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Mallory v. National Labor Relations Board

December 26, 1967

P.R. MALLORY & COMPANY, INC., PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD, RESPONDENT



Schnackenberg, Circuit Judge, Knoch, Senior Circuit Judge, and Swygert, Circuit Judge.

Author: Swygert

SWYGERT, C. J.:

Mallory Capacitor Company, a division of P. R. Mallory & Co., operates a manufacturing plant at Glasgow, Kentucky. On February 1, 1967 the National Labor Relations Board issued an order requiring the petitioner to refrain from committing certain unfair labor practices and to reinstate two discharged employees with back pay.

The Board found that, in violation of section 8(a) (1) of the National Labor Relations Act, the company interfered with its employees in the exercise of their section 7 rights by threatening them with adverse economic consequences if they selected the IUE (International Union of Electrical, Radio and Machine Workers, AFL-CIO) as their collective bargaining representative. These purported threats were contained in several letters sent to the employees prior to a representation election which was held in May, 1966. The Board also found that the company violated section 8(a) (1) by maintaining a shop rule that in effect prohibited employees from engaging during nonworking time in either union solicitation on company property or union literature distribution in nonworking areas. Additionally, the Board found that the company violated section 8(a) (3) and (1) by discharging employees Betty Davis and Charles Judd because of their activities in behalf of the union. The petitioner Mallory seeks to set aside this order; the Board cross-petitions for its enforcement.

I.

The Company Letters to the Employees

On four different occasions between January 11 and March 2, 1966, the company sent letters to its employees urging them to reject the union in the impending election. The trial examiner found that the letter of February 16 was "not violative as charged in the complaint," and he did not mention the February 7 letter in his decision. But, after quoting from the January and March letters, the examiner determined that the company's "barrage of letters before the election was a none too subtle threat that to accept the union meant to destroy employees' job security."*fn1 The examiner continued: "I do not know any way the message could be made more clear. Respondent [the company] told the employees in so many words, . . . that the work of making capacitors was taken by respondent from the Indianapolis plant and that it resulted from the union activities in that plant."

Although the rules for determining whether employer communications are protected by section 8(c) or are violative of section 8(a) (1) have often been stated, every case requires a careful balancing to ascertain on which side of the line a given communication falls. Thus we have held that an employer may not suggest that if his employees vote in favor of union organization, he will retaliate by making economic decisions adversely affecting their interest. Wausau Steel Corp. v. NLRB, 377 F.2d 369 (7th Cir. 1967). But an employer does not commit an unfair labor practice by expressing an opinion or even a prediction that dire economic consequences will befall his employees if they choose a union to represent them. NLRB v. S. & H. Grossinger's, Inc., 372 F.2d 26 (2d Cir. 1967); Amalgamated Clothing Workers v. NLRB, 124 U.S. App. D.C. 365, 365 F.2d 898 (D.C. Cir. 1966). Thus the determination whether an employer's statement to his employees during an organizational campaign is a direct or subtle threat of employer reprisal or is instead a prognostication of disastrous consequences, which the union and not the employer will bring about, raises the threshold question as to the existence of a section 8(a) (1) violation. Sometimes this determination can be made by looking at the questioned statements alone. At other times, as in the instant case, the questioned statements do not of themselves clearly indicate whether they are protected or proscribed. In such situations, the statements must be considered in light of the totality of employer communications. Under the test just advanced, if a statement cannot be interpreted as a subtle suggestion that the employer will seek to thwart unionization by visiting economic disadvantage upon his employees, but rather that such consequences may result from unionization itself, the statement is immune from the statutory ban.*fn2

In the case at bar, the accused portions of the letters do not contain direct employer threats of reprisal. Therefore, we must consider them in their totality to determine whether they contain indirect threats. When thus viewed, we believe that the letters sent by the company to its employees were within the protection of section 8(c) of the Act. A fair reading of these communications does not suggest that if the union was successful, the company would of its own volition transfer work from its plant in Glasgow to some other plant. Nor was the company predicting adverse economic consequences which were within its power to initiate if the employees voted for the union. The company had a right to state its opinion about the potential effects upon its customers if costs were increased as a result of granting union demands for increased wages and other benefits, thus compelling higher prices for its product. Similarly, the company had a right to speculate about the consequences of a strike called if the company refused to meet union demands. In this regard, the company could opine that while its employees were on strike, it would not be making capacitors, resulting in a permanent loss of customers. Finally, the company had the right to support its opinions by citing past experiences with the same union in other plants which the company operated. Consequently, the Board's conclusion that the campaign letters sent by the company violated section 8(a) (1) is not supported by substantial evidence on the record considered as a whole.*fn3 In reaching this conclusion, we are in agreement with the Second Circuit's statement in NLRB v. River Togs, Inc., 382 F.2d 198, 202 (2d Cir. 1967):

Although the Board apparently thinks workers should be shielded from such disconcerting information, an employer is free to tell his employees what he reasonably believes will be the likely economic consequences of unionization that are outside his control, as distinguished from threats of economic reprisal to be taken solely on his own volition. . . . If ยง 8(c) does not permit an employer to counter promises of pie in the sky with reasonable warnings that the pie may be a mirage, it would indeed keep Congress' word of promise to the ear but break it to the hope.

II.

The Discharges of Davis and Judd

On February 11, 1966 the company discharged employees Betty Davis and Charles Judd. Davis had originally been hired in the latter part of September 1965, and she had worked until about the middle of December 1965 at which time she left voluntarily. She was rehired on January 25, 1966. Of the following fourteen working days, she was absent five. Judd was hired on December 6, 1965. Between that date and his discharge he was absent eight days. Davis' and Judd's absenteeism amounted to 35.7 per cent and 16 per cent of their respective possible working time. Both Davis and Judd had signed union cards and each was a member of the IUE local organizing committee. Knowledge of their membership came to the company's attention on February 7, 1966 when the union sent the company a letter saying, "This letter is to advise you that the following people are serving on the IUE-AFL-CIO voluntary organizing Committee." The nineteen names listed included Davis and Judd.

In response to the Board's claim that the discharges were motivated by union animus, the plant manager, Wayne Ruggles, testified that Davis and Judd were dismissed for absenteeism. He said that on February 11, the date of the discharges, he conferred with three executives from the company's Indianapolis headquarters about the Glasgow plant's production problems; that they suggested he review the records to ascertain the "rates of absenteeism" during the "past 30 days or so." He further testified that Davis' and Judd's records were brought to his attention, and because of their poor attendance, he decided to discharge them, "to try to point out to the other people in the plant in this department [660] the importance of . . . being at work all the time."

Evidence was introduced showing that during the thirty-day period prior to February 11 at least four employees in department 660 were absent from work more than either Davis or Judd. (The Board emphasized this evidence in concluding that Davis' and Judd's discharges were in fact motivated because of their union activity.) Yet one of these four employees was also a member of the union organizing committee, and his name was included in the letter from the union to the company. In the thirty-day period, that employee was absent sixteen days. If the company wanted to discharge union sympathizers on the pretext of absenteeism, this employee would have provided a far better choice than Davis or Judd. In addition, an employee in department 681, who was on the union organizing committee, was absent five days during the same period. During the entire month of January, however, she was absent ten days. The Board does not attempt to explain this disparity of treatment of union sympathizers. Nor is there anything in the record to show that Ruggles was aware at the time of the discharges that other employees had a worse absenteeism record than did Davis and Judd. In our opinion, the records of these five employees lead inevitably to the conclusion that absenteeism was the cause of the discharges rather than union activity.

This conclusion is supported by additional evidence. Prior to the discharges of Davis and Judd, eleven other employees were discharged for absenteeism. Of these eleven, two were in department 660, the same department in which Davis and Judd worked. After the discharges in question, two additional department 660 employees were also discharged for absenteeism. However, none of the names of these other four dischargees were on the list of the union organizing committee sent to the company. Thus the record contains objective evidence corroborating Ruggles' testimony that production problems in department 660 were due to excessive absenteeism and that the discharges were deemed necessary to set examples for other employees in that department.

Although the trial examiner discredited much of Ruggles' testimony, there is no substantial evidence in the record to support the examiner's conclusion, adopted by the Board, that union activity rather than absenteeism was the dominant reason for the discharges of Davis and Judd.*fn4 We do not agree, as the Board attempts to argue, that the company was obliged to prove that the discharges were for the nondiscriminatory reason assigned. Instead, the Board had the burden of demonstrating that the discharges were motivated for a proscribed purpose. Portable Electric Tools, Inc. v. NLRB, 309 F.2d 423 (7th Cir. 1962). The findings of the Board rested on tenuous inferences. These inferences are not entitled to deference on review when the evidence, as here, considered on the record as a whole, compellingly leads to contrary inferences.

III.

The No-solicitation, ...


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