Stone & Webster Engineering Corp. v. N.L.R.B., 75-1411

• Decision Date: 10 June 1976
• Docket Number: No. 75-1411,75-1411
• Parties: 92 L.R.R.M. (BNA) 2904, 78 Lab.Cas. P 11,468 STONE & WEBSTER ENGINEERING CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — First Circuit

Page 461

536 F.2d 461

92 L.R.R.M. (BNA) 2904, 78 Lab.Cas. P 11,468

STONE & WEBSTER ENGINEERING CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 75-1411.

United States Court of Appeals, First Circuit.

Argued March 4, 1976.

Decided June 10, 1976.

William G. Meserve, Boston, Mass., with whom John V. Woodard and Ropes & Gray, Boston, Mass., were on brief, for petitioner.

David F. Zorensky, Washington, D. C., Atty., with whom John S. Irving, Jr., Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and Aileen Armstrong, Atty., Washington, D. C., were on brief, for respondent.

ON PETITION FOR REVIEW AND CROSS-APPLICATION FOR ENFORCEMENT OF AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD

Before ALDRICH, McENTEE and CAMPBELL, Circuit Judges.

McENTEE, Circuit Judge.

In a decision dated April 28, 1975, an administrative law judge of the National Labor Relations Board found that Stone & Webster Engineering Corporation had engaged in certain unfair labor practices in violation of § 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. § 151 et seq. ("the Act"). She issued a cease and desist order and also ordered the reinstatement of the eight complainants. The decision and order of the administrative law judge was adopted by the Board with a relatively minor modification, 220 N.L.R.B. No. 124, and this appeal followed.

The disputed conclusions of the administrative law judge may be summarized as follows:

1. The termination on August 2, 1974, of eight named employees the complainants before the Board was effected by Stone & Webster "in order to discourage membership in and activities on behalf of the Union" ¹ and constituted discrimination "against employees in regard to their hire or tenure of employment" and therefore was an unfair labor practice within the meaning of § 8(a)(3) and (1) of the Act.

2. "By following employees in the plant to prevent employee conversations about the Union" and "by maintaining surveillance of the conversations and activities of employee Union organizers," Stone & Webster interfered with, restrained, and coerced its employees in the exercise of their § 7 rights and thereby engaged in unfair labor practices within the meaning of § 8(a)(1) of the Act. ²

We deal with these two sets of conclusions in order.

Stone & Webster is a large engineering firm with many employees in Boston and in other parts of the country. It is engaged in the design and construction of heavy industrial projects including nuclear power facilities. Because of the importance of reports, drawings, and specifications to its work, it maintains several "reproduction departments" in Boston and elsewhere. One such reproduction department was established at 401 Summer Street in Boston in January, 1974. At this facility, Stone & Webster employed some 85-90 people before the contested terminations. All the events which constituted the background of this case involved only the Summer Street facility.

On or about July 22, 1974, certain Stone & Webster employees at the Summer Street location decided that they wanted union representation, contacted a Union representative, and began an organizational campaign. ³ On Friday, August 2, ten employees at the Summer Street facility were informed ⁴ that, effective immediately, their employment was terminated. The Union charged Stone & Webster with an unfair labor practice in dismissing eight of these ten employees, noting that all eight had participated, in varying degrees in the union organizational campaign. The company maintained that the terminations were simply the result of a necessary reduction in its workforce and did not represent antiunion discrimination.

The basic issue in this dispute is whether these terminations were the result of a business judgment based on economic necessity or of an impermissible decision to snuff out incipient unionism through a show of force. The administrative law judge and the Board concluded that Stone & Webster's economic justification for these terminations was not persuasive. As in all cases where motivation must be assessed, there is no substitute for close scrutiny of the factual context in which the disputed actions occurred.

Our standard of review in considering the conclusion of the administrative law judge and the Board that the complainants were terminated in order to discourage membership in or activity on behalf of the Union is that of substantial evidence. "(T)his court's limited function . . . is merely to determine whether on the record as a whole there is substantial evidence to support the Board's findings." NLRB v. Universal Packaging Corporation, 361 F.2d 384, 387 (1st Cir. 1966). In making this determination, however, we must be mindful of the burdens of proof which the law imposes on the Board in cases of this nature. In the first place, the Board has the burden of showing that the employer had knowledge of the union activity. NLRB v. Gotham Industries, Inc., 406 F.2d 1306, 1310 (1st Cir. 1969). If the Board sustains that burden, it then has the burden of "affirmatively show(ing) that the discharges were improperly motivated." NLRB v. Patrick Plaza Dodge, Inc., 522 F.2d 804, 807 (4th Cir. 1975). In the event that the employer had a permissible reason for discharging the employee (e. g. economic considerations) and an impermissible reason (antiunion animus), "the Board must show an 'affirmative and persuasive reason why the employer rejected the good cause and chose a bad one.' " Id., quoting NLRB v. Billen Shoe Co., 397 F.2d 801, 803 (1st Cir. 1968). See also NLRB v. Fibers International Corp., 439 F.2d 1311, 1312 & n. 1 (1st Cir. 1971).

While we give due weight to the privileged vantage point of the administrative law judge as the fact-finder and also to the Board's "vast experience in dealing with labor disputes," Editorial "El Imparcial," Inc. v. NLRB, 278 F.2d 184, 187 (1st Cir. 1960), we simply are not persuaded that in this case the Board has sustained its burden ⁵ as to improper motivation. ⁶

At the hearing before the administrative law judge, there was testimony by F. Lawrence Doherty, vice president and senior personnel manager of Stone & Webster, that economic considerations had required the company to effect a reduction in force in the Summer of 1974:

"In the investor owned electric power generating industry there have been very very substantial commitments made financially to finance large nuclear power stations, and some fossil and hydroelectric power stations.

"As we came to the end of the first half of 1974 these companies encountered some difficulties in not only obtaining new financing for new projects; but continued financing for projects they already committed themselves to in contracts with companies like Stone & Webster Engineering Corporation; and this was true even at the exorbitant interest rates that were being charged by the lenders at that time.

"This is a matter of public knowledge. This has been discussed in the Wall Street Journal; discussed in the professional trade journals; the New York Times; and I've read articles about it in the Boston newspapers. The information is in the public domain.

"Early in July 1974 Savannah Electric Company asked us to stop work on a fossil power station known as Effingham I, and by stopping work that meant to discontinue all engineering; all design; and procurement which had impact on the work of the reproduction department.

"On July 9, 1974 Niagara Mohawk Power Company directed us to slow down engineering; design; and construction; and purchasing work on a plant we are constructing for them known as Nine Mile II.

"Nine days later on July 18, 1974 the same company, Niagara Mohawk, instructed us to stop work and discontinue all expenditures on another fossil plant we're doing for them known as Oswego VI."

Mr. Doherty's testimony continued in the same vein, referring additionally to stop and slow orders received from other clients such as Long Island Lighting Company (two nuclear power projects) (July 24, 1974) and Virginia Electric and Power Company (six nuclear power projects) (July 24, 1974). He testified that the estimated completed construction cost for the projects on which they had received stop and slow orders by July 24 was $3,000,716,207. Mr. Doherty testified that, as a result of this situation, Stone & Webster "went from a company that was terribly short of technical professional support manpower almost overnight to a company that had too much manpower" and consequently a decision was made on July 24 that some reductions in force would have to be made. Mr. Doherty also testified concerning terminations actually effected by the company in several of its operations centers and construction sites in various parts of the country. We need not quote in detail his testimony in this regard, but his summation is worthy of note: "In total, through the end of November starting with the 24th of July, we have terminated due to reduction of force 884 people in all locations or a total of 9% of our work force." ⁷

Although this highly specific and empirical testimony was unrefuted, the administrative law judge found the testimony of (Stone & Webster's) witnesses "unconvincing" and "vague, inherently inconsistent, and contradictory"; she concluded that the company had failed to show "that these terminations were required by economic conditions." She went on to itemize some of the weaknesses which she saw in Stone & Webster's case:

"(Stone & Webster) introduced no original documentary evidence to show the economic need for these terminations. . . . Nor does the testimony adduced by (Stone & Webster) as to the stop and slow orders establish the economic necessity for the 8 terminations. . . . (Stone & Webster) presented no evidence as to new contracts obtained during this period; as to existing contracts that were unaffected by stop or slow orders; as to arrangements...