the Service Award bonus, and in each December respectively thereafter, to and including 1963, Stark paid to its factory employees two bonuses graduated according to length of service. The maximum aggregate per annum to any one individual was about $600.00. The bonuses were separately announced each December with the cautionary statement that they could be paid only out of profits and that no precedent was intended for future years. In the nine years before 1963 the annual operating net profit of the Company before "income taxes, bonuses or profit sharing" averaged over $650,000 a year. Stark's sales and production dropped sharply in 1963-64 in line with a general industry (structural facing tile) downtrend which had commenced in 1958 and which Stark avoided until 1963. Stark's net operating profit before income taxes, bonuses and profit sharing for 1962 was $639,000; for 1963 there was a loss of approximately $40,000; for 1964 there was a profit of approximately $86,000. Stark received a net clay depletion refund in 1963 of approximately $145,000, of which about $30,000 represented interest. Stark considered the total depletion refund as a "profit" for bonus purposes in 1963, but at least technically, practically the entire bonus for 1963 was paid out of surplus and not out of net operating profit. The bonuses involved in this case (to which we shall refer hereinafter in the singular) amounted to approximately $88,000 in 1963. The amount required to pay the 1964 bonus, as ordered by the Board and as computed in Stark's ordinary methods, is $87,975 (practically the same as the amount required in 1963) some $1,549 more than the operating net profit of the Company for 1964, which amounted to $86,426.80.

For some years prior to 1964, the Union had made unsuccessful efforts to become the bargaining representative of Stark's employees. Elections were held in March of 1961 and again in February of 1964. In the campaigns before each election, Stark emphasized the bonus to its employees as a "campaign plank." Responsible Company officials, by letter and orally, repeatedly called attention to "the unique year end bonus," referred to it as "as much a part of the earnings as the rest of wages." The estimated cost of the bonus was accrued periodically through the calendar year by Stark, including the calendar year 1964. On February 25, 1964, while the Company was in the midst of the worst financial quarter in its history, insofar as disclosed by the record before us, a Company vice president, in his letter to each employee, pointed to the bonus as one of the benefits enjoyed by the employees without a union and indicated "1964 looked like a good business year." This was two days before the election of February 27, 1964, won by the Union by a narrow margin. The Union was finally certified on September 29, 1964. During both the pre-election and pre-certification periods in 1964 supervisory employees of Stark freely commented that a union victory would cost the employees their bonus. Stark's Board of Directors on November 2, 1964, five days after the certification and before any bargaining session with the Union, voted categorically not to pay the bonus in December, 1964. At the first bargaining session, on November 11, 1964, the Company representative (who, significantly enough, had not even been informed of the action of Stark's Board) advised the Union representative, who inquired whether the 1964 bonus would be paid, that "we will talk about that * * * in the future." At the next bargaining meeting on December 9, the Union representative repeated his inquiry, at which time the Company representative replied with an emphatic "no." It was the Company contention then, as it is before this Court, that if it paid the bonus for 1964 it would suffer a loss for the year. In December, 1964, Stark offered to submit financial data to support this position. The Union countered with the opinion that Stark's action in withholding the bonus was "punitive because the people joined the Union." The Union promptly filed an unfair labor practice charge with the Board. In February, 1965, after the Board had issued a complaint respecting this and other charges to which reference has been made herein, the Company, as part of a single offer covering a new contract, offered to pay 25% of the 1964 bonus. The Union asserted that it was willing to bargain about future bonuses and wages, but that the 1964 bonus was a matter pending before the Board.

Stark concedes here, as it did before the Board, the regularity of the bonus payments in previous years and also that the payment or non-payment of the 1964 bonus was a bargainable issue.

The Board found, with respect to the issues before us —

FIRST, that Stark\'s motive in deciding to and withholding the 1964 bonus was to discourage Union activity (concluding that Stark, therefore, violated Section 8(a) (3) and (1) of the Act). SECOND, that Stark unilaterally determined not to pay the bonus without any bargaining on the matter, and failed and refused to bargain in respect of that bonus (concluding that Stark had thereby violated Section 8 (a) (5) and (1).

The Board concluded that the proper remedial order was one directing the Company to pay the 1964 bonus in the customary amount.

Petitioner contests the findings, the conclusions, and the propriety of the remedy.

Petitioner urges that the failure to pay the bonus was caused by the unusual financial situation of the Company and that the refusal to bargain was bilateral.

Petitioner also questions the propriety of the remedy, relying mainly upon NL RB v. Citizens Hotel Co., 326 F.2d 501 (5th Cir. 1964).

The scope of our review in respect of the substantive objections of petitioner is limited. Section 160(e), Title 29 U.S. C. provides in part, "The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive."

If facts are open to conflicting inferences, we are not at...