# National Labor Relations Board v. Savair Manufacturing Co.

> Supreme Court of the United States · December 17, 1973 · 414 U.S. 270

URL: https://www.frixlaw.com/law-library/cases/9425481

## Case

- **Full name:** National Labor Relations Board v. Savair Manufacturing Co.
- **Court:** Supreme Court of the United States
- **Decided:** December 17, 1973
- **Citations:** 414 U.S. 270; 84 L.R.R.M. (BNA) 2929; 94 S. Ct. 495; 38 L. Ed. 2d 495; 1973 U.S. LEXIS 184
- **Precedential status:** Published
- **Opinion:** Dissent by White
- **Judges:** Douglas, Burger, Stewart, Marshall, Powell, Rehnquist, White, Brennan, Blacicmun
- **Cited by:** 164 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9425481

## How later opinions describe it (automated extraction)

- noting that although an employee may not be "legally bound to vote for the union and has not promised to do so in any formal sense" some "would feel obliged " to cast a union vote after having signed a union recognition slip

## Opinion text

Me. Justice White,
with whom Mr. Justice Brennan and Mr. Justice Blackmun join, dissenting.
The report of the Hearing Officer, filed in response to the Company’s objections to the election, reveals that prior to the filing of the representation petition, a union organizer had told employees that, if the Union won the election, they would be subject to an initiation fee or “fine” if they did not sign an authorization card. The Union was then engaged in securing the necessary 30% showing of union support which would entitle it to hold an election under the Labor Board’s rules. 29 CFB, §§ 101.17, 101.18 (1973). The officer concluded that there was “insufficient evidence . . . that a threat of a 'fine’ occurred either before or after the filing date of the petition.” In any event, he also concluded that conduct occurring before the filing of an election petition was not ground for setting aside the election since “[w]hether or not a sufficient valid showing of interest was obtained, constitutes a matter for administrative determination.” Cf. Goodyear Tire & Rubber Co., 138 N. L. R. B. 453 (1962). 1
After the representation petition was filed and the election campaign proper commenced, the Union’s Sec *282 retary-Treasurer, Alfred Smith, addressed a group of about 20 employees at an organization meeting. In response to a question about the initiation fee, Smith indicated that there was “a small fee” which would be waived for all employees who signed cards prior to the election. 2 The fee was, in fact, $10. Qualification for fee waiver was obtained by signing membership cards, but the testimony indicated that no one incurred any obligation to the Union until and unless the Union became the bargaining agent and a collective contract was signed. The Hearing Officer found “no evidence, nor any contention, that the Union misrepresented to employees that they would have to become members immediately upon the certification of the union as bargaining agent.”
On this record, the Board, obviously relying on its decision in DIT-MCO, Inc., 163 N. L. R. B. 1019 (1967), enforced, 428 F. 2d 775 (CA8 1970), which overruled its prior decision in Lobue Bros., 109 N. L. R. B. 1182 (1954), ordered the employer to bargain with the Union. 194 N. L. R. B. 298 (1971). The Sixth Circuit denied enforcement of the order, 470 F. 2d 305 (1972), and the majority now affirms that judgment.
Because in my view the Labor Board has “a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees,” NLRB v. Tower Co., 329 U. S. 324, 330 (1946), and because I am unpersuaded that the waiver of initiation fees in this case is so clearly coercive within § 7 of the National Labor Relations Act that the Board has abused its discretion in finding otherwise, I respectfully dissent.
*283 I
It is well established that an “unconditional” offer to waive initiation fees, where the waiver offer is left open for some period of time after the election, is not coercive and does not constitute an unfair labor practice. The Sixth Circuit itself has so held, NLRB v. Gafner Automotive & Machine, Inc., 400 F. 2d 10 (1968), and other courts of appeals have reached the same result. Amalgamated Clothing Workers v. NLRB, 345 F. 2d 264 (CA2 1965); NLRB v. Crest Leather Mfg. Corp., 414 F. 2d 421 (CA5 1969). The existence of the initiation fee is created by the union 'and represents .a self-imposed barrier to entry. 3 There is no evidence that the fee is normally imposed for the sole purpose of removing it during a labor campaign. A different case might be put if the union purported to remove a nonexistent fee or artificially inflated the fee so as to misrepresent the benefit tendered by its removal. See NLRB v. Corbea, Perez & Morell, 328 F. 2d 679 (CA1 1964). Similarly, it is established that the union can promise employees to obtain wage increases or other benefits if it is elected as a bargaining representative. Wilson Athletic Goods Mjg. Co. v. NLRB, 164 F. 2d 637 (CA7 1947).
It must be obvious that these waivers of fees are a form of economic inducement, as the opinion for the Court employs that term. Undoubtedly an offer to reduce the cost of joining the union makes the union a *284 more attractive possibility and may influence an employee to vote for the union, though one would assume, in view of the other costs and benefits at stake, that this consideration will be marginal. Similarly, if the union represents to the employees that it will attempt to secure higher wages, an employee’s calculations of costs and benefits will be altered, but in that instance the union is merely stating the obvious; indeed, the promise of higher wages is the primary rationale for the existence of the union. In any event, these forms of inducement are valid.
In the instant case, an offer which by its terms expires with the conclusion of the election is also a form of economic inducement. But insofar as the offer might affect the calculation of costs and benefits of joining the union, its effect is the same as an offer which does not expire until some time after the election. The inability to distinguish between these two situations, at least where small fees are involved and where the sole source of concern is pure financial inducement, led the Board to conclude in DIT-MCO that “an employee who did not want the union to represent him would hardly be likely to vote for the union just because there would be no initial cost involved in obtaining membership.” 163 N. L. R. B., at 1022.
The majority places heavy reliance on the supposed analogy between the waiver of fees in this case and an actual increase in benefits made by an employer during the course of an election campaign. NLRB v. Exchange Parts Co., 375 U. S. 405 (1964). There the employer increased vacation-pay benefits during the course of the campaign. The Court agreed with the Board that this was coercive activity on the part of the employer, and accordingly reversed the Court of Appeals, and ordered enforcement of the Board’s order. It was stated that *285 "[t]he danger inherent in well-timed increases in benefits is the suggestion of a fist inside the velvet glove.” Id., at 409 . A number of important differences exist between that case and the instant one. First, the employer actually gave his employees substantial increased benefits, whereas here the benefit is only contingent and small; the union glove is not very velvet. Secondly, in the union context, the fist is missing. When the employer increased benefits, the threat was made “that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged.” Ibid. The Union, on the other hand, since it was not the representative of the employees, and would not be if it were unsuccessful in the election, could not make the same threat by offering a benefit which it would take away if it lost the election. A union can only make its own victory more desirable in the minds of the employees. 4
II
If pure economic inducement in the form of lowering anticipated costs of joining the union is not to be con *286 sidered coercive, one must focus on the special dangers, if any, presented by the conditional offer, an analysis not undertaken by the majority. It has been proposed that the conditional offer is specially to be proscribed because of the interjection of a new consideration into the voting choice of an employee: how probable it is that the union will win or lose the election. NLRB v. Gafner Automotive & Machine, Inc., 400 F. 2d, at 13 (Phillips, J., concurring); Amalgamated Clothing Workers v. NLRB, 345 F. 2d, at 268 (Friendly, J., concurring). The argument might be that an employee who estimates that the costs of joining the union exceed the benefits, even taking into account the reduced initiation fees available by signing a card, will still sign the card, as a hedge, because of his prediction that the union will win the election. 5 A statement of the theory carries with it its own disproof. The special inducement is to sign the card, not to vote for the union. The majority decision collapses these two choices into one, and is thus untenable. The majority assumes, contrary to fact, that the employee has joined the Union by signing the authorization card. This is only true, however, if the Union wins the election and signs a collective contract, and the employee can still seek to prevent that outcome by cast *287 ing his vote against the Union in a secret ballot. The testimony was clear that if the Union loses the election, the employee who signs the card incurs no obligation to the Union. The expressed preference in the National Labor Relations Act for secret ballot elections assumes that voters may act differently in private than in public, and ordinarily guarantees to employees the ability to make a secret choice. It is, therefore, important to highlight the fact that the Board in DIT-MCO assumed, arguendo, “that employees who sign cards when offered a waiver of initiation fees do so solely because no cost is thus involved; that they in fact do not at that point really want the union to be their bargaining representative.” 163 N. L. R. B., at 1021.
There is no need to consider here, as does the majority, whether the Union could achieve recognition on the basis of authorization cards secured, in part, by an offer of fee waiver. Of course, a card majority cannot serve as a basis for a § 8 (a) (5) bargaining order under NLRB v. Gissel Packing Co., 395 U. S. 575, 614-616 (1969), unless the employer has committed serious unfair labor practices. It may be that even given a serious unfair labor practice on the part of the employer, these cards could not serve as a basis for recognition. In this case, however, the Board’s bargaining order was based on the vote of a secret ballot election, and the Court must supply the connective between the decision to sign a card and the decision to vote for the Union. 6 *288 This connective can only be supplied by some rather speculative counter-rational psychological assumptions, i. e., that a person who signs the card will vote for the union. 7 The Board assumes that such is not the case, and I am not prepared to upset the Board’s judgment on this matter. 8 The majority opinion stresses the fact that the margin of Union victory was only two *289 votes, and thus suggests that the “psychological connective” may explain the outcome indicating that it “may well have had a decisive impact” (emphasis added). But there is no evidence to this effect, and definitions of unfair practices which become a function of the outcome of an election are subject to severe problems of administration. The Board, in my judgment, is entitled to regulate elections on standard theories of coercion.
Ill
Since the case for coercion arising out of the conditional offer is speculative, and since the alteration of the calculus of costs and benefits is marginal where a small fee is involved, the issue here resolves into the proper allocation of institutional responsibility between an administrative agency and a reviewing court. The Board, upon reflection and study, has concluded that the conditional offer is not coercive within the meaning of § 7. This represented a basic change in policy but “one of the signal attributes of the administrative process is flexibility in reconsidering and reforming of policy.” City of Chicago v. FPC, 128 U. S. App. D. C. 107, 115, 385 F. 2d 629 , 637 (1967). Such revisions are especially likely in the regulation of labor elections, due to the substantial problems in deciding what is likely to interfere with employee free choice. See Bok, The Regulation of Campaign Tactics in Representation Elections under the National Labor Relations Act, 78 Harv. L. Rev. 38 , 44-45 (1964).
While the invocation of agency expertise is not talis-manic, see Radio Corp. v. United States, 341 U. S. 412, 421 (1951) (Frankfurter, J., dubitante), and while the decision of the Board must be supported by substantial evidence, Universal Camera Corp. v. NLRB, 340 U. S. 474 (1951), one cannot ask the agency to do the impossible. When choosing between alternative contentions *290 of coercion, the agency must make judgments based on available knowledge. This is a difficult task and accounts in part for the decision of Congress to entrust the Board “with a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees.” NLRB v. Tower Co., 329 U. S., at 330 . Recognition of this discretion has been a recurrent theme in this Court's review of Board decisions. NLRB v. Waterman S. S. Co., 309 U. S. 206, 226 (1940); NLRB v. Wyman-Gordon Co., 394 U. S. 759, 767 (1969). In other contexts, the Board has had to perform the “far more delicate task ... of weighing the interests of employees in concerted activity against the interest of the employer in operating his business in a particular manner . . . .” NLRB v. Erie Resistor Corp., 373 U. S. 221, 229 (1963); American Ship Bldg. Co. v. NLRB, 380 U. S. 300, 312 (1965). There is certainly a conflicting interest between the union's right to make itself attractive to employees without misrepresentation and the employee's unfettered choice to vote for or against the union. I think it is rational for the Board to conclude on the basis of the facts presented that the decision of the Union to waive small fees was not coercive within the meaning of § 7. I, therefore, respectfully dissent.
The opinion for the Court places no special emphasis on the fact that the waiver of initiation fees may have been referred to as a “fine.” Since the Hearing Officer expressly found that no such representation was made, the matter deserves no further attention.
Mr. Bridgeman, an employee who attended the meeting, testified that his brother asked Smith if there was a fee for joining the union. Mr. Smith’s answer was “[t]here would be a small fee.” App. 28.
The role of the initiation fee has been described by one writer as follows: “Initiation fees serve several sorts of union purposes. First, of course, they are a source of revenue, which is occasionally expendable however during an organization drive when the union is anxious to induce workers to join the union. Second, the initiation fee represents for the older member a kind of equity payment by the new member to compensate, at least partially, for the efforts that others have put into building the union. . . .” J. Barbash, The Practice of Unionism 79 (1956).
The Court cannot ignore the fact, as well, that § 1 of the National Labor Relations Act declared the congressional policy of “encouraging the practice and procedure of collective bargaining.” 29 U. S. C. § 151 . The existence of unions is an inescapable corollary of this preference. To the extent that this Court prohibits the union from promising a fairer deal for unionized employees by describing the benefits to be obtained by unionization, this policy is seriously eroded. This Court has often underscored this preference in the Act. See, e. g., Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 182 (1941); NLRB v. Allis-Chalmers Mfg. Co., 388 U. S. 175, 180 (1967). This preference is only one of opportunity and the free choice of the employee must be protected, but restrictions on the communications of the union as to potential benefits may unduly prevent the intelligent exercise of such choice. The employer may garner loyalty through his actions and record of past performance for his own employees; the union can only sell employees the future.
This possibility of hedging is to some extent borne out by the record. Although the Court cannot know what the correlation was between signed cards and votes for the Union, we do know that not everyone who signed cards voted for the Union. Twenty-eight persons plus signed cards (App. 75) and only 22 voted for the Union. Moreover, there is testimony that some employees discussed the hedge. “Of course some of us fellows did say to other fellows that were really against it [the Union] and have always been against it you better sign your ticket and turn it in because if you didn’t if it does get voted in, if the majority of the men vote the union in, at least you have to pay your dues which is very natural but you wouldn't have to pay no initiation fee." App. 28-29. (Emphasis added.)
As to the possible effect of the fee waiver offer on securing the 30% showing necessary for holding an election, whether or not there is a valid showing is a matter for administrative determination not subject to litigation by the parties. Goodyear Tire & Rubber Co., 138 N. L. R. B. 453 (1962). Courts of appeals have uniformly so held. See NLRB v. J. I. Case Co., 201 F. 2d 597 (CA9 1953); NLRB v. White Constr. & Eng. Co., 204 F. 2d 950, 953 (CA5 1953); Kearney & Trecker Corp. v. NLRB, 209 F. 2d 782, 787-788 (CA7 *288 1953); NLRB v. National Truck Rental Co., 99 U. S. App. D. C. 259, 261-262, 239 F. 2d 422, 424-425 (1956) (Burger, J.), cert. denied, 352 U. S. 1016 (1957); NLRB v. Louisville Chair Co., 385 F. 2d 922, 926-927 (CA6 1967); Intertype Co. v. NLRB, 401 F. 2d 41, 43 (CA4 1968), cert. denied, 393 U. S. 1049 (1969).
It is certainly arguable that such a connection can be made when the union pays a person cash to vote for or assist the union. The benefit of the union has been tendered and the employee may well feel he has incurred a moral obligation to vote for the union. See, e. g., Wagner Electric Corp., 167 N. L. R. B. 532, 533 (1967) (grant of life insurance policy to those who signed with union before representation election “subjects the donees to a constraint to vote for the donor union”). See also Collins & Aikman Corp. v. NLRB, 383 F. 2d 722 (CA4 1967) (payment of $7 to employee to be observer at election); NLRB v. Commercial Letter, Inc., 455 F. 2d 109 (CA8 1972) (excessive payments to union members to attend meetings). In Wagner, supra, the Board distinguished the initiation fee decision in DIT-MCO, Inc., 163 N. L. R. B. 1019 (1967), on the ground that there was no immediate improvement in an employee's economic situation when fees were waived.
The majority in its conclusion seems to articulate still another theory of coercion: “The failure to sign a recognition slip may well seem ominous to nonunionists who fear that if they do not sign they will face a wrathful union regime, should the union win.” This theory, of course, assumes a card signer will vote for the union. Moreover, this problem is fundamental in labor elections, at the outset, when cards are collected for the purpose of holding an election pursuant to the necessary showing of support, and, at the conclusion, if the union wins, when those who oppose the union must still decide to join the union or face the union’s wrath. One could easily argue that at least an equal deterrent to signing the card is the wrathful employer if the union loses the election.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9425481. Public record. Not legal advice.