Petition — National Labor Relations Board v. Electro Vector, Inc.

Sep:eme Court, U. &

FILED

76-1561 | way 9 un

No. MICHAEL RODAK, N.,

Yn the Supreme Court of the Wnited States

Ocroser TERM, 1976

Nationat LABOR RELATIONS BoarD, PETITIONER

v.

Exectro Vector, INC.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

WADE H. McCREE, IR.

Solicitor General,

Department of Juatice,

Washington, D.C. 20580.

JOHN s. IRVING,

General Counsel,

JOHN E. HIGCINS, IR.

Deputy General Counsel,

CARL L. TAYLOR,

Associate General Counael,

NORTON JZ. COME,

Deputy Associate General Counact,

LINDA SHER,

Assistant General Counsel,

National Labor Relations Board,

Washington, D.C. 20570.

Page

ee 1

GD — — 1

. 2

. — —ò1¹ 2

1 —— — — 4

Reasons for granting the writ 8

GD —— 18

55 la

Fe Oe 7A

88 ———ñ—ñ— 84

1881 —— 264

CITATIONS

Cases :

American Fire Apparatus Co. v. National

Labor Relations Board, 380 F. 2d 1005 — 14

Geauga Plastics Co. v. National Labor Re-

lations Board, 404 2d 1382 ~~~ a ©

R Manufacturing Co., 169 NLRB 57— 17

Marshall Field d Co. v. National Labor

Relations Board, 318 U.S. 253— 9, 12, 14

National Labor Relations Board v. Cast-a-

Stone Products Co., 479 F. 2d 396 14

National Labor Relations Board v. Cheney

California Lumber Co., 327 U.S 385. 8, 9, 10, 12

National Labor Relations Board v. District

50, United Mine Workers, 355 U.S. 453. 9

National Labor Relations Board v. Duncan

Foundry and Machine Works, Inc., 435

2 ͤ³—Uü—Ui!1—— 17

National Labor Relations Board v. Erie

Resistor Corp., 373 U.S. 221 15

(1)

234-3876 —77—_-11

United States v. L. A. Tucker Truck Lines,

Inc., 344 U.S. 33.

1

Cases Continued

National Labor Relations Board v. Frick page

OU GS Ee 17

National Labor Relations Board v. Great

Dane Trailers, Inc., 388 U.S. 26-.------ 6, 14

National Labor Relations Board v Inter-

national Union of Operating Engineers

Local 66, A B & C, 357 F. 2d 841_----. 14

National Labor Relations Board v. Maine

Sugar Industries, Inc., 425 F. 2d 942... 14

National Labor Relations Board v. Mid-

western Manufacturing Co., 388 F. 2d

1 citi etiiitiemepiitatiadtiis 14

National Labor Relations Board v. Nello

Pistoresi d Son, Inc., 500 F. 2d 399. 8,16

National Labor Relations Board v. Ochoa

Fertilizer Corp., 368 U.S. 318_----- 8, 9, 10, 13

National Labor Relations Board v. Seven-

Up Bottling Co., 344 U.S. 344 9, 12

Nello Pistoresi & Son, Inc., 203 NLRB

1K———— a A a 16

Niz v. National Labor Relations Board, 418

i, § eee 14

Puerto Rico Drydock & Marine Terminals,

Ine. v. National Labor Relations Board,

284 P. 2d 212............ 2 14

Red Cross Drug Co. v. National Labor

Relations Board, 419 F. 2d 1245. 14

Sullivan Dry Dock d Repair Corp., 67

NLRB 627— 8 17

Tex Tan Welhausen Co. v. National Labor

Relations Board, 419 F. 2d 1265, re-

manded on other grounds, 397 U.S. 819 — 17

Statutes :

National Labor Relations Act, as amended

(61 Stat. 136, 73 Stat. 519, 29 U.S.C. 151,

et seq.) :

Section 7..-------- |

Section 8(a)(1)---------------- 2, 6, 16, 18

Section 8(a)(3)-------------- 2, 3, 6, 15, 17

Section 8(a) (5 2

Section 10e) 3, 9, 10, 11, 13, 14, 18

Gn the Supreme Court of the United States

Ocroser Term, 1976

No.

National Laon RELATIONS Board, PETITIONER

v.

Exezecrro Vector, Inc.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

The Solicitor General, on behalf of the National

Labor Relations Board, petitions for a writ of cer-

tiorari to review the judgment of the United States

Court of Appeals for the Ninth Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra)

is reported at 539 F. 2d 35. The decision and order

of the National Labor Relations Board (App. C,

infra) are reported at 220 NLRB 445.

The opinion of the court of appeals was entered on

August 5, 1976, and the Board’s timely petition for

rehearing and suggestion for rehearing en banc (App.

B, infra) was denied on January 17, 1977. On April 6,

(1)

1977, Mr. Justice Rehnquist extended the time for

filing a petition for a writ of certiorari to and in-

cluding May 9, 1977. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254(1).

1. Whether, in view of the employer's tailure to

raise the issue before the Board, Section 10(e) of the

National Labor Relations Act foreclosed the court of

appeals from considering whether a cash bonus for

work previously performed, and paid by the employer

to employees who were working on certain dates but

withheld from employees who were striking on those

dates, was a term or condition of employment within

the meaning of Section 8(a)(3) of the Act.

2. Whether, if the court of appeals was not fore-

closed, it erred in concluding that the bonus was not a

term or condition of employment within the mean-

ing of Section 8(a)(3) of the Act merely because it

was discretionary in amount and of recent origin,

and in failing to consider the Board’s alternative find-

ing that the employer’s conduct also violated Section

8(a)(1) of the Act.

The relevant provisions of the National Labor

Relations Act, as amended (61 Stat. 136, 73 Stat. 519,

29 U.S.C. 151, et seq.), are as follows:

Section 7. Employees shall have the right to

self-organization, to form, join, or assist labor

organizations, to bargain collectively through

representatives of their own choosing, and to

membership in any labor organization * * *.

Section 10(e). The Board shall have power

petition any court of appeals of the United

within any cireuit * * * i

(“the Union”) (App. C, infra, 16a; Tr. 30.)* On

May 2, 1974, during negotiations for a new contract,

the Union, in support of its bargaining demands,

called a strike which was still continuing at the time

of the Board hearing in March 1975 (App. C, infra,

16a; Tr. 7, 11-12, 14-15). Initially, all of the unit em-

ployees participated in the strike, but approximately

one-third returned to work two or three weeks after

the strike started and more employees returned there-

after (App. C, infra, 17a; Tr. 20-21, 39-40).

The Company's fiscal year is October 1 through

September 30. On November 27, 1974, the Company

Tr.“ references are to the stenographic transcript of the hear-

ing before the Administrative Law Judge. “GCX” references are

to the exhibits introduced at the hearing by the Board’s General

Counsel. — of

5

paid a bonus, in varying amounts, to 101 of its em-

ployees who had worked for some period during the

Company’s fiseal year and who also worked on both

September 30 and November 27, 1974 (App. C, infra,

17a; Tr. 17, 23-24, 29, GCX 5).* A majority of the em-

ployees received less than $150 (the base figure) because

of absences from the payroll during the fiscal year. In-

cluded in this group were employees who had

abandoned the strike prior to September 30 and

striker replacements (App. C, infra, 17a; Tr. 21, 24,

30-31, 34-35). A few employees, whose performance

Vice-President-General Manager Del Valle con-

sidered exceptional, received more than $150 (App. C,

infra, 174-184; Tr. 26-27, 29).

None of the approximately 33 employees who had

worked for some period during the 1974 fiscal year

but who were still striking on September 30 or No-

vember 27 was paid the bonus (App. C, infra, 94, 174;

Tr. 7-8, 10-11, 18; GCX 3). Approximately nine

employees who were working at the end of the fiscal

year, September 30, but were not working on the

day the bonus was actually paid, November 27, also

did not receive the bonus (App. A, infra, 2a; Tr. 23).

* Year-end cash bonuses were instituted by the Company in 1973,

in lieu of its former practice of distributing hams and turkeys

(App. C. infra, 18a; Tr. 18, 29-30). The Company's reasons for

instituting the bonus were to mitigate the economic “tough time”

the employees were suffering in 1973 “due to the inflation,” and

“to motivate [the employees] to better attendance” (App. C, infra,

18a; Tr. 28-29, 36-37). The Company utilized the same eligibility

requirement for payment of the 1974 bonus as it did for payment

of the 1973 bonus (App. C, infra, 18a; Tr. 17, 23-24, 29-30).

234- 376—77— 2

After charges had been filed by the Union, and a

hearing held, the Administrative Law Judge ruled

that the Company had discriminated against striking

employees in violation of Section 8(a)(3) and (1)

of the Act by paying a year-end bonus, based on time

previously worked, to nonstriking employees, strik-

ers who had returned to work, and replacements for

strikers, while denying the bonus to employees still on

strike (App. C, infra, 184-214). The Company filed

two general exceptions to the Judge’s decision, broadly

challenging the statement and conclusion of law that

its exclusion of strikers from bonus distributions

violated Section 8(a) (3) and (1) of the Act (App.

D, infra, 264-274). The Company also filed a support-

ing brief, contending that it had not discriminated

against strikers and that any deni was

supported by substantial busin The

Company at no time contested that the bonuses were

“a term or condition of employment.”

The Board, applying the principles set forth in

National Labor Relations Board v. Great Dane Trail-

ers, Inc., 388 U.S. 26, affirmed the decision of the Ad-

ministrative Law Judge (App. C. infra, 8a—14a). The

Board reasoned that, since “[dJepriving striking em-

ployees of the benefits which they have previously

qualified for because they are on strike will have the

natural tendency of coercing employees to give up the

strike” (App. C, infra, ga), Great Dane required the

employer to come forward with a legitimate business

7

justification for disqualification of the strikers. The

Board coneluded that, while it is “legitimate to reduce

the bonus by the length of any employee’s absence,

even if that absence is due to a strike,“ the Company

“offers no justification, nor do we preceive any, for its

requirement that the strikers be actually on duty on

the two eligibility dates” (App. C, infra, 9a—10a). The

Board ordered the Company, inter alia, to restore the

strikers to eligibility for the 1974 bonus and to pay

them their share “reduced pro rata for their absences

from the job during the pertinent fiscal year whether

because on strike or for any other reason” (App. C,

infra, 10a—lla, 224, 234).

The court of appeals denied enforcement of the

Board’s order, finding it to be “not supported by sub-

stantial evidence” (App. A, infra, 14). In the court’s

view, the Board’s ultimate finding of discrimination

implicitly rested on a threshold finding that the Com-

pany’s “bonus practice involved a term or condition

of employment” (App. A, infra, 3a). Although admit-

ting that the parties had not raised the issue (App. A,

infra, 3a), the court held that it was not bound to ac-

cept this finding unless it was “supported by substantial

evidence in the record taken as a whole” (App. A, infra,

4a). Making its own independent examination of the

record, the court concluded that the short history of the

»The Board noted (App. C, infra, 10a) that the Administra-

tive Law Judge’s proposed remedy, which it adopted, called for

such a reduction.

bonus program, combined with its informal nature and

the discretionary variance in the amounts of the individ-

ual bonuses, indicated that it “was a gift rather than

a wage” and therefore not a “term or condition of em-

ployment” (App. A, infra, 44-64).

The Board filed a petition for rehearing and sug-

gestion for rehearing en banc, contending that the

court’s consideration of an issue not previously raised

by the Company before the Board was contrary to

Section 10(e) of the Act and this Court’s decisions in

National Labor Relations Board v. Cheney California

Lumber Co., 327 U.S. 385, and National Labor Rela-

tions Board v. Ochoa Fertilizer Corp., 368 U.S. 318.

The court denied the Board’s petition for rehearing

and rejected the suggestion for rehearing en banc

(App. B, infra, 74).

REASONS FOR GRANTING THE WRIT

1, The decision of the court of appeals, overturning

the Board’s finding of an unfair labor practice on a

ground not raised before the Board, is inconsistent

»The court applied the test enunciated in an earlier decision,

National Labor Relations Board v. Nello Pistoresi d Son, Inc.,

500 F. 2d 399, 400 (C.A. 9), ., “Bonuses * * * are considered

wages if they are of such a fixed nature and have been paid over

a sufficient length of time to have become a reasonable expectation

of the employees and, therefore, a part of their anticipated

remuneration” (App. A, infra, 4a).

The court stated: “The full Court was advised of the Sugges-

tion for Rehearing en banc, An active judge of the Court sug-

gested that the opinion may be in conflict with Supreme Court

cases cited by the Government, but later, after considering the

re 1 3 Board's Petition, withdrew his objection“ (App. B,

infra, Ta).

with the plain language of Section 10(e) of the Na-

tional Labor Relations Act and with numerous deci-

sions of this Court. National Labor Relations Board

v. Cheney California Lumber Co., 327 U.S. 385; Va-

tional Labor Relations Board v. Ochoa Fertilizer

Corp., 368 U.S. 318. See also Marshall Field & Co. v.

National Labor Relations Board, 318 U.S. 253; Na-

tional Labor Relations Board v. Seven-Up Bottling

Co., 344 U.S. 344; National Labor Relations Board v.

District 50, United Mine Workers, 355 U.S. 453. Proper

interpretation of Section 10(e) is of great importance

to the administration of the Act, since that Section

enables the Board to act expeditiously on uncontested

issues and give full and proper consideration to the

issues that are in dispute.

Section 10(e) of the Act provides that in reviewing

an order of the Board:

No objection that has not been urged before

the Board, its member, agent, or agency, shall

be considered by the court, unless the failure

or neglect to urge such objection shall be ex-

cused because of extraordinary circumstances.

The findings of the Board with respect to ques-

tions of fact if supported by substantial evi-

dence on the record considered as a whole shall

be conclusive. * * *

The purpose of this provision is to give the review-

ing court the benefit of the Board’s views on dis-

puted questions of fact and law.

In National Labor Relations Board v. Cheney

California Lumber Co., supra, this Court held that the

court of appeals had improperly limited an order is-

10

sued by the Board in a litigated proceeding because

no objection to the breadth of the order had been

urged bx “ore the Board. The Court held that the duty

of a court of appeals in such circumstances is “to

render judgment on consent as to all issues that

were contestable before the Board but were in fact

not contested' (327 U.S. at 389). The Court then

noted :

Justification of such an order, which neces-

sarily involves consideration of the facts which

are the foundation of the order, is not

open for review by a court if no prior objec-

tion has been urged before the case gets into

court and there is a total want of extraordinary

circumstances to excuse “the failure or neglect

to urge such objection * * *” Congress desired

that all controversies of fact, and the allow-

able inferences from the facts, be threshed out,

certainly in the first instance, before the

Board. libid.]

This construction of Section 10(e) was reaffirmed

in National Labor Relations Board v. Ochoa Fertilizer

Corp., supra. Unlike Cheney, there was no formal

proceeding at all before the Board in Ochoa but rather

the order was entered pursuant to a settlement agree-

ment. This Court disagreed with the court of appeals

that it was nonetheless entitled to satisfy itself that

there was record support for the Board’s order,

stating (368 U.S. at 323):

We understand the opinion of the Court of

Appeals to hold that the limitation of § 10(e)

11

is inapplicable when the record contains no

findings or facts supporting the order—that

“affirmative reasons must appear to warrant

broad injunctions.” * * * The court reasoned

that the limitation of § 10(e) was therefore no

barrier to its sua sponte revision of the order

and stated that “We do not think that consent

makes the difference.” * * * Contrary to the

Court of Appeals, we think that consent makes

a significant difference; it relieves the Board

of the very necessity of making a supporting

record. * * *

See also United States v. L. A. Tucker Truck Lines,

Inc., 344 U.S. 33, 37 (“Simple fairness to those who

are engaged in the tasks of administration, and to

litigants, requires as a genera! rule that courts should

not topple over administrative decisions unless the

administrative body not only has erred but has erred

against objection made at the time appropriate under

its practice).

In the present case, the court of appeals disregarded

Section 10(e), and thus exceeded its reviewing au-

thority, by considering and deciding the question

whether the bonus paid by the Company was a term

or condition of employment. As the court acknowl-

edged (App. A, infra, 34): “No such finding was ex-

pressly made [by the Board] nor was this implicit

finding discussed in the parties’ briefs before this

Court. Rather, the proceedings below focused on

whether Electro’s activities discouraged union mem-

bership and whether these activities had an anti-union

12

motive.“ Moreover, the court suggested no extraor-

dinary circumstances that would excuse the fail-

ure to present the issue to the Board.

The court of appeals apparently believed that it was

required to satisfy itself that the Board’s findings of

fact were supported by substantial evidence on the

record considered as a whole in order to insure that

it was not entering a decree where “the Board has

patently traveled outside the orbit of its authority.“

Cheney, supra, 327 U.S. at 388. However, while this

Before the Board, the Company made the following exceptions

(App. D, infra, 264-27).

“To the statement of the Administrative Law Judge that the

Employer’s exclusion of strikers from participation in the bonus

distribution, because not on the active payroll at the prescribed

times, violated Section 8(a) (3) and (1).

“To the Administrative Law Judge’s conclusion of law that by

disqualifying strikers from bonuses as found in this case, the

Respondent ELECTRO VECTOR, INC., engaged in unfair labor

practices within Section 8(a) (1) and (3) of the Act.”

Contrary to the Company’s contention (Reply to Pet. for Re-

hearing, p. 6), these general exceptions were not sufficient to place

“the burden upon the Board to support its order as to questions

of fact by substantial evidence on the record, which requires a

showing that the employer has discriminated against employees

with respect to a term or condition of employment.” See Marshall

Field & Co. v. National Labor Relations Board, 318 U.S. 253, 255

(objection that the Trial Examiner had erred “in making each

and every recommendation” did not sufficiently apprise the Board

that the employer intended to press the question whether unem-

ployment compensation benefits should be deducted from backpay

award); National Labor Relations Board v. Seven-Up Bottling

Co., 344 U.S. 344, 350 (objection that the Examiner’s “recommen-

dations as to the remedy were contrary to, and unsupported by, the

evidence and contrary to law” did not give adequate notice to the

Board that the employer intended to contest the propriety of com-

puting backpay on a quarterly basis for a seasonal business).

13

Court in Cheney did acknowledge that a court of ap-

peals need not render a decree “if the Board has pat-

ently traveled outside the orbit of its authority so that

there is, legally speaking, no order to enforce” (ibid.),

that narrow exception to the policy of Section 10(e)

applies only to an order that would be beyond the

Board’s power on any conceivable set of facts. Thus,

the Court in Ochoa found that the standard of Cheney

had been satisfied, despite the absence of any record,

because “[t]he order here consented to would be

within the Board’s authority under appropriate cir-

cumstances.’’ 068 U.S. at 322, n. 6. It is unquestion-

ably within the Board’s authority to find that a cash

bonus is a term and condition of employment (see

infra, pp. 14-18) and to prohibit discrimination in the

award thereof.’

The requirements of Section 10(e) are of consider-

able importance to the Board. In the sensitive area of

labor-management relations, it is plainly inappro-

priate to permit a party to leave important issues,

whether factual or legal, unaddressed and unbriefed

before the Board and then challenge their resolution

before the reviewing court on the ground of an in-

adequate supporting record. Under such circumstances

the Board is not only deprived of the opportunity to

apply its own experienced judgment in the first in-

stance—a judgment that well may assist the court of

Indeed, the court below acknowledged that “If Electro had

adopted a formal program of paying a cash bonus or had paid a

bonus for a number of years, we might reach a different result”

(App. A, infra, 5a).

234-376—17-—_3

14

appeals on review—but also of the opportunity to in-

sist upon a fuller record appropriate for resolution of

those issues. Such deprivation is directly contrary to

„the salutary policy adopted by 5 10(e) of afford-

ing the Board opportunity to consider on the merits

questions to be urged upon review of its order”

(Marshall Field & Co. v. National Labor Relations

Board, supra, 318 U.S. at 256).

2. The need for proper observance of Section 10(e)

is emphasized by the decision in this case, which is

not only inconsistent with the rationale of this Court’s

“decision in National Labor Relations Board v. Great

Dane Trailers, Inc., 388 U.S. 26, but also violative of

a fundamental purpose of the Act to safeguard em-

* Other courts of appeals have properly recognized the policy

of Section 10(e). Thus, in American Fire Apparatus Co. v. Va-

tional Labor Relations Board, 380 F. 2d 1005, 1006, the Eighth

Circuit held that an employer was “precluded by Section 10(e)

of the Act from obtaining judicial review” of his contention “that

he did not commit an unfair labor practice by failing to pay

the employees a Christmas bonus,” when no exceptions on that

issue were taken to the Trial Examiner’s decision.

See also National Labor Relations Board v. Maine Sugar In-

dustries, Inc., 425 F. 2d 942, 944 (C.A. 1); National Labor Rela-

tions Board v. International Union of Operating Engineers, Local

66, A, B & C, 357 F. 2d 841 (C.A. 8); National Labor Relations

Board v. Cast-a-Stone Products Co., 479 F. 2d 396 (C. A. 4); Nia

v. National Labor Relations Board, 418 F. 2d 1001, 1009 (C. A. 5) ;

Geauga Plastics Co. v. National Labor Relations Board, 404 F. 2d

1382, 1383 (C. A. 6) ; Red Cross Drug Co. v. National Labor Rela-

tions Board, 419 F. 2d 1245, 1249 (C. A. 7) ; National Labor Rela-

tions Board v. Midwestern Manufacturing Co., 388 F. 2d 251, 253

(C. A. 10); Puerto Rico Drydock d Marine Terminals, Ino. v. Na-

tional Labor Relations Board, 284 F. 2d 212, 215-216 (C. A. D.C.).

15

ployees against discrimination for engaging in pro-

tected concerted activities.

While Section 8(a)(3), in relevant part, merely

proscribes discrimination in regard to a “term or con-

dition of employment,’’ Congress entrusted the Board

with the task of giving content to those terms in light

of “the complexities of industrial life.” National

Labor Relations Board v. Erie Resistor Corp., 373

U.S. 221, 236. Thus, in Great Dane Trailers, supra,

this Court accepted the conclusion of the Board and

court of appeals (388 U.S. at 30) that a refusal to pay

accrued vacation benefits to striking employees con-

cerned “a term or condition of employment. Indeed,

the Court recognized that the “result of the company's

refusal to pay vacation benefits to strikers was dis-

crimination in its simplest form” (id. at 32). The

Court therefore struck down the denial of benefits to

a group of employees identified ‘‘only by their par-

ticipation in protected concerted activity” (ibid.).

The facts in this case present a very similar issue.

The Company's bonus program, although only in its

second year of operation, was tied to work perform-

ance. Employees earned less than the base amount if

because of late hire or absenteeism they had missed

work during the preceding year; superior work was

compensated by bonuses larger than the base amount.

The Board found that the bonus “was earned as a

result of work attendance over the fiscal year’’ and

that the striking employees had “previously qualified”

for the bonus and would have received it had they not

been on strike (App. C, infra, 9a). In these cireum-

stances, the Board could reasonably have concluded

that the bonus accrued from the employment relation

and thus was a “term or condition of employment.”

The court of appeals did not disturb the Board’s

findings. Rather, relying on its decision in National

Labor Relations Board v. Nello Pistoresi d Son, Inc,,

500 F. 2d 399, 401,“ the court held that the discretion-

ary amount of the bonus and the short duration of the

program precluded characterization of the bonus as a

term or condition of employment (App. A, infra, 54

6a). However, while these factors may be relevant in

determining whether a bonus withdrawn from all em-

ployees was a term or condition of employment (see n.

9, supra, and cases cited at App. A, infra, 34-44),

they are immaterial where the employer has decided to

pay a bonus. In those circumstances, an employer is not

free to pay the bonus to some employees, and withhold

it from others who are engaged in a strike or other

»In Nello Pistoresi, the court reversed the Board’s conclusion

that the company had violated Section 8(a)(5) and (1) of the

Act, 29 U.S.C. 158(a) (5) and (1), by terminating, in 1971, a bonus

program that had been in effect for only two years. However,

in Pistoresi, the Administrative Law Judge, whose findings were

adopted by the court, had noted that, since the size of the bonus

had been within the company’s discretion and since the work

force did not remain constant each year, there was no way to know

whether or to what extent the failure to pay a bonus in 1971 was

a substantial departure from past practice. See Nello Pistoresi d

Son, Ine, 203 NLRB 905, 910. Since a bonus was paid here on the

same basis as it was paid in 1973, there is no doubt that it ac-

corded with past practice.

SO — eee

17

activity protected by Section 7, without being subject

to the ban on discrimination imposed by Section 8(a)

(3). See National Labor Relations Board v. Duncan

Foundry and Machine Works, Inc., 435 F. 2d 612, 617,

n. 8 (C.A. 7) (“Certainly, the Company was under no

duty to apply the terms of the expired contract,

but * * if the terms were applied, they could not

be applied discriminatorily”). See also Tex Tan Wel-

hausen Co. v. National Labor Relations Board, 419

F. 2d 1265, 1271 (C. A. 5), remandea on other grounds,

397 U.S. 819; National Labor Relations Board v.

Frick Co., 397 F. 2d 956, 961-962 (C. A. 3) ; Sullivan Dry

Dock & Repair Corp., 67 NLRB 627, 634; K-D Man-

ufacturing Co., 169 NLRB 57, 60, 64.

The contrary view of the court below that a bonus is

removed from the ambit of Section 8(a)(3) where it

is discretionary in nature and of recent origin opens

up a wide gap in the protection against discrimination

afforded by that Section. Many employment benefits—

é.g., promotions, overtime work, favorable work

shifts—are within the employer’s discretion, at least

absent their coverage in a collective bargaining agree-

ment. Under the reasoning of the court below, the

employer would be free to withhold such discretionary

benefits from employees engaged in Section 7 activity

without violating Section 8(a)(3). It is hardly likely

that Congress would have intended to permit such a

ready means of eluding the reach of the latter See-

tion’s basic guarantee against discrimination for en-

gaging in protected activity.”

For the foregoing reasons, the petition for a writ

of certiorari should be granted."

Respectfully submitted.

Wane H. McCnez, Jr.,

Solicitor General.

Jonx S. Irvine,

General Counsel,

Joun E. Hicars, Jr.,

Deputy General Counsel,

Cari L. Tayior,

Associate General Counsel.

Norton J. Come,

Deputy Associate General Counsel,

Laiypa SHeEr,

Assistant General Counsel,

National Labor Relations Board.

May 1977.

Apart from its unduly restrictive interpretation of “term or

condition of employment” as used in Section 8(a) (3), the court

below also failed to consider the Board's alternative finding that

the Company's withholding of the bonus from employees who

were striking on the specified dates also violated Section 8(a) (1)

of the Act. Section 8 (4) (1) proscribes any employer action which

would “interfere with, restrain, or coerce employees in the exer-

cise of the rights guaranteed in section 7,” without regard to

whether a “term or condition of employment” is affected. To with-

hold from strikers a bonus which they had earned for work pre-

— —EUũ4ͤ— on 2

tend

J

2 unequivocal language of Section 10 (e) and its

prior decisions under that Section, the Court consider

mary reversal to be appropriate in this case. as

— — —

APPENDIX A

No. 75-3638

United States Court of Appeals, Ninth Cireuit

Natrona, Lasor Reiations Board, PETITIONER

v.

Ex.ectrro Vector, INC., RESPONDENT

Aug. 5, 1976

O pinion

Before Barnes, Senior Circuit Judge, and WricHt,

and Kr-Kenny, Circuit Judges

Barnes, Senior Circuit Judge:

The National Labor Relations Board seeks enforce-

ment of its order against Electro Vector, Inc. Affirm-

ing the administrative law judge, the Board held that

the Company violated 29 U.S.C. § 158(a) (3) and (1)

by granting a bonus for work previously performed,

to employees who were actually working on Septem-

ber 30, and November 27, 1974, while denying such

bonus for work previously performed to other em-

ployees who were striking on either of those two dates.

We hold that because the Board’s finding that the

bonuses were wages, hours, or other term[s] or condi-

tionſs]̃ of employment is not supported by substantial

evidence, enforcement of its order is denied.

The relevant facts follow. Electro manufactures

cleetronie equipment in a plant located near Santa

(la)

24

Rosa, California. The Company's production and

maintenance employees have been represented for col-

lective bargaining purposes by the Union for a num-

ber of years. On May 2, 1974, after the expiration of

the prior contract and the breakdown of negotiations,

the Union struck Electro over economic issues.

Electro followed a discretionary policy of paying

“year-end”’ bonuses based on a fiscal year ending Sep-

tember 30, 1974. The previous 1972-73 fiscal year was

the first year for paying cash bonuses. In prior years,

turkeys and hams were distributed. Attendance and

exceptional merit determined the amount paid above

and below the base figure of $150.00. Eligibility for

the bonus depended upon an employee maintaining

“active pay roll status“ on two crucial dates—the final

day of the fiscal year and the actual date of bonus

payment, here, November 27, 1974.

The group which received the bonus included non-

striking workers, strikers who had returned to work,

and replacements for strikers. All of these employees

had active payroll status on the two relevant dates—

September 30 and November 27. Excluded were thirty-

three strikers who had not worked either date and

cate e who had worked only one of those

Subsequently, the Union filed charges against Elec-

tro alleging discrimination against the striking em-

ployees through the Company’s refusal to pay them

bonuses. The N.L.R.B. issued a complaint based on

the charges and ordered a hearing. After such a hear-

ing was conducted, the administrative law judge

concluded that “[b]y disqualifying strikers from bo-

nuses * * * [Electro] engaged in unfair labor prac-

tices within Section 8(a) (1) and (3) of the[ National

Labor Relations] Act.” The judge recommended the

3a

issuance of a cease and desist order and the payment

of 1974 bonuses to the striking employees. Elec-

tro excepted. The Board, however, adopted the

administrative law judge’s recommendations and is-

sued an order requiring bonus payments to the em-

ployees. Electro appeals from this order. ;

Implicit in the administrative proceedings below is

a finding that Electro’s bonus practice involved a

term or condition of employment. No such finding

was expressly made nor was this implicit finding dis-

cussed in the parties’ briefs before this Court. Rather,

the proceedings below focused on whether Electro’s

activities discouraged union membership and whether

these activities had an anti-union motive. See National

Labor Relations Board v. Great Dane Trailers, Inc.,

388 U.S. 26, 32-34, 87 S. Ct. 1792, 18 L. Ed. 2d 1027

(1967); Portland Willamette Company v. National

Labor Relations Board, 534 F. 2d 1331, 1332 (9th Cir.

1976). But in order to determine whether Electro’s

activities violated the Act here, a preliminary require-

ment must be satisfied. It must be shown that there

had been employer discrimination with respect to

“fany] term or condition of employment.” See

N.L.R.B. v. Great Dane Trailers, supra, 388 U.S. at

30, 87 S. Ot. at 1976; E. I. Du Pont de Nemours and

Company v. V. L. R. B., 480 F. 2d 1245, 1248 (5th Cir.

1973).

The importance of this findin- is that a bonus which

is considered a „gift“ can be withheld by the em-

ployer at will, but a bonus which is in reality a

„wage“ becomes a term or condition of employment.

See Century Electric Motor Company v. N. L. R. B.,

447 F. 2d 10, 14 (8th Cir. 1971); N. L. R. B. v. Harrah’s

Club, 403 F. 2d 865, 874 (9th Cir. 1968); N. L. R. B. v.

Electric Steam Radiator Corporation, 321 F. 2d 733,

234-376-774

4a

736-37 (6th Cir. 1963). In elaborating upon this con-

cept in V. L. R. B. v. Nello Pistoresi d Son, Inc, 500

F. 2d. 399 (9th Cir. 1974), this Court observed: Bo-

nuses * * * are considered wages if they are of such a

fixed nature and have been paid over a sufficient

length of time to have become a reasonable expectation

of the employees and, therefore, part of their antici-

pated remuneration.“ Id. at 400."

Applying these principles to the case before us, the

Board was required to find that Electro’s bonus policy

involved a term or condition of employment. This

Court is bound to accept this finding unless it is not

supported by substantial evidence in the record taken

as a whole. Universal Camera Corp. v. V. L. R. B., 340

U.S. 474, 477-91, 71 S. Ct. 456, 95 L.Ed. 456 (1951).

Upon examining the record, we find no such finding

or any discussion thereof. Hence, we must conclude

that the Board’s finding is not supported by substan-

tial evidence.

Our conclusion is based on the following evidence

which appears in the record. Ms. Ann L. Waterman,

an accountant for Electro, testified that prior to 1973,

the company did not have a bonus program. In 1973,

the company determined that it was financially able

to pay a bonus. Even then, however, there was no

official program established. Ms. Waterman further

testified that even after the company began giving

cash bonus to its employees, this bonus was not auto-

matically given. Mr. Philip B. Del Valle, the vice

president and general manager of Electro, testified

that the giving of a bonus was not mandatory but was

rather at the discretion of Electro’s owner. He fur-

' Neither petitioner nor respondent has seen fit to mention this

two-year-old case in their briefs.

—

5a

ther testified that the bonus issue was not part of the

Union contract that was in existence at the time of

the controversy. Additionally, Mr. Del Valle stated:

“[P]rior to 1973 there wasn’t any bonuses.

We gave turkeys or hams, but the inflation got

so bad we realized the predicament of of

the people, and so I went to the owner. I don't

have the authority to disburse profits. I went to

20 CURE? SE 5 95 eae \ Goeee SS 0 coe

sum of money and this was given, in essence in

lieu of a turkey or in lieu of a ham, as being a

little bit more substantial; but it wasn’t a

formal a ». in any way. It was

R.T. at 29-30. None of the above testimony has been

refuted by any other witness.

We thus must determine whether the payment of

a cash bonus by Electro was of a fixed nature and

had been paid over a sufficient period of time to have

become a part of the employees’ anticipated remuner-

ation. From the above evidence, we conclude that the

1973-74 fiseal year was only the second year in which

such a cash bonus was given. The amounts of these

bonuses were determined primarily by Mr. Del Valle

and ranged greatly from a base of $150.00. In

V. L. R. B. v. Nello Pistoresi d Son, Inc., supra, we

held that because of the short two-year history of the

company giving cash bonuses to its employees and

the indefinite nature of the bonuses, the bonuses did

not constitute wages but were rather gifts. 500 F. 2d

at 400-01. We find the case at bar indistinguishable.

If Electro had adopted a formal program of paying

a cash bonus or had paid a bonus for a number of

years, we might reach a different result. But here,

the cash bonus had only been given for two years, and

was agreed upon by the owner only informally. We

6a

therefore conclude that the bonus given by Electro

was a gift rather than a wage. Hence, the Union has

failed to prove that there has been employer discrimi-

nation with respect to any term or condition of

employment.

Accordingly, enforcement of the Board’s order is

denied. Respondent’s counsel to prepare order.

APPENDIX B

In the United States Court of Appeals for the

Ninth Circuit

No. 75-3638

NaTIONAL Laspor RELATIONS BoARD, PETITIONER

v.

ELectro Vector, INC., RESPONDENT

[Filed January 17, 1977]

ORDER

Before: Barnes, Wricut, and Ki.Kkenny, Circuit

Judges.

After considering Petitioner’s Petition for Rehear-

ing with Suggestion for Rehearing en bane (filed Sep-

tember 9, 1976), and Respondent's reply to said Petition

filed October 14, 1976, Judge Wright voted to deny the

Petition for Rehearing and to reject the Suggestion for

Rehearing en banc. Judges Barnes and Kilkenny voted

to deny the Petition for Rehearing and recommended

the denial of the Suggestion for Rehearing en bane.

The full Court was advised of the Suggestion for

Rehearing en bane. An active judge of the Court sug-

gested that the opinion may be in conflict with Supreme

Court cases cited by the Government, but later, after

considering the reply to the Board’s Petition, withdrew

his objection.

The Petition for Rehearing is denied, and the

Suggestion for an en bane Rehearing is rejected.

(TA)

APPENDIX CO

United States of America Before the National Labor

Relations Board

Case 20-CA-9771

ELxorno Vector, Inc. anp GENERAL Truck DRIvERs,

WaRreHOUSEMEN & Hetpers Union, LocaL 980, Ix-

TERNATIONAL BrRoTHERHOOD OF TEAMSTERS, CHAUF-

FEURS, WAREHOUSEMEN AND HELPERS OF AMERICA

Decision and Order

On April 8, 1975, Administrative Law Judge Rich-

ard J. Boyce issued the attached Decision in this pro-

ceeding. Thereafter, Respondent filed exceptions and

a supporting brief, and the General Counsel filed a

brief in support of the Decision.

Pursuant to the provisions of Section 3(b) of the

National Labor Relations Act, as amended, the Na-

tional Labor Relations Board has delegated its author-

ity in this proceeding to a three-member panel.

The Board has considered the record and the

attached Decision in light of the exceptions and briefs

and has decided to affirm the rulings, findings, and

conclusions of the Administrative Law Judge and to

adopt his recommended Order.*

In the absence of exceptions, we adopt pro forma the Admin-

istrative Law Judge’s conclusion that the strike was not converted

into an unfair labor practice strike.

In support of our finding of a violation, we also rely on V.L.2.B.

v. Great Dane Trailers, Inc. 388 U.S. 26 (1967).

(Sa)

9A

The Administrative Law Judge finds that Respond-

ent unlawfully denied bonus payments to striking

employees. We agree.

The faets here are not in controversy. Respondent

in 1974 had in effect a bonus program. Under the

program such employees received a basic amount of

$150, less diminutions due to absences or due to not

being on the payroll for the entire fiscal year. The

diminutions were based on a formula uniformally

applied. However, no bonus was paid to any employee

who was not on the active payroll, i.e., actually work-

ing, both on the last day of the fiscal year, Septem-

her 30, and the date the bonus was paid, November 27,

1974. On May 2, 1974, the employees had gone on

strike. The strike was continuing as of November 27,

1974. As a result of their participation in the strike,

a number of employees were not on the payroll on

the two qualifying dates and were, therefore, denied

anv bonus.

The benefit here was earned as a result of work

attendan over the fiscal year. As of the May 2, 1974,

strike date the employees had, under Respondent’s

formula, earned a part of the benefit subject only to

their being on the active payroll on the two qualifying

dates. Depriving striking employees of the benefits

which they have previously qualified for because they

are on strike will have the natural tendency of co-

ereing employees to give up the strike.

Nevertheless, disqualification of the strikers is not

unlawful if it serves Respondent’s legitimate business

interests in some significant fashion. N. L. N. B. v. Great

Dane Trailers, Inc., 388 U.S. 26. It is, of course, legiti-

mate to reduce the bonus by the length of any em-

ployee’s absence, even if that absence is due to a

104

strike.“ The Administrative Law Judge’s proposed

remedy, correctly, calls for such a reduction. However,

Respondent offers no justification, nor do we perceive

any, for its requirement that the strikers be actually

on duty on the two eligibility dates. Thus, Respond-

ent does not contend that the failure of employees to

work on those dates, as opposed to any other dates of

the year, has any significant impact on its business.

Nor does it contend there is anything else special

about those particular dates.

Depriving employees of any entitlement to the

bonus which they had otherwise qualified for because

they are on strike on two dates without special busi-

ness significance is inherently destructive of the em-

ployees’ right to strike.“ Therefore, we adopt the Ad-

ministrative Law Judge’s finding that Respondent

violated Section 8(a) (3) and (1) by depriving strik-

ers of bonus payments,

Order

Pursuant to Section 10(e) of the National Labor

Relations Act, as amended, the National Labor Rela-

tions Board adopts as its Order the recommended Or-

Of. Tex-Tan Welhausen Company and Tex-Tan Western

Leather Company, Division of Tandy Corporation, 172 NLRB

851, 889-890 (1968), enfd. 419 F. 2d 1265 (C. A. 5, 1969), rehearing

denied and rehearing denied en bane Jan. 12, 1970.

* Quality Castings Company, 1389 NLRB 928 (1962). The in-

stant case is factually much stronger for the result reached than

Quality Castings. In that case the employer sought to apply a 50-

percent attendance requirement for eligibility to participate in a

profit-sharing plan. Such a requirement bears at least some rela-

tionship to productivity. Whether there is a sufficient relationship

to productivity to warrant denial of benefits to strikers must be

determined on the facts of each case. We perceive no business jus-

tification herein which would even arguably warrant denial of

benefits to strikers for failure to work on the two eligibility dates.

lla

der of the Administrative Law Judge and hereby

orders that Respondent, Electro Vector, Inc., Forest-

ville, California, its officers, agents, successors, and

assigns, shall take the action set forth in the said

recommended Order.

Dated, Washington, D.C., September 18, 1975.

NATIONAL. Lasor RELATIONS Boarp

Berry SournHarp Murpny,

Chairman.

Howarp JENKINS, Jr.,

Member.

Member FannING, concurring

I concur in my colleagues’ adoption of the Admin-

istrative Law Judge’s Decision.

Pursuant to a practice instituted in 1973, Respond-

ent paid a bonus to employees who worked for it

during fiscal year 1974. Respondent's tiscal year runs

from October 1 to September 30 of the following

+

;

:

:

i

;

;

i

according to a set formula for absences during

fiscal year. According to Respondent's officials.

reason for instituting the practice of paying a

was “a humanistic one due to the economic

ye

.

ö

|

if

et

are

pr Eee

ite

rap

111515

This

i

The issue in this case is whether Respondent's treat-

ment of the strikers’ absence on September 30 and

November 27 as absence from the “active payroll”

constituted discrimination against the strikers be-

iii

keit“

4 5

Fi if

7 Fei

115

12127

2555

71177

I.

f

i

:

15

+

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134

in protected activities surely may have a discouraging

effect on either present or future concerted activity.”

Ibid. There seems to me no reasonable doubt that the

determination between the two groups was “so ‘inher-

ently destructive of employee interests’ that it may be

deemed proscribed without the need of proof of an

underlying improper motive.” Id. at 33. I can per-

ceive no business justification that would excuse this

discriminatory conduct.

Nor has Respondent come forward with a justifica-

tion for discriminating between those employees who

received the earned portion of their bonus and the

strikers who did not. At most, Respondent argues

that it did not have a discriminatory motive because

it treated strikers the same way it treated other em-

ployees who were absent from work on September 30

or November 27. But the argument at once proves too

two groups of employees who did not receive the

to

those employees who did not receive the bonus

on the two critical dates in all instances. As noted in Respondent's

brief, she testified “that a person on lay-off for maternity leave

might recei¥g the bonus even though she was not actively working

on the date of payment, if she had in fact been working at the close

of the fiscal year.”

|

f

|

4

—

son of strike with other absences and its

consequent discrimination between strikers and em-

their strike

lawful

Company, 139

I would therefore find that Respondent’s denial of

a bonus to strikers because they were not at work on

September 30 and November 27 violated Section 8(a)

(3) and (1) of the Act.

Dated, Washington, D.C., September 18, 1975.

Nationa Laon Recations Boarp,

Jonx H. Farm,

Member.

JD-(SF)-68-75, Forestville, CA

United States of America before the National Labor

Relations Board, Division of Judges, Branch Office,

San Francisco, California

Case No. 20-CA-9771

Exectro Vector, Inc. A&D GeneraL Truck Drivers,

WanrenousemMen & Huren Union, Locar 980, Ix-

TERNATIONAL BrotHernoop or TEamMsTers, CHAUF-

FeuRS, WAREHOUSEMEN AND HELPERS oF AMERICA

Lucile L. Rosen, Atty., of San Francisco, Calif.,

for the General Counsel.

Michael P. Merrill, Esq., of Santa Rosa, Calif., for

the Respondent.

Decision

I. STATEMENT OF THE CASE

Ricuarp J. Boyce, Administrative Law Judge: This

case was tried before me in San Francisco, California,

on March 4, 1975. The charge was filed December 3,

1974, and amended January 29, 1975, by General

Truck Drivers, Warehousemen & Helpers Union, Lo-

cal 980 (herein called the Union). The complaint is-

sued January 29, 1975, was amended February 6, and

alleges that Electro Vector, Inc. (herein called Re-

spondent) violated Section 8(a) (1) and (3) of the

National Labor Relations Act.

(15a)

164

The parties were permitted at the trial to introduce

relevant evidence, examine and cross-examine wit-

nesses, and argue orally. Briefs were filed for the

General Counsel and Respondent.

II. ISSUES

The issues are whether Respondent, by not paying

year-end bonuses to economic strikers in the circum-

stances detailed below, violated Section 8(a) (1) and

(3) of the Act; and, if so, whether the strike thereby

was converted into an unfair labor practice strike.

III. JURISDICTION

Respondent is a California corporation engaged in

Forestville, California, in the manufacture of elec-

tronie products. It annually sells and causes to be de-

livered to customers outside California products of a

value exceeding $50,000.

Respondent is an employer engaged in and affect-

ing commerce within Section 2 (2), (6) and (7) of

the Act.

IV. LABOR ORGANIZATION

The Union is a labor organization within Section

2(5) of the Act.

V. THE ALLEGED UNFAIR LABOR PRACTICE

A. Facts

Respondent’s production and maintenance employ-

ees are represented in collective bargaining by the

Union. On May 2, 1974, during contract negotiations

with Respondent, the Union called a strike in support

of its demands. The strike is still on.

174

Respondent’s fiscal year is October 1 through Sep-

tember 30. On November 27, 1974, it paid end-of-

fiscal- year bonuses to those of its employees who were

on the “active” payroll—i.e. actually working—on both

that date and on the final day of the fiscal year, Sep-

tember 30. There were about 100 recipients, among

them strikers who had quit the strike in time to meet

September 30/November 27 qualifying standard, as

well as striker replacements meeting that test. Re-

spondent’ general manager, Philip Del Valle, testified

eredibly and without refutation that the qualifying

test was not compromised for anyone. Strikers and

anyone else not satisfying it were ineligible. There

were about 33 strikers in this category.

Among those qualifying, the bonus amounts varied.

The basic amount was $150, but the great majority

got less because of absenteeism or absence from the

active payroll during the fiscal year.“ A formula was

eh a tae

allow for these factors, an exception being that ab-

sences sometimes were overlooked, as in the case of

serious illness or maternity leave, if Del Valle felt

the specific circumstances so warranted. The record

does not set forth the particulars of the formula, and

is devoid of citation to any given situation in which

special dispensation was granted. Those who quit

strike and striker replacements received the same

partial-year treatment as others who worked like

periods of time. A select few, who in Del Valle’s judg-

ment had made exceptional contributions during the

year, received above the basic $150. Four thus re-

For example, Floyd Maes, hired September 26, 1974, received

only $10.

F

18a

ceived $225 in 1974. The record does not reveal the

nature of their contributions.

Year-end bonuses were instituted by Respondent

in 1973, in lieu of hams and turkeys. Although not a

product of collective bargaining, they apparently had

the Union’s blessing. They were administered in ex-

actly the same way in 1974 as 1973. To quote Del

Valle: [Wie took great pains to follow the exact

formula so there would be no question of an unfair

labor practice.” A prime purpose of the bonuses is to

stimulate better attendance, other purposes being to

give the employees a stake in the success of the busi-

ness after the fashion of profit-sharing plans and to

ease the economic impact on employees of inflation

and Christmastime.

No evidence was proffered that the denial of bon-

uses to strikers prolonged the strike. Two strikers

testified of learning, at about the time the bonuses

were granted, that they had been excluded from

participation. °

B. Diseussion

It is concluded, in agreement with the General

Counsel, that Respondent’s exclusion of strikers from

participation in the bonus distribution, because not

on the active payroll at the prescribed times, violated

Section 8(a) (3) and (1). This conclusion is grounded

on Quality Castings Company, 139 NLRB 928—

a case similar to the present.

Quality Castings involved distributions under a

profit-sharing plan. Each employee, to qualify, had

to have worked 50 percent of the time between Janu-

ary and September preceding distribution. As in the

present case, the amounts paid to those qualifying

were a function of absenteeism, exceptions being

19a

allowed for excused absences. Some 64 employees, who

had struck in April and May of that year and were

not thereafter recalled for valid economic reasons,

were deemed not to have satisfied the qualifying

The Board held that the disqualified strikers had

been discriminated against in violation of Section 8(a)

(3) and (1), determining that the respondent’s inter-

pretation of the qualifying criterion rested * * *

* * * on the faulty premise that time on strike

may lawfully be considered the equivalent of

normal absence for purposes of determining

profit-share forfeiture. [139 NLRB at 930]

The Board continued (139 NLRB 930-31) :

T]he Respondent cannot be required to make

istributions to individuals for the period they

were absent on strike. Neither, however, can the

Respondent state that strike time is merely an-

other form of absence, equating it to other

forms of absence discouraged by it, and then

roceed to impose a total and non-proportionate

orfeiture on employees because they engaged

in such absences—in effect because they en-

gaged in Section 7 activities.

[N Jotwithstanding the obvious fact that strike

absences intensify an employer’s production

problems, strikers are given protection under

the Act not available to workers whose absences

are caused by other reasons. While the Act

2 no protection to workers who are absent

ause of illness, athletic events, or family

celebrations, it does protect employees who are

absent because of a strike, and “excuse” such

absences, in the sense contemplated by Respond-

ent. Respondent’s contrary treatment subverts

the protection afforded = statute, and its

total denial of all profit-sharing benefits to the

strikers because of their absence“ discrimi-

20a

nates against them as directly as if they were

discharged for such activities. Surely Re-

spondent could not lawfully enforce a general

discharge rule for absenteeism against the 64

strikers, merely because their participation in

the strike for its duration constituted “exces-

sive absenteeism” under the Respondent’s for-

mula. We therefore find that the 100-percent

profit-sharing forfeiture * * * imposed by Re-

spondent on the 64 strikers * * * was violative

of Section 8(a) (3) and (1), regardless of

Respondent’s motivation in imposing such a

penalty.’

This reasoning, which the Board has never disavowed,

is equally @pposite to the present situation.“

In addition to urging the illegality of Respondent’s

denial of bonuses to strikers, the General Counsel

contends that the denials converted the strike into an

* Citing Erie Resistor Corp., 132 NLRB 621, later to be affirmed

by the Supreme Court at 373 U.S. 221 (1963).

* This reasoning, however, has experienced some difficulty at

judicial levels. Quality Castings Corpany was reversed at 325 F. 2d

36 (Sixth Cir. 1963). Similarly, Pittsburgh-Des Moines Steel Co.,

124 NLRB 855, and National Seal, 141 NLRB 661, in which the

Board used kindred reasoning to support violations, were reversed,

respectively, at 284 F. 2d 74, (Ninth Cir. 1960) and 336 F. 2d. 781

(Ninth Cir. 1964). Board law, not that of the circuits, is control-

ling, however, at this juncture of this proceeding. E.g., Brick-

layers Local No. 1,209 NLRB No. 123, fn. 1. Academic criticism

of the Board’s Quality Castings reasoniug appears in Getman,

Section 8(a) (3) of the NLRB and the Effort to Insulate Free Em-

ployee Choice, 32 U. of Chi. L. Rev. 735, 741-42 (1965), wherein

it is observed among other things:

Where the employer applies uniform criteria which ate

the — 1 2 pp

siderable leeway * * *, [T]he fact that the employer applies

these standards in situations which do not involve union

ay a 6 ee a

in

21a

unfair labor practice strike, entitling any strikers not

theretofore permanently replaced to unqualified re-

instatement upon their application. This contention is

rejected. There is no evidence that the bonus mis-

conduct influenced any striker to prolong the strike,

and it is not manifest from the facts that the mis-

conduct would have had that effect. The strike was

called in aid of the Union’s overall position in contract

negotiations and already had been underway some

7 months. It cannot be assumed that the larger strike

strategy was affected by the bonus matter. See Romo

Paper Products Co., 208 NLRB No. 96; Anchor Rome

Mills, 86 NLRB 1120, 1122.*

VI. CONCLUSIONS OF LAW

1. By disqualifying strikers from bonuses as found

herein, Respondent engaged in unfair labor practices

within Section 8(a) (1) and (3) of the Act.

2. These unfair labor practices affect commerce

within Section 2 (6) and (7) of the Act.

3. Respondent’s misconduct, as found herein, did

not convert the economic strike that began May 2,

1974, into an unfair labor practice strike.

VII. THE REMEDY

It is recommended that Respondent be ordered to

cease and desist from the unfair labor practices found.

The General Counsel’s argument to the contrary cites M. L. N. B.

v. Erie Resistor Corp., 373 U.S. 221 (1963). As I read that de-

cision, however, the Supreme Court did not address itself to the

issue of the strike’s status. Beyond that, a reading of the under-

lying NLRE decision—Zrie Resistor Corp., 132 NLRB 621—

reveals that in that case, unlike the present, the striking employees

expressiy voted to continue the strike in protest of the company’s

unlawful conduct.

224

Affirmatively, it is recommended that Respondent be

ordered to cure its unlawful discrimination by restor-

ing to eligibility for the 1974 bonuses those disquali-

fied because of strike- related absence, and by caleulat-

ing their bonus shares in such a way that they do not

suffer a disproportionate reduction because of their

strike activities. Their shares may, however, be re-

duced pro rata for their absences from the job during

the pertinent fiscal year whether because on strike or

for any other reason. Quality Castings Company,

supra, at page 932. Interest at the rate of six percent

per annum from November 27, 1974, shall be included

in the shares.

Those entitled to relief include: °

J. E. Anderson M. Gramlich

J. L. Aviles D. G. Herrington

S. A. Aviles S. F. Hester

R. L. Beck I. J. Jorgensen

A. Bribiescas D. Karson

D. Burris B. L. Kelly

S. E. Butters S. L. Palmer

P. V. Cox J. L. Say

D. G. Cresta V. M. Signett

M. Cribbins A. E. Skinner

S. L. Davis E. Stockman

E. B. Edwards J. B. Tryon

J. Frost B. S. Vierra

H. P. Galusha B. A. Wesley

P. A. Garrison L. K. Whitley

G. A. Gibson F. G. Wilson

R. N. Graham

» And such others as are determined, in the compliance phase

of this proceeding, to be entitled. F.C.F. Papers, Inc., 211 NLRB

No. 67, slip op. 7; Boilermakers Local No. 101, 206 NLRB No. 5,

slip. op. 2, fn. 3.

23

Upon the foregoing findings of fact, conclusions of

law, and the entire record, and pursuant to Section

10(e) of the Act, I hereby issue the following recom-

mended : °

Order

Respondent, Electro Vector, Inc., its officers, agents,

successors, and assigns, shall:

I. Cease and desist from discouraging membership

in General Truck Drivers, Warehousemen & Helpers

Union, Local 980, International Brotherhood of Team-

sters, Chauffeurs, Warehousemen and Helpers of

America, or any other labor organization, by discrim-

inatorily denying a bonus distribution to employees

because of their participation in a strike.

II. Take the following affirmative action:

A. Make whole the employees referred to in the

Remedy section of this Decision, in the manner set

forth in that section, for the losses suffered by reason

of Respondent’s discrimination against them.

B. Preserve and, upon request, make available to

the Board or its agents, for examination and copying,

all payroll records, social security payment records,

timecards, personnel records and reports, and all

other records necessary for determination of the

amount of payment due under this Order.

C. Post at its place of business in Forestville, Cali-

fornia, copies of the attached notice marked “Ap-

* All outstanding motions inconsistent with this recommended

Order hereby are denied. In the event no exceptions are filed as

provided by Section 102.46 of the Rules and Regulations of the

National Labor Relations Board, the findings, conclusions, and

recommended Order herein shall, as provided in Section 102.48

of the Rules and Regulations, be adopted by the Board and be-

come its findings, conclusions, and Order, and all objections thereto

shall be deemed waived for all purposes.

244

pendix.” Copies of said notice, on forms provided by

the Regional Director of Region 20, after being signed

by an authorized representative of Respondent, shall

be posted by Respondent immediately upon receipt

thereof, and be maintained by it for 60 consecutive

days thereafter, in conspicuous places, including all

places where notices to employees customarily are

posted. Reasonable steps shall be taken to ensure that

said notices are not altered, defaced, or covered by

other material

D. Notify the Regional Director of Region 20, in

writing, within 20 days from the date of this Order,

what steps Respondent has taken to comply herewith.

Dated: April 8, 1975.

RicHarD J. Boyce,

Administrative Law Judge.

Norice To EMPLovers

Posted by Order of the National Labor Relations

Board—an Agency of the United States Govern-

The trial held in San Francisco, California, on

March 4, 1975, in which we participated and had a

chance to give evidence, resulted in a decision that

we had committed certain unfair labor practices in

violation of Section 8(a)(1) and (3) of the National

In the event that the Board's Order is enforced by a Judgment

of a United States Court of Appeals, the words in the notice read-

ing “POSTED BY ORDER OF THE NATIONAL LABOR

RELATIONS BOARD” shall be changed to read “POSTED

PURSUANT TO A JUDGMENT OF THE UNITED STATES

COURT OF APPEALS ENFORCING AN ORDER OF THE

NATIONAL LABOR RELATIONS BOARD.”

25a

Labor Relations Act, as amended, and this notice is

posted pursuant to that Decision.

Section 7 of the National Labor Relations Act, as

amended, gives all employees the following rights:

To organize themselves

To form, join, or support unions

To bargain as a group through a representative

they choose

To act together for collective bargaining or

other mutual aid or protection

To refrain from any or all such activities.

In recognition of these rights, we hereby notify our

employees that:

WE WILL NOT discourage membership in Gen-

eral Truck Drivers, Warehousemen & Helpers Union,

Local 980, International Brotherhood of Teamsters,

Chauffeurs, Warehousemen and Helpers of America,

or any other labor organization, by discriminatorily

denying a bonus distribution to employees because of

their participation in a strike.

WE WILL make whole the approximately 33 strik-

ing employees for losses suffered by reason of their

being discriminatorily excluded from the November

1974 bonus distributions.

(Representative) (Title)

THIS IS AN OFFICIAL NOTICE AND MUST NOT BE

DEFACED BY ANYONE

This notice must remain posted for 60 consecutive days from the

date of posting and must not be altered, defaced, or covered by

any other material. Any questions concerning this notice or com-

pliance with its provisions may be directed to the Board’s Office,

450 Golden Gate Ave., Federal Building, Rm. 13018, Box 36047,

San Francisco, California, 94102—Telephone No. (415) 556-6721.

APPENDIX D

United States of America before the National Labor

Relations Board

Case No. 20-CA-9771

Ex.ecrro Vector, Inc., anp GENERAL TRucK DRIVERS,

WaAREHOUSEMEN & HAS, Loca, 980, LNTERNA-

TIONAL BroTHERHOOD oF TEAMSTERS, CHAUFFEURS,

WaAREHOUSEMEN AND HELPERS OF AMERICA

Employer’s Exceptions to the Administrative Law

Judge’s Decision

Pursuant to the Board’s Rules and Regulations, Se-

ries 8, as amended, Section 102.46. Counsel for the

Employer, ELECTRO VECTOR, INC., hereby files

the following exceptions to the Administrative Law

Judge’s Decision in the above case, which Decision

was issued on April 8, 1975, by Administrative Law

Judge Richard J. Boyce.

Exceptions

1. Page 3, lines 19-24: To the statement of the Ad-

ministrative Law Judge that the Employer’s exclusion

of strikers from participation in the bonus distribu-

tion, because not on the active payroll at the pre-

scribed times, violated Section 8(a)(3) and (1).

(26a)

27a

2. Page 5, lines 10-13: To the Administrative Law

Judge’s conclusion of law that by disqualifying strik-

ers from bonuses as found in this case, the Respondent

ELECTRO VECTOR, INC., engaged in unfair labor

practices within Section 8(a)(1) and (3) of the Act.

Respectfully submitted

Dated: April 25, 1975.

Merritt & THOMPSON,

Attorneys for Respondent,

Electro Vector, Inc.

By: MichAEL P. MERRILL.

U.S. COVERNEENT PRINTING OFFICE, 1977