Petition — Oil, Chemical & Atomic Workers International Union v. Johns-Manville Products Corp.

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Supreme Court, U. &.

gem ae

MAR 24 1978

—

IN THE — ae

Supreme Court of the United States

OCTOBER TERM, 1977

. “77-1351

OIL, CHEMICAL AND ATOMIC WORKERS

INTERNATIONAL UNION, AFL-CIO,

. Petitioner,

JOHNS-MANVILLE PRODUCTS CORPORATION

and

NATIONAL LABOR RELATION BOARD,

Respondents.

f PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FIFTH CIRCUIT

JERRY D. ANKER

WALD, HARKRADER & Ross

4 1320 Nineteenth Street, N.W.

Washington, D.C. 20036

JOHN R. TADLOCK

JAMES J. CRONIN

P. O. Box 2812

Denver, Colorado 80201

VICTOR H. HEss, JR.

DENNIS M. ANGELICO

HESS & WASHOFSKY

1411 Decatur Street

“ New Orleans, Louisiana 70116

Counsel for Petitioner

March 24, 1978

WILSON - EPES PRINTING Co.. INC. - RE 7-6002 - WASHINGTON. D.C. 20001

INDEX

Page

OPINIONS BELOW — ae 1

.. 2

QUESTIONS PRESENTED * — 2

STATUTES INVOLVED D 2

STATEMENT OF THE CASE 3

The Decision of the NLRB .. 6

The Decision of the Court of Appeals 7

REASONS FOR GRANTING THE WRIT 8

CONCLUSION ............ * — 14

APPENDIX A—Opinion of Court of Appeals la

APPENDIX B—Judgment of Court of Appeals 47a

APPENDIX C—Notice of Denial of Rehearing ............ 49a

APPENDIX D—Decision and Order of NLRB B 50a

TABLE OF AUTHORITIES

Cases:

American Ship Building Co. v. NLRB, 380 U.S.

300 (1965) . 11,12

Hess Oil Virgin Islands Corp., 205 N. L. R. B. 23

(1973) 13

Inland Trucking Co., 179 N. L. R. B. 350 (1969), en-

forced, 440 F.2d 562 (7th Cir.), cert. denied, 404

U.S. 858 (1971) 6, 12

Inter Collegiate Press, 199 N. L. R. B. 177 (1972),

enforced, 486 F.2d 837 (8th Cir. ne cert. de-

nied, 416 U.S. 938 (1974) 13

International Ladies Garment Workers v. „ NLRB,

237 F. 2d 545 (D. C. Cir. 1956) 10

NLRB v. Brown, 380 U.S. 278 (19657 12

TABLE OF AUTHORITIES - continued * 6

page Supreme Court of the United States

NLRB v. Cast Optics Corp., 458 F.2d 398 (3d OCTOBER TERM, 1977

Cir.), cert. denied, 409 U.S. 850 (1972) 10

NLRB v. Clinchfield Coal Co., 145 F.2d 66 (4th

C 10

NLRB v. Erie Resistor Corp., 373 U.S. 221 b No.

Fee 13

NLRB v. Fansteel Metallurgical Corp., 306 U.S.

I 9

“aa Great Dane Trailers, Inc., 388 U.S. 26 * } Ou, CHEMICAL AND ATOMIC WoRKERS

NLRB v. Insurance Agents, 361 U.S. 477 (1960) 9 | INTERNATIONAL UNION, AFL-CIO,

NLRB v. Local 1229, IBEW, 346 U.S. 464 (1953) 9 Petitioner,

NLRB v. Mt. Clemens Pottery Co., 147 F.2d 262 V.

r 10 |

NLRB v. Ohio Calcium Co., 133 F.2d 721 (6th JOHNS-MANVILLE PRODUCTS CORPORATION

p 10 | and

NLRB v. Sea-Land Services, Inc., 356 F.2d 955 NATIONAL LABOR RELATION BOARD,

(Ist Cir.), cert. denied, 385 U.S. 900 (1966) — 10 | Respondents.

NLRB v. Valley Die Casting Corp., 303 F.2d 64

(6th Cir. 19085 .ĩũ„9? 10 |

_ NLRB v. Witchita Television Corp., 377 T 578 | PETITION YOR A WRIT OF CERTIORARI TO THE

(10th Cir.), cert. dented, 964 U.S. STi (1960) 10 | UNITF® STATES COURT OF APPEALS FOR THE

Ottawa Silica Co., 197 N.L.R.B. 449 (1972), en- FIFTH CIRCUIT

forced per curiam, 482 F.2d 945 (6th Cir.

% 12 ö

Sargent-Welch Scientific Co., 208 N. L. R. B. 811 |

— —— —— 13 *

Stewart Die Casting Corp. v. NLRB, 114 F. 2d 849 Petitioner requests that a writ of certiorari issue to

(7th Cir. 1940), cert. denied, 312 U.S. 680 review the judgment of the United States Court of Ap-

OS EE si 10 | peals for the Fifth Circuit entered in this case on Au-

WGN of Colorado, Inc., 199 N.L.R.B. 1058 (1972). 13 | gust 19, 1977.

Statutes: | OPINIONS BELOW

National Labor Relations Act: The opini 0 f th 7 rt f A al N rted 5

n of the Court of Appeals is repo at 557

Section 7, 29 A — 2,8 | F.2d 1126 and reprinted in Appendix A (la). The Deci-

Section 8, 29 U.S.C. § 158 ....... — 3, 6,8 | sion and Order of the National Labor Relations Board,

including the Decision of the Administrative Law Judge,

are reported at 223 N.L.R.B. 1317 and reprinted in

Appendix D (50a).

JURISDICTION

The judgment of the Court of Appeals (Appendix B)

was entered on August 19, 1977, and petitions for rehear-

ing were denied on October 26, 1977 (Appendix C). By

an order dated January 13, 1978, Mr. Justice Powell

extended the time for filing a petition for certiorari to

and including March 25, 1978. This Court’s jurisdiction

to review the judgment below is based on 28 U.S.C.

§ 1254(1).

QUESTIONS PRESENTED

1. Whether the occurrence of some disruption of an

employer’s operations during collective bargaining nego-

tiations constitutes an “in-plant strike“ which permits the

employer to hire permanent replacements for all union-

represented employees, where there is no proof and no

finding that all or even a substantial number of such

employees engaged in any disruptive activities.

2. Whether an employer that has locked out its em-

ployees in connection with a collective bargaining dispute

may permanently replace such employees with new hires.

STATUTES INVOLVED

Section 7 of the National Labor Relations Act, 29

U.S.C. § 157, provides in pertinent part as follows:

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 engage in other concerted activities

for the purpose of collective bargaining or other mu-

tual aid or protection....

Section 8 of the National Labor Relations Act, 29

U.S.C. § 158, provides in pertinent part as follows:

(a) it shall be an unfair labor practice for an em-

ployer—

(1) to interfere with, restrain, or coerce employ-

ees in the exercise of the rights guaranteed in sec-

tion 7;

* 0 * *

(3) by discrimination in regard to hire or tenure

of employment or any term or condition of employ-

ment to encourage or discourage membership in any

labor organization

(5) to refuse to bargain collectively with the rep-

resentatives of his employees

STATEMENT OF THE CASE

Petitioner Union was the collective bargaining repre-

sentative of approximately 107 production and mainte-

nance employees at the New Orleans plant of respondent

Johns-Manville Products Corporation. On September 11,

1973, the Union and the Company commenced negotiations

for a new collective bargaining agreement, to replace

one which was due to expire on October 12, 1973. The

negotiations were unsuccessful, due largely to the Com-

pany’s insistence upon certain proposed changes in the

prior agreement, particularly one which would have de-

leted a provision requiring the Company to train its own

employees to fill mechanical positions rather than hiring

mechanics from outside.

On October 31, 1973, the Company announced that the

plant would be shut down until an agreement was reached.

Two weeks later, on November 14, the Company resumed

production with temporary replacements, consisting of

employees from its other plants, supervisors, and some

newly-hired temporary employees. Thereafter, in April

1974, the Company began to hire permanent replace-

ments. Although negotiations with the Union were con-

tinuing during this period, the Company did not inform

the Union in advance of its decision to hire permanent

replacements, nor did it bargain with the Union concern-

ing this action. Ultimately all of the former employees

were permanently replaced.

The Company contended that its decision to close the

plant on October 31, and its subsequent decision to per-

manently replace the entire workforce, were prompted

largely by acts of sabotage which it claims were com-

mitted by employees during September and October

1973. The Administrative Law Judge who heard the

evidence made extensive findings with respect to this

issue, which were adopted in full by the NLRB and

left undisturbed by the Court of Appeals.“ These findings

may be briefly summarized as follows:

The Company’s plant manufactures dried felt, a crude

form of paper which is used as the base for asphalt roof-

ing materials. This product is made from a slurry of

paper, pulpwood, and water, which is first compressed to

form a sheet capable of supporting its own weight, then

processed across a conveyor belt onto dryer drums or

rollers until most of the remaining moisture is removed,

after which it is wound on a reel and cut into rolls. In

the course of this process, the sheets sometimes break,

either because of a maladjustment in the rollers, a defect

in the slurry mixture, or foreign objects in the equipment.

The sheets can also easily be broken, deliberately or acci-

dentally, by hand. In addition, the rollers and other

equipment sometimes break down due to the presence

of scrap metal or other foreign objects.

1The Court of Appeals stated: “We agree with the factual find-

ings cf the Administrative Law Judge and the Board, but not with

the conclusions they reached.” (12a.)

Although paper breaks and equipment malfunctions

occur quite regularly, the Company claimed that such

incidents occurred with excessive frequency during periods

of collective bargaining negotiations, both in the past and

in 1973. There was evidence that there were more paper

breaks than usual in September and October.“ In addi-

tion, in early October “the Respondent found that a

2,300-volt switch had been disconnected causing a shut-

down of the mill. Dvring this same period there were

also some maladjustments in the dryer sections, as well

as damage to a cylinder wire which appeared to have been

clearly and sharply cut... .” (77a). Because of these

problems, the Company laid off its production force from

October 12 through 21, to enable its maintenance em-

ployees to inspect and repair all equipment (51a). Shortly

after production was resumed, “[o]n October 22 or 23,

1973 all three defibrators were inoperable because heavy

foreign materials were lodged between the segments with-

in the equipment.. (78a.) On the same day, there

was also an unsually high incidence of paper breaks, “re-

sulting in the production of only 13% tons of paper as

compared to a normal day’s production of 110 to 120

[tons].” (78a.)

The Company did not conduct any investigation to de-

termine which (if any) of its employees were responsible

for these incidents, nor did it make any effort to obtain

an investigation by law enforcement authorities. At the

NLRB hearing, it “did not introduce any evidence which

identified any employee who was even alleged to be

responsible for such activities.” (97a.) Nevertheless, it

The Court of Appeals also referred to the fact that “[a]n inor-

dinate number of paper breaks occurred on or about August 21 or

22, 1973 which were the result of improper adjustment of dryer

section controls.” (4a.) Although the Company suggested, and the

court seemed to infer, that this incident was related to the negotia-

tions, this seems highly unlikely since the negotiations did not even

commence until three weeks later, on September 11.

contended that the disruptions were the result of de-

liberate, concerted action by the employees.

The Administrative Law Judge found, however, that

the evidence was “insufficient to support a conclusion and

finding that Respondent’s employees were engaged in

concerted improper conduct.” (97a.) He pointed out that

paper breaks can be “caused by several unintentional

factors as well as by intentional acts,” and that the fre-

quency of such events was sometimes “erratically un-

stable” even during nonnegotiating periods. (98a.) He

further found that, even if sabotage could be inferred

from the evidence, “‘such activities could have been car-

ried out by a single individual, acting on his own behalf

and not on behalf of, or in concert with, other employees

or the Ur ion.“ (99a.) He noted that the Union had not

“advocated, initiated or condoned” any disruptive activi-

ties. (99a.)

The Decision of the NLRB

Both the Administrative Law Judge and the Board

held that the Company had the right, after reaching a

bargaining impasse, to lock out its employees, and that

it also had the right to operate its plant during the lock-

out with temporary replacements.* They further held,

however, that when the Company hired permanent re-

placements it violated Sections 8(a)(1), (3), and (5)

of the National Labor Relations Act. Such action, the

Board held, was “inherently discriminatory and destruc-

tive of said employees’ protected rights” (103a), “com-

Board Member Jenkins dissented from the holding that the Com-

pany had the right to utilize temporary replacements during the

lockout. On the basis of his dissenting opinion in various prior cases

and the Seventh Circuit’s decision in Inlend Trucking Co. v. NLRB,

440 F.2d 562 (7th Cir.), cert. denied, 404 U.S. 858 (1971), he would

have held that even the temporary replacement of locked-out em-

ployees is prohibited by Sections 8(a)(1) and (3) of the Act.

(56a-59a.)

pletely destroyed the bargaining unit“ and “constituted a

withdrawal of recognition” of the Union. (52a-53a.)

The Board emphasized that the Company “did not have

reasonable and sufficient objective considerations upon

which to conclude that ‘any or all of its employees’ were

engaged in improper conduct so as to justify discharge

of all production employees.” (53a.)

The Decision of the Court of Appeals

A divided Court of Appeals (Judge Wisdom dissent-

ing) ‘reversed the decision of the Board. The majority

held that “as a matter of law, the employees were in-

volved in what amounted to an in-plant strike” (12a),

and that the employer therefore had a right to hire

permanent replacements in accordance with the well-

established rule that “strikers” can be permanently re-

placed. The court found it unnecessary to reach the

question of whether an employer may permanently re-

place locked-out employees.

Judge Wisdom, in dissent, emphatically rejected the

majority’s conclusion that there was an “in-plant strike.”

He pointed out, inter alia, that there was “less than one

additional paper break per shift during August through

October 1973” (20a), that excessive paper breaks had

also occurred “in January, May, and July of 1973, long

before any negotiations” (20a), and that with the excep-

tion of a single day—October 22—production during the

period of the alleged “strike” ranged from 104 to 112

tons per day, very close to the normal average of 110 tons

per day. (22a.) He also demonstrated that the evidence

fully supported the Board’s finding that all of the inci-

dents of disruption, if they were caused by employees at

all, could have been caused by only “one or two or a

handful of workers.” (24a.)

The dissent further argued that the majority’s decision

was contrary to all precedent. Sabotage of an employer’s

operations, Judge Wisdom pointed out, is not a “strike”

but an unprotected activity, and the employees en-

gaging in such activity may be fired or otherwise penal-

ized, not merely replaced. The prior cases uniformly

hold, however, that such action may be taken only against

those employees who have been shown to have engaged

in the improper activity. (25a-28a.)

The majority’s holding, the dissent said, “has given

employers a lethal new tool to combat future unioniza-

tion and to avoid the process of collective bargaining. . . .

Companies will be encouraged to thwart bargaining and

unionization by visiting the sins of the few on the many,

causing unemployment on those who seek to exercise their

section 7 rights.” (30a.)

Having rejected the basis for the majority’s opinion,

the dissent found it necessary to reach the question of

whether an employer who locks out his employees may

thereafter permanently replace them. After a lengthy

analysis of the facts and applicable legal principles, the

opinion concluded that such permanent replacement was

unlawful under Sections 8 (a) (1) and (3) of the Act, 29

U.S.C. § 158 (a) (1), (3). (31a-46a.)

REASONS FOR GRANTING THE WRIT

Certiorari is warranted in this case to review the

unprecedented holding of the Court of Appeals that evi-

dence of participation by some employees in disruptive

activities permits the permanent replacement of the entire

workforce. This startling decision is in conflict with all

prior cases, including decisions of this Court and many

courts of appeals. Unless reversed, the decision will

cause conflict and confusion—and foster litigation—in an

area of the law which has long been regarded as settled,

and will encourage employers to use the misconduct of

some employees as a pretext for depriving all others of

the rights guaranteed by the National Labor Relations

Act.

The problem presented in this case is a recurring one,

since unlawful conduct, including violence and destruction

of property, is unfortunately not an uncommon occurrence

on the American labor-relations scene. Cases dealing

with such conduct—both by employers and by employees—

are legion. But no court has ever previously held that an

employer may terminate or permanently replace all of his

employees because of the misconduct of a few. As the

dissent below pointed out, the majority cited “no section

of the Act, no decision of a court, no holding of the Board,

and no argument of labor policy in support of its conclu-

sion. There is no citation because no supporting case

exists.” (24a-25a.)

In NLRB v. Fansteel Metallurgical Corp., 306 U.S. 240

(1939), this Court held that an employer may discharge

employees who engage in unlawful or “unprotected” ac-

tivities—in that case, the seizure and physical occupation

of the employer’s buildings. But the Court made clear

that only the actual perpetrators of the offense could be

dismissed. The Court spoke of the employer’s “right to

discharge the wrongdoers from its employ,” “to dis-

charge those responsible for the unlawful seizure.” 306

U.S. at 254 (emphasis added). Similarly, in NLRB v.

Local 1229, IBEW, 346 U.S. 464 (1953), the Court

sustained the discharge of nine employees who had en-

gaged in unprotected conduct, but held that a tenth em-

ployee had been improperly discharged because he had

not participated in the offense. And in NLRB v. Insur-

ance Agents, 361 U.S. 477, 493-94 (1960), the Court

noted that an employer “could have discharged or taken

other appropriate disciplinary action against the em-

ployees participating in these ‘slow-down,’ ‘sit-in,’ and

arguably unprotected disloyal tactics.” (Emphasis added.)

Consistently with these cases, the courts of appeals

have uniformly held that only those employees who are

shown to have been guilty of unlawful or unprotected

activities may be terminated. “Certainly all the em-

ployees should not be deprived of the benefits of the Act

because certain undisclosed ones forfeited their rights.”

Stewart Die Casting Corp. v. NLRB, 114 F.2d 849, 856

(7th Cir. 1940), cert. denied, 312 U.S. 680 (1941). An

employer may not discharge employees “who took no part

in the disturbance.” NLRB v. Clinchfield Coal Co., 145

F.2d 66, 72 (4th Cir. 1944). The violent conduct of

some employees “is not . . . to be imputed to other union

members in the absence of proof that identifies others as

participating in such violence.” NLRB v. Mt. Clemens

Pottery Co., 147 F.2d 262, 268 (6th Cir. 1945). “An act

of violence by a participant in a strike may not be

imputed to others generally or to the union in the absence

of a showing of agency, ratification, counselling, incite-

ment, or other form of participation in the act of violence

by others or by the union.” NLRB v. Sea-Land Services,

Inc., 356 F.2d 955, 966 (1st Cir.), cert. denied, 385 U.S.

900 (1966). Employees have “no obligation to disavow

misconduct which they did not initiate and with which

they are not shown to have been connected,” and their

failure to do so “provides no rational basis for inferring

that they acquiesced in the wrongs of others with whom

no agency relationship is shown.” International Ladies

Garment Workers v. NLRB, 237 F.2d 545, 552 (D.C.

Cir. 1956). “The law is settled that an employee’s dis-

qualification for reinstatement must be based upon evi-

dence that he personally participated in misconduct.”

NLRB v. Wichita Television Corp., 277 F.2d 579 (10th

Cir.), cert. denied, 364 U.S. 871 (1960). See also NLRB

v. Cast Optics Corp., 458 F.2d 398, 406 (3d Cir.), cert.

denied, 409 U.S. 850 (1972); NLRB v. Valley Die Cast

Corp., 303 F.2d 64, 67 (6th Cir. 1962); NLRB v. Ohio

Calcium Co., 133 F.2d 721, 726 (6th Cir. 1943).

— ———— I důe ee

The decision below is squarely in conflict with all of

these cases. It is also in conflict with a fundamental

principle of our jurisprudence—namely, that only the

guilty may be punished. To be sure, one consequence of

that principle is that wrongdoers who cannot be identified

will go unpunished. But our system has always preferred

that result to the imposition of communal guilt and the

punishment of the innocent.

Aside from being in conflict with precedent and basic

juridical principles, the decision below can only have mis-

chievous results. It would encourage employers, instead

of seeking to identify and punish wrongdoers, to use the

occurrence of any misconduct as a basis for depriving

innocent employees of their statutory rights. Even in

this case, the Company made no effort to find out who

was responsible for the disruption, perhaps because it

preferred to use it as a means of ridding itself of an

unwanted union. If the law permits this result, em-

ployees who would otherwise refrain from improper con-

duct might be tempted to participate, since they would

be subject to punishment whether they did so or not.

We believe the decision below is.so plainly wrong that

this Court should reverse it summarily, without further

briefs or argument. But in any event, the issue pre-

sented is sufficiently important and recurring, and the

decision so squarely in conflict with prior precedent, as to

require review by this Court.

II.

A separate question presented by this case is whether,

quite apart from any disruption, an employer may hire

permanent replacements for employees who have been

locked out because of a collective bargaining dispute. In

American Ship Building Co. v. NLRB, 380 U.S. 300

(1965), this Court held that it is not a violation of the

National Labor Relations Act for an employer to lock

out its employees after a bargaining impasse, but ex-

pressed “no view whatever as to the consequences which

would follow had the employer replaced his employees

with permanent replacements or even temporary help.”

380 U.S. at 308 n.8. In a companion case, NLRB v.

Brown, 380 U.S. 278 (1965), the Court held that it was

not unlawful for a group of employers to utilize tem-

porary replacements during a lockout instituted as a

“defensive measure” in response to a whipsaw strike.

But Brown did not hold that permanent replacements

could be used even in that circumstance, see 380 U.S. at

292 n.6; id. at 293 (concurring opinion of Mr. Justice

Goldberg), and American Ship left open the question

whether even temporary replacements could be used if

the lockout is “offensive” rather than “defensive” in

character—i.e., if its purpose is to bring economic pres-

sure on the union and the employees, rather than to

counteract pressure brought by the union.

This appears to be the first case which has raised the

permanent-replacement issue, although there have been

several cases since Brown and American Ship involving

temporary replacements. The Board initially held that

the use of temporary replacements during an offen-

sive lockout was unlawful, and its decision was affirmed

by the Seventh Circuit. Inland Trucking Co., 179

N.L.R.B. 350 (1969), enforced, 440 F.2d 562 (7th Cir.),

cert. denied, 404 U.S. 858 (1971). After a change in the

membership of the Board, however, a conflict in views

developed, with two new members (Kennedy and Pen-

nello) taking the position that the use of temporary

replacements is permissible, two old members (Fanning

and Jenkins) adhering to the Inland Trucking view that

such use is not permissible, and the fifth member (Chair-

man Miller) taking the position that each case must be

decided on the basis of its own facts and circumstances.

See Ottawa Silica Co., 197 N.L.R.B. 449 (1972), enforced

per curiam, 482 F.2d 945 (6th Cir. 1973); Inter Col-

legiate Press, 199 N.L.R.B. 177 (1972), enforced, 486

F.2d 837 (8th Cir. 1973), cert. denied, 416 U.S. 938

(1974); WGN of Colorado, Inc., 199 N.L.R.B. 1053

(1972); Hess Oil Virgin Islands Corp., 205 N.L.R.B. 23

(1973); Sargent-Welch Scientific Co., 208 N.L.R.B. 811

(1974).

Despite these conflicting views concerning temporary

replacements, the Board had no difficulty deciding in

this case that the permanent replacement of locked- out

employees was unlawful. As the Board noted, such action

utterly destroyed the employees’ right to bargain collec-

tively, since the consequence of their exercise of that

right was the loss of their employment.“ Although we

believe the Board’s decision was clearly correct, the issue

is of such fundamental importance that it should be

definitively settled by this Court. Furthermore, the

Court’s decision would also tend to shed light on the

more difficult issue of whether locked-out employees may

be temporarily replaced, as to which the cases are now

in conflict.“

We recognize that this Court sometimes prefers not to

review an issue which was not decided by the Court of

Appeals. Thus, the Court may conclude that the question

of whether an employer has a right to hire permanent

replacements for locked-out employees is not yet ripe for

As this Court has held, employer actions which are “inherently

destructive” of rights guaranteed by the Act are unlawful regard-

less of the employer’s subjective motive. See, e.g., NLRB v. Great

Dane Trailers, Inc., 388 U.S. 26 (1967); NLRB v. Erie Resistor

Corp., 373 U.S. 221 (1963).

The temporary-replacement issue is not directly presented here,

since the Union did not seek review in the Court of Appeals of the

Board’s holding that the employer’s use of temporary replacements

in this case was not unlawful. However, any decision by this Court

on the permanent-replacement issue would tend to clarify the law as

to temporary replacements as well.

review, since it was not decided by the court below. In

that event, we urge the Court to grant certiorari with

respect to the other issue in the case, and if the judg-

ment below is reversed, to remand the case to the Court

of Appeals for consideration of the remaining issue.

CONCLUSION

For the reasons stated, this petition for a writ of cer-

tiorari should be granted, and the judgment below should

either by summarily reversed or the case set for plenary

consideration of one or both of the issues presented.

March 24, 1978

Respectfully submitted,

JERRY D. ANKER

WALD, HARKRADER & Ross

1320 Nineteenth Street, N.W.

Washington, D.C. 20036

JOHN R. TADLOCK

JAMES J. CRONIN

P. O. Box 2812

Denver, Colorado 80201

VICTOR H. HESS, JR.

DENNIS M. ANGELICO

HESS & WASHOFSKY

1411 Decatur Street

New Orleans, Louisiana 70116

Counsel for Petitioner

Appendices

APPENDIX A

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

No. 76-2444

JOHNS-MANVILLE PRODUCTS CORPORATION,

Petitioner-Cross Respondent,

NATIONAL LABOR RELATIONS BOARD,

Respondent-Cross Petitioner.

Aug. 19, 1977

Rehearing and Rehearing En Banc

Denied Oct. 26, 1977

Before WISDOM, GEE and FAY, Circuit Judges.

FAY, Circuit Judge:

This case is before the Court on a petition for review

and to set aside an Order of the National Labor Rela-

tions Board and on a cross-application by the Board

seeking enforcement of its Order. The Board affirmed

the findings and conclusions of the Administrative Law

Judge and adopted his Order in its entirety,’ holding

that the petitioner, Johns-Manville Products Corporation,

violated Sections 8 (a) (1), 8(a) (3), and 8(a) (5) of the

National Labor Relations Act [the Act], as amended, 29

1 The Board’s Decision and Order are reported at 223 NLRB No.

189 (1976).

U.S.C. 8 151 et seq.,? by unilaterally hiring permanent

replacements for employees who had been lawfully locked

out. As a remedy, the Board ordered, in addition to cease

and desist provisions, that the Company reinstate the one

hundred and seven locked out bargaining unit employees

with back pay and, upon request, to bargain with the

Oil, Chemical and Atomic Workers International Union,

AFL-CIO [the Union]. After carefully examining the

record, this Court finds that the Board erred in its con-

clusions. Therefore, we set aside the Board’s Order and

decline to enforce it.

2 The pertinent statutory provisions are as follows:

29 U.S.C. § 158 [§ 8, National Labor Relations Act]

(a) It shall be an unfair labor practice for an employer—

(1) to interfere with, restrain, or coerce employees in the

exercise of the rights guaranteed in section 157 of this

title ...

(3) by discrimination in regard to hire or tenure of

employment or any term or condition of employment to

encourage or discourage membership in any labor organi-

zation ...

(5) to refuse to bargain collectively with the representa-

tives of his employees, subject to the provisions of section

159 (a) of this title

„The Johns-Manville Products Corporation, Respondent herein,

its officers, agents, successors and assigns, shall:

1. Cease and desist from:

(a) Discharging or otherwise discriminating against em-

ployees in regard to hire or tenure of employment, or any

term or condition of employment because of protected con-

certed activities.

(b) In any other manner interfering with, restraining

or coercing employees in the exercise of their rights guar-

anteed in Section 7 of the Act except to the extent that such

rights may be effected by lawful agreements in accord

with Section 8(a)(3) of the Act.”

This Court has jurisdiction under Section 10(e) and (f) of the

National Labor Relations Act, 29 U.S.C. §160(e) and (f).

THE FACTS

The petitioner is engaged at its New Orleans plant in

the manufacture of “organic felt,” which is a crude form

of paper used as a base for asphal; roofing products

which the Company produces at its plants in Georgia,

Louisiana and California. The procedure for making or-

ganic felt consists of a series of steps by which the two

basic raw materials, waste wood chips and waste paper,

are decomposed, blended with water, and then dried out

to finally form paper sheets. Breaks in the paper, es-

pecially while still a damp “web”, can be caused by strik-

ing the water mixture (the “slurry”) or the finished

sheet with one’s finger or an object, or by changing the

proper revolutions per minute of the rollers in the various

dryer sections. Damage can also be caused by improperly

adjusting the valves controlling the blending of paper and

wood slurry stock. The evidence shows that sabotage in

all these forms can be carried on surreptitiously, making

it difficult if not impossible to observe the guilty individual

or individuals.“ Further, the large size of the physical

plant precluded constant surveillance of the operations.“

After this Company purchased the New Orleans plant

in 1964, the Union was certified by the Board as the unit

employees’ exclusive collective bargaining representative.’

Since that time, the Company and the Union have entered

into fcur successive two-year contracts, the latest of which

5’ Government witness St. Angelo testified that the sheets, par-

ticularly at the point just in front of the dryer section, can easily

be broken and that this can be done without others in the vicinity

observing it.

»The operations are housed in five separate buildings having a

total of approximately forty thousand square fect of floor space

and are conducted by three shifts of employees per day.

A substantial number of these employees had worked for the

former owner of the plant, Flintkote Company, and had been repre-

sented by the Union since 1947.

was due to expire on October 12, 1973. Negotiations be-

gan in September 1973, following the Union’s service of

its 60-day notice of termination of contract. The parties

met several times for the purpose of negotiating a new

collective bargaining contract, but the parties could not

agree in several areas.“

Prior to and during the negotiation period, the Com-

pany experienced an unusual amount of production dis-

ruption which became more widespread and serious as

negotiations progressed. An inordinate number of paper

breaks occurred on or about August 21 or 22, 1973 which

were the result of improper adjustment of dryer section

controls. On August 23, Darrell Wells, the Company’s

Employee Relations Manager for the New Orleans plant,

telephoned Ernest Rousselle, the Union’s International

Representative, and informed him of this problem. Wells

said this type of activity could “only hurt negotiations”

and that the plant was not going to continue to operate

and make scrap. Rousselle replied that he would check

with Local Union officials and get back to him. However,

Rousselle did not contact Wells on this subject and the

next time it was discussed was at a bargaining meeting

held about two months later on October 3, 1973.

® Apparently the most controversial proposal by the Company

would have permitted it to hire mechanics from outside the bar-

gaining unit, relieving it of the obligation to train maintenance

department employees to do mechanics’ work. The Company urged

this proposal, contending that the lack of sufficiently trained main-

tenance people was affecting its maximum productivity. The Union

opposed this change because it believed that senior maintenance

employees would be laid off in favor of less senior, but more skilled

mechanics hired from the outside. The parties also disagreed on

the duration of a new contract and a wage increase, the Company

suggesting a three year contract and conceding to a 17, 20, and 25

cent wage increase per year, and the Union asking for a one year

contract with a 30 cent wage increase each year. Further, in addi-

tion to other proposals from each side, the Company wanted to de-

lete a no-strike, no slowdown, no work stoppage, and no lockout

clause, and the Union wanted increased fringe benefits.

From September 1 through October 22, 1973, accord-

ing to the record, the number of paper breaks during

production periods was fifteen to twenty per week in con-

trast to one to three per week during periods when ne-

gotiations were not in progress.“ Moreover, these breaks

occurred on a daily basis and on all three shifts, with the

excessive number of paper breaks generally coinciding

with negotiation sessions.

Paper breaks were not the only problem. On the day

before the October 3rd bargaining meeting, for example,

the fine mesh stainless steel surface of a cylinder on one

of the paper forming machines was “sharply cut” along

its circumference. James Weil, the Company's plant man-

ager, testified that in thirty-five years experience he had

never seen that kind of damage to a cylinder and that

usually the type of damage resulting from wear and tear

to such cylinders consists of dents or cuts, which are

generally across the cylinder, rather than in the direction

of its circumference. The repair of this cylinder cost

approximately $4,000.

On the same day it was discovered that a 2,300 volt

electrical switch had been opened or disconnected causing

a complete shutdown of the mill. This switch is located

in the defibrator building, separate and apart from the

building in which excessive paper breaks were occurring.

The uncontradicted testimony is that this incident could

not have happened accidentally because the switch is held

® Based on the conflicting testimony presented at the hearing, the

Administrative Law Judge found that the more accurate number

of paper breaks during non-negotiating periods would be about

eight per week:

I find the frequency rate of paper breaks during the non-

negotiating periods was about eight (8) per week, instead of

three (3) per week as Respondent [the Company] contends,

or considerably more per week as the employee witnesses con-

tend. This figure makes allowance for inaccuracies and bias on

the part of witnesses for both parties.

in a closed position, not only by a mechanical catch, but

also by a heavy rubber band. Weil saw the switch in

the open position with the broken rubber band on the

floor. Despite the absence of the rubber band, the me-

chanical catch would have been sufficient to hold the

switch closed, if it too had not been released.

As a result of the above described production disrup-

tion and damage, James Weil approached the Union’s

president, Mack Jordan, and asked him to see whether

anything could be done about individuals tampering with

equipment and causing production delays. Jordan was

angered by Weil’s request, did not respond to him, and

took no affirmative action. At the negotiation meeting

on the following day, October 3, 1973, Rousselle said he

was “disturbed” because on the previous day Weil had

accused Mack Jordan and other Union members of de-

liberately disrupting production.“ Wells responded by

saying that the Company would not tolerate a continua-

tion of disruptions in production and that they interfered

with “the climate of the negotiations’. Wells then made

an “official” request of the Committeemen that they see

to it that production disruptions cease immediately. None

of them made any reply to this request.

Immediately thereafter, a vibration developed in one

of the three defibrators requiring it to be shut down. Ball

bearings were discovered between its rotating grinding

dises.

Sometime about October 11, 1973, the Union held a

strike vote among the bargaining unit employees and

Rousselle thereafter applied to the International for strike

10 At the meeting, Rousselle also explained that several months

earlier he showed the Company a large piece of metal which was

found in the raw materials, and that Mr. Weil had stated at that

time that the Company was purchasing the paper chips from any

place they could get them and that the Company was not accusing

the employees of causing the breakdowns which resulted from the

foreign materials.

authorization which it granted on October 23, 1973. Al-

though a strike vote had been taken and a strike au-

thorized, Rousselle admitted he never presented any Com-

pany offer to the rank and file for a vote.

At the October 12th negotiation meeting the parties

had reached a bargaining impasse.

By October 11th and 12th, paper breaks on both form-

ing machines were so frequent that the machines became

inoperable because the pits beneath them were filled with

scrap paper. At this point the Company decided to cease

operations and lay off 70-80 production employees for a

few days. During this time a maintenance crew checked

and repaired all the machinery, determining that the re-

cent paper breaks and other problems were not the result

of machinery or equipment malfunctioning. Wells tes-

tified :

I found as a result of the shut down... there was

nothing found during that period of time that would

have contributed to the vast number of breaks that

we had on the machines.

The Company recalled production employees on October

22nd in the hope that operations would return to normal.

However, sabotage of products and equipment reached

a crescendo on that date. The record shows that all three

defibrators were jammed with junk metal and had to be

shut down and that there was a multitude of paper breaks.

The Government’s rebuttal witness Donald Hall agreed

the situation was “unusual.” On his 3:00 p.m. to 11:00

p.m. shift there were as many as six breaks an hour on

one machine. Paper breaks on the 22nd were so numerous

that in the twenty-four hour period on that date, only

thirteen and one-half tons of felt were produced, com-

pared to normal daily production of one hundred and ten

to one hundred and twenty tons.

Jim Weil, an expert with over thirty years experience

in the paper industry, testified that if the scrap metal

found in the bins and screw conveyor chamber had worked

its way to the grinding surfaces of the discs, they would

have caused an explosion which could have severely dam-

aged the machine and endangered human lives.

Due to the continuing sabotage, it was decided be-

tween October 22 and October 31 that plant operations

could not continue without serious risk to lives and

property. On October 31, 1973, the Company held a

meeting first with the Union Committee and then with

all the production employees, informing them that it had

been decided to discontinue operations with bargaining

unit personnel until a contract was agreed upon. A letter

to this effect was also sent by registered mail to the

home of each employee. The Company’s spokesman ex-

plained that the decision to lay off the employees had

been made primarily to protect the employees’ safety and

to preserve the Company’s assets. Additional reasons

given for the lock-out were the Union’s unreasonable de-

mands, unresponsive attitude and willful acts, as well as

the history of sabotage during prior negotiations between

the parties.“ When the Company representatives finished

speaking, Union Representative Rousselle stated, “You

let us go before and we will go again. We can hold

out to any amount of pressure you can give us. We will

not settle for any less than the other plants.” A Union

Committeeman added, “We don’t care if you shut the

plant down for six months.” “

11 Testimony at the hearing before the Administrative Law Judge

shows that similar incidents of sabotage had occurred in earlier

negotiations. During ten weeks of the negotiations resulting in the

1965 contract, there was an average of 9.3 paper breaks per week.

In the 1969 negotiations there was a forced shutdown from October

11 through October 27 because fifteen to twenty paper breaks during

the week of October 6 had caused the pits to fill up. During the

1971-72 negotiations, paper breaks averaged fifteen to twenty per

week from January, 1972 until May or June, 1972 when the contract

was settled.

12 The six month time period refers to the maximum period the

employees might be eligible for unemployment compensation bene-

fits, assuming it was determined that the employees were not in-

The plant was indeed shut down and the production

employees laid off. On November 14, 1973, the Com-

pany resumed partial operations using temporary re-

placements and employees loaned by the Company’s other

plants.

The parties continued to meet for the purpose of ne-

gotiating a new contract. On November 14, 1973, the

same day the Company resumed partial production with

temporary replacements, the Company presented an im-

proved proposal to the Union. The Union rejected the

Company’s proposal and offered a counterproposal, which

the Company rejected. Subsequent meetings were held on

November 27 and November 30, 1973, and on January

23 and March 20, 1974, but the impasse continued.

Reports to the Company concerning the output and

profitability of the New Orleans operation during the time

when temporary replacements were being used indicated

that the Company was losing approximately $300,000 per

month in pre-tax profits. Further, due to vastly reduced

output, the Company had been forced to curtail opera-

tions at two other plants which relied on New Orleans

for paper. The record reveals that the Company rep-

resentatives involved in negotiations or responsible for the

New Orleans operation met together after the March 20th

negotiations to consider the alternatives. According to

the testimony, there were four reasons for their con-

clusion that the only course left was to hire permanent

replacements: (1) with contract negotiations stalemated,

it did not seem reasonable to resume operations with

volved in a labor dispute. From the end of October through the

month of April, eighty-eight of the one hundred seven members

of the bargaining unit applied for and were awarded such benefits,

see Johns-Manville Products Corp. v. Doyal et al., 510 F.2d 1196

(5th Cir. 1975). Employees received 54% of their average gross

weekly pay. In addition to unemployment benefits the Union also

provided the employees with weekly benefits, characterized by

Rousselle as “lock-out benefits.”

10a

bargaining unit employees without a contract, based on

the history of sabotage and disruption preceding the lay-

off on October 31, 1973; (2) the use of salaried em-

ployees and temporary hourly replacements was not pro-

ducing the required volume and the costs were excessive ;

(3) the Company was suffering an economic loss of be-

tween $280,000 and $300,000 per month, which from

November 1, 1973 through March 31, 1974, amounted

to a total of about $1.5 million; and (4) the adverse

effect the New Orleans labor dispute was having on

other plants within the residential products division, in-

cluding a decrease in the number of employees and days

of operations.

After the Company decided it was necessary to hire

permanent replacements, it started interviewing appli-

cants. Although seven new people started working the

second week of April, 1974, the full one hundred seven

employees were not replaced until late June or early

July. On June 12, 1974, before the workforce was com-

pletely replaced, the parties met and bargained, but with-

out success.

FINDINGS

The le of this Court in reviewing the order of the

Nation: Labor Relations Board is to determine whether

the Board’s decision is supported by substantial evidence

on the record as a whole,” or is a proper application of

the law. This Court has the utmost respect for findings

and conclusions of the Board, but recognizes that their

judgment is not “the last word.” As the Supreme Court

13 NLRB v. Brown, 380 U.S. 278, 291, 85 S.Ct. 980, 983, 13 L.Ed.

2d 839, 849 (1965); Universal Camera Corp. v. NLRB, 340 U.S.

474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

14 Labor Board v. Wilcox Co., 351 U.S. 105, 112-13, 76 S.Ct. 679,

100 L.Ed. 975 (1956), NLRB v. Insurance Agents Intern’l Union, 361

U.S. 477, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960).

lla

stated in N.L.R.B. v. Brown, 380 U.S. 278, 85 S.Ct. 980,

13 L.Ed.2d 839 (1965) :

It is argued, finally, that the Board’s decision is

within the area of its expert judgment and that, in

setting it aside, the Court of Appeals exceeded the

authorized scope of judicial review. This proposition

rests upon our statement in Buffalo Linen [Labor

Board v. Truck Drivers Union, 353 U.S. 87, 77 S.Ct.

643, 1 L.Fd.2d 676 (1957)] that in reconciling the

conflicting interests of labor and management the

Board’s determination is to be subjected to “limited

judicial review.” 353 U.S., at 96 [77 S.Ct. 643].

When we used the phrase “limited judicial review”

we did not mean that the balance struck by the Board

is immune from judicial examination and reversal

in proper cases. Courts are expressly empowered to

enforce, modify or set aside, in whole or in part, the

Board’s orders, except that the findings of the Board

with respect to questions of fact, if supported by

substantial evidence on the record considered as a

whole, shall be conclusive. National Labor Relations

Act, as amended, 88 10 (e), (f), 29 U.S.C. 88 160

(e), (f) .... Courts should be “slow to overturn an

administrative decision,” Labor Board v. Babcock &

Wilcox Co., 351 U.S. 105, 112 [76 S.Ct. 679, 100

L.Ed. 975], but they are not left “to ‘sheer accept-

ance’ of the Board’s conclusions,” Republic Aviation

Corp. v. Labor Board, 324 U.S. 793, 803 [65 S.Ct.

982, 89 L.Ed. 1872]. Reviewing courts are not obliged

to stand aside and rubber-stamp their affirmance of

administrative decisions that they deem inconsistent

with a statutory mandate or that frustrate the con-

gressional policy underlying a statute. Such review

is always properly within the judicial province, and

courts would abdicate their responsibility if they

did not fully review such administrative decisions.

12a

Of course due deference is to be rendered to agency

determinations of fact, so long as there is substantial

evidence to be found in the record as a whole. But

where, as here, the review is not of a question of

fact, but of a judgment as to the proper balance to

be struck between conflicting interests, “[t]he defer-

ence owed to an expert tribunal cannot be allowed

to slip into a judicial inertia which results in the

unauthorized assumption by an agency of major

policy decisions properly made by Congress.” Ameri-

can Ship Building Co. v. Labor Board, [380 U.S. 300,

318, 85 S.Ct. 955, 957, 13 L.Ed.2d 855 (1965)

[footnote citation omitted]. 380 U.S. 278, 290-92,

85 S.Ct. 980, 987, 13 L.Ed.2d 839.

In the instant case the Board, in accordance with the

finding of the Administrative Law Judge, held that “the

evidence in this record is insufficient to support a con-

clusion and finding that [the Company’s] employees en-

gaged in an in-plant strike or in concerted improper

conduct so as to enable it to replace or discharge its

entire complement of production employees.” We agree

with the factual findings of the Administrative Law

Judge and the Board, but not with the conclusions they

reached. |

Based on the facts as discussed above, this Court finds

that, as a matter of law, the employees were involved

in what amounted to an in-plant strike. The employees’

conduct was so severe that we cannot help but find that

their behavior was tantamount to a strike and forced

the Company to lock them out. The Company’s reaction

had a valid, substantial business justification and there

was no anti-union motivation indicated by the record or

found by the Board or asserted by the Union. The his-

tory of the relationship between the parties reveals the

Company’s continuing desire to negotiate and full recog-

nition and acceptance of the Union, notwithstanding nu-

—

18a

merous incidents of prior sabotage by the employees. In

the most recent negotiation period, Company manage-

ment on at least two occasions requested Union officials

to see if something could be done about individuals caus-

ing damage and disruptions; the Union never responded,

or expressly denied the allegations. In the interest of

public policy and industrial peace, we cannot condone

behavior which causes actual and substantial damage to

property or potential, serious injury to human lives. Al-

though employees and employers are permitted to choose

their own weapons in the bargaining battle,“ the em-

ployees in the instant case went too far. Since we find

their actions amounted to a strike, the Company’s subse-

quent lock-out and hiring of permanent replacements

were not violative of the National Labor Relations Act,

including Sections 8 (a) (1), (3) and (5). National Labor

Relations Board v. Mackay Radio & Telegraph Co., 304

U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381 (1938). This

18 Quoting from NLRB v. Insurance Agents, 361 U.S. 477, 80 S.Ct.

419, 4 L.Ed.2d 454 (1960), the Supreme Court has stated:

Our decisions hold that Congress meant that these activities

[attempting to exert economic strength], whether of employer

or employees, were not to be regulable by States any more than

by the NLRB, for neither States nor the Board are “afforded

flexibility in picking and choosing which economic devices of

labor and management would be branded as unlawful.” “

Rather, both are without authority to attempt “introduce

some standard of properly ‘balanced’ bargaining power,“ . or

to define “what economic sanctions might be permitted negoti-

ating parties in an ‘ideal’ or ‘balanced’ state of collective bar-

gaining.” Lodge 76, Etc. v. Wisconsin Employment Relations

yt 427 U.S. 132, 96 S.Ct. 2548, 2557, 49 L.Ed.2d 396

See also, Inter-Collegiate Press v. NLRB, 486 F.2d 837, 847 (8th

Cir. 1973) (“Neither the Bourd nor the courts should sit as arbiters

of the permissible econoraic weapons available to the parties in a

labor dispute”) ; NLRB v. Dalton Brick & Tile Corp., 301 F.2d 886,

895 (5th Cir. 1962).

16 In Mackay Radio, the Supreme Court held that it was not an

unfair labor practice for the employer to replace his striking em-

14a

conclusion precludes the necessity of considering the

other issues raised by the parties,” particularly the ques-

ployees with other employees in an effort to carry on his usual

business and neither was the employer bound to later discharge

the more-recently-hired employees in order to reinstate the strikers.

However, the employer was found to have committed an unfair labor

practice in violation of §8 of the National Labor Relations Act

when he discriminated against certain of the strikers by refusing

to rehire them for the sole reason that they had been active in the

union.

17 The Administrative Law Judge and the Board in the instant

case determined that the employees were not engaged in an in-plant

strike or concerted action sufficient to justify the Company’s perma-

nently replacing them without notice after a lawful lockout and bar-

gaining impasse; that such action tilted the scales out of balance

with respect to bargaining power; and that such action also rendered

more than a slight adverse effect upon the employees’ protected

rights, as compared with the Company’s legitimate business purpose

and its lockout bargaining leverage. The Administrative Law Judge

further found, and the Board agreed, that the Company’s action

was so inherently discriminatory and destructive of the employees’

rights that such action constituted a per se violation of Section

8(a)(1) and (3) of the Act. It was further held that the hiring

of permanent replacements in effect constituted a withdrawal of

recognition of the employees’ elected bargaining representative and

was indicative of bad faith bargaining or refusing to bargain on

the part of the Company, all in violation of Section 8 (a) (5) of the

Act.

In passing we would like to note that when certain conduct by

an employer is found to be “inherently destructive” of employees’

rights, the conduct is deemed to be a per se violation and it is un-

necessary to examine the employer’s intent behind that conduct in

order for the employer to be guilty of having violated the Act.

When the employer’s conduct is not inherently destructive but rather

has only a comparatively slight impact or slight adverse effect

on employees’ rights, then intent becomes an important issue. If

there is subjective evidence of anti-union motivation, then the em-

ployer has committed a violation. In the absence of anti-union

motivation, a balancing test is done to determine whether the em-

ployer’s legitimate business reasons outweigh the effect on the

employees’ protected statutory rights. NLRB v. Fleetwood Trailer

Co., 389 U.S. 375, 380, 88 S.Ct. 543, 19 L.Ed.2d 614 (1967); NLRB

v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S.Ct. 1792, 18

L.Ed.2d 1027 (1967); NLRB v. Brown, 380 U.S. 278, 287, 85 S.Ct.

980, 13 L.Ed.2d 839 (1965). Because the Board and the Administra-

15a

tion of whether an employer may permanently replace

locked out employees after bargaining impasse.”

tive Law Judge held the conduct of the employer in the presen

to be a per se violation, there was no need to go any further. But as

long as they attempted to perform the balancing test, we observe

the instruction of judicial precedent that neither the Board nor

the courts are permitted to choose the weapons or balance the

bargaining power of the parties beyond that delineated by Congress

in the National Labor Relations Act and other federal and state

labor law. See n. 15 infra. As noted in the text, however, due to our

disposition of the case before us, we need not reach these issues.

In American Ship Bldg. v. Labor Board, 383 U.S. 300, 85 S.Ct.

955, 13 L.Ed.2d 855 (1965), the Supreme Court held that an em-

ployer does not commit an unfair labor practice under the Act when,

after an impasse in negotiations has been reached, he temporarily

shuts down his plant and lays off his employees for the sole purpose

of applying economic pressure in support of his bargaining posi-

tion. However, in a footnote, the Court expressly reserved ruling as

to the consequences that would follow if an employer replaced his

oe with permanent replacements or temporary help. Id. at

n. 8.

This Court in National Labor Relations Board v. Dalton Brick

and Tile Corp., 301 F.2d 456 (5th Cir. 1962), upheld the use of a

lockout for legitimate bargaining purposes when not accompanied

by any anti-union animus.

The Eighth Circuit went one step further by holding that an

employer’s conduct in hiring temporary replacements during a law-

ful lockout was not “inherently destructive” of employees’ rights

and, balanced on the facts presented in that case, was not a violation

of the Act. Inter-Collegiate Press v. NLRB, 486 F.2d 837 (8th Cir.

1973), cert. denied, Bookbinders Local No. 60 v. NLRB, 416 U.S. 938,

94 S.Ct. 1939, 40 L.Ed.2d 288. This approach was adopted by the

Administrative Law Judge in the instant case in reference to the

hiring of temporary employees after the lockout, with no party

challenging it.

One year ago in Lodge 76, Intern’l Assoc. of Machinists 1d

Aerospace Workers, AFL-CIO v. Wisconsin Employment Relations

Comm'n, 427 U.S. 132, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976), the

Supreme Court considered federal preemption of state regulation

of a group of employees’ concerted refusal to work overtime while a

new contract was being negotiated. After holding that the state was

preempted from regulating such conduct (although such conduct was

not expressly protected or prohibited by the Act), the Supreme

Court stated:

16a

Johns-Manville’s petition to set aside the order of the

National Labor Relations Board is hereby granted and

the Board’s cross-petition for enforcement of said order

is hereby denied.

WISDOM, Circuit Judge, dissenting:

I must respectfully dissent.

The Court today infers that an in-plant strike occurred

at the Johns-Manville paper plant in New Orleans despite

contrary factual conclusions by the administrative law

judge and the National Labor Relations Board. As I

Moreover, even were the activity presented in the instant

case “protected” activity within the meaning of §7, economic

weapons were available to counter the union’s refusal to work

overtime, e.g., a lockout, American Ship Building Co. v. NLRB,

380 U.S. 300, 85 S.Ct. 955, 13 L.Ed.2d 855, and the hiring of

permanent replacements under NLRB v. Mackay Radio & Tel.

Co., 304 U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381 (1938). [footnote

omitted]. 96 S.Ct. at 2559.

Although we adhere carefully to the words of the Supreme Court

we would not say at this time that the above statement clearly

indicates whether the hiring of permanent replacements in the

absence of a strike (as in Mackay, supra, n. 16) would be a violation

of the Act.

1 The administrative law judge found:

Consequently, based upon the foregoing credible evidence,

legal authority, and reasons, while I conclude and find such

evidence sufficient to legally justify the respondent’s lockout

of its employees to impose economic pressure upon them in an

effort to advance its bargaining position, on the one hand, and

to protect its legitimate and substantial business operations

from frequent disruptive operations on the other, I nevertheless

do not find such evidence sufficient to support a conclusion and

finding that respondent’s employees were engaged in an in-

plant “strike,” so as to enable it to replace or discharge its

entire complement of production employees.

In view of the fact that such disruptive acts could have been

performed by any one employee, acting independently and not

on behalf of any other employee or the Union; that the evidence

17a

read the record, substantial evidence does support the

Board’s conclusion that the company violated sections

8 (a) (1) and 8(a)(3) of the National Labor Relations

Act. Here, the company could not identify a single

worker who participated in the alleged strike and could

not even determine with reasonable definiteness when the

strike occurred. With deference, I submit that the Court’s

holding is both factually and legally erroneous.

Because of its finding that there was an in-plant strike,

the majority did not reach the difficult question whether

a company may permanently replace locked-out workers.

I would reach this question and hold that the replacement

of these workers without notification violated sections

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

of record fails to show that respondent conducted any in-plant

investigation in an effort to ascertain who was responsible for

such disruptive activities; that the respondent did not intro-

duce any evidence which identified any employee who was even

alleged to be responsible for such activities, I am thereby

persuaded that the respondent did not have reasonable and

sufficient objective considerations upon which to conclude that

any or all of its employees were engaged in improper and un-

lawful conduct or concerted activity, so as to justify its replace-

ment or discharge of all of its production employees, innocent or

guilty alike.

The Board adopted the findings, conclusions, and recommended

order of the administrative law judge. One member of the Board,

dissenting, stated:

I join my colleagues in finding that respondent violated

Section 8(a)(3), (5), and (1) of the Act by permanently re-

placing its entire complement of locked-out unit employees.

However, contrary to my colleagues, I would find in accord with

my dissenting opinions in Ottawa Silica Company, 197 NLRB

449 (1972), and Inter Collegiate Press, Graphic Arts Division-

Sargent Welch Scientific Co., 199 NLRB 177 (1972), that Re-

spondent violated Section 8(a)(1) and (3) by operating its

plant with temporary replacements for its locked-out employees

from November 1973 until April 1974, when it discriminatorily

replaced the locked-out employees with permanent employees.

18a

The majority opinion relies* on the factual inference

that all or a majority or a substantial minority of the

workers at the plant sabotaged production from August

through October 1973. The inference is drawn from sev-

eral occurrences and, according to the majority, flows

from the facts as found by the administrative law judge.

First, the Court concludes that an unusual number of

paper breaks or tears occurred as the paper was proc-

essed in August, September, nd October. Because the

increase in breaks was supposedly so great and coincided

with negotiations for a new contract, the Court concluded

that the workers caused the disruptions. Second, the

Court concluded that metal periodically found lodged in

production equipment was inserted by the workers. Third,

the majority says that the workers disconnected a power

switch and cut a cylinder on a paper dryer.

The union emphatically denied that its unit employees

engaged in disruptive activities in the plant. The facts

that the administrative law judge found relating to these

occurrences do not support the inference that all or a

2 The conclusory nature of the majority opinion creates an am-

biguity in the Court’s holding. The majority declares that an “in-

plant strike” occurred because someone or a number of employees

must have committed acts causing the production disruptions. The

opinion does not reveal, however, whether this “strike” is concerted

protected activity or unprotected activity under section 7 of the

Act, 29 U.S.C. § 157 (1970). The opinion does not indicate whether

the inferred strike is the equivalent of a strike voted by the majority

of the members of the union or whether it is the equivalent of con-

certed activity by a minority. If the assumed action by the workers

amounts to concerted minority action, the opinion does not explain

whether the action supports a clearly articulated union position

or whether the union has organized or supported the activity. See

NLRB v. Shop Rite Foods, Inc., 5 Cir. 1970, 430 F.2d 786. The

legality of the assumed worker conduct, as well as the legality of

the employer’s response, depends in part on these unanswered

questions.

19a

majority or even a substantial number of employees par-

ticipated in any plant sabotage. Instead, the record pro-

vides substantial evidence in support of the Board’s deci-

sion that no worker had been sufficiently linked to un-

protected conduct to justify his dismissal or replacement.

The Paper Breaks. The company and the majority of

the Court base their argument that an in-plant strike

occurred primarily on the assertion that the workers dis-

rupted production by causing paper breaks. Although

the majority says that it accepts the factual findings of

the Board, its adoption of the company’s version of the

facts belies the asserted deference and ignores substan-

tial evidence supporting the Board’s findings. For exam-

ple, the parties disputed the average number of paper

breaks occurring during non-negotiating periods. The

company contended that about three breaks occurred each

week. Workers, including utility men who would re-

thread machines after breaks, testified that as many as

twenty breaks occurred each week. After considering all

of the testimony, the administrative law judge found

that the paper probably broke about eight times in an

average week. Yet the majority bases its decisions on

the company’s estimate of three a week without demon-

strating why the facts do not support the administrative

law judge’s finding.“

In cases where company records provide a clear picture of in-

dustrial activity, perhaps reliance on company information and dis-

regard of testimony by workers would be justified. But here, the

majority is not relying on records accumulated in the regular course

of business. Instead, data supporting the majority’s contentions

come from the personal diary of the plant production manager,

hardly an unbiased observer in the dispute. The company fortuitous-

ly destroyed its records about the paper breaks even though the

impasse continued at the time of destruction. The administrative

law judge found:

Paper breaks are caused by several unintentional factors

as well as by intentional acts; that the frequency of such paper

breaks, though somewhat stabilized during nonnegotiating

20a

If the administrative law judge’s facts are used, the

company experienced less than one additional paper break

per shift during August through October 1973. This is

not a significant increase and disproves the contention

that a substantial number of workers participated in

concerted activity. Indeed, as the administrative law

judge concluded, the more reasonable inference is that

the workers were not responsible for the breaks or that

one or two dissidents caused the disruptions.

The inference that a substantial number of the work-

ers did not create the disruptions is bolstered by the his-

tory of mechanical problems that periodically caused in-

creases in breaks. The record contains evidence of un-

usually frequent breaks in January, May, and July of

1973, long before any negotiations. An employee testified

that excessive breaks in January caused the company to

change its policy about shutting down machines to remove

paper after a break. Before January 1973, management

relied on regular cleaning crews to pick-up the waste.

But the increase in breaks in early 1973 prompted the

company to grant supervisors the discretion to order

paper removed from scrap pits.

The Board’s findings are also supported by the failure

of the company to attempt to identify any individual as

periods, was nevertheless erratically unstable on some occasions

during the same period; that anyone, or a combination of em-

ployees, can intentionally or unintentionally cause paper breaks

by improperly adjusting the heat or revolutions of the dryer

machines, by varying the paper mixture formula, or by striking

the paper with the hand or an object; and that since Manager

Weil’s testimony on the frequency of paper breaks was not

from official company records, and additionally, was in conflict

with the testimony of some of the employees who operate the

machines daily, I find the frequency rate of paper breaks during

the nonnegotiating periods was about eight (8) per week, in-

stead of three (3) per week as respondent contends, or con-

siderably more per week as the employee witnesses contend.

This figure makes allowance for inaccuracies and bias on the

part of witnesses for both parties.

—

— 5

—— —

21a

a saboteur. The majority justifies this failure to identify

even one worker who disrupted production by asserting

that detection was impossible. Here again, the majority

has accepted the company’s story without critical analy-

sis. Most importantly, the failure by the company even

to attempt to find a worker in an act of sabotage or to

identify a saboteur in some way prevents the conclusion

that detection was “difficult if not impossible”. It seems

to me that if the disruptions were as serious as the com-

pany alleged, the facts suggest that detection was prob-

able and that the company should have resorted to serious

attempts at surveillance. With 107 production employees,

management had to supervise only 35 workers on each

shift. Supervisors were in the plant; guards could have

been added.* Although the majority contends that the

expanse of the plant prevented adequate supervision, the

facts do not show that the disruptions occurred in all of

the buildings. Instead, they occurred in only three.“ If

the breaks were as numerous as the majority contends,

a tally of them might have revealed a pattern permitting

*The employer in NLRB v. Shop Rite Foods, Inc., 5 Cir. 1970,

430 F.2d 786, 787, hired guards to catch suspected saboteurs. When

a supervisor eventually caught an employee cutting sacks of flour,

the worker was fired for engaging in conduct not protected by the

Act.

»The majority also accepted the company’s contention that paper

breaks were easy to make and therefore undetectable. The adminis-

trative law judge recognized the ease with which breaks occurred.

The delicate nature of the production process also supports the ad-

ministrative law judge’s conclusion that mechanical problems could

have caused the breaks as easily as disgruntled workers. That the

company checked the machinery in October and found no obvious

mechanical problems does not upset this inference. Because the

records about the breaks have been destroyed, we cannot assess

the accuracy of the mechanical check. In addition, paper breaks in-

creased during other non-negotiating periods, and no mechanical

causes appeared. If the breaks were as easy to cause and impossible

to detect as the company contends, workers engaged in concerted

plant sabotage probably would have created more disruptions than

actually occurred.

22a

further narrowing of the scope of supervision. Because

the company destroyed all records about these disruptions

(company policy requires records to be kept for one

year), it could not now determine whether the breaks

usually occurred in the vicinity of particular workers.

Nevertheless, the facts provide little support for the con-

tention that detection was impossible at the time when

the information was available. The reasonable inference

is that the company failed to identify any saboteurs be-

cause the small increase in breaks did not warrant an

investigation.“

Finally, the majority relies on produetion figures to

show that the disruptions were widespread during the

negotiations. Yet the only figure cited is 13% tons, the

production for October 22, when all parties agree that

an unusual number of breaks occurred.” The record

shows, however, that October 22 was the only day when

the company experienced a substantial loss of production.

The average output of the plant was 110 tons a day dur-

ing non-negotiating periods. In August, September and

October 1973, the critical period, production ranged from

104 tons a day to 112 tons a day. Despite these figures,

the majority concludes that an in-plant strike occurred

at some unspecified time during the period. We are there-

fore asked to believe that a substantial number of un-

identified employees engaged in concerted industrial sabo-

6 Even though the majority excuses the company’s failure to in-

vestigate, the opinion relies in part on the failure of the union to

react to the disruptions. The union, however, had less access to

the plant and company records than management. I would not con-

demn the union for not uncovering the saboteurs, when the company

failed even to investigate the sources of the alleged sabotage.

On October 22 workers returned to work after the company

had locked them out to check machinery. The labor dispute had

reached its peak by then; the parties had reached an impasse. If

the company seriously expected widespread worker sabotage, it

should have expected disruptions on the twenty-second. Yet manage-

ment still made no attempt to identify the saboteurs.

23a

tage that was easy to accomplish and impossible to detect,

and yet that the employees met or exceeded the average

output of the plant. It is not surprising that the majority

and the company have such a difficult time attempting

to establish the date of this strike or the identity of the

strikers. As the Board concluded, the facts do not demon-

strate that a strike occurred.

The Metal. The majority submits that the workers

sabotaged the plant by inserting scrap metal into the ma-

chinery. Specifically, the opinion states that the workers

inserted ball bearings into a grinder shortly after the Oc-

tober 3 bargaining session. How the majority determined

that workers had placed the metal in the production

process is unclear. No direct evidence supports that con-

clusion. Even the company, at the October 3 bargaining

session, acknowledged the more reasonable inference that

small pieces of metal such as ball bearings were probably

mixed with the wood chips ground to make paper slurry.

After union officers pointed out instances of metal dam-

age in August, including the jamming of a defibrator

with ball bearings, company officials admitted that the

company was not accusing its employees of placing metal

in the wood. As of October 3, then, the facts do not sup-

port the inference that any worker engaged in an in-plant

strike by jamming machinery with metal. During the

period after October 3, the evidence connects no individ-

ual worker to the metal jams, and the majority fails to

specify when the introduction of foreign materials into the

production process amounted to a strike. Because the

number of jams and the amount of metal was so small,

the Board’s conclusion that one or two disgruntled em-

— caused the jams finds substantial support in the

record.

The Power Switch and Damaged Cylinder. The record

contains no direct evidence as to the cause of either the

disconnecting of a major power switch or the cutting of

24a

a wire mesh cylinder on October 2. The majority uses the

incidents to supports its theory of an in-plant strike. Both

occurrences support the Board’s conclusion that only one

or two workers acting independently created several of

the disruptions. It takes only one person to throw a

switch or to cut a cylinder. If a group had been involved

in either incident, the participants probably would have

been detected. The majority has therefore failed again to

demonstrate that a substantial number of employees

sabotaged the plant or otherwise engaged in an in-plant

strike.

On these facts the Court concludes that “the employees

in the instant case went too far“; they struck and may be

replaced. Whenever the employees “went”, as a matter of

fact the entire workforce did not strike, and there is no

evidence that a substantial number of employees struck.

The facts prove no more than that one or two or a hand-

ful of workers may have created a few production dis-

ruptions, most of them occurring on October 22, 1973.

The facts do not show who “went too far” or when they

went there. Consequently, the facts do not show a strike

by anyone. Instead, the record shows that substantial

evidence supports the conclusion of the administrative

law judge and the National Labor Relations Board that

the company identified no workers as actually connected

to any misconduct justifying replacement or dismissal.*

II.

The majority declares that a strike occurred as a matter

of law at the Johns-Manville plant. This holding is un-

precedented. The Court cites no section of the Act, no

s As set out in section II of this opinion, the case law does not

support the holding that in-plant concerted activity damaging com-

pany property is protected under section 7. Consequently, the ma-

jority opinion would appear to justify other disciplinary action by

the company, including the firing of all of the workers.

25a

decision of a court, no holding of the Board, and no argu-

ment of labor policy in support of its conclusion. There is

no citation because no supporting case exists. Both law

and policy compel the conclusion reached by the Board that

action may not be taken against in-plant strikers until

the participating workers are identified.

The first legal error made by the majority, if I may say

so with deference, is its confusion of unprotected em-

ployee activity, with protected activity. The Court says

that an “in-plant strike” occurred as a matter of law. Par-

ticipation by workers in an in-plant strike has consistently

been regarded as unprotected concerted activity.’ In this

case the sabotage asserted by the company would, if

proved, be deemed unprotected because it allegedly inter-

fered with the company’s rightful use of its property,

damaged the property, and endangered lives.“ When the

majority addresses the validity of the permanent replace-

ment of the workers, however, it grants its approval with

citation only to NLRB v. Mackay Radio & Telegraph Co.,

1938, 304 U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381, a case

involving an ordinary strike protected by section 7 of the

Act. The Court’s reasoning therefore yields the following

conclusion: concerted activity outside the protection of the

F. g., NLRB v. Fansteel Metallurgical Corp., 1939, 306 U.S. 240,

59 S.Ct. 490, 83 L.Ed. 627 (takeover and damage of employer's

property by workers); NLRB v. Clinchfield Coal Corp., 4 Cir. 1944,

145 F.2d 66 (interference with employer’s operation of its mining

facilities); Honolulu Rapid Transit, 1954, 110 NLRB 1806 (inter-

mittent on-the-job strikes); Elk Lumber Co., 1950, 91 NLRB 333

(slowdown) ; cf. NLRB v. Shop Rite Foods, Inc., 5 Cir. 1970, 430

F.2d 786 (action by a minority of workers in a unionized plant) ;

NLRB v. Draper Corp., 4 Cir. 1944, 145 F.2d 199 (action by a

minority of workers in a unionized plant).

10 Recently, the Supreme Court suggested that partial strikes may

not always be deemed unprotected under section 7. Lodge 76, Int'l

Ass'n of Mach. & Aero. Wkrs. v. Wisconsin Employment Relations

Comm’n, 1976, 427 U.S. 132, 152 n. 14, 96 S.Ct. 2548, 49 L.Ed.2d

396. But the Court also approved cases such as Fansteel in which

activity interfering with the company’s use of its property or dam-

aging the property was denied protection.

26a

Act by unidentified workers permits the inference that

the entire workforce engaged in protected concerted ac-

tivity. I cannot buy this. The lack of logic or policy in

this inference explains why the proposition is unique in

America labor law.

As its second legal error, the Court approves company

action against all of its production employees even though

no individual has been specifically connected with any con-

certed activity, protected or unprotected. Mackay ap-

proved the permanent replacement only of workers who

were identified as striking. 304 U.S. at 337, 345, 58

S.Ct. 904. Similarly, companies have been permitted to

respond unilaterally to unprotected activity only when the

participating workers bave been identified. In Stewart

Die Casting Corp. v. NLRB, 7 Cir. 1940, 114 F.2d 849,

cert. denied, 1941, 312 U.S 680, 61 S.Ct. 449, 85 L.Ed.

1119, for example, a sit-down strike by unidentified em-

ployees preceded a general strike by the entire workforce.

The company argued that the employment relationship

with all the workers had terminated, not just the re-

lationship with those who had participated in the sit-down

strike. The Court of Appeals rejected the contention:

In this connection, it is also pertinent to observe

that the record, with the exception of twelve or four-

teen Board witnesses who admitted they participated

in the sit-down strike, is silent as to who were the

participants. In fact, it is shown with no certainty

as to the number who participated. Petitioner’s presi-

dent estimated the number at 75, the Board found

“about 100” and some of the witnesses placed the

number as high as 150. . Certainly all of the

employees should not be deprived of the benefits of

the Act because certain undisclosed ones forfeited

their rights.

Id. at 856.

27a.

The reasoning of Stewart Die Casting is consistent with

all other reported cases involving unprotected concerted

activity by a minority of employees,“ unprotected sit-

down strikes, unprotected slow-down actions, and un-

protected displays of violence by workers.“ In no case has

1 F. g. Emporium Capwell Co. v. Western Addition Community

Org., 1975, 420 U.S. 50, 95 S.Ct. 977, 43 L.Ed.2d 12 (Strikers were

identified as they picketed the plant); NLRB v. Shop Rite Foods,

Inc., 5 Cir. 1970, 430 F.2d 786 (Strikers were identified when they

failed to time-in for work); NLRB v. Sunbeam Lighting Co., 7 Cir.

1963, 318 F.2d 661 (Only the 50 workers who walked out in a wild-

cat strike were discharged.) ; C. G. Conn, Ltd. v. NLRB, 7 Cir. 1939,

108 F.2d 390 (Workers were identified as they walked out.); Terry

Poultry Co., 1954, 109 NLRB 1097 (Only two workers who left the

assembly line to present a grievance to management were dis-

charged.)

12 FE. g., NLRB v. Fansteel Metallurgical Corp., 1939, 306 U.S. 240,

59 S. Ct. 490, 83 L. Ed. 627 (The company fired only the workers

who participated in the violent sit-down strike.); NLRB v. Clinch-

field Coal Corp., 4 Cir. 1944, 145 F.2d 66 (The company fired only

the workers who had blocked the entrance to the mine with a coal

car.); Stewart Die Casting Corp. v. NLRB, 7 Cir. 1940, 114 F.2d

849 (The company could not discipline the entire workforce for a

sit-down strike launched by an undetermined number of the

workers).

18 F. g., Harnischfeger Corp. v. NLRB, 7 Cir. 1953, 207 F.2d 575,

(The company discharged only the three men who led a partial,

intermittent work stoppage.); Honolulu Rapid Transit Co., 1954,

110 NLRB 1806 (The company discharged only those drivers who

did not report for work during intermittent work stoppages.) ; Elk

Lumber Co., 1950, 91 NLRB 333 (The company fired only those

workers who slowed the pace of their work and discussed the slow-

down with management.).

14 F. g., Seminole Asphalt Refining, Inc. v. NLRB, 5 Cir. 1974,

497 F.2d 247 (The Court refused to enforce a Board order of rein-

statement only after concluding that the three workers had actually

participated in violence); W. J. Ruscoe v. NLRB, 6 Cir. 1969, 406

F.2d 725 (The identification of workers who participated in violence

included photographs of the activity). Oneita Knitting Mills, Inc. v.

NLRB, 4 Cir. 1967, 375 F.2d 385 (The company could not alter the

seniority of returning strikers but could fire a worker who drove

a car from which eggs were thrown. The Court required reinstate-

ment of a worker who was not sufficiently connected by the facts

to the egg throwing.) ; NLRB v. Clearfield Cheese Co., 3 Cir. 1954,

a company been permitted to discipline, replace, or fire

workers who did not participate in the activity. The

picket line violence cases are particularly instructive be-

cause the courts have required clear identification of the

offending workers before action may be taken against

them. In NLRB v. Mt. Clemens Pottery Co., 6 Cir. 1945,

147 F.2d 262, for example, the company argued that it

had no duty to reinstate any unfair labor practice striker

because violence had erupted during the strike. The Court

of Appeals concluded that only two workers had com-

mitted acts that would justify denying them reinstate-

ment. As for the other workers, “the violence of these

two employees, so clearly established by their convictions,

is not, however, to be imputed to other union members in

the absence of proof that identifies others as participating

in such violence.” Id. at 267. Yet the violence and sabo-

tage that the Johns-Manville management says occurred

at its plant are imputed to the entire workforce with no

evidence identifying any participant. The Court’s hold-

ing disregards thirty years of contrary precedent sup-

porting the Board’s decision.

213 F.2d 70 (Reinstatement after an unfair labor practice strike

was denied only to 21 employees who were clearly identified as par-

ticipants in picket line misconduct) ; NLRB v. Mt. Clemens Pottery

Co., 6 Cir. 1945, 147 F.2d 262 (The Court refused to impute the

violence of two employees to the rest of the workforce.) ; Republic

Steel Corp. v. NLRB, 3 Cir. 1939, 107 F.2d 472, modified on other

grounds, 1940, 311 U.S. 7, 61 S.Ct. 77, 85 L.Ed. 6 (Workers denied

reinstatement were identified by criminal convictions.) ; Alcon Cable

West, 1974, 214 NLRB 236 (One worker may be terminated because

the facts sufficiently connected him to violence; another worker,

who participated only in the isolated incident could not be termi-

nated.) ; Jai Lai Cafe, 1973, 200 NLRT 1167 (The two employees

terminated had engaged in mass picketing, had placed nails in the

road to puncture tires, and verbally had abused customers and other

workers.); Berkshire Knitting Mills, 1943, 46 NLRB 955 (When

the company could not prove that several employees had engaged in

misconduct, the Board prevented their discharge. ).

The implication of the in-plant strike also violates the

labor policy embodied in section 7 of the Act in that it

inhibits future unionization and collective bargaining.

Workers have the right to bargain collectively, to union-

ize, and to refuse unionization without coercion. The

origin of these rights is the policy judgment by Congress

that the settlement of labor disputes by collective bar-

gaining will diminish industrial strife. The proper role

of the Board and the courts, therefore, is to protect the

process of collective bargaining and the freedom of

workers to decide whether to unionize. American Ship

Building Co. v. NLRB, 1965, 380 U.S. 300, 308-09, 85

S.Ct. 955, 13 L.Ed.2d 855; Inter Collegiate Press v.

NLRB, 8 Cir. 1973, 486 F.2d 837, cert. denied sub nom.

Bookbinders Local No. 60 v. NLRB, 1974, 416 U.S. 938,

94 S.Ct. 1939, 40 L.Ed.2d 288; Note, 85 Harv.L.Rev. 680

(1972).

No one can question the majority’s statement that the

protection of these basic policies must be distinguished

from attempts to balance the economic strengths of parties

in collective bargaining. Economic coercion may be used

to achieve particular terms and conditions of employment.

International Association of Machinists and Aerospace

Workers v. Wisconsin Employment Relations Commission,

1976, 427 U.S. 132, 143-44, 96 S.Ct. 2548, 49 L.Ed.2d

396. But the coercion may not be directed toward in-

hibiting the exercise of section 7 rights.

15 29 U.S.C. § 157 (1970) states:

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 engage in

other concerted activities for the purpose of collective bar-

gaining or other mutual aid or protection, and shall also have

the right to refrain from any or all of such activities except to

the extent that such right may be affected by an agreement

requiring membership in a labor organization as a condition

of employment as authorized in section 158(a)(3) of this title.

30a

In this case the Court has given employers a lethal

new tool to combat future unionization and to avoid the

process of collective bargaining. By permitting the em-

ployer to imply the existence of a strike without identify-

ing any participant and on, what appears to me, to be a

flimsy factual basis, the Court in effect denies workers

their livelihoods because they joined a union and en-

gaged in collective bargaining. The message will not be

lost on workers or management. When a worker joins

a union and attempts to bargain about the terms of his

employment, he may now lose his job if at his plant any

disruptions of production occur which may be laid at the

door of a few malcontents or overreacting union workers.

Even though he produces a normal output and puts no

economic pressure on the company, management may re-

place him with impunity; the Court of Appeals will in-

fer that he created the disruptions, because the disrup-

tions coincided with his union’s negotiations for a new

contract. Conversely, when a company tires of its union-

ized workforce, it can highlight a few production disrup-

tions during contract negotiations, infer an in-plant strike,

and replace its workers with non-unionized employees.

As a result, workers will be encouraged to avoid union-

ization and the process of collective bargaining. Com-

panies will be encouraged to thwart bargaining and

unionization by visiting the sins of the few on the many,

causing unemployment on those who seek to exercise their

section 7 rights.

By declining to infer the existence of an in-plant strike,

the Board refused to countenance damage to these basic

policies. The majority justifies its reversal of the Board

in part because the Supreme Court has instructed courts

not to rubber stamp “administrative decisions that they

deem inconsistent with a statutory mandate or that frus-

trate the congressional policy underlying a statute”, quot-

ing NLRB v. Brown, 1965, 380 U.S. 278, 291, 85 S.Ct.

31a

980, 988, 13 L. Ed. 2d 839. In the case before us, how-

ever, the majority rather than the Board frustrates con-

gressional policy and in the process ignores overwhelm-

ing precedent in support of the Board’s decision. I would

affirm the holding that no in-plant strike occurred, as a

matter of law and fact, and that no worker was suffi-

ciently linked to unprotected conduct to justify his dis-

missal or replacement.“

III.

Because I would sustain the Board’s decision on whether

a strike occurred, I must address the more difficult legal

question raised by the parties: may an employer who

has locked out his nonstriking workers permanently re-

place them without notification? The Supreme Court de-

clined to reach the question in American Ship Building

Co. v. NLRB, 1965, 380 U.S. 300, 308, n. 8, 85 S.Ct.

955, 13 L.Ed.2d 855. This Court has never faced the

issue.

1% The company also submits that the workers began a regular

strike at the same time as the lockout. The members of the unit

approved a strike and received authorization for it from the Inter-

national. But this is a common negotiating technique and does not

justify the inference that a strike actually occurred. The company

also relies on a statement made by the International representative

to company officials:

[Y]Jou let us go before and we will go again . We can hold

out to any amount of pressure you can give us .... [Wle

will not settle for any less than the other plants.

Because this statement refers to the lockout that had just ended and

responds to the company’s announcement on October 31 of another

lockout, the sentences logically refer to the union’s ability to with-

stand a lockout, not to the imminence of a strike. “Holding out“ to

company pressure in this context means refusing to capitulate to

the company’s contract demands despite the economic pressure.

Finally, the receipt of union benefits would show a strike only if

strikers alone could receive the benefits. The company offered no

evidence to prove that locked-out workers could not receive such

benefits. In short, the record does not support the assertion that

the employees mounted an economic strike.

32a

The administrative law judge concluded that permanent

replacement of locked-out workers amounted to a violation

of sections 8 (a) (1), “ 8 (a) (3), “ and 8 (a) (5) * of the

Act. With regard to the 8 (a) (1) and 8 (a) (3) violations,

the administrative law judge held both that the employer's

business purpose could not outweigh the damage inflicted

by the replacement on worker rights and that NLRB v.

Erie Resistor Corp., 1963, 373 U.S. 221, 83 S.Ct. 1139,

10 L.Ed.2d 308, required finding the replacement to be

a per se violation of the sections. The Board agreed

with the administrative law judge that the hiring of

permanent replacements without notifying the union

“rendered more than a slight adverse effect upon em-

ployees’ protected rights, as compared with Respondent’s

legitimate business purpose”. Neither the Board’s nor

the administrative law judge’s opinion reveals the basis

of the comparison of the employer and employee interests.

The company attacks the order on two levels. First,

it argues that permanent replacement of locked-out

1729 U.S.C. § 158 (a) states in part:

It shall be an unfair labor practice for an employer—

(1) to interfere with, restrain, or coerce employees in the

exercise of the rights guaranteed in section 7... .

18 29 U.S.C. § 158(a) states in part:

It shall be an unfair labor practice for an employer—

(3) by discrimination in regard to hire or tenure of employ-

ment or any term of condition of employment to encourage

or discourage membership in any labor organization

19 29 U.S.C. § 158 (a) states in part:

It shall be an unfair labor practice for an employer—

(5) to refuse to bargain collectively with the representatives

of his employees, subject to the provisions of section 9(a).

workers should not constitute a per se violation of the

Act. It bases this argument on NLRB v. Mackay Radio

& Telephone Co., 1938, 304 U.S. 333, 58 S.Ct. 904, 82

L.Ed. 1381, which held that an employer may continue

to operate his business during a strike with permanent

replacements. The employer also contends that the re-

placement of these workers did not inherently destroy

their rights because they retained certain privileges

guaranteed by the Supreme Court.” Second, the com-

pany justifies the replacement of these workers by balanc-

ing its business interests against the rights and interests

of the employees. On the company’s side of the scales,

Johns-Manville places the interest in the survival of the

plant as a profitable component of the enterprise. Because

of the lockout, the company lost money and faced a loss

of permanent customers. The temporary replacements

20 The replaced worker is subject to recall in the event of a

vacancy, Laidlaw Corp., 1968, 171 N.L.R.B. 1366, enforced, 7 Cir.

1969, 414 F.2d 99, cert. denied, 1970, 397 U.S. 920, 90 S.Ct. 928,

25 L.Ed.2d 100. He may vote in any representation election con-

ducted within twelve months after commencement of a strike. Wahl

Clipper Corp., 1972, 195 N.L.R.B. 634. The union may continue to

bargain unless the company has sufficient evidence to challenge

its representative status. C. H. Guenther & Son, Inc. v. NLRB, 5 Cir.

1970, 427 F.2d 983, cert. denied, 400 U.S. 942, 91 S.Ct. 240, 27

L.Ed.2d 246.

Although these cases provide the replaced worker some protection,

they do not lead to the conclusion that his rights and interests have

not been damaged. The protections listed above are of only minimal

value to the locked-out Johns-Manville workers. First, in the

sluggish economy of 1974 few vacancies occurred. Second, because

the company permanently replaced the workers five and a half months

after the lockout, the workers’ right to vote in representation elec-

tions probably extended orly six and a half months after the replace-

ment. The company needed only to wait a short time to gain a rep-

resentation election in which the electorate would have been com-

posed exclusively of replacements. Third, the union’s ability to rep-

resent the bargaining unit was substantially undermined by the

replacement of the entire workforce. In comparison to the rights

that a fully employed worker enjoys, then, the rights granted to

a locked-out and permanently replaced worker are inferior.

34a

employed immediately after the lockout began had not

performed satisfactorily. The management felt that it

could not have reactivated the locked-out workers without

a contract because of the production disruptions that had

occurred five and a half months previously. It also de-

sired to maintain its bargaining position. To avoid fur-

ther losses without capitulating to the union, then, it ar-

gues that its only alternative was to employ the perma-

nent replacements. On the workers’ side of the scale,

the company places the right to continue the bargaining

unit and the right to bargain through that unit. After

asserting that it did not intentionally damage these two

rights, the company says that detriment by permanent

replacement after the lockout was no greater than damage

by replacement after the strike in Mackay.

I respond to these arguments by analyzing the interests

of the parties and the motive of the company consistent

with the facts found by the administrative law judge.

I would adhere to the guidelines established by NLRB

v. Great Dane Trailers, Inc., 1967, 388 U.S. 26, 87 S.Ct.

1792, 18 L.Ed.2d 1027, for assessing alleged (8) (1) and

8(a) (3) violations." Great Dane analyzed an alleged in-

fraction of section 8 (a) (3) by a company’s refusing to

pay accrued vacation benefits to strikers while paying

the benefits to replacements, nonstrikers, and returning

strikers. The Court identified three elements of an 8(a)

(3) unfair labor practice: discrimination against workers

exercising their rights, resulting discouragement of union

membership, and anti-union motivation on the part of the

company. Although the Court easily found discrimination

and discouragement of membership on the facts of the

21 Because of my resolution of the 8(a)(1) and 8(a)(3) issues,

I would not reach the 8(a) (5) question.

case, it considered the motive of the company at length.

From a series of earlier decisions * the Court established

several guiding principles for assessing the motive of

employers.

First, conduct may be deemed “inherently destructive”

of employee rights when the effect on employee interests

is so severe that the conduct carries its own indicia of

antiunion animus. Id. at 33, 87 S.Ct. 1792. Although the

Court has never precisely defined “inherently destruc-

tive“, I would say that the term denotes conduct that

thwarts the basic policies of the Act. For example, action

that frustrates the process of collective bargaining or the

future of unionization at a plant thwarts congressional

goals embodied in sections 7 and 8. Such behavior might

lead to the finding of an unfair labor practice, depending

on the justifications offered by the company for the be-

havior. On the other hand, conduct merely influencing

workers’ ability to maintain their bargaining demands

does not reach the viability of the process of collective

bargaining and should not be labeled “inherently destruc-

tive”. American Ship Building Co. v. NLRB, 1965, 380

U.S. 300, 85 S.Ct. 955, 13 L.Ed.2d 855, Note, 85 Harv.

L.Rev. 680, 683 (1972).

When the behavior of the company begins to frustrate

the basic policies of the Act and by its nature demon-

strates anti-union animus, direct proof of motive is not

required. The Board may infer the illegal intent and

find an unfair labor practice even if a business justifica-

tion exists for the company’s action. Id. at 34, 87 S.Ct.

1792. Whenever the infringement of employee interests

22 The Court relied on NLRB v. Brown, 1965, 380 U.S. 278, 85 S.Ct.

980, 13 L.Ed.2d 839; American Ship Building Co. v. NLRB, 1965,

380 U.S. 300, 85 S.Ct. 955, 13 L.Ed.2d 855; and NLRB v. Erie

Resistor Corp., 1963, 373 U.S. 221, 83 S.Ct. 1139, 10 L.Ed.2d 308.

28 This method of assessing intent developed in Erie Resistor. It

merely applies the well-established principles that a person intends

is more than “comparatively slight” and the company

asserts a business justification, the Board must balance

the respective interests in order to draw a correct in-

ference about the real motive of the employer. NLRB

v. Great Dane Trailers, Inc., 388 U.S. at 33, 87 S.Ct.

1792; NLRB v. Brown, 1965, 380 U.S. 278, 286, 85 S.Ct.

980, 13 L.Ed.2d 839; NLRB v. Erie Resistor, 1963, 373

U.S. 221, 228-29, 83 S.Ct. 1139, 10 L.Ed.2d 308.

Second, if the damage to the employee rights is only

“comparatively slight“ and the company offers a busi-

ness justification for its conduct, the activity will be

considered prima facie lawful. An unfair labor practice

may then be found only upon proof of actual anti-union

motive. NLRB v. Great Dane Trailers, Inc., 388 U.S. at

34, 87 S.Ct. 1792.

Third, whenever any damage, however slight, occurs

to the rights of employees, the burden shifts to the em-

ployer to come forward with a legitimate business jus-

tification for his conduct. The burden of going forward

with this evidence shifts because the employer has greater

access to proof about his motives. Id. at 34, 87 S.Ct. 1792.

These principles also apply to alleged violations of

section 8 (a) (1). See NLRB v. Fleetwood Trailers Co.,

1967, 389 U.S. 375, 378, 88 S.Ct. 543, 19 L.Ed.2d 614;

Inter- Collegiate Press v. NLRB, 8 Cir. 1973, 486 F. 2d

837, cert. denied sub nom., Bookbinders Local No. 60 v.

NLRB, 1974, 416 U.S. 938, 94 S.Ct. 1939, 40 L.Ed.2d

288. The basic elements of an 8 (a) (1) unfair labor prac-

tice therefore are a) employer action that effectively

interferes with, restrains, or coerces employees in the

exercise of their section 7 rights and b) intent by the

employer to interfere with, restrain, or coerce the right

of employees to organize.

the natural and probable consequences of his conduct, 373 U.S. at

227, 83 S.Ct. 1139.

37a

Application of these legal principles to the instant facts

reveals an unfair labor practice under section 8 (a) (1)

of the Act. To begin with, Johns-Manville effectively

restrained and coerced the employees who attempted to

exercise the right to unionize and the right to bargain

collectively at the New Orleans plant. The workers lost

their jobs and incomes because they bargained until they

reached an impasse. The lesson is clear. These workers

and their replacements will be less likely to unionize and

bargain in the future because they experienced the eco-

nomic deprivation imposed by the company. Consequently,

the first element of an 8(a)(1) unfair labor practice is

met.

Restraint or coercion alone is not sufficient, however,

to establish a violation of the Act. All economic pressure

by employers coerces or restrains workers, and most of

it influences the future exercise of section 7 rights by

employees. The pressure is illegal only if it results from

an improper, anti-union motive. In this case, an analysis

of the company’s motive justifies the Board’s conclusion

that an 8 (a) (1) violation occurred.

First, Great Dane requires. resolution of the question

whether the coercion and restraint of the worker’s rights

were more than “comparatively slight”. If the effects

were only slight, then Great Dane would prohibit the

inference of an impermissible motive on the facts of this

case. If the effects were more than slight, as the admin-

istrative law judge and the Board concluded, then the

Board would be able to infer the illegal motivation if

the company could not justify its conduct on other

grounds. I agree with the Board’s conclusion, because

the company’s conduct will have a serious impact on the

future of unionization and collective bargaining at the

plant, as demonstrated by comparison of these facts with

analogous cases. For example, NLRB v. Erie Resistor

38a

Corp., 1963, 373 U.S. 221, 83 S.Ct. 1139, 10 L.Ed.2d 308,

found an unfair labor practice when the company grant-

ed twenty years of superseniority to permanent replace-

ments. This action imposed a substantial discrimination

on those exercising their rights because it a) affected all

pre-strike workers without regard to whether they had

engaged in improper conduct or economic warfare against

the company, b) imposed an obvious detriment on those

exercising their section 7 rights and an obvious benefit

on the replacements, e) dealt a crippling blow to the

exercise of the section 7 rights in the future, and d)

created an unnatural cleavage in the bargaining unit

that would have lasted beyond the duration of the strike.

Id. at 230, 83 S.Ct. 1139.

Similarly, consider the lockout and permanent replace-

ment of the Johns-Manville production workers. (a) All

of the workers were replaced, not just those who allegedly

engaged in illegal economic warfare by creating produc-

tion disruptions. (b) The workers who exercised their

section 7 rights by unionizing and bargaining collectively

lost their jobs, for a substantial period and certainly

beyond the duration of the labor dispute. This was a

detriment not imposed on those who did not exercise their

section 7 rights; the replacements were given jobs. (c)

The replacements crippled the future exercise of worker

rights. The bargaining unit was entirely replaced with

workers who had not unionized or bargained. The eco-

nomic devastation to those who did unionize and bargain

would have a chilling effect upon the new workers. Fur-

thermore, in a depressed economy few of the new em-

ployees left their jobs within a year of the lockout. Few

of the locked-out employees were reinstated. Consequent-

ly, the chance for the locked-out workers to exercise sec-

tion 7 rights was remote.“ (d) To the extent that any

24 See note 20 supra for a comparison of the rights of a replaced

worker with those of a fully employed worker.

of the workers were reinstated, the company created a

permanent cleavage in the bargaining unit between those

who exercised their section 7 rights and those who helped

management crush the exercise of those rights. This

cleavage would have inhibited future unionization and

collective bargaining in the plant. In short, the effect of

Johns-Manville’s permanent replacement of the locked-out

workers was just as serious as the effect of the company

action in Erie Resistor. The Board therefore correctly

found that worker rights were more than slightly im-

paired.

This conclusion is buttressed by a comparison of the

facts of this case with cases involving company action

having only slight impact on worker rights. In NLRB

v. Brown, 1965, 380 U.S. 278, 85 S.Ct. 980, 13 L.Ed.2d

839, for example, the Court permitted members of a

multiemployer bargaining group to lock-out and tempo-

rarily replace all of its workers when the workers at

only one store launched a strike. The lock-out and tem-

porary replacement of workers had only a slight effect

on worker rights. (a) The coercion was only temporary;

it did not threaten permanent employment. (b) The ac-

tion did not harm future unionization, because the effects

of the action did not extend beyond the end of the dispute

and because the company retained its character as a

union shop. (c) The members could have ended the detri-

ment to their interests by agreeing on a new contract

that was better than their previous contract. Jd. at 288,

85 S.Ct. 980.

None of these facts existed in the Johns-Manville dis-

pute. (a) The coercion was not temporary. The threat

of permanent loss of employment at the plant was sub-

stantial because the workers had to be carried on the

hiring list for only six and a half months.* (b) The

25 See note 20 supra.

40a

future of unionization and collective bargaining in the

plant was placed in substantial doubt. The company

hired an entirely new group of workers who realized

that they had their jobs only because the company re-

placed the unionized workforce. (c) The Johns-Manville

workers could not have ended the effect of the employer’s

action by agreeing to the company’s terms. Indeed, the

workers never had the opportunity to avoid the perma-

nent replacement by modifying their bargaining position;

the company replaced them without notification. This is

an important factor in assessing the company’s motive.

If management had notified the union that it would re-

place the workers unless a settlement could be reached,

the motive would logically have been directed toward

settlement of the dispute. By proceeding without notifi-

cation the company made clear its motive to rid itself

of these unionized workers. Once the replacement oc-

curred, the employees could no longer have ended their

economic distress by settling the dispute. They could

only have gained access to a hiring waiting list during

a sluggish period of the economy. The effect of company

action on the rights of these workers therefore does not

resemble the effect identified by the Supreme Court in

Brown as “slight”.

In another case in which a court found company ac-

tion to affect worker rights only slightly, the company

also replaced the workers temporarily. The Eighth Cir-

cuit analyzed the facts of Inter-Collegiate Press v. NLRB,

8 Cir. 1973, 486 F.2d 837, according to Brown. After

exploring the factors we have referred to, the Court of

Appeals added an element further suggesting that the

company acted without anti-union animus: Inter-Collegi-

ate Press retained the union’s security provisions during

the dispute. In this case, on the contrary, the company

cancelled the security provisions, which not only distin-

guishes these facts from Inter-Collegiate Press but also

4la

supports directly the inference that the company acted

with anti-union animus.

Comparison of the Johns-Manville facts with the cases

in which courts have considered the extent of damage to

worker interests and rights supports the Board’s decision

that the effect on worker interests here was more than

comparatively slight. By permanently replacing the en-

tire workforce without notification, Johns-Manville in-

flicted substantial and longlasting damage on worker

interests and rights. Because this destruction is the obvi-

ous and natural consequence of the company’s conduct,

the inference arises that the company intended the ef-

fects.”

Second, Great Dane requires a two-fold examination of

the business justifications asserted by the company to ex-

plain its motives. The legitimacy of the proposed justi-

fications must be established. In NLRB v. Fleetwood

Trailer Co., 1967, 389 U.S. 375, 379-80, 88 S.Ct. 543, 19

L.Ed.2d 614, for example, the Court rejected considera-

tion of an efficiency justification because the company, as

a matter of fact, had instituted no changes in its produc-

tion process. The legitimate justifications must then be

weighed against the damage to worker interests to reveal

the real motive of the employer. NLRB v. Great Dane

Trailers, Inc., 388 U.S. at 33, 87 S.Ct. 1792.

The primary justification submitted by Johns-Manville

is invalid, as a matter of fact. The management says

26 The employer contends that the workers’ rights were not

seriously affected by arguing that the Supreme Court permitted

the permanent replacement of striking workers in Mackay. The

argument is unpersuasive. Mackay did not consider the effect of the

replacement on the workers’ rights; it did not attempt to infer

an illegal intent on the part of the employer. The case pre-dates

the legal tests established in Brown v. Erie Resistor and Great

Dane by more than 20 years. Consequently, it offers little guidance

as to whether the Johns-Manville facts demonstrate more than a

single impairment of worker interests.

42a

that it hired permanent replacements rather than ending

the lock-out because the workers continued to threaten

production disruptions. This phantom fear is based on

speculation. As emphasized earlier, no proof exists that

more than one, two, three or, at most, a handful of dis-

gruntled employees caused disruptions during August

through October 1973. These mavericks may have found

other employment during the lock-out. The disruptions

therefore might have ceased upon reinstatement of

workers available in April. Fear of a recurrence of the

disruptions of October 22 is also unreasonable. The

workers had been laid off for nearly six months, a sub-

stantial cooling-off period. The economic hardship im-

posed during that time might have made a steady pay

check and a job more appealing to the employees than the

unemployment compensation and convulsive disruption.

Furthermore, the workers neared the end of their six-

month eligibility for unemployment benefits. The prospect

of the loss of that source of income could have provided

additional incentive for the workers to return peaceably

to work while the negotiations for a new contract con-

tinued. But they never received the opportunity to return

because the company permanently replaced them. Without

notifying the union of the need for the experienced

workers or of the prospect for permanent replacement, the

company has no legitimate factual basis to declare that

sabotage would have recurred with the return of the em-

ployees. The more reasonable inference is that production

of about 110 tons a day of paper would have resumed.

Two additional justifications asserted by the company

do have sufficient legitimacy to enter the balance required

by Great Dane. First, the company had an interest in

maintaining its bargaining posture and in pressuring

workers to accept its position. Second, it had an interest

in maintaining the profitability of its enterprise by con-

tinuing production despite the economic warfare with

43a

the union. According to the company, both ef these in-

terests could be satisfied in April 1974 only by permanent

replacement of the workforce. According to the company,

four courses of action were open to the company when

the impasse continued in April. It could have continued

its lock-out without replacement of any kind, which would

not have satisfied the first interest. It could have contin-

ued the lock-out with temporary replacements, which also

would not have satisfied the first interest.“ It could have

reinstated the locked-out workers and continued bargain-

ing, which would have satisfied the first but not the second

interest. Thus, management concluded that only by

permanently replacing the workers could the company

maintain its profits while continuing to pressure the union

to capitulate.

The company omits a fifth course and thereby under-

mines the asserted innocence of its motives in April 1974.

The company could have notified the union that it was

contemplating permanent replacement of the workers to

reverse the financial losses incurred while using tempor-

ary replacements. Notification would have demonstrated

a true interest in pressuring the union to accept the com-

pany proposal because it would have given the union

leadership a chance to avoid the damage that permanent

replacement threatened to employee interests. By taking

this action, the company could have satisfied both of its

legitimate interests more effectively than by using the

permanent replacements. Regarding profitability, the pre-

vious workforce could have manufactured the paper more

efficiently than a new crew that needed training and

orientation. Regarding maintenance of the bargaining

position, a settlement induced by the notification would

* Operation of the plant with temporary replacements proved

unprofitable. The company lost $300,000 a month in pre-tax profits

from October 1973 through March 1974. Because of r-ljuced out-

put from the plant, management had to curtail production at two

other installations that relied on the New Orleans paper.

44a

have satisfied this concern completely whereas the perman-

ent replacement alternative left the company with an im-

passe and a new, untested crew of workers that might or

might not have performed satisfactorily. If they had not,

the company would still have faced the impasse. Man-

agement’s disregard for the best approach to protect its

interests therefore casts doubt on whether these con-

cerns actually motivated company action. In balancing

the various effects to reveal the motive of Johns-Manville,

this failure diminishes the weight assigned to the two

interests asserted by the company.

Finally, Great Dane requires a comparison of the as-

serted business justifications and the damage inflicted on

worker rights and interests. On the facts of this case

the damage to worker rights dominates the alleged justi-

fications. The damage flows naturally from the permanent

replacement of the workers. The inference therefore arises

that the company intended the consequences. Johns-

Manville could have rebutted this inference by showing

that business justifications motivated its conduct and

that the damage to worker rights was therefore an unin-

tended effect. The company has not met this burden, how-

ever because it failed to pursue the avenue that would

have best protected its profits and supported its bargain-

ing position. Instead, it adopted an approach that pro-

vided less protection for its interests and more damage

to the worker’s rights. I can only conclude that such con-

duct was motivated by anti-union animus.** The com-

28 This conclusion is reached without an attempt to balance the

economic weapons available to the parties. The company argues at

length that the NLRB issued the order in this case only because

it found the company’s economic warfare to be “too effective”. This

argument legally misses the point. The balancing mandated by

Erie Resistor and Great Dane is not pursued for its own sake. It

is merely a method of determining whether the company acted with

an illegal motive. If the company’s behavior and the results of that

behavior effectively promote the company’s bargaining position and

do not inhibit the future exercise of section 7 rights by workers,

45a

pany therefore committed an unfair labor practice under

section 8 (a) (1) of the Act by permanently replacing its

locked-out workers without notification.

The company also violated section 8(a) (3) of the Act.

As pointed out in subsection III-B of this opinion, an

8(a) (3) unfair labor practice includes three elements:

(a) discrimination with regard to hiring or tenure of

employment, (b) encouragement of union membership,

and (c) intent to encourage or discourage worker union-

ization. 388 U.S. at 32-33, 87 S.Ct. 1792. Here, the

first element is satisfied because Johns-Manville hired the

replacements while failing to reinstate the locked-out

workers. This is discrimination with regard to hiring.

The analysis of the alleged 8(a)(1) violation demon-

strated that the discrimination will discourage union

membership.“ Both the locked-out workers and the per-

manent replacements will be less likely to unionize at

the Johns-Manville plant in the future. The replacements

have seen the economic deprivation that results from

unionization. The replaced workers have no positions at

the plant and will probably not be reinstated in the fu-

ture. They will therefore have little opportunity to join or

to retain union representation for the bargaining unit.

The intent element is satisfied by the analysis of the

then an illegal motive cannot be inferred. On the other hand if the

conduct also tends to coerce or restrain the future exercise of those

rights, regardless of its “effectiveness” in promoting the bargaining

position of the company, the basis for inferring the impermissible

motive exists. Here, the destruction of rights is so significant and

the company’s supposed interests are sc ineptly pursued that the

company must have intended to thwart future unionization and

collective bargaining at its plant.

2° See subsection III-C supra.

46a

company’s intent to violate section 8 (a) (1).“ Thus the

violation is established and the Board’s order justified.

IV.

In summary, I would enforce the order of the National

Labor Relations Board. As a matter of fact and law, no

“in-plant” strike occurred to justify the replacement of

the workers. The replacement of them without notification

and in the absence of a strike violates sections 8(a) (1)

and 8 (a) (3) of the Act. Because the majority has ap-

proved these violations and permitted serious damage to

worker rights and congressional policy, I cannot agree

with the decision of the Court.

0 Jd. Great Dane, the basis for the preceding intent analysis, held

that the employer had committed an unfair labor practice under

section 8 (a) (3).

47a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 76-2444

JOHNS-MANVILLE PRODUCTS CORPORATION,

Petitioner,

NATIONAL LABOR RELATIONS BOARD,

Respondent.

JUDGMENT

Before: WISDOM, GEE and FAY, Circuit Judges.

THIS CAUSE came on to be heard upon a petition

filed by Johns-Manville Products Corporation, to review

an order of the National Labor Relations Board issued

against said Petitioner, its officers, agents, successors, and

assigns on May 6, 1976, and upon a cross-examination

filed by the National Labor Relations Board to enforce

said Order. The Court heard argument of respective

counsel on March 29, 1977, and has considered the briefs

and transcript of record filed in this cause. On August

19, 1977, the Court being fully advised in the premises,

handed down its opinion granting the petition for review

and denying the cross-application.

N CONSIDERATION WHEREOF, it is ordered and

auy.uged by the United States Court of Appeals for the

Fifth Circuit that enforcement of the order of the Na-

tional Labor Relations Board directed against Johns-

Manville Products Corporation, its officers, agents, suc-

cessors, and assigns, be and it hereby is denied, and costs

48a

in this matter are hereby awarded to Johns-Manville

Products Corporation.

ENTERED: August 19, 1977

Issued as Mandate: Nov. 3, 1977

49a

APPENDIX C

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

Office of the Clerk

October 26, 1977

TO ALL PARTIES LISTED BELOW:

NO. 76-2444—JOHNS-MANVILLE PRODUCTS

CORP. v. NATIONAL LABOR

RELATIONS BOARD

Dear Counsel:

This is to advise that an order has this day been entered

denying the petition(s) for rehearing,** and no member

of the panel nor Judge in regular active service on the

Court having requested that the Court be polled ci re-

hearing en bane (Rule 35, Federal Rules of Appellate

Procedure; Local Fifth Circuit Rule 12) the petition()

for rehearing en banc has also been denied.

See Rule 41, Federal Rules of Appellate Procedure for

issuance and stay of the mandate.

Very truly yours,

EDWARD W. WADSWORTH

Clerk

By /s/ Brenda M. Hauck

Deputy Clerk

** on behalf of the intervenor and the respondent, Johns-

Manville Products Corp.,

ec: Mr. John D. O’Brien

Mr. Elliot Moore

Messrs. Paul J. Spielberg

Howard E. Perlstein

Mr. Voctor H. Hess, Jr.

50a

APPENDIX D

223 NLRB No. 189 MJP

D-1151

New Orleans, La.

UNITED STATES OF AMERICA

BEFORE THE

NATIONAL LABOR RELATIONS BOARD

Case 15-CA-5238

JOHNS-MANVILLE PRODUCTS CORPORATION

and

OIL, CHEMICAL AND ATOMIC WORKERS

INTERNATIONAL UNION, AFL-CIO

DECISION AND ORDER

On April 10, 1975, Administrative Law Judge Elbert

D. Gadsden issued the attached Decision in this pro-

ceeding. Thereafter, the General Counsel and Respondent

filed exceptions and supporting briefs.’

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

National Labor Relations Act, as amended, the National

Labor Relations Board has delegated its authority 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 recom-

mended Order in its entirety.

Respondent is engaged in New Orleans in the manu-

facture of dried felt, which is a crude form of paper

used as a base for asphalt roofing products. The Union

1 As the record and the briefs adequately present the positions

of the parties, Respondents’ request for oral argument is hereby

denied.

51a

was certified in 1964, and since that time the parties

have entered into four successive 2-year colleetive-

bargaining agreements, the latest of which terminated

on October 12, 1973. The latest contract negotiations

began on September 11, following the Union’s earlier

60-day notice of termination. Before and after this notice

Respondent observed an unusual number of paper breaks,

found a considerable number of pieces of scrap metal in

conveyers, and improper adjustments with the dryers,

causing disruptions in production. Respondent requested

the Union’s assistance in correcting the situation, but

the Union took no affirmative action. Respondent became

increasingly concerned about the above-described inei-

dents and decided that if they continued, the operation

at this particular plant could not sustain itself. The

plant was shut down on October 12 and remained closed

until about October 22. In the interim Respondent main-

tained a complement of employees, whose duties were to

inspect, maintain, and repair all of its machinery to as-

certain any malfunction in order to determine whether

or not it was machine failure which would cause breaks

in its paper.

On October 22 Respondent reopened the plant but on

that date several machines had broken down and Re-

spondent again noticed innumerable paper breaks; and

on this particular day, production dropped from a normal

daily production of 110 tons to about 131, tons. At this

point, Respondent decided that it could no longer sustain

operations in the plant without endangering lives and

property and decided to lay off its production workers

that day.

Respondent met with the Union and employees on Octo-

ber 31 and informed them that the plant would remain

closed until a contract was reached. On November 14,

1973, Respondent submitted its last proposal which pro-

vided for a 3-year contract, a wage increase, and other

benefits, plus a no-strike clause, no slowdown, no work

stoppage, and no-lockout provisions. Respondent resumed

production on November 14 using salaried personnel from

other plants, supervisors, and temporary employees, until

April 7, 1974.

The record shows that during the same period Re-

spondent experienced a high demand for roofing materials

which it was not able to supply, thus creating the fear

of loss of customers.

In March 1974, Respondent considered the feasibility

of hiring permanent replacements. Before doing so, Re-

spondent’s officials met with the Union, as they had been

doing in the interim period, to attempt to resolve the dif-

ficulties at the New Orleans plant. No resolution came

about, so Respondent went ahead with plans to hire per-

manent replacements. Respondent did not want to rehire

its own employees in view of the history of sabotage and

disruptions during the other periods of negotiations and

the fact that its employee complement at that time was

not producing efficiently, it was losing a substantial

amount of sales, and the operation at New Orleans was

having an adverse effect on other plants operated by

Respondent. The first replacements were hired in April

1974, and by about mid-June 1974, the entire work force

was replaced.

We agree with the Administrative Law Judge, for the

reasons more fully set forth in his decision, that Respond-

ent’s unilateral act of hiring permanent replacements on

April 8, 1974, “without consulting or notifying the Union

or the employees of such intention . . . rendered more

than a slight adverse effect upon the employees’ protected

rights, as compared with Respondent’s legitimate busi-

ness purpose in its lockout bargaining leverage” and

this conduct violated Section 8 (a) (3) of the Act. The

permanent replacement of all unit employees was also a

violation of Section 8 (a) (5), as it completely destroyed

53a

the bargaining unit. In the circumstances herein and in

the complete absence of any unfair labor practices on

the part of the Union, the employees and/or their law-

fully designated representative have the right, as a mat-

ter of law, to engage in effective and responsible negotia-

tions over their terms and conditions of employment.

When Respondent elected to replace them permanently,

without any warning, consultation, or negotiation, such

action destroyed that very right itself, and constituted a

withdrawal of recognition of their duly designated bar-

gaining representative in violation of Section 8(a) (5)

and (1) of the Act. We also agree with the Administra-

tive Law Judge that the evidence in this record is in-

sufficient to support a conclusion and finding that Re-

spondent’s employees engaged in an in-plant strike or

in concerted improper conduct so as to enable it to replace

or discharge its entire complement of production em-

ployees. Thus, we agree with the Administrative Law

Judge that the failure of the Respondent to conduct an

investigation to ascertain responsibility for such disrup-

tive activities is sufficient to warrant a finding that

Respondent did not have reasonable and sufficient objec-

tive considerations upon which to conclude that “any or

all of its employees” were engaged in improper conduct

so as to justify discharge of all production employees.’

In affirming the conclusions of the Administrative Law

Judge in their entirety, we note that he specifically dealt

with the issue of the effects of the legality of Respond-

ent’s lockout and the utilization of temporary employees,

from about November 14, 1973, until April 8, 1974,

when it began the permanent replacement of its entire

2 We agree with the Administrative Law Judge that Raleigh

Water Heater Mfg. Co., Inc., 136 NLRB 76 (1962), and Massey Gin

and Machine Works, Inc., 78 NLRB 189 (1948), relied on by the

Respondent, are distinguishable, as is N.L.R.B. v. Fansteel Metal-

lurgical Corp., 306 U.S. 240 (1939).

54a

work force. In this respect, the Administrative Law

Judge found that since the collective bargaining of the

parties was at an impasse in October 1973, Respondent

could legally shut down its plant and lock out its em-

ployees because it was done for a legitimate and sub-

stantial business purpose without antiunion motivation.

We agree with the Administrative Law Judge, contrary

to our dissenting colleague, that the lockout and subse-

quent resumption of operations on November 14, 1973,

on a reduced scale with temporary employees not covered

by the expired contract, which were transferred from

some of its other operations, and others which were

secured from an independent contractor, did not violate

Section 8(a)(3) and (1) of the Act, for these same

reasons fully set forth in our decision in Ottawa Silica

Company. The Administrative Law Judge found, and we

again agree, that “such operation is legally permissible

because the evidence of its impact upon the exercise of

the employees’ protected rights was slight, as compared

to the Employer’s legitimate use of the lockout and con-

tinued operation with temporary replacements.”

Respondent has adequately demonstrated that the lock-

out was not based upon antiunion considerations but was

rather based upon legitimate and substantial business

reasons. The lockout was intended to and did serve a

legitimate business end. Respondent had a reasonable

apprehension that if it resumed normal business produc-

tion with its own employees substantial disruptions in

its productive process would soon take place against its

substantial economic interest and those of its customers

and to the great detriment of the New Orleans opera-

tion. This lockout was legal because of the overriding

business purposes and because of the vital interest and

convenience of the Company. Respondent had a good-

faith anticipation of almost simultaneous disruptive ac-

197 NLRB 449 (1972).

” — Dantes —

55a

tion by its employees. The lockout and the use of tem-

porary employees was not designed to destroy the em-

ployees’ rights or the capacity of the Union to represent

them. Respondent’s action was designed solely to further

legitimate business interests and it has established by a

preponderance of the probative and substantial evidence

that it had no antiunion motivation in what it did but

rather it was motivated solely by legitimate objectives.‘

Certainly Respondent was faced with unusual operational

problems and hazards and most probable and irreplac-

able economic loss had it resumed operating the plant

without completing an agreement with the Union. Hav-

ing found therefor that following a bargaining impasse

an employer has the right to replace locked-out employees

temporarily and continue operations, absent an antiunion

motivation, an employer does not violate the Act by hir-

ing temporary replacements to continue operations dur-

ing an otherwise lawful lockout.

Accordingly, we adopt the Administrative Law Judge’s

recommended Order in its entirety.

ORDER

Pursuant to Section 10 (e) of the National Labor Re-

lations Act, as amended, the National Labor Relations

Board adopts as its Order the recommended Order of

the Administrative Law Judge and hereby orders that

Respondent, Johns-Manville Products Corporation, New

Orleans, Louisiana, its officers, agents, successors, and

assigns, shall take the action set forth in said recom-

mended Order.

Dated, Washington, D.C., May 6, 1976.

BETTY SOUTHARD MuRPHY, Chairman

JOHN A. PENELLO, Member

[SEAL] NATIONAL LABOR RELATIONS BOARD

N of Colorado, Inc., 199 NLRB 1053, 1056, 1057 (1972).

56a

MEMBER JENKINS, dissenting in part:

I join my colleagues in finding that Respondent vio-

lated Section 8(a) (3), (5), and (1) of the Act by per-

manently replacing its entire complement of locked-out

unit employees. However, contrary to my colleagues, I

would find in accord with my dissenting opinions in

Ottawa Silica Company, 197 NLRB 449 (1972), and

Inter Collegiate Press, Graphic Arts Division-Sargent

Welch Scientific Co., 199 NLRB 177 (1972), that Re

spondent violated Section 8(a) (1) and (3) by operating

its plant with temporary replacements for its locked-out

employees from November 1973 until April 1974, when

it discriminatorily replaced the locked-out employees with

permanent employees.

The Union was certified on October 27, 1964, as the

exclusive collective-bargaining representative of the unit

employees. Since that time, the parties have entered into

four successive 2-year collective-bargaining agreements

from October 12, 1965, through October 12, 1973. On

September 11, 1973, the parties commenced negotiations

for a new contract. Several meetings were held but no

agreement was reached. On October 31, 1973, Respondent

informed the Union that the plant would be shut down

until the contract could be negotiated and that the Re-

spondent was not willing to let the unit employees con-

tinue to work without a contract. On that day, Re-

spondent locked out all members of the bargaining unit.

Notwithstanding the statement that the plant would be

shut down until a contract could be negotiated, Respond-

ent resumed operations within 1 or 2 weeks of the October

31 plant c.osure, utilizing approximately 35 salaried per-

sonnel from various corporate locations and a contract

labor force consisting of approximately 32 employees.“

5 Several of these temporary employees became permanent em-

ployees of Respondent, when it was decided to replace the locked-

out employees.

57a

The Administrative Law Judge found that the use of

temporary employees during the lockout was legally per-

missible “because I find the evidence of its impact upon

the exercise of the employees’ protected right to be

slight, as compared to the employer’s legitimate use of the

lockout and continued operation with temporary replace-

ments,” citing Inter Collegiate Press, supra. Member

Fanning and I dissented in that case as well as in Ot-

tawa Silica Company, supra, and no worthwhile purpose

would be served by a repetition of the analysis enunci-

ated in those opinions. It suffices at this point to state

that the issue posed in the instant case was given judicial

attention and decided in Inland Trucking Co. and Wes-

ley Meilahn, Co-partners d/b/a Oshkosh Ready-Mix Co.,

et al., v. N. L. R. B. 440 F.2d 562 (C. A. 7, 1971), cert.

denied 404 U.S. 858 (1971). It is significant that the

Supreme Court denied on appeal from the circuit court’s

decision, and that a majority of the Board has never in

any case expressed an unwillingness to abide by that de-

cision. In accordance with the Court’s reasoning there,

I would find that Respondent’s use of replacements for a

prolonged period was inherently destructive of the rights

of its locked-out « nployees and therefore violative of

Section 8(a) (1) and (3) without regard to any claim

that such conduct was motivated by business consider-

ations.

However, even if the test of business justification is

applied it is clear that Respondent has not succeeded in

presenting evidence of legitimate and substantial busi-

ness justification for its continued operation during the

lockout. This is certainly not the type of situation where

there was a defensive lockout to avoid injury to cus-

tomer relations caused by a strike occurring while un-

finished work was in the shop,“ disruption of general op-

* Betts Cadillac Olds, Inc., 96 NLRB 268 (1951).

58a

erations caused by unexpected intermittent work stop-

page,’ spoilage of materials by sudden strike, or threats

to the preservation of a multiemployer bargaining unit.“

Indeed there is no evidence in the instant record that

the Union threatened to strike. Moreover, with respect

to Respondent's alleged fear of disruptions, the Adminis-

trative Law Judge specifically found that the evidence

fails to establish that the Union and/or any plant em-

ployee, independently or through a conspiracy, actually

engaged in sabotage or disruptive activities. The Admin-

istrative Law Judge further noted that the activities

could have been carried out by a single individual, acting

on his own, and that the Union emphatically denied that

its unit employees were engaged in disruptive activities at

the plant. Thus my colleagues’ conclusionary finding that

Respondent’s conduct was justified by business considera-

tions is based on no more than Respondent’s desire to

continue operations. In my view, this position is unten-

able, and I would find that Respondent has presented no

evidence of legitimate and substantial business justifica-

tion for its discriminatory conduct.”

Finally, Respondent’s action with respect to the lockout

and the reopening of the plant have no relation to legiti-

mate business purposes but rather demonstrate animus

towards the represented unit employees. As previously

stated, Respondent announced that it would shut the

plant down until a contract was reached. Despite this

rather definitive statement, the plant closure lasted

only 1 or 2 weeks. This rapid resumption of the oper-

7 International Shoe Company, 93 NLRB 907 (1951).

8 Duluth Bottling Association, 43 NLRB 1335 (1943).

o N. L. R. B. v. Truck Drivers Local Union No. 449 International

Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers

of America, AFL (Buffalo Linen Supply Co.), 353 U.S. 87 (1957).

10 See N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 34

(1967).

59a

ations indicates that Respondent’s real intention was to

close its plant only to members of the bargaining unit.

Further, permanent replacements for the locked-out em-

ployees were hired in April 1974, and the record indicates

that Respondent discussed the possibility of replacing

the unit employees as early as January 1974, despite the

fact that the Union notified Respondent that the union

employees were willing to work without a contract.

Furthermore, the record in the instant case lacks many of

the alleged mitigating circumstances that existed in

Inter-Collegiate Press. In that case, the employer made

it clear that the replacements were to be used only for

the duration of the strike and the employer offered to

abandon the lockout and the use of temporary help if the

Union agreed not to strike. No such conciliatory action

on the part of the Respondent are present in the instant

case.

As I have already stated, I would find that Respondent’s

conduct was not only inherently destructive of protected

employee rights, but was also without sufficient economic

justification. Accordingly, I would find that Respondent’s

lockout and concomitant operation with temporary re-

placements violated the Act.

Dated, Washington, D.C.

May 6, 1976

HOWARD JENKINS, JR., MEMBER

NATIONAL LABOR RELATIONS BOARD

JD-182-75

New Orleans, La.

UNITED STATES OF AMERICA

BEFORE THE

NATIONAL LABOR RELATIONS BOARD

DIVISION OF JUDGES

WASHINGTON, D.C.

Case No. 15-CA-5238

JOHNS-MANVILLE PRODUCTS CORPORATION

and

OIL, CHEMICAL AND ATOMIC WORKERS

INTERNATIONAL UNION, AFL-CIO

J. Harold Koretsky, Esq., and Robert E. Sheahan, Esg.,

for the General Counsel.

John D. O’Brien, Esq. (Sey forth, Shaw, Fairweather

& Geraldson), of Washington, D.C. for the Respondent.

DECISION

Statement of the Case

ELBERT D. GADSDEN, Administrative Law Judge:

Upon an original and an amended charge of unfair labor

practices, filed on April 22, 1974 and April 25, 1974 and

July 31, 1974, respectively, Ernest J. Rousselle, interna-

tional representative, for the Oil, Chemical and Atomic

Workers International Union, AFL-CIO, herein called

the Union, against Johns-Manville Products Corporation,

herein called Respondent, the General Counsel of the Na-

tional Labor Relations Board issued an original and an

amended complaint against Respondent on August 5,

1974 and October 9, 1974, respectively, alleging that

6la

Respondent had engaged in unfair labor practices in

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

and (5) and Section 2(6) and (7) of the National Labor

Relations Act, as amended, herein called the Act.

The Respondent filed an answer and an amended an-

swer on August 9, 1974 and October 15, 1974, respec-

tively, denying that it engaged in any unfair labor prac-

tices in violation of the Act.

The hearing in the above matter was held before me

at New Orleans, Louisiana on December 4, 5 and 6,

1974. Briefs have been received from counsel for the

Respondent and counsel for the General Counsel, re-

spectively, and have been carefully considered.

Upon the entire record in this case and from my ob-

servation of the witnesses, I hereby make the following:

Findings of Fact

I. Jurisdiction

Respondent, is now, and has been at all times material

herein, a corporation duly organized under and existing

by virtue of the laws of the State of Delaware, with a

manufacturing plant located in New Orleans, Louisiana

(the only facility involved herein), where it is engaged in

the manufacture of asphalt shingles and rolled roofing.

During the past 12 months, a representative period,

Respondent purchased and received goods and materials

valued in excess of $50,000, which were shipped directly

to Respondent in the State of Louisiana from points lo-

cated outside the State of Louisiana, and correspondingly,

during the same period, Respondent shipped products

valued in excess of $50,000 from its New Orleans, Louis-

iana plant directly to customers located outside the State

of Louisiana.

62a

The complaint alleges, the answer admits and I find

that Respondent is an employer engaged in commerce

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

II. The Labor Organization Involved

Oil, Chemical and Atomic Workers International

Union, AFL-CIO, herein called the Union, is now and

has been at all times material, a labor organization with-

in the meaning of Section 2(5) of the Act.

III. The Alleged Unfair Labor Practices

A. Background of the Dispute

The Respondent manufactures an organic dried felt,

which is a crude form of paper used as the base for

asphalt roofing products. After this process is completed

the paper is then sent to the Marrero plant of Johns-

Manville in Savannah, Georgia and Los Angeles, Cali-

fornia, where the asphalt processing is carried on. How-

ever as far as the plant in question is concerned, the end

product is the result of a process whereby paper is in-

itially mixed with water to a slurry, and then to that

slurry is added a slurry made up of water and pulp

wood. The then combined slurry is ground to a certain

degree then passed on to a mesh wire, flattened and

compressed to squeeze out moisture from 80 percent to

approximately 55 or 60 percent, until the sheet is able

to sustain its own weight. It is then processed across a

conveyor belt on to dryer drums or rollers where it be-

comes drier and drier and all of the moisture is re-

moved to 4 or 5 percent. It is then wound on a bull

reel and cut into rolls of 36 inches, after which it is

prepared for shipment.

The paper sheets can be broken during the manufactur-

ing process through a lack of proper adjustment between

the drier sections of the revolutions per minute which,

63a

if not properly done, can be broken as a result of vibra-

tions and tensions between the sections. Paper breaks

may also occur as a result of being physically struck

with the hand or an object. The paper can be broken

also as a result of variations in the formula of the pulp

wood slurry. In other words the end product can be

damaged or broken at nearly any point along the pressing

route or by improper formula mixtures or adjustments

in the revolutions of the processing machinery.

The bargaining history of the parties shows that the

locked out employees constitute the appropriate unit for

purposes of collective bargaining, for which the Union

was properly certified the exclusive collective-bargaining

representative on October 27, 1964. Since that time, the

parties have entered into four successive 2-year collective-

bargaining agreements from October 12, 1965 through

October 12, 1973.

However, prior to the expiration of its collective-bar-

gaining agreement on October 12, 1973, the parties (Re-

spondent and the Union) commenced negotiations for a

new agreement on September 11, 1973. Nevertheless, af-

ter several bargaining sessions the current bargaining

agreement expired on October 12 without the parties hav-

ing reached a new agreement. Meanwhile, since Sep-

tember 1973, Respondent has complained to the union

representative that it was experiencing an excessive

amount of paper breaks in its manufacturing process

and had been finding a considerable number of scrap

metal in the conveyor and other manufacturing ma-

chinery, causing interruptions in production and down-

time and resulting in substantial costs and losses in

profits. Since these occurrences not only continued but

became worse on October 22 or 23 of 1973, the Respond-

ent said it issued a notice to its production employees

advising them of the shutdown of the plant on October

31, 1973. The parties continued to negotiate without

64a

reaching a bargaining agreement and the Respondent

reopened the plant with temporary employees in mid-

November 1973, which temporary employees were made

permanent employees around April 1974, while the regu-

lar employees in the Union were still locked out.

The Respondent contends that it shut down its plant to

avoid further damage to its manufacturing equipment

and for the safety of plant personnel or persons in the

vicinity; and that it ultimately employed permanent re-

placements in order to save its business operations at the

plant. The Union contends that Respondent’s hiring of

permanent replacements was discriminatory and had a

substantial discouraging effect upon union membership

and activities, in violation of Sections 8 (a) (3) and (1)

and (5) of the Act.’

B. The Negotiations out of which the

Current Dispute Arose

A composite of the credible evidence of record estab-

lished that the Union and Respondent commenced negotia-

tions for a new collective-bargaining agreement on Sep-

tember 11, 1973 with Mr. Ernest J. Rousselle, representa-

tive for the Union and spokesman for the employees, and

Mr. Darrell Wells, employee relations director for the

Respondent, as first-time spokesman for the Respondent

in negotiating sessions. The union committee consisted

of Mack Jordan, president of the local union, Donald

Hall, chairman of GM group, Mr. Johnson, Sid Meggs,

Charlie Ebeyer and Raymond Haisch. At this time the

Union presented 19 proposals which it explained and held

discussions on two of such items. The Company then

stated that it would have a set of proposals to present at

the next meeting on September 19.

On September 19 the bargaining parties met, during

which time the Respondent presented six proposals and

1 The facts set forth above are undisputed in the record.

65a

had agreed to two or three of the Union’s proposals.

However, the Respondent proposed deleting the language

in the present contract which required it to train em-

ployees in the maintenance department to do mechanic

work and prohibited it from hiring mechanics from the

outside. Respondent contended that the lack of sufficiently

trained maintenance people was affecting its maximum

productivity.

The Union opposed this change because it contended

that it would affect the seniority rights of some employees

with 25 or 30 years seniority by layoffs or reduction in

force because of lack of qualifications, wherein such per-

sons could be trained by Respondent and retained in

employment. The Respondent also proposed a 3, rather

than a 2-year contract as had been previously entered

into. The Union was proposing a l-year contract. The

parties agreed to meet again on September 25, 1973.

However, on September 19, 1973, the Respondent posted

a notice on its bulletin board at the plant revealing, in

large measure, the contents of the September 19 meeting,

and more particularly, describing the issue on the change

of language in the present contract as follows:

As your Plant Manager I can honestly say that we

have reached a critical point in out maintenance

program. Our proposal is not double barreled with

any underlying motives. Our proposal is simply

necessary for our very existence. Contracting work

out is not the answer because that is costly to the

Company and it takes away from you people.

In addition, our proposal does not threaten the pres-

ent seniority provisions. Your Union bargaining

committee feels that the Company will hire a skilled

maintenance man for example, and then if a layoff

would occur, the Company would claim that the

newly hired man should stay because he is more

qualified than a senior employee thereby forcing the

66a

senior employee on layoff. This position is exactly

what I meant when I said our proposal is not “double

barreled.” There is no way we intend to deny or not

recognize your seniority. Furthermore, there is no

reasonable man who would uphold the Company

where the Company laid off, for example, a me-

chanic with 15 years of Felt Mill experience and

seniority and kept a mechanic with 3 years of Felt

Mill experience and seniority. Even if the qualifica-

tions were “approximately equal” the present lan-

guage states seniority will be the determining factor

and therefore you are protected. Your bargaining

committee also stated we have not trained in the

past and we are not training now. I have already

talked about that point. We simply need immediate

relief in the maintenance area—more help and more

skills now.

In this notice the Respondent also advised that it

was proposing to reduce the 30 days to 5 days for the

time limit for filing a grievance; to revise the language

concerning strikes and lockouts; and that the collective-

bargaining agreement should be for 3 years to provide

flexibility and allow for planning for long term improve-

ments. It also advised that the next negotiating session

was scheduled for October 3, 1973.

The parties met in negotiations session again on Sep-

tember 25, 1973, wherein they reached an agreement on

Company’s Proposal No. 1 and held discussions regard-

ing the problem of training maintenance employees, a

8-year agreement, and the deletion of the contract pro-

vision dealing with strike and lockout. When the Union

asked the Respondent why did it want to delete the

language on the no-strike, no lockout agreement, it sim-

ply replied that they wanted to take the garbage out

of the contract; that this provision was not needed. The

Union again reiterated its concern to the Respondent

67a

on the matter of Respondent hiring maintenance people

off the street who might subsequently replace older em-

ployees in the event of a layoff. The Company’s position

was that it needed trained men “now” and not in the

“future.” The Union contended that since Respondent

had mechanics and mechanic helpers, the mechanic help-

ers could progress into the mechanic job when such a

job became available; but that it had no electricians,

no electrician helpers, no machinist helpers and no welder

helpers, and therefore, the Company was obligated to

train people for these jobs. The Company maintained its

position for a 3-year agreement and the parties agreed

to meet again on October 3, 1973.

Prior to the scheduled October 3 meeting, Mr. Rousselle

said he was informed by Mr. Jordan that Mr. Weil had

accused him and members of the Union of participating

in disruption of operations of the plant (the breaking of

paper and putting foreign materials into its machinery

process). When the parties met on October 3, 1973, Mr.

Rousselle said he expressed his concern about this accu-

sation and further explained to company representatives

that several months earlier, the president of the local

union had brought in a piece of metal approximately 6

inches wide and 9 to 10 inches long which he described

and took to the Respondent, advising it that the metal

was found in the pulp which was purchased from the

concern from which Respondent was purchasing its scrap

paper or wood chips; and that Mr. Weil then stated that

Respondent was purchasing paper chips from any place

they could get it and that Respondent was not accusing

the employees of causing the disruptions in the operations

as a result of the foreign materials.

Mr. Rousselle said he further advised company repre-

sentatives that he would not tolerate the employees par-

ticipating in any type of disruptive procedures. Then Mr.

Wells said the Respondent was not going to tolerate these

disruptive acts and that the Respondent had posted some

safety regulation signs on the board in the plant which

the employees had torn down. The parties did not have

any discussions on the no-strike, no-lockout provisions in

the 1967, 1969, nor the 1971 negotiations between the

Respondent and the Union. The parties then agreed to

meet again on October 11, 1973.

The parties met on October 11 at which time the Re-

spondent again proposed a deletion of the language relat-

ing to training of employees for maintenance and boiler-

house jobs, as well as the revision of the no-strike, no

lockout provision; it proposed a wage increase of 17 per-

cent across-the-board, each year for a 3-year agreement ;

and it made some other proposals relative to service pen-

sion credit. (See General Counsel’s Exhibit Nos. 10 and

11). After counterproposals made by the Union which

were unacceptable to the Respondent, the parties could

not reach an agreement on a contract and they agreed

that the utilization of a mediator might be helpful since

the current contract expired on the next day (October 12,

1973).

The parties succeeded in obtaining the services of Mr.

Bates, a mediator, on October 12, 1973. Mr. Bates had

assisted the parties in past negotiations. When the par-

ties could not reach an agreement with the assistance of

the mediator, the Company through its spokesman, Mr.

Wells, (Respondent) notified the Union that they were

terminating the agreement, that they would no longer

honor the Union’s security provision and the arbitration

procedures or any other contractural obligations which

they had previously adhered to. The Respondent subse-

quently reduced its termination announcement to writing

(General Counsel’s Exhibit No. 12). Mr. Rousselle ad-

vised Respondent that the Union wanted the opportunity

to negotiate further prior to Respondent’s effectuating

the substance of its notification, and he further advised

Mr. Wells that he did not know whether Respondent

could legally and unilaterally revoke the Union’s security

provisions but he would check into the matter with his

attorney. Mr. Wells then stated that he was not going

to tolerate any slowdown or harassment and Respondent

presented the Union with the written notice (General

Counsel’s Exhibit No. 12) which Mr. Weil read as fol-

lows:

Dear Mr. Jordan and Mr. Rousselle:

As you know, under Article XXVI of our 1971-1973

contract, such agreement remained in full force and

effect to and including October 12, 1973.

This will serve to notify you that we are no longer

willing to continue to honor any contractural obli-

gations whatever after midnight, October 12, 1973.

We will, of course, continue to negotiate with you

concerning wages and working conditions applicable

during the period prior to the execution of any new

contract and the terms of any new contract.

Since we will no longer have any contractural obli-

gations, this will also serve to notify you of the fol-

lowing:

1. Since Article III entitled Union security is no

longer a contractural obligation, union mem-

bership is no longer a condition of employ-

ment at this Plant and in addition, we will no

longer deduct union dues

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