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E & L Transport Co. v. National Labor Relations Board

June 5, 1996




On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board No. 13-CA-29431

Before BAUER, MANION, and KANNE, Circuit Judges.

KANNE, Circuit Judge.



The National Labor Relations Board found that E & L Transport Company violated the National Labor Relations Act by threatening not to hire the union-affiliated ex-employees of a former competitor and by discriminating against those applicants by either refusing to consider or refusing to hire them for various positions. E & L challenges the Board's order and requests that we deny enforcement; the general counsel asks us to grant enforcement. We deny enforcement in part and grant enforcement in part and remand the remainder of the case to the Board for further proceedings.


Petitioner E & L Transport Company is a motor carrier engaged in the interstate transportation of newly manufactured automobiles. It operates several terminals, including one in Chicago. In February 1990, E & L was awarded the contract to be the sole carrier in Chicago for the Ford Motor Company. Previously, E & L had been the secondary carrier for Ford; Nu-Car Carriers had been the primary carrier. As a result of the 1990 contract, Nu-Car phased out and eventually closed its Chicago operations, and E & L assumed all of Ford's Chicago business by the middle of April 1990.

Local 710 of the Highway Drivers, Dockmen, Spotters, Rampmen, Meat Packing House and Allied Products Drivers and Helpers, Office Workers and Miscellaneous Employees Union ("union") represents E & L and Nu-Car employees. Pursuant to the National Master Automobile Transport Agreement--the collective bargaining agreement between the union, E & L, and Nu-Car--when Nu-Car closed its doors E & L was obligated to offer employment to the former Nu-Car drivers. The agreement did not obligate E & L to employ the former Nu-Car garage workers or the former Nu-Car office employees.

On March 29, 1990, Eugene Wade, the union representative, and Bob Brown, the union steward at Nu-Car and soon-to-be E & L driver, *fn1 met with Al Schaeffer, E & L's terminal manager, to discuss E & L's potential employment of the former Nu-Car union employees. Schaeffer told them that E & L would hire the garage workers. Schaeffer explained that E & L did not currently need the office clericals because the office was fully automated. Schaeffer mentioned that E & L would consider hiring the office employees at some later point but that "we will not hire the Union office people." On two other occasions, Schaeffer stated that E & L's Chicago office "would be a non-union office. There would not be any union employees." On one occasion, Lisa Buschman, E & L's sole check-in dispatch supervisor at the time, overheard Schaeffer making the statement to another member of management. On the other occasion, Schaeffer made the statement directly to James Houseman, E & L's operations supervisor, at the same time Schaeffer instructed Houseman to determine which of the former Nu-Car office employees were nonunion and to discretely obtain their resumes.

By the end of March 1990, six of the former Nu-Car office employees had submitted their resumes to E & L for consideration relative to available office positions. They included two nonunion employees, Nancy Norton, Nu-Car's office manager, and Pat Garcia, the personal secretary to Nu-Car's terminal manager, and four union members who were Nu-Car's general office employees, Rebecca Pyka, Kathy Williams, Kathy Parker, and Dawn Sczcepaniak. All six ceased working for Nu-Car by March 30, 1990.

In late March 1990, E & L interviewed the two nonunion Nu-Car office employees, Norton and Garcia, for the position of confidential secretary. E & L did not interview Pyka, Williams, Parker, or Sczcepaniak, all of whose resumes were on file. Both Garcia and Norton were asked during their interviews why they were not members of the union. E & L hired Norton for the job on March 31, 1990, but she was terminated on April 5, 1990, for unsatisfactory job performance. Her termination coincided with the removal of Al Schaeffer as E & L's terminal manager and the hiring of his replacement, Ron O'Reilly. Instead of interviewing to permanently fill the then-vacant confidential secretary position, on April 6, E & L sought a temporary replacement through Kelly Temporary Services. The temporary secretary, Judy Nilsen, was offered the job of confidential secretary on a permanent basis on April 19, 1990.

In addition to requesting one temporary secretary, the April 6 order to Kelly Temporary Services also requested one temporary data-entry clerk. E & L made seven subsequent orders to Kelly Temporary Services for secretaries, data-entry clerks, and typists. Several of those orders involved replacing individuals E & L had found unsatisfactory. The total number of temporary secretaries, dataentry clerks, and typists utilized by E & L at any one time ranged from two to four. *fn2 E & L ceased utilizing Kelly temporaries in September 1990.

In May 1990, E & L placed an advertisement in a local newspaper seeking "dispatch supervisors." Shortly thereafter, O'Reilly spoke with Wade and Brown, and Wade again asked if E & L would hire the former office employees. O'Reilly responded that the former office workers would be considered if they put in resumes but that if E & L hired them "they will not be Union." O'Reilly had made an identical statement to Wade and Brown during another discussion in late April 1990.

In June 1990, E & L interviewed applicants for the two check-in dispatch supervisor positions. The interviewees included Williams and Sczcepaniak, both former Nu-Car office employees and union members. Parker and Pyka applied, but E & L did not interview them. In July 1990, E & L offered the positions to Williams and Vern Joyner, who had responded to the newspaper advertisement.

On April 27, 1990, the union filed an unfair labor practices charge against E & L with the Regional Director of Region 13 of the NLRB, alleging that E & L had violated sections 8(a)(1), (3), and (5) of the National Labor Relations Act ("Act"), 29 U.S.C. secs. 158(a)(1), (3), (5), by refusing to consider the four former Nu-Car office employees for various positions because of their union membership and activities. The Regional Director issued a complaint on June 29, 1990, charging E & L with unfair labor practices in violation of secs. 158(a)(1) and (3). Specifically, the complaint alleged that (1) Schaeffer's statement that E & L would not hire the union members constituted a threat, (2) O'Reilly's statement that if E & L hired the union members they would be nonunion constituted a threat, (3) E & L discriminated against the four union members on the basis of their union membership or activities when it failed to consider them for the confidential secretary position, and (4) E & L discriminated against the four union members when it failed to consider them for one temporary clerical position. The Regional Director issued an amended complaint on December 7, 1990, alleging, in addition to the claims in the original complaint, that E & L discriminated against the union members when it refused to consider two and refused to hire one for one check-in dispatch supervisor position. On April 2, 1991, the Regional Director submitted her notice of intent to amend the amended complaint to include the allegation that E & L refused to consider the four union members for more than one temporary clerical position.

The administrative law judge held a hearing on the alleged unfair labor practices on April 8-10 and June 11-12, 1991. The ALJ issued his decision and order on December 16, 1992. He found that Schaeffer's statement to Brown that E & L would not hire the union former office workers constituted a threat in violation of sec. 158(a)(1). The ALJ also found that O'Reilly's statement to Brown that if E & L hired the former union office workers they would be nonunion was a threat in violation of sec. 158(a)(1). He further found that the check-in dispatch supervisor position did not qualify as a supervisory position within the meaning of 29 U.S.C. sec. 152(11) and that E & L had discriminated against three of the union members because of their union activities when E & L did not consider two and did not hire one for that position.

The ALJ determined that a company may not discriminate against nonemployee applicants for a confidential position on the basis of their prior union status or activities, and he found that E & L had done just that by not interviewing the four union members for the confidential secretary position.

Finally, the ALJ found that E & L had discriminated against the four union members by not considering them for the temporary clerical positions. The ALJ ordered E & L to offer positions to the three union members who were not hired and to make all four whole for any lost earnings that resulted from the discrimination. E & L filed exceptions to the ALJ's decision and order.

A panel of the NLRB ("Board") issued its decision and order on October 18, 1994. E & L Transport Co., 315 N.L.R.B. 303 (1994). The Board summarily affirmed the ALJ's decision, except for two issues with regard to which it applied its own reasoning and affirmed. The first issue concerned the supervisory status of the check-in dispatch supervisor position; the Board concluded that the position was nonsupervisory because although Joyner was required to issue warnings to drivers, the warnings he issued were insufficient to afford him supervisory status: "[T]o the extent that Joyner has occasionally issued warnings which are not automatic pursuant to regulations or the contract, such incidents have been isolated and sporadic and are insufficient to indicate that Joyner is a supervisor within the meaning of Sec. 2(11)." The second issue concerned the confidential secretary position; the Board observed that the ALJ had not actually determined whether the position met the "labor nexus" test. *fn3 Assuming that it did, the Board decided that applicants for that position are still within the definition of "employee" and, as a result, are accorded the antidiscrimination protections of the Act pursuant to Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 182-87, 61 S. Ct. 845, 847-49 (1941). The Board did not decide what protections actual confidential employees are accorded under the Act. The Board did articulate a defense, which E & L could not meet, for employers charged with discriminating against applicants for confidential labor nexus positions:

[A]n employer would have to show more than mere membership in a union or past union activities in order to disqualify an applicant for being considered for a confidential position; rather, the employer would have to prove by objective evidence that it has reasonable grounds for believing that an applicant will be disloyal or will impair business operations.

On October 25, 1994, E & L filed a petition to review and set aside the Board's decision and order. On November 18, 1994, the general counsel, on behalf of the NLRB, filed a cross-application for enforcement. We ordered the cases consolidated.


E & L raises multiple challenges to the Board's finding that it unlawfully discriminated against the union applicants. We first consider E & L's arguments that the confidential secretary and check-in dispatch supervisor positions are not covered by the antidiscrimination provisions of the Act. We then consider E & L's challenges to the discrimination finding itself, as well as E & L's challenges to the finding that it made unlawful threatening communications. Finally, we consider E & L's argument that the general counsel should not have been permitted to amend the amended complaint.


E & L argues that applicants for confidential positions with a labor nexus should be accorded none of the protections of the Act, including the protection against discrimination under sec. 158(a)(3). In support of that conclusion, E & L relies upon Peerless of America, Inc. v. NLRB, 484 F.2d 1108, 1112 (7th Cir. 1973), and NLRB v. Wheeling Electric Co., 444 F.2d 783, 788 (4th Cir. 1971), which held that actual confidential employees are treated as supervisory employees completely excluded from protection under the Act. *fn4 If actual confidential employees are treated as supervisory, E & L argues, then the Board's holding in Pacific American Shipowners Ass'n, 98 N.L.R.B. 582, 596 (1952), that non-employee applicants for supervisory positions are not protected would dictate that non-employee applicants for confidential positions are also not protected. Thus, under E & L's theory, nonemployee applicants for confidential positions receive none of the protections accorded by the Act.

The general counsel argues that this is not an appropriate case in which to consider what protections accrue to actual confidential employees. Instead of following E & L's indirect analysis, the general counsel urges that we should directly address the protections due applicants. According to the general counsel, the Board's decision to protect applicants and accord only a limited defense to a charge of discrimination is a rational construction of the Act because to do otherwise would deter individuals from joining unions for fear of forever limiting their employment options.

The extent to which applicants for confidential positions with a labor nexus are protected by the Act is a question of law. So too is the Board's determination as to what qualifies as a defense against an unfair labor practice charge. In reviewing the Board's interpretation of the Act, we are mindful of the fact that "Congress conferred the authority to develop and apply fundamental national labor policy" on the Board. Beth Israel Hosp. v. NLRB, 437 U.S. 483, 501, 98 S. Ct. 2463, 2473 (1978). For that reason, where the Act is silent or ambiguous on an issue, we will uphold the Board's conclusion regarding that issue if it is "rational and consistent with the Act." NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 787, 110 S. Ct. 1542, 1549 (1990). However, "[i]f the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-43, 104 S. Ct. 2778, 2781 (1984).

As an initial matter, we find that the statute is ambiguous as to whether applicants for confidential positions with a labor nexus are protected under the Act. Indeed, the Act does not even mention applicants for employment. See 29 U.S.C. sec. 152(3).

The Act is similarly ambiguous with regard to what protections accrue to actual confidential employees. A main purpose of the 1947 amendments to the Act was to exclude supervisors from the definition of "employee" under the Act, thereby excluding them from the protections of the Act. Wheeling Electric, 444 F.2d at 785. The original House version of the bill specifically included confidential employees within the definition of "supervisor." H.R. 3020, 80th Cong., 1st Sess. sec. 2(3) (1947).

However, the Senate version, which was the one eventually passed, did not specifically mention confidential employees as being within the definition of "supervisor." S. 1126, 80th Cong., 1st Sess. sec. 2(3) (1947). The report of the conference committee provided an ...

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