Dynasteel Corp. v. National Labor Relations Board

United States Court of Appeals

Fifth Circuit

F I L E D

UNITED STATES COURT OF APPEALS

January 16, 2007

FOR THE FIFTH CIRCUIT

Charles R. Fulbruge III

Clerk

No. 06-60006

DYNASTEEL CORPORATION,

Petitioner-Cross-Respondent,

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent-Cross-Petitioner,

Petition for Review of an Order of the

National Labor Relations Board

Before SMITH, BENAVIDES, and PRADO, Circuit Judges.

BENAVIDES, Circuit Judge:

An administrative law judge (ALJ) found that Dynasteel

Corporation engaged in a number of unfair labor practices in

violation of the National Labor Relations Act (NLRA). 29 U.S.C. §§

151-69. The unfair practices arose out of Dynasteel’s

discrimination against employees and prospective employees

affiliated with labor unions. The National Labor Relations Board

(NLRB) adopted a substantial majority of the ALJ’s findings, issued

a cease and desist order, and instructed Dynasteel to undertake

several affirmative remedies. The NLRB now seeks to enforce its

order.

Dynasteel challenges the NLRB’s factual findings. Its

arguments amount to little more than reasserting, before this

Court, that its witnesses should have been credited over union

witnesses. Finding that substantial evidence supports all of the

NLRB’s findings, we DENY Dynasteel’s petition for review and GRANT

the NLRB’s request to enforce its order.

I. NLRB’S FACTUAL FINDINGS

Dynasteel is a steel manufacturer with several plants. The

NLRB found that unfair labor practices occurred at facilities in

Iuka, Mississippi and Millington, Tennessee. The Iuka activity

involved illegal threats and discipline of Dynasteel employees,

while the Millington activity involved discrimination against job

applicants.

A. Illegal Threats, Discipline and Discharge in Iuka

In July 2001, Dynasteel altered employee benefits and required

workers to purchase some of their own equipment. Employees found

this to be an unwelcome development, and discussed forming a union.

Eddy Goss and Dee Vaughn, the only two permanent employees in the

maintenance department, spearheaded the effort.

When local supervisors learned that employees were possibly

forming a union, they responded with hostility. The Iuka plant

manager, Mark Jones, told Goss that Dynasteel would “shut the doors

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and fire everybody before [it] let a Union come in.” In July, shop

foreman Glen Adcock told a group of employees virtually the same

thing. In August, Jones again told Goss in front of co-workers

that there “wouldn’t be no union,” and supervisor Bill Sanders

subsequently put his arm around Goss and told him that if a union

started, “you’ll be the first one fired.” There were several

similar incidents.

In mid- to late-September, Goss and Vaughn contacted the

Steelworkers and Boilermakers unions. Following the unions’

advice, the pair contacted 80 to 90 percent of the Iuka plant

employees and collected names of those interested in forming a

union. On the morning of October 3, foreman Adcock asked Goss

whether the workers were starting a union, and he replied “probably

so.” Adcock then indicated that he would have to get Goss involved

in management so he could not be involved with the union.

He then pointed to a number of tools left out overnight and a

work truck with its windows down, and instructed Goss to fill out

disciplinary forms for Vaughn and a temporary maintenance employee,

Tim Barnes. Goss objected to filling out the disciplinary forms,

but eventually did as instructed. Goss told Vaughn and Barnes that

he was forced to write them up and not to worry about it. Adcock

then called Vaughn and Barnes to his office and issued their

disciplinary forms. By all accounts, this was the first time Goss

administered any type of punishment.

Later that same day, Goss was called into manager Jones’s

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office and terminated. Jones said it was not his decision and that

the company’s general counsel, Jack Melvin, told him to fire Goss.

Goss called Jones again the next day and tape recorded the

conversation, where Jones once again claimed he fired Goss at the

direction of Melvin. While admitting to these statements, Jones

claimed at the administrative hearing that Goss was fired for poor

job performance and for leaving work equipment out unsecured

overnight.

The following week Vaughn organized approximately 25

employees, including Goss, for a lunchtime union meeting at a

nearby diner. Vaughn drove a company truck along with two other

employees to the meeting. During the meeting, supervisor Sanders

walked into the diner and looked around without purchasing anything

while Jones waited for him in a truck outside. When Vaughn

returned from the meeting, Adcock called him into an office and

terminated him, supposedly for taking a company truck off the

premises. While Dynasteel’s handbook does provide that employees

are forbidden from taking company trucks off the premises without

permission, several employees testified that the rule was regularly

disregarded without consequence.

In mid-October, after their terminations, Goss and Vaughn

returned to the plant wearing union buttons and were greeted in a

reception area by secretary Glenda Basham. In a tape-recorded

conversation, Basham indicated that they would not be rehired while

wearing union buttons and reiterated that the company did not want

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a union. General Counsel Melvin then emerged and asked them to

leave the property. The NLRB did not fault Dynasteel for Basham’s

statements as she was not a supervisor.1

B. Failure to Hire or Consider for Hire in Millington

In early November, 2001, union organizer Barry Edwards saw a

Dynasteel advertisement seeking welders and fitters in a Memphis

newspaper. On November 5, Edwards called Dynasteel and discussed

the openings with receptionist Rhonda Duffin. He asked if he

needed to turn in an application and she told him a resumé would

suffice. Edwards then contacted two unemployed union members, Ron

Fuqua and Jeff Pearson, to apply for the openings with him. Each

of them had significant welding experience, ranging from five to

thirty-four years. Edwards dropped off the three resumés—with each

identifying himself as a union organizer—to Dynasteel’s president,

Harold Trusty, on November 5. Trusty indicated it was unnecessary

for them to fill out applications.2

Between November 5 and 16, Dynasteel hired six welders, but

none of the three union applicants were contacted. None of the six

hired welders had more than five years of experience, and two of

1

The ALJ did fault Dynasteel for Basham’s remarks because

Melvin, a supervisor, failed to disavow her statements. The NLRB

did not adopt the ALJ’s finding on that count, since it was not

clear that Melvin ever heard Basham’s statement.

2

Dynasteel uses the lack of applications as a justification

for failing to hire the union organizers. It also repeatedly

points out that none of the applicants passed a welding test,

although the company never attempted to administer welding tests

for any of them.

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them did not have applications in the record.

On December 5, union member Tony Churchill attempted to apply

for a position at the Memphis plant. He arrived wearing a union

shirt. General Counsel Melvin, without asking what position

Churchill was seeking, told him that the company was not hiring

during the month of December. He did not give Churchill the

opportunity to fill out an application or take a welding test. The

company hired three laborers later that month.

II. STANDARD OF REVIEW

Dynasteel’s arguments amount to little more than complaints

that its witnesses should have been credited over union witnesses.

We do not make a habit of second guessing such credibility

determinations. This Court will uphold the NLRB’s fact findings so

long as they are “supported by substantial evidence on the record

considered as a whole.” NLRB v. McCullough Envtl. Servs., Inc., 5

F.3d 923, 927 (5th Cir. 1993).

Where, as here, there are two materially conflicting versions

of the events requiring that one story be credited over the other,

the ALJ’s credibility determination must be deferred to unless it

(1) is unreasonable, (2) contradicts other findings, (3) is based

upon inadequate reasons or no reason, or (4) is not justified by

the ALJ. Asarco, Inc., v. NLRB, 86 F.3d 1401, 1406 (5th Cir.

1996).

III. SUBSTANTIAL EVIDENCE SUPPORTS ALL THE NLRB’S FINDINGS

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NLRA Section 8(a)(1) makes it unlawful to “interfere with,

restrain, or coerce employees in the exercise of rights” to

collective organization. 29 U.S.C. § 158(a)(1). Section 8(a)(3)

makes it unlawful for employers, “in regard to hire or tenure of

employment . . . to encourage or discourage membership in any labor

organization.” Id. at § 158(a)(3). The NLRB found numerous

violations of these sections.

The violations are based on four findings that Dynasteel now

disputes: (1) Goss was not a supervisor, and therefore was an

employee covered by the NLRA, (2) Goss and Vaughn were terminated

due to their union activities, (3) Edwards, Pearson, Fuqua and

Churchill were not hired or considered for hire due to their union

activities, and (4) Dynasteel threatened, interrogated and spied on

employees to deter the formation of a union. Generally, Dynasteel

argues that its witnesses were more believable and should have been

credited over union witnesses, but that is precisely the type of

judgment we leave to the ALJ. Substantial evidence supports each

of the disputed findings.

A. Goss was not a Supervisor

The NLRA generally only protects employees, thereby excluding

supervisors from its protections. Id. at §§ 151, 152(3). The NLRA

defines a supervisor as:

any individual having authority, in the interest of the

employer, to hire, transfer, suspend, lay off, recall,

promote, discharge, assign, reward or discipline other

employees, or responsibility to direct them, or to adjust

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their grievances, or effectively to recommend such

action, if . . . such authority is not of a merely

routine or clerical nature, but requires the use of

independent judgment.

Id. at § 152(11).

The burden of demonstrating Goss’s supervisory status rests

with Dynasteel as the party asserting it. “It falls within the

Board’s discretion to determine, within reason, what scope of

discretion qualifies.” NLRB v. Kent. River Cmty. Care, Inc., 532

U.S. 706, 713 (2001). Dynasteel argues that Goss was a supervisor

on three bases: Goss (1) disciplined Vaughn and Barnes on one

occasion, (2) effectively recommended Vaughn’s hire, and (3)

assigned work and directed employees.

The NLRB’s finding that Goss was not a supervisor is supported

by substantial evidence and was within its scope of discretion.

First, it is uncontested that the only time Goss disciplined

anybody was hours before he was fired, when he was instructed to

write disciplinary memos for employees Vaughn and Barnes. The ALJ

credited Goss’s and Vaughn’s testimony that this was a subterfuge

to make it appear that Goss was a supervisor, and that he was

unlawfully forced to write the disciplinary memos.

As to the second point, even if Goss recommended Vaughn for

hire—an issue that is refuted by Goss—there is nevertheless no

evidence in the record that his recommendation was of any decisive

import.

Third, Barnes testified with regard to Goss that, “I guess he

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was supervisor, but I don’t know.” Goss told him to do “little-

bitty particular things” like sweeping the floor and making welding

leads. Such instructions should be considered “routine or clerical

in nature” under the NLRA, and it is within the Board’s discretion

to decide whether those activities made Goss a supervisor. Kent.

River Cmty. Care, Inc., 532 U.S. at 713.

Dynasteel’s repeated reliance on the fact that Goss was “the

highest paid employee in his department” is almost comical when

reminded that the department had only two permanent employees, Goss

and Vaughn. Goss had been employed by Dynasteel approximately six

months longer than Vaughn, thereby explaining his marginal pay

advantage.

We conclude that the NLRB was well within its discretion when

it found on these facts that Goss was not a supervisor.

B. Goss and Vaughn Were Discharged due to Union Animus

The NLRB found that Goss and Vaughn were discharged in

retaliation for attempting to start a union. The ALJ credited

Goss’s and Vaughn’s testimony, finding it to be “clear, detailed,

and specific” and supported by the evidence. Specifically, Goss

was fired the day he filled out his first ever disciplinary form

and was told repeatedly that he would be fired if he started a

union. Vaughn was fired the day he was seen organizing a union

meeting. Their testimony and the remarkable timing of their

terminations provide substantial evidence that they were fired due

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to union animus.

Dynasteel presented witnesses that claimed Goss was fired for

leaving tools unsecured and that Vaughn was fired for taking a

company truck to a lunch meeting. But the existence of divergent

testimony is not enough to make the administrative findings

unreasonable or unsupported. Once again, we are faced with

contradictory testimony, and we defer to the NLRB’s findings so

long as they are reasonable and supported. There is no requirement

that they be undisputed. The discredited and highly suspect3

testimony of supervisors does not compel a finding that Goss and

Vaughn would have been fired absent the protected activity.

C. Applicants Not Hired or Considered for Hire due to Union Animus

There was substantial evidence to support the finding that

applicants Edwards, Pearson, Fuqua and Churchill were not hired or

considered for hire due to union animus. On Friday, November 2,

Dynasteel ran an advertisement seeking welders and fitters for its

Memphis plant. The following Monday, November 5, union

representative Edwards submitted resumés for himself, Pearson and

3

Dynasteel’s explanation of Sanders’s activity when he spied

on Vaughn in the diner is dubious at best. At one point, it

claims that Sanders went inside the diner to assess who took the

company truck, despite the fact that upon seeing twenty-five

employees in the diner Sanders never asked who took it. (Blue

Br. at 55). At another point, Sanders claims that he was simply

trying to get a plate of food, making it peculiar that he left so

quickly without actually getting food. Id. In either case, this

testimony was discredited by the ALJ, and we do not disturb that

finding.

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Fuqua, with each identifying himself as a union member. Two

welders were hired that very day, one the next, and one each on

Nov. 11th, 13th, 14th, and 16th. The most experienced person hired

had five years of welding experience, the same amount as the least

experienced of the three union applicants. This provided

substantial evidence that (1) the employer was hiring, (2) the

applicants were adequately qualified, and (3) union animus

contributed to the decision not to hire the applicants.

Dynasteel denies that its decision was based on union animus,

and claims that the applicants were not hired because they did not

complete an application or welding test.4 But Edwards testified

that both a receptionist and Dynasteel’s president informed him

that a resumé was all that was needed to apply. While Edwards’s

testimony is enough to constitute substantial evidence, this is

further supported by the fact that two hired applicants had no

application on file.

As for Churchill, who attempted to apply on December 5 wearing

a union t-shirt, General Counsel Melvin told him that the company

4

Dynasteel also contends that it hires using a reverse

chronological method, giving first consideration to those

candidates that apply latest (closer to the time of hire).

Dynasteel’s account of its hiring policy is suspect. Dynasteel

argues that it hired the most recent applicant every time a job

position opened up, and during the several days that the union

applicants were the most recent applicants, no job positions were

open. But once somebody else applied, on November 11, there was

suddenly a job opening and that person became the most recent

applicant. It is a whimsical policy that could insulate any

company’s hiring choices, but the ALJ was not obligated to

believe such a far-fetched account.

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was not hiring during December and would not accept any application

materials from him. Melvin did not ask Churchill about his

experience or what position he was applying for. Dynasteel hired

three laborers in the weeks after Churchill attempted to apply.

Dynasteel argues that its activities were consistent with a

general plan not to hire welders or fitters during December, and

points out that it did not hire any welders after Churchill

attempted to apply. But its theory is drastically undercut by the

fact that Melvin did not ask what type of job Churchill was

applying for. For all Melvin knew, Churchill wanted to be a

laborer, and Dynasteel hired three laborers in subsequent weeks.

The best account of what happened, and an account that is at least

supported by substantial evidence, is that Churchill was turned

away because of his union affiliation as signified by his shirt.5

D. Illegal Threats, Surveillance and Interrogations

Finally, the NLRB adopted numerous findings that Dynasteel

threatened, interrogated and spied on its employees attempting to

form a union. The numerous threats include: (1) Adcock telling

employees that Dynasteel would shut down before it let a union in,

(2) Jones telling Goss that “there wouldn’t be no Union come in

5

At oral argument, Dynasteel’s counsel attempted to undercut

the ALJ’s reasoning that Churchill was turned away because he was

wearing a union t-shirt. Counsel argued that, “if I were wearing

a Drew Brees jersey, you wouldn’t assume that I’m Drew Brees.”

But, as opposing counsel pointed out, we would probably assume he

was a Drew Brees fan, much like Melvin would have assumed that

Churchill was a union supporter.

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here,” and (3) Sanders telling Goss he would be the first one fired

if a union came in. Interrogations include (1) Adcock asking Goss

if they were starting a union and, post-termination, (2) Jones

asking Goss “why do they want a union?” The only incident of

surveillance occurred when Jones and Sanders arrived at a company

diner during a union meeting and Sanders stepped in, looked around,

and left just minutes before Vaughn was fired.

Dynasteel’s only complaint with regard to these findings is

that the ALJ credited the wrong witnesses. Once again, that is a

judgment we generally leave to the ALJ and NLRB, and will defer to

their findings so long as they are reasonable and supported by

substantial evidence. Dynasteel never shows how the findings were

unreasonable or unsupported, so we defer to the NLRB on the matter.

IV. CONCLUSION

Because all the NLRB’s findings are supported by substantial

evidence, Dynasteel’s petition for review is DENIED, and the NLRB’s

request to enforce its order is GRANTED in full.

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