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National Labor Relations Board v. Electro-Voice

April 26, 1996




Appeal from the United States District Court for the Northern District of Indiana, South Bend Division. No. 94 C 1037--Robert L. Miller, Jr., Judge.

Before ESCHBACH, COFFEY, and EVANS, Circuit Judges.

ESCHBACH, Circuit Judge.


DECIDED APRIL 26, 1996 *fn*

The United States brought a petition in federal district court on behalf of the Regional Director of the National Labor Relations Board (collectively "the Director") requesting injunctive relief and a bargaining order pursuant to sec. 10(j) of the National Labor Relations Act, 29 U.S.C. sec. 160(j) (hereinafter "the Act"). In support of the petition, the Director presented evidence that the employer threatened plant closure, interrogated employees regarding union activity, solicited employees' grievances, remedied employees' grievances, and fired union organizers. The district court denied injunctive relief. Because we conclude that the district court based its decision on incorrect legal analysis and clearly erroneous factual findings, we REVERSE.


Electro-Voice, Inc., *fn1 is a manufacturing company, with plants located in several locations: Buchanan, Michigan; Sevierville, Tennessee; Newport, Tennessee; and Mishawaka, Indiana. At the plant located in Mishawaka, Indiana, (hereinafter "the Indiana plant"), Electro-Voice manufactures fiberglass stadium horns, electronic cross-over panels, and cables for military headsets. In June of 1994, the Indiana plant was home to approximately 30 production and maintenance employees. Plant Manager Dennis Northam and General Foreman Paul Grasso supervised the Indiana operation. Minnie Warren was the Human Resources Manager of the plant in Buchanan, Michigan. Although she was located in Michigan, she had oversight responsibility for human resources at the Indiana plant.

Around the beginning of 1992, Electro-Voice implemented a program called "Customers Are Our Real Employers," referenced by the acronym "CARE." The program was a form of "total quality management," designed to solicit the input of employees at all levels of the company regarding how to improve the quality of the company's products. Under the auspices of CARE, Electro-Voice regularly held employee meetings to solicit employees' concerns and questions on issues ranging from technology and equipment to the employees' work environment. Dennis Northam was responsible for implementing CARE at the Indiana plant. Northam informed Director of Quality Anthony Sawyer, who was responsible for the CARE program company-wide, that employees in the Indiana plant did not want to participate in formal CARE meetings. Therefore, Northam said he would implement CARE informally, if at all.

Implementation of the CARE program was not the only problem plaguing the Indiana plant. In late 1993, the Indiana plant experienced a decline in labor efficiency. *fn2 In January or February of 1994, employees began to voice their dissatisfaction with conditions at the plant. One of the employees, Pam Buford, phoned Minnie Warren to request a meeting with Warren to discuss the policies and conditions at the Indiana plant. Specifically, Buford indicated that employees were dissatisfied with Northam, the attendance policy, and working conditions in the plant. Unfortunately, Warren was too busy to address the matter. Two weeks later Northam and Grasso met with Indiana plant employees, telling employees that they knew that the employees had complained about conditions in the plant, and stating that no changes would be made. In May, employees approached supervisor Kathy Nash to request additional exhaust fans to alleviate the excessive heat and air pollution in the plant. Again, their request was denied.

In May, after receiving no response from her complaints, Buford began an effort to organize Indiana plant employees to form a union. First, she approached almost all of the employees at the plant. Next, in early June, Buford contacted Dana Fere, a representative of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, AFL-CIO (hereinafter "the union"). On June 17, Buford and Fere held a meeting at a nearby restaurant; sixteen plant employees attended. The employees discussed the possibility of organizing, and agreed to meet again. Meanwhile, by early June of 1994, Warren had received other complaints about the Indiana plant, including allegations of employee drug use.

On June 21, Indiana plant employee Scott Ressler played golf with Ronald Graham. *fn3 Graham was the Vice President of Human Resources for Electro-Voice and maintained his office at the Michigan plant. Ressler told Graham that the Indiana plant was suffering as a result of Northam's mismanagement and that attendance at the plant was becoming a "joke." According to Warren, Ressler also told Graham that "there were some union rumors" in the Indiana plant.

Graham returned to the Michigan office, and ordered Warren to go to the Indiana plant and to individually interview plant employees. *fn4 The parties offer different explanations for why Graham sent Warren. The Director maintains that Graham told Warren to defuse the union effort. Electro-Voice maintains that Warren was sent to address employee complaints and to investigate the drug allegations. Regardless, on June 22, 1994, Warren met with employees at the Indiana plant, informing them that she would meet with them individually over the next few days to discuss problems at the plant. *fn5

Also on June 22, twenty-one employees attended a second union meeting. The employees signed union authorization cards and gave them to union representative Al Warzecha. Eleven employees volunteered to serve on a union organizing committee, *fn6 including Michelle Kincses, Scott Kendall, David E. Shaffer, Jason Havens, Pam Buford, and Tracy Dermody. As the meeting concluded, employee Kevin Wolverton arrived. Wolverton was not invited to the union meeting. Apparently angry about receiving no invitation, Wolverton said that Northam knew about the meeting and would fire anyone involved in the union effort.

On June 23 through June 29, 1994, Warren met with employees individually. During the interviews Warren asked employees whether they had any complaints. Employees complained about their working environment, the ventilation in the plant, the lack of proper tools, and the absentee policy. Warren promised to investigate the complaints. However, Warren also allegedly discussed the union on at least three occasions. December Barrows claims that Warren said that Warren was once in the union and that the union would not help employees in the Indiana plant. Warren allegedly told Michelle Kincses that her personal experience suggested that the union was of little or no help to workers. Warren also supposedly inquired of Kincses whether Kincses would vote for the union and whether a majority of employees would do so. According to Scott Kendall, Warren told him that the union lacked the support of enough employees to unionize. Warren denies making any of these statements.

On June 27, Electro-Voice terminated Northam. Jay Melton, the Director of Manufacturing and Northam's superior, replaced Northam. Melton met with the Indiana plant employees, promising to improve conditions and review the attendance policy. Melton also allegedly vowed that the Indiana plant would never be a union shop. *fn7 According to Barrows and Kincses, Melton threatened to close the Indiana plant if the employees organized, noting that the Texas plant would take over the work of the Indiana plant. Finally, according to Tracy Dermody, Melton said that a union was not able to either protect the employees' jobs or secure for them higher wages. Melton contends that he spoke only from prepared note cards that contain no reference to the union. *fn8 Melton claims that he was unaware of the union effort until June 28, 1994, when he was informed of union activity by plant employee Don Simon. Electro-Voice concedes only that during the speech Melton pledged to "give serious consideration to [employees'] concerns" and discussed "the need to produce quality products at a competitive price."

On June 29, Melton held another meeting with Indiana plant employees. Although the purpose of the meeting supposedly was to discuss the CARE program, Electro-Voice concedes that Melton discussed the union effort, said that "there was no need for a union," and encouraged employees not to give up their independence. Melton also discussed the consequences to the plant of "not remaining competitive." Again, employees claimed that anti-union threats were made. Melton denies making any threats.

Following the June 29 meeting, Melton joined Warren to continue conducting individual interviews with employees. Melton allegedly asked questions regarding employees' grievances, and renewed his verbal assault on the union. Melton allegedly told Tracy Dermody that "the Union can't protect your job" and that the plant was "small and movable." Melton allegedly made similar comments to Kincses, and asked whether Kincses or any other employee had signed a union authorization card. Warren and Melton jointly met with Pam Buford. They allegedly inquired whether Buford was responsible for organizing the union activity or knew who was. According to Buford, they assured her that the company would not tolerate the unionization of the Indiana plant. Warren and Melton deny the charges.

Warren returned to the Michigan plant following the June 29 meetings. Warren claims that she reported to Graham that the absenteeism problem in the Indiana plant was serious. On June 30, 1994, however, the company's "absentee point system" for tracking employee absenteeism was made less restrictive. Meanwhile, back in Indiana, Buford held another union organizational meeting on July 5, 1994 to determine whether the employees wanted to continue the union effort in the light of Warren's and Melton's meetings. All but one of the 12 to 15 employees who attended the meeting voted to proceed.

On July 7, Graham, Grasso, Melton, and Warren met at the Indiana plant. Just after the meeting started, Melton presented Graham with a letter from the union demanding recognition at the Indiana plant. After receiving the letter, Graham decided that any employee with a high incidence of absenteeism should be discharged. *fn9 Graham ordered terminated every employee at the Indiana plant who had accumulated more than seven absentee points or who had been employed by the company for less than six months and had accumulated "a good number of points." *fn10 Graham ordered the terminations despite the fact that the company's written attendance policy provided that employees are subject to discharge after accumulating thirteen or more points in a twelve month period. *fn11 In fact, the company's absentee policy provided that "an absentee control policy and procedure is necessary to assure that those who are excessively absent are notified . . . ." But the employees Graham terminated received no notice that they were at risk of termination. Conveniently for the company, the employees that met Graham's criteria were December Barrows, Tracie Bentley, Pam Buford, Tracy Dermody, Jason Havens, Scott Kendall, Michelle Kincses, Sherry Mize, and Debbie Lello. Each of the foregoing had attended a union meeting and signed a union card. Five of the nine had volunteered to serve on the organizing committee. *fn12 Graham asserts that the decision was in response to employees' viewing the attendance policy as a "joke" and threats by key employees to quit if the policy was not enforced. Graham also disavows any knowledge of the terminated employees' union activities.

The employees were immediately fired and replaced by personnel from a temporary employment service. *fn13 On July 8, the union held another meeting. This time, only one or two company employees attended. The turnout was small, despite some evidence that support for the union among plant workers remained high. Other company employees informed a union representative that they feared losing their jobs. After the terminations, the company continued to remedy employee objections in the Indiana plant, including providing the fans and tools requested by employees, and adding seating in the employee break room. No union meetings have been held since the meeting on July 8.

Also on July 8, the union filed an unfair labor practice charge, alleging that Electro-Voice terminated six of the employees for engaging in union activity, and that Electro-Voice interfered with or coerced employees for engaging in union activity. On July 19, the charge was amended to include all ten employees terminated--including David Shaffer who was terminated on July 6. The amended charge also alleged that Electro-Voice threatened to close the Indiana plant if the employees unionized. On August 30, 1994, the union filed a second amended charge requesting a bargaining order and injunctive relief pursuant to sec. 10(j). On October 18, 1994, the Director issued a complaint, charging Electro-Voice with violations of secs. 8(a)(1), (3) and (5) of the Act, 29 U.S.C. sec. 158(a)(1), (3) and (5), including: (1) unlawful discharge, (2) unlawful plant closing threats, (3) unlawful statements regarding the "futility" of union organization, (4) unlawful solicitation of complaints and promises of benefits, (5) unlawful surveillance of union activity, and (6) unlawful granting of benefits. In October, following the Director's complaint, the company reinstated employees Bentley, Kincses, Dermody, and Mize.

On December 19, 1994, an Administrative Law Judge (hereinafter "ALJ") began hearing the case. The next day, December 20, the United States petitioned the federal district court for injunctive relief on behalf of the Director pursuant to sec. 10(j). The ALJ completed his hearing on January 19, 1995. The transcript of the proceedings before the ALJ was submitted to the district court. At the request of the Director, the district court did not conduct an evidentiary hearing; the court heard no live testimony. Rather than ...

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