Texas Instruments, Inc. v. N.L.R.B.

• Decision Date: 07 January 1981
• Docket Number: No. 80-1120,80-1120
• Citation: 637 F.2d 822
• Parties: 106 L.R.R.M. (BNA) 2137, 90 Lab.Cas. P 12,476 TEXAS INSTRUMENTS INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — First Circuit

Page 822

637 F.2d 822

106 L.R.R.M. (BNA) 2137, 90 Lab.Cas. P 12,476

TEXAS INSTRUMENTS INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 80-1120.

United States Court of Appeals First Circuit.

Argued Sept. 5, 1980.

Decided Jan. 7, 1981.

Wayne S. Bishop, Washington, D. C., with whom Adin C. Goldberg, and Seyfarth, Shaw, Fairweather & Geraldson, Washington, D. C., were on brief, for petitioner.

Jerrold J. Wohlgemuth, Atty., Washington, D. C., with whom William A. Lubbers, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and John G. Elligers, Atty., Washington, D. C., were on brief, for respondent.

Before CAMPBELL and BOWNES, Circuit Judges, and KEETON, ^* District Judge.

LEVIN H. CAMPBELL, Circuit Judge.

In Texas Instruments, Inc. v. NLRB, 599 F.2d 1067 (1st Cir. 1979), we vacated and remanded that part of a decision of the National Labor Relations Board (Board) finding that Texas Instruments, Inc. (TI) violated sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1), (3) (1976), when it discharged six employees for disseminating information classified by the company as confidential. See Texas Instruments, Inc., 236 NLRB 68 (1978). Subsequent to our remand the Board issued a Supplemental Decision and Order affirming its earlier order in the case. 247 NLRB No. 37 (Jan. 15, 1980). TI now petitions for review and reversal of the Supplemental Decision and Order, and the Board cross-petitions for enforcement.

I

The facts in the case are set out in our earlier opinion, 599 F.2d at 1069-70, but we partially restate them here in the interest of clarity.

The six employees whose termination triggered this litigation worked at Texas Instruments' plant in Attleboro, Massachusetts and belonged to a small group called the Union Organizing Committee. As members of the Committee, they sought to elicit support for unionization of the Attleboro plant by occasionally distributing union leaflets at the plant gates and by generally showing their support for the union. Prior to the present incident, the six employees had received satisfactory or good performance ratings and at least one was promoted. In May 1977, however, they ran afoul of TI's company security policy, which as applied in the present context is challenged as invalid.

As a major manufacturer of sophisticated electronic products which deals extensively with the Department of Defense, TI

"has had, since 1960, a well developed internal security system, to deal adequately with defense security demands, to protect itself against those who would seek highly valued technological product and process information, and to safeguard certain managerial information including 'competitive or business intelligence'. There are two levels of classification: 'TI Strictly Private' and 'TI Internal Data'. The former is the more sensitive and is applied to all 'important TI information or material of a proprietary nature, the unauthorized use or disclosure of which could seriously impair the interests of TI'."

599 F.2d at 1069.

TI effectuates its classification program in part by means of a rule requiring immediate discharge for deliberate disclosure of "strictly private" material to unauthorized persons. See 599 F.2d at 1072; 247 NLRB No. 37, supra, slip op. at 4-5. A company handbook given to each employee lists "disclosure of classified or proprietary material to unauthorized persons" among the "major infractions (which) may be considered grounds for termination." TI's Personnel Manual provides that if such a security violation "was deliberate and resulted in compromise of information, immediate termination will result." The mandatory nature of the penalty for deliberate disclosure of classified information is borne out in practice. Testimony by company witnesses indicated that wilful (as contrasted with negligent) commission of a major infraction has regularly led to termination. In its Supplemental Decision, the Board found that "(d)uring the approximately 20 years that this security system has been in effect, (TI) has consistently applied this sanction (i. e., termination) in the five cases where it had been proven that such classified information was revealed." 247 N.L.R.B. No. 37, supra, at 5.

TI employees are generally apprised of this policy through the company handbook and staff and department meetings. In addition, the treatment of confidential information was apparently a frequent topic in a monthly company newspaper circulated among employees at the Attleboro plant.

Of present concern is the application of this security rule to certain wage information gathered and analyzed by TI. As a matter of corporate policy, TI seeks to make wages and benefits at each of its plants competitive with other employers in the area. To implement this policy the company conducts an annual area wage survey which solicits information from both union and nonunion employers about the number of persons they employ in specific job categories and their minimum, maximum and average rates of pay for each category. In seeking the cooperation of other employers, TI advises them that "all data will be treated with strict confidence."

TI compiles the wage information it receives into two reports. One report is distributed to the companies participating in the survey. It lists the average rate of pay for each job category at each company and identifies the companies only by code letters, thus ensuring the anonymity of the data. The other report is far more detailed and circulation of the few copies produced is restricted to a small number of high level TI management personnel. ¹ It comprises roughly fifty separate "wage recommendation sheets," one for each job category, that show the number, as well as the minimum, maximum and average wage, of employees in that category at each company. The companies are identified by name and arranged on the sheets according to pay scale, with the highest-paying company listed first. Arrows in the right-hand margin of each sheet indicate TI's rank in the survey, the compensation staff's recommended wage increase for that job category and where the proposed increase would place TI in relation to the other companies. Counsel for TI stated in oral argument that the second report also contains information about company profitability, recent wage increases and the reevaluation of jobs, but this is not apparent from the record. This more extensive report is used by TI's top management to determine the company's wage schedule and has always been classified "TI Strictly Private"; indeed, every page of the report is stamped with this classification.

Sometime prior to May 25, 1977, a copy of the most recent version of this second, highly confidential wage survey report

"was anonymously mailed to the Organizing Committee's post office box. Members of the Committee were never implicated in the mailing. After receipt of the papers, members of the Committee discussed the information; realized that it would be helpful in their attempts to unionize the company, inasmuch as organized plants were shown to be paying higher rates; and cut off the 'Strictly Private' label, reduced and reproduced in a leaflet two comparative tables of wages, one comparing rates for a grade 2-3 bench-worker at TI and sixteen other named plants and the other comparing rates for a grade 10 toolmaker at TI and 15 other named plants. Narrative material pointed to the moral:

'The key thing for setting the wages in this area is what the union shops are doing. Take G.E., for example, doing the same work we're doing but making well over $1.00 more an hour, because workers there have struggled over the years through their union for a decent wage. If it wasn't for these organized places paying better wages to bring the average up, we'd be down there with Balfours.' "

599 F.2d at 1070.

The leaflets were first distributed on May 25, 1977 at 6:30 a. m. TI management personnel soon discovered that the material contained reproductions of two wage recommendation sheets. Augat and Balfours, two companies at or near the bottom of the wage survey tables, also became aware of the contents of the leaflet (the source of their information is not specified) and called TI on May 25 to express concern. The leafletting continued at 3:30 p. m.

"and management representatives contacted four of the distributors, informing them that the leaflet contained 'Strictly Private' matter and warning them that continued distribution would subject them to summary termination. They and others met in the evening. One of them testified, 'We discussed it and our decision was that if the company did have any rights in the matter, had any claim on the material or anything of that sort; then they would have confiscated the leaflet right on the spot or taken some kind of measures against us. And, since that hadn't happened, we decided to go out again the next day.' "

599 F.2d at 1070.

On the next morning, May 26, the leaflets were again distributed, notwithstanding renewed warnings. Later in the day

"the six people who had been distributing the leaflets were interviewed and then suspended. Five days later TI concluded that evidence was lacking to implicate the employees in the original leak of the data, but that the six employees had wilfully disseminated classified materials and that company policy required immediate termination."

599 F.2d at 1070. The employees were suspended on May 26, and then terminated several days later. This unfair labor practice proceeding was subsequently initiated.

II

The original disposition of the case by the administrative law judge (ALJ) and the Board is described in our previous opinion. See 599 F.2d at 1070-71. In remanding to the Board, we indicated that further proceedings were to focus "on the issues of the validity of the rule invoked...