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Prairie Tank Southern Inc. v. National Labor Relations Board

June 28, 1983


On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board

Author: Rosenn

Before CUMMINGS, Chief Judge, POSNER, Circuit Judge, and ROSENN, Senior Circuit Judge.*fn*

ROSENN, Senior Circuit Judge. Prairie Tank Southern Inc. (the Company) petitions for review of an order of the National Labor Relations Board (the Board) compelling it to bargain with the certified representative of its employees, the International Brotherhood of Boiler-makers, Iron Shipbuilders, Blacksmiths, Forgers, and Helpers, AFL-CIO (the Union). The Board has filed a cross-application seeking enforcement of its order. We deny enforcement and grant the petition for review.

In early 1981, Prairie Tank Southern, an Alabama corporation,*fn1 engaged in the construction, modification, and repair of steel tanks, entered into a Stipulation for Certification Upon Consent Election with the Union. That stipulation was approved by the Regional Director of the Board and a representative election was duly held. The Union won by a vote of 10 to 5.

On April 6, 1981, the Company timely filed with the Regional Director Objections to Conduct Affecting Results of Election. The Company urged that the election results be set aside because an employee favorably disposed toward the Union had, prior to the election, threatened his fellow employees, thereby destroying the atmosphere necessary to the exercise of free choice in a representation election. The Regional Director thereupon conducted an ex parte investigation into the allegations. After interviewing witnesses identified by the Company and obtaining affidavits, the Regional Director issued a report recommending that the objections be overruled without a hearing. A footnote at the end of the report notified the Company of the proper procedure for appeal, stating in pertinent part:

Under the provisions of Section 102.69 of the Board's Rules and Regulations, exceptions to this report may be filed with the Board in Washington, D.C. Pursuant to Section 102.69(g), affidavits and other documents which a party has submitted timely to the Regional Director in support of objections are not a part of the record unless included in the Regional Director's report, or appended to the exceptions or opposition thereto which a party submits to the Board....

The Company filed timely exceptions to the Regional Director's report with the Board accompanied by a supporting brief. The Regional Director, pursuant to 29 C.F.R. § 102.69(g), transmitted to the Board a record comprised of the objections and the Regional Director's report. The record transmitted did not contain the affidavits which the Regional Director had gathered in the course of his investigation.

On July 21, 1981, the Board issued a one-page decision and certification of representation adopting the Regional Director's findings and recommendations and certifying the Union. The Board held no hearing because it believed that the Company had not raised any material factual issues.

Because the Company refused to bargain, the Union filed an unfair labor practice charge with the Board on September 15, 1981 and the Board issued a complaint. The Company filed a timely answer denying that the Union had been properly certified by the Board and raising affirmative defenses regarding the Regional Director's failure to transmit a complete record to the Board in the earlier representation proceeding.

On May 12, 1982, the Board summarily found the Company in violation of sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and (5), for refusing to bargain with the Union. The decision was predicated on the Board's belief that issues raised by the Company in the enforcement proceeding, including the Company's contention that the complete record had not been transmitted to the Board, were or could have been litigated in the earlier representation proceeding. The Company thereupon petitioned for review of the Board's order, urging that the Board's decision and certification of the Union were defective because the Regional Director failed to transmit to the Board the affidavits he had collected in the course of his investigation. The Company contends that without the affidavits it was impossible for the Board effectively to review them, and because the Company had raised issues of material fact those issues required resolution at a hearing.

Prairie Tank Southern's argument concerning the inadequacy of the record transmitted is dispositive in this case. We therefore need not reach the issue of election misconduct. This court's recent decision in NLRB v. Allis-Chalmers Corp., 680 F.2d 1166 (7th Cir. 1982), establishes a per se rule under which the Board can never adopt the findings and recommendations of a Regional Director without first reviewing the affidavits produced by the Regional Director's investigation on which he based his conclusions. This court stated emphatically:

We agree with the Fifth and Sixth Circuits, and hold that this Court cannot enforce an order of the NLRB founded upon a regional director's ex parte investigation under 29 C.F.R. § 102.69 where the Board has not seen the evidence relied on by the regional director.

680 F.2d at 1169 (footnote ...

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