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

RODAK, ., CLERK

Zn the Supreme

Anited States

OcroBEer TERM, 1976

No. 76-156 1

NATIONAL LABOR RELATIONS Bon,

Petitioner,

VS.

Exvectrro Vector, INc.,

Respondent.

Georce J. Ticry, II.

Litrier, Menpexson, Fastirr & Tick,

650 California Street, 20th Floor

San Francisco, California 94/08,

Telephone: (4/5) 433-1940,

MicRAkRL P. MERRILL,

145 Wikiup Drive,

Sante Rose, Californie 9540

Telephone: {707} 528-2882.

Attorneys for Respondent.

Page

DT MT, eee eee eee 1

D Lo, —— eee 2

resse esse dees esse eos esse 5

A. Section 10(e) of the National Labor Relations Act

requires the Board's findings to be sustained on appeal

only u supported by substantial evidence in the

rvcord considered as a whole, exclusive of whether or

no. that lack of evidence was objected to by the

responding party before the Board, its member agent

GP GF odin c % ¶—— 5

B. The Ninth Cireuit Court of Appeals properly con-

eluded that the cash bonus for work previously per-

formed herein was not a term or condition of employ-

ment within the meaning of Section 8(a)(3) of the

C. Even if the bonus is concluded to be a condition of

employment wtihin the meaning of Section 8(a) (3)

of the Act, there is no substantial evidence that the

respondent violated the Act by failing to pay dis-

eretionary bonuses to permanently replaced strikers .. 10

Drees e 19

Table of Authorities Cited

Cases Page

Allied Industrial Workers, AFL-CIO, Local Union No. 289

v. NLRB, 476 F.2d 868 (197): 12

Cavalier Division of Seeburg Corporation, 192 NLRB 290

(BOTA) vn nccccccccccccccccccccccencveeeceveseseeseres 12

Century Electrie Motor Company v. NLRB, 447 F.2d 10

(Gt Cle. een) ))) 10

ii TRL or AuTHoritiges CITED

Pages

E. I. DuPont DeNemours & Company v. NLRB, 480 F.2d

I. 11 . 8, 9

NLRB v. Cheney California Lumber Company, 327 U.S.

ö eee 6

NLRB v. Duncan Foundry and Machine Works, Inc.,

LL 12, 17, 19

NLRB v. Eleetrie Steam Radiator Corporation, 321 F. 2d

II. LTI 10

NLRB ». Federal-Mogul-Bower Bearings, Inc., National

Seal Division, 336 F.2d 781 (C.A. 9, 1964) ............ 16,17

NLRB v. Frick Co., 397 F.2d 956 (C. A. 3, 1968) ........ 12,19

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

eee desen eee 8, 9, 10, 11, 12, 17, 18, 19

NLRB v. Harrah’s Club, 403 F.2d 865 (9th Cir. 1968) ... 10

NLRB v. Jemeo, 465 F.2d 1148 (C. A. 6, 1972), cert. denied

// q 12

NLRB v. Ochoa Fertilizer Corporation, 368 U.S. 318 (1961) 6,7

NLRB v. Pistoresi, Nello & Son, Inc., 500 F.2d 399 (C.A.

% ᷣ éͤ—337232888] DB ̃˙ 8, 10

NLRB v. Quality Castings Company, 325 F.2d 36 (C. A. 6,

DEY «3060600060606 ceanénebebes otebnmonseseneseer 13, 14,17

NLRB v. Red Spot Electric Company, 191 F.2d 697 (C.A.

—K — 6

NLRB v. Selvin, 527 F.2d 1273 (C. A. 9, 1975) .......... 5

Pittsburgh-Des Moines Steel Company v. NLRB, 284 F.2d

See Gee UO rr 14,17

Quality Castings Company, 139 NLRB 928 ........... 12, 13,17

Radio Officers’ Union v. NLRB, 347 U.S. 17 ............. 14

Tex-Tan Welhausen Co. Inc. v. NLRB, 419 F.2d 1265 (C. A.

JK» 22 12, 19

Statutes

National Labor Relations Act:

Ie 2, 7, 13

reer eee eee ee eee 2, 7, 9, 13

; B eee 1, 5, 19

In the Supreme Court

Anited States

OorohrR TERM, 1976

No. 76-1561

NATIONAL LABOR RELATIONS Boarp,

Petitioner,

va.

Exectro Vector, INC.,

Respondent.

RESPONDENT’S BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Michael P. Merrill, on behalf of the Respondent,

Electro Vector, Inc., hereby submits its Brief in

opposition to the Solicitor General’s request for Writ

of Certiorari to review the judgment of the United

States Court of Appeals for the Ninth Circuit in this

case.

The statement of the Opinions Below, Jurisdiction

of this Sourt and the Statute Involved as set forth

in the Petition for Writ of Certiorari submitted

herein are correct.

QUESTIONS PRESENTED

1. Whether or not Section 10(e) of the National

Labor Relations Act requires the Board’s findings to

be sustained on appeal if the lack of certain evidence

was not timely objected to by the responding party

before the Board, its member agent or agency.

2. Whether the Ninth Circuit Court of Appeals

erred in concluding that the bonus was not a term or

condition of employment within the meaning of Sec-

tion 8(a)(3) of the Act as a prerequisite of finding

the Respondent in violation of that Section.

3. Whether, irrespective of said bonus being a

condition of employment, there is substantial evidence

that the Respondent violated Section 8(a)(3) and

(1) by failing to pay the stated bonus to permanently

replaced strikers.

STATEMENT OF THE CASE

The underlying facts of this case as indicated by

the exhibits on file herein and the transcript are pri-

marily undisputed. On May 2, 1974, the Union ini-

tiated an economic strike in support of collective

bargaining demand. Initially, all of the production

and maintenance employees of the Employer partici-

pated in said strike. (Tr. 10, 11). On May 6, 1974,

the Employer sent a letter to all striking employees

requesting that they return to work by May 13, 1974,

or that suitable replacements would be sought for

their positions. (GC Ex. 7, Tr. 31, 32). As replace-

ments were hired for appropriate positions, the strik-

*References are to the transcript of the hearing before the

ministrative Law Judge on March 4, 1975. *

ing employees were sent a second letter informing

them of the replacement and their status as a replaced

employee. (GC Ex. 88, Tr. 32, 33). On November 27,

1974, the Employer paid a bonus. (Tr. 24). This

bonus was paid to all employees who (1) were ac-

tively working for the Company on that day, and (2)

who were actively working for the Company at the

end of the Company’s fiscal year. (Tr. 17, 23, 29, 30,

37). The term “actively working” meant present at

the Employer’s place of business and actually working

at that time. Notably, these criteria were uniformly

applied to employees whether they were returning

employees who had participated in the strike or not.

Those employees who were working at the end of the

fiscal year but who were not working on the date the

bonus was paid as well as those employees who were

on strike at the close of the fiscal year but returned

prior to the payment date were not paid a bonus.

(Tr. 19, 24).

This bonus was in no way an accrued benefit auto-

matically paid to the employee. (Tr. 22). Further,

it was not a set Company program to pay bonuses

and, in fact, payment was in no way mandatory.

(Tr. 18, 29, 30). The bonus was not a part of the

expired collective bargaining agreement between the

Employer and Union nor was there any written pol-

icy in existence as to that bonus with a computation

thereof. (Tr. 22, 28, 30). To the contrary, the pay-

ment of the bonus was not necessarily tied to profits;

rather, it was fully a matter of discretion with the

Company and a decision which rested primarily with

4

the owners after an annual audit of the Company’s

books. (Tr. 35, 37).

The bonus was computed at a base amount of

$150.00. More was paid to supervisors, lead men, and

others who showed exceptional merit. A percentage

less than $150.00 was paid to others based on their

over-all attendance for the past fiscal year. (Tr. 19,

28). The bonus was paid as part of a regular payroll

check. (Tr. 41). Precisely the same format for com-

putation and payment was followed as that utilized

in fiscal year 1973 which was the first year any

monetary bonuses were paid. Prior to that time, tur-

keys and other gifts in kind were given as bonuses

for the precise same purposes. (Tr. 29, 41). The

stated basis of paying this monetary bonus was pri-

marily a “humanistic” one due to the economic hard-

ships which the employees were suffering under in

fiscal year 1973 in addition to the Company's desire

to keep attendance at an optimum. (Tr. 36).

At the time the bonus was paid, over one-third of

the striking employees had already abandoned the

strike and returned to work for the Employer. (Tr.

40). The record shows no promise of payments to

returning strikers or replacement of strikers still

supporting the work stoppage. (Tr. 24, 25, 31). At

the time of the computation and granting of the

bonus, there was no expectation that the employees

then on strike would return to work for the Em-

ployer. (Tr. 39, 40). The testimony of employees still

on strike indicated that there were no negative effects

caused by the granting of this bonus. (Tr. 7 through

15).

A. SECTION 10(e) OF THE NATIONAL LABOR RELATIONS ACT

REQUIRES THE BOARD’S FINDINGS TO BE SUSTAINED ON

APPEAL ONLY IF SUPPORTED BY SUBSTANTIAL EVIDENCE

IN THE RECORD CONSIDERED AS A WHOLE, EXCLUSIVE

OF WHETHER OR NOT THAT LACK OF EVIDENCE WAS OB-

JECTED TO BY THE RESPONDING PARTY BEFORE THE

BOARD, ITS AGENT OR AGENCY.

As indicated by the Board in its petition, Section

10(e) of the Act provides as follows:

“No objection that has not been urged before the

Board, its member agent or agency shall be con-

sidered by the Court, unless the failure or neglect

to urge such objection will be excused because of

extraordinary circumstances. The findings of the

Board with respect to questions of fact if sup-

ported by substantial evidence on the record con-

sidered as a whole shall be conclusive .. .”

The Ninth Circuit Court of Appeals in NLRB v.

Selvin, 527 F.2d 1273 (C.A. 9, 1975) has indicated

that the limitation that objections to the Board’s

application for enforcement must be urged before

the Board previous to being considered by the Court

is independent from the question of whether or not

the Board patently travelled outside the orbit of its

authority. It is Respondent’s contention that Selvin

stands for the proposition that the Board’s factual

findings will be sustained on appeal only if supported

by substantial evidence in the record considered as

a whole; regardless of whether or not previous ob-

jection has been made to lack of substantial evidence

in a particular area before the Board or any of its

agencies.

The foregoing analysis would appear to be con-

sistent with the language in NLRB v. Red Spot Elec-

tric Com any, 191 F.2d 697 (C.A. 9, 1951). In that

case, the Board had moved for summary entry of

decree of enforcement of a Board order automatically,

without examination, inasmuch as the Respondent

had not filed exceptions to the Board’s previous deci-

sion and had not made an appearance before the

Court. Although the Ninth Circuit Court of Appeals

did eventually enforce the Board’s order, it rejected

automatic enforcement, stating inter alia that it is

the custom of the courts to take notice of manifest

error to which no exception has been made, quoting

from NLRB v. Cheney California Lumber Company,

327 U.S. 385 (1946) :

“Since the Court is ordering entry of a decree,

it need not render such a decree if the Board

has patently travelled outside the orbit of its

authority so that legally speaking there is no

order to enforce.” (NLRB v. Cheney, 327 U.S.

385, 387.)

The leading Supreme Court cases in this area are

NLRB v. Cheney California Lumber Company, 327

U.S. 385 (1946) and NLRB v. Ochoa Fertilizer Cor-

poration, 368 U.S. 318 (1961). It is significant to

note that in both of those cases, the respondent em-

ployers had not taken exception to the hearing offi-

cer’s decision, nor had they made an appearance in

the Cireuit Court of Appeals in which the Board

was seeking enforcement of the order.

In Cheney, this Court noted that there had been

no previous objection made to interstate commerce

7

requirements or actual violation of the National Labor

Relations Act. Both of these areas do not relate to

questions of substantial evidence, but are rather basic

requirements for jurisdiction by the Board. In Ochoa,

the Court sua sponte deleted certain terms of a cease

and desist order which had actually been consented

to by the parties. This Court in that case emphasized

the importance of a consent by both parties in re-

versing the First Circuit Court of Appeals:

„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. A decree rendered by consent

‘is always affirmed without considering the merits

of the cause’. Nashville C of ST L.R. Company v.

U.S., 113 U.S. 261.”

Furthermore, this case again concerned critical

statutory or jurisdictional language as opposed to

consideration of substantial evidence.

Conversely, in the instant case, we are concerned

only with the issue of substantial evidence. Addition-

ally, the Respondent Company, Electro Vector, Inc.,

did file exceptions to the administrative law judge’s

conclusion of law that it had engaged in unfair labor

practices within Section 8(a)(1) and (3) of the Na-

tional Labor Relations Act by disqualifying strikers

from bonuses, thereby discriminating against employ-

ees with regard to their hours and conditions of

employment. Respondent in this case has also made

an appearance before the Ninth Circuit Court of

Appeals supporting its position both factually and

legally. As to the factual issue of whether or not the

bonus was in fact a term or condition of employment,

the Respondent has steadfastly maintained that this

bonus was clearly a matter of discretion with the

Company.

Effectively, the Respondent’s filing of exceptions in

this matter and their appearance in this case has

placed 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. NLRB v. Great

Dane Trailers, Inc., 388 U.S. 26, 30 (1967); F. J.

DuPont DeNemours d Company v. NLRB, 480 F.2d

1245, 1248 (5th Cir. 1973). Inclusion in the record of

uncontroverted evidence that the bonus paid was

purely a discretionary one in this case raises the

issue de facto. Its importance is buttressed by its

mention in the employer’s brief supporting its objec-

tions to the National Labor Relations Board and in

its brief before the Ninth Circuit Court of Appeals.

Failure of counsel to mention the precedent case of

NLRB v. Pistoresi, Nello & Son, Inc., 500 F.2d 399

(C. A. 9, 1974) did not require the Ninth Cireuit Court

of Appeals to ignore the existence of that case.

B. THE NINTH CIRCUIT COURT OF APPEALS PROPERLY CON-

CLUDED THAT THE CASH BONUS FOR WORK PREVIOUSLY

PERFORMED HEREIN WAS NOT A TERM OR CONDITION

OF EMPLOYMENT WITHIN THE MEANING OF SECTION

8(a)(3) OF THE ACT.

The Court of Appeals properly interpreted the ree-

ord below in determining that the bonus in question

did not in fact amount to a condition of employment.

Reviewing the evidence in the record, the Court in-

dicated that prior to 1973 the Company did not have

a bonus program. In 1973 the Company did in fact

pay a bonus but it did not establish an official pro-

gram of bonuses. The accountant for Electro Vector,

ne., indicated that this bonus was never automati-

cally given. The Vice President and General Man-

ager of Electro Vector, Inc., further testified that the

giving of a bonus was not mandatory but was at the

discretion of the owner of the Company. It is im-

portant to note further that this bonus was not part

of the Union contract which was in existence at the

time of the controversy. The above evidence was un-

refuted by any witnesses or documentary evidence to

the contrary.

The Court of Appeals properly determined that in

order to find employer discrimination with respect to

a term or condition of employment, the benefit being

conferred by the employer must in fact be “a term

or condition of employment.” NLRB v. Great Dane

Trailers, Inc., supra; E. I. DuPont DeNemours d

Company v. NLRB, supra. A bonus may in fact be a

wage in some cireumstances and in other cireum-

stances be considered to be a gift. Bonuses should

properly be considered gifts unless they have been

paid over a sufficient length of time to have become

a reasonable expectation of the employees and, there-

fore, to be a part of their anticipated remuneration.

Century Electric Motor Company v. NLRB, 447 F.2d

10 (8th Cir. 1971); NLRB v. Harrah’s Club, 403 F. 2d

865 (9th Cir. 1968); NLRB v. Electric Steam Radi-

ator Corporation, 321 F.2d 733 (6th Cir. 1963); NLRB

v. Pistoresi, Nello & Son, Inc., 500 F.2d 399 (9th

Cir. 1974).

©. EVEN IF THE BONUS IS CONCLUDED TO BE A CONDITION

OF EMPLOYMENT WITHIN THE MEANING OF SECTION

8(a)(3) OF THE ACT, THERE IS NO SUBSTANTIAL EVI.

DENCE THAT THE RESPONDENT VIOLATED THE ACT BY

FAILING TO PAY DISCRETIONARY BONUSES TO PERMA-

NENTLY REPLACED STRIKERS.

The leading case in this area is the NLRB v. Great

Dane Trailers, Inc., supra, wherein this Court held

that the Court of Appeals below erred in speculating

as to the motives of the Employer/Company. In that

case, accrued vacation benefits under an expired

Union contract were summarily denied to strikers.

The record was entirely devoid of the Company’s

motivation in denying such benefits to the strikers

and this Court held that the Court of Appeals could

not speculate as to what the Employer’s motives were

in such a denial, specifying the applicable rule of

law as follows:

“From this review of our recent decisions, sev-

eral principles of controlling importance here

can be distilled. First, if it can be reasonably

—

11

concluded that the employer’s discriminatory

conduct was ‘inherently destructive’ of important

employee rights, no proof of an anti-union moti-

vation is needed and the Board can find an unfair

labor practice even if the rmployer introduces

evidence that the conduct was motivated by busi-

ness considerations. Second, if the adverse effect

of the discriminatory conduct on employee rights

is ‘comparatively slight’ an anti-union motivation

must be proved to sustain the charge if the Em-

ployer has come forward with evidence of legiti-

mate and substantial business justifications for

the conduct. Thus, in either situation, once it

has been proved that the Employer engaged in

discriminatory conduct which could have ad-

versely affected the employee rights to some ex-

tent, the burden is upon the Employer to establish

that he was motivated by legitimate objective

since proof of motivation is most accessible to

him.”

Essentially, the Great Dane Trailers, Inc. case is

one that sets forth the various burdens of proof. On

one hand, if it is reasonably concluded that an Em-

ployer’s discriminatory conduct is inherently destruc-

tive of important employee rights, then the Board

need not prove any further anti-union motivation. On

the other hand, if the Board shows discriminatory

conduct which is comparatively slight, then anti-union

motivation must be proved to sustain the charge. In

this second instance, the Employer must first place

on the record proof of a legitimate and substantial

justification for his conduct. Once the Employer's

motivations other than anti-union are placed on the

record, it then becomes the Board’s burden to rebut

12

these business justifications and prove a case of anti-

union motivation. It is important to note that in the

case of alleged discriminatory action which results in

a comparatively slight effect on employee rights that

the National I bor Relations Board must prove the

anti-union mot vation in order to legitimately find a

violation of the act.

Apart from the controlling precedent with regard

to burdens of proof and legal presumptions, the Great

Dane Trailers, Inc., case, supra, has been cited as

factual precedent in subsequent accrued benefits cases.

NLRB v. Frick Co., 397 F.2d 956 (C. A. 3, 1968);

NLRB v. Duncan Foundry and Machine Works, Inc.,

435 F.2d 612 (C.A. 7, 1970); Tex-Tan Welhausen

Co. Inc. v. NLRB, 419 F.2d 1265 (C.A. 5, 1969). As

in Great Dane Trailers, Inc., supra, each of the fore-

going cases involved the denial of accrued vacation

benefits as set forth in prior existing union contracts

which had expired prior to the commencement of

strike activity. Notably, the additional cases cited

by general counsel in support of the Board’s conten-

tions herein also involved accrued vacation benefits.

Cavalier Division of Seeburg Corporation, 192 NLRB

290 (1971); Allied Industrial Workers, AFL-CIO,

Local Union No. 289 v. NLRB, 476 F.2d 868 (1973);

NLRB v. Jemco, 465 F.2d 1148 (C.A. 6, 1972), cert.

denied, 409 U.S. 1109.

The controlling Board precedent which was applied

in this case both by the administrative law judge and

the Board itself was the National Labor Relations

Board case of Quality Castings Company, 139 NLRB

928. That case involved the distribution under a

13

profit sharing plan. Each employee to qualify had

to have worked fifty percent of the time between Jan-

uary and September preceding distribution. The

amounts paid to those qualifying were a function of

absenteeism, exceptions being allowed for excused

absences. Some 64 employees struck in April and

May of that year and were not thereafter recalled for

valid economic reasons. Because of this, these strik-

ing employees were deemed not to have satisfied the

qualifying criteria and were denied any distributions

under the profit sharing plan. The National Labor

Relations Board found that the disqualified strikers

had been discriminated against in violation of Section

8(a)(3) and (1) on the basis that time on strike

may not be lawfully considered the equivalent of

normal absence for the purposes of determining a

forfeiture. The Board specifically stated :

“The Respondent cannot be required to make

distributions 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 proceed

to impose a total nonproportionate forfeiture on

employees because they engaged in such ab-

sences—in effect because they are engaged in

Section 7 Activities.”

The reasoning of the Quality Castings Company

case which is the leading Board precedent has not

been accepted by the Circuit Courts of Appeals in

total. In fact, the Quality Castings Company case

was reversed by the Court of Appeals for the Sixth

Circuit. NLRB v. Quality Castings Company, 325

14

F.2d 36 (C.A. 6, 1963). In that opinion, the Court of

Appeals quoted in length from this Court’s opinion

in Radio Officers’ Union v. NLRB, 347 U.S. 17, stat-

ing as follows:

“The unfair labor practice is for an employer

to encourage or discourage membership by means

of discrimination. Thus, this section does not out-

law all encouragement or discouragement of mem-

bership in labor organizations. Only such as is

accomplished by dscrimination is prohibited. Nor

does this section outlaw discrimination in em-

ployment as such. Only such discrimination as

encourages or discourages membership in a labor

organization is proscribed.”

This Court in that case went on to state:

“We are of the opinion that when as in this

case an Employer’s action is not specifically di-

rected against those who have engaged in pro-

tected types of union activity but is rather

directed at a group which is defined by other

than union membership or activity criteria and

which clearly includes others who did not engage

in the protected concerted activities. The Board

not only must prove discrimination but also it

must prove the Employer’s motivation. There is

nothing in NLRB v. Erie Registor Corporation,

373 U.S. 221 (1963), which conflicts with this

holding.” (Emphasis added).

The specific precedent set forth in the Ninth Cir-

cuit Court of Appeals has been similar to that of the

Sixth Circuit in its refusal to enforce Board orders

in such cases. In the case of Pittsburgh-Des Moines

Steel Company v. NLRB, 284 F.2d 74 (C.A. 9, 1960),

the Employer’s pei-tion to set aside the order of the

15

Board was granted. In that case, the Employer had

denied a bonus to said workers of a plant because

of their failure to achieve sufficient productivity to

satisfy the demands of the Company’s bonus formula.

The lack of productivity was clearly the consequence

of a strike carried on by the employees. The rationale

in that case was as follows:

“That protected union activity is the direct

cause of a business condition upon which an Em-

ployer actually predicates discrimination among

his employees does not mean that the basis for

discrimination is the protected union activity. An

employer may hire permanent replacements for

economic strikers even though the business con-

dition—and a lack of manpower—which impels

the Employer to act was directly caused by a

strike . . . indicates that when in order to obtain

replacements for economic strikers it is necessary

for an employer to promise seniority to the re-

placements, the denial of seniority status to those

strikers who are reinstated, is not an unfair labor

practice although the business condition which

actuat * the Employer to deny seniority status

to reinstated strikers was directly caused by the

strike itself and in Local 200 International

Brotherhood of Teamsters v. NLRB, 233 F.2d

233, 238 (7th Circuit 1956) the court approved

a conclusion of the Board which held that Em-

ployer had not committed an unfair labor prac-

tice by discharging an employee because the de-

mand for his job had ceased even though the job

was rendered unnecessary by the employee’s own

picketing. The picketing, a protected union ac-

tivity, had caused business to drop off with the

result that the Employer no longer had any need

for the job which the employee had been doing.”

16

The Ninth Circuit Court of Appeals further indi-

cated that frequently the very business condition upon

which the Employer has predicated the alleged dis-

criminatory action is the direct result of participation

in protected union activity and in this specific case

the particular poor productivity of the group which

did not receive the bonus was in fact caused by their

participation in a prolonged strike during the year

in question. Effectively, the strike had caused the

business condition which the Employer then used as

the criteria for its determination to withhold the

bonus. The important point was that the protected

Union activity was not in itself the basis of the Em-

ployer’s discrimination. The Court then concluded

that to enforce the Board’s order they must find in the

records substantial evidence of the bad motive or

intent which underlay the Company’s action other

than the discriminatory act itself and its foreseeable

consequences.

In NLRB v. Federal-Mogul-Bower Bearings, Inc.,

National Seal Division, 336 F.2d 781 (C.A. 9, 1964),

the Employer terminated several employees who had

not completed their sixty day probation period and

who had incidentally participated in a strike. The

case was heard upon stipulated facts indicating no

anti-union animus by the Employer. In that case, it

was indicated that the Board is bound to first con-

sider the effect of the Employer’s rule or conduct on

the rights of the employee to strike and secondly, the

of the Employer in promulgating the rule or adopt-

ing the course of conduct in issue; and further, that

17

upon a balance in favor of one side or the other being

struck, that evidence concerning the motivation of the

Employer would become an important element. The

Ninth Cireuit Court of Appeals went on to hold in

NLRB v. Federal-Mogul-Bower Bearings, Inc., supra,

that the record considered as a whole was barren of

substantial evidence to sustain the Board’s finding of

unfair labor practices by the Respondent Company.

The foregoing cases, to wit: NURB v. Quality Cast-

ings Company; NLRB v. Federal-Mogul-Bower Bear-

ings, Inc., and Pittsburgh-Des Moines Steel Company

v. NLRB, supra, admittedly predate the Supreme

Court's decision in NLRB v. Great Dane Trailers,

Inc., supra. Notwithstanding this fact, the Great

Dane Trailers, Inc., case does not specifically over-

rule the precedent set in these foregoing cases but

merely states a new approach with regard to setting

forth certain presumptions and burdens of proof to

be borne by the National Labor Relations Board and

the respective Employer. In the specific matter of

facts which give rise to an unfair labor practice in

the alleged discriminatory denial of employee bene-

fits, the Federal Courts have never expanded the

Board’s Quality Castings doctrine beyond that of the

denial of accrued vacation benefits which had pre-

viously been provided for by an expired union con-

tract.

In the case of NLRB v. Duncan Foundry and Me

chine Works, Inc., supra, the Ninth Circuit Court of

Appeals specifically distinguished the Pittsburgh-

Des Moines Steel case, supra, as not controlling in

that particular situation because it dealt with a pro-

18

duction bonus as opposed to a question of accrued

vacation benefits under an expired union contract.

Applying the foregoing legal principles to the in-

stant case, it is the Employer’s contention that the

payment of discretionary bonus in the manner set

forth by established company policy did not consti-

tute a violation of the National Labor Relations Act.

In the language of the Great Dane Trailers, Inc.,

case, the action of the Employer in this case is clearly

not that which can be described as inherently de-

structive of employee rights. This bonus was (1) a

purely discretionary act on the part of the Employer;

(2) totally unannounced to any employees including

strikers or non-strikers; (3) took place after the

majority of strikers had either been permanently

replaced or had abandoned the strike and returned to

work; (4) not viewed as having a substantial impact

on the employees which were still on strike according

to both their testimony and that of the Employer’s

representatives. This fact is buttressed by the finding

of the administrative law judge and the Board that

the particular act charged herein did not constitute a

serious enough violation to convert the economic

strike which was in progress to an unfair labor prac-

tice strike.

The instant situation is one where the Employer

is presumed to have granted the bonus as a diserimi-

natory act absent any evidence on the record to the

contrary. However, the record is not void of the

Employer's motivation. Representatives of the Em-

ployer have specifically testified that the motivation

behind granting such a bonus was based on humani-

tarian desires as well as encouraging good attendance.

19

Once this evidence of a substantial business interest

has been placed on the record, it is then the duty of

the Board to show controverting evidence of anti-

union animus. In this case, there is virtually no evi-

dence of anti-union animus other than the alleged

discriminatory action of granting the bonus itself.

Further, unlike the cases of Great Dane Trailers,

Inc.; Frick Company; Duncan Foundry and Machine

Works and Tex-Tan Welhausen, there was no entitle-

ment to benefits set forth in any pre-existing con-

tract nor was there any entitlement to a bonus at all

for the year 1974 unless the Employer deemed it

appropriate.

CONCLUSION

To summarize, the Ninth Circuit Court of Appeals

was correct in holding, in line with its precedent,

that the bonus paid was not a condition of employ-

ment; and even if this Court found to the contrary,

the facts still fail to produce the substantial evidence

required for enforcement of a Board order. In any

ease, Section 10(e) does not vitiate the traditional

requirement that the Board’s findings may only be

supported by substantial evidence.

Accordingly, the Petition for Writ of Certiorari

should be denied.

Dated, June 1, 1977.

Respectfully submitted,

Georce J. Tien, II.

Micnaew P. MERRILL,

Attorneys for Respondent.