Petition — Honolulu Sporting Goods Co. v. National Labor Relations Board

Supreme Court brief1980

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ye Court, U. $.

4 1° ! L E D

680-550 OCT 6 1980

No. 80-___ MICHAEL Rop JR., CLERK |

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1980

HONOLULU SPORTING GooDs CoMPANY, LTD.,

A DIvIsiIon OF ZALE CORPORATION, Petitioner,

NATIONAL LABOR RELATICNS BOARD, Respondents.

—_—_—_——

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

JARED H. JossEM

Counsel of Record

RICHARD M. RAND

Suite 1512, Amfac Building

700 Bishop Street

Honolulu, Hawaii 96813

Of Counsel: a

Attorneys for Petitioner

NorMAN LanDA, Esq. Honolulu Sporting Goods

3000 Diamond Park Co., Ltd., A Division of

Dallas, Texas 75222 Zale Corporation

it POSE EDGER SATAN A NL ESTEE IEE IT ELI PLEIN LE IE LLM ITE,

PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D.C.

¥%

QUESTIONS PRESENTED

The basic question is whether the National. Labor

Relations Board must weigh the factors set forth in

NLRB v. Gissel Packing Co., 395 U.S. 575 (1969), prior

to imposing a bargaining order, where the Board, revers-

ing its Administrative Law Judge, finds but one unfair

labor practice and no pattern of, or other, employer

misconduct.

The subsidiary question is whether, for purposes of

determining a union’s majority status based on

authorization cards, the National Labor Relations Board

may disregard its criteria of voter eligibility for secret

ballot elections applied as of the date of the union

makes its demand for recognition, and find majority

- Status in bargaining order cases on separate legal

grounds.

TABLE OF CONTENTS

PAGE

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B. The Board’s Decision and Order ......... 4

C. The Decision Of The Court of Appeals... 5

REASONS FoR GRANTING THE WRIT ............0000005 6

I. The Decision Below Conflicts With This

Court’s Decision In Gisse/ And With The

Correct Application Of Gissel Adopted By The

First, Second, Third, Fourth, Fifth, Sixth,

Seventh And District Of Columbia Circuits,

While Joining The Eighth And Tenth Circuits

In Condoning Disregard Of The Gissel

NS Dicer Sa Ubiee ede 6 hOU Skee 8 ae 046 Gees 6

Il. By Excluding An Eligible Voter From The Unit

For Purposes Of Calculating A Card Majority,

The NLRB Departed From All Known Prece-

dent Which Constitutes A Clear Abuse Of

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PRECEDING PAGE WAS BLANK

TABLE OF AUTHORITIES

CASES: PAGE

American Leather & Suede Cleaners, 189 NLRB 652 ‘

1s: BO are mn ser R rhe,” IN Nh "RABY sry Yo

Ann Lee Sportwear, Inc. v. NLRB, 543 F.2d 739 (10th

Ors BETES bck o od Seen tad Ca CAMESE RUE e Ae'e'es 6 1]

Appletree Chevrolet v. NLRB, 608 F.2d 988 (4th Cir.

SOFE hig 60.65.40 b- 00 oe ed 04 RARPPUWERRAMID Bird Kees

Arbie Mineral Feed Co. v. NLRB, 438 F.2d 940, 945

Cee GIs DEED: 05 bb odd nk bes keds COKEV CR 0 co ¥ Onn 11

Chandler Motors, Inc., 236 NLRB 1565, 1566 n. 8

CROPU DC hw hh do.cb ROMO SENT e cde ase dane ke uselve. 7

Chromalloy Mining v. NLRB, __.__._ F.2d _____., 104

LRRM 2897, 2995 (Sth Cir. 1980) ................ 9

Cleveland Board of Education v. LaFleur, 414 U.S. 632

CIP PUES Go. LEER ASO OREN Seer Rh an th ceuet duds bas 13

Donn Products v. NLRB, 613 F.2d 162, 167 (6th Cir.

SBD hcGA a Wolals dhiv'd) (es Kes ORR LAD OUR Bide 40 00's 7,8

Drug Package, Inc. v. NLRB, 570 F.2d 1340 (8th Cir.

SEE ia P50 ah Bs bcd tee Oka La Rd bend CHM acer 1}

First Lakewood Associates v. NLRB, 582 F.2d 416, 423

CE ee BOPUN 6 CEkS LARARLAed RoR E henna tan ebe 7,8

Kenworth Trucks of Philadelphia v. NLRB, 580 F.2d 53

COG Cans DOU cn 5s Catdben nc ose ieoxebeabhewekss 9

NLRB vy. Appletree Chevrolet, 608 F.2d 988, 998, 1000

OOS, BFGN cb chcs ch 0s cc chaan beens wi vacances ee

NLRB v. Armcor Industries, 535 F.2d 239, 244 ........ )

NLRB v. General Stencils, Inc., 438 F.2d 894 (2nd Cir.

ISTEP kn web cnc ebbs cteveds cub bebe OhEwCewanbur 6

NLRB vy. Gissel Packing Co., 395 U.S. 575 (1969) ... passim

NLRB v. Jamaica Towing, 602 F.2d 1100, 1104-1105

CO A Free. Fa XG i von oo aces ha 5,7,9, 11

VLRB v. Laars Engineers, 332 F.2d 664 (9th Cir. 1964),

cert. den. 374 U.S. 930 (1964)... cc ccc cee ccees 5

Table of Authorities Continued

CASES: PAGE

NLRB vy. Matouk Industries, 582 F.2 125 (1st Cir.

PD oo Seated § oben bed oO pew a ea-aee balemitaes 8, 10

NLRB v. New England Lithograph, 589 F.2d 29 (ist

Coe ME STULL» licaeey Gade Caer aes to euaian 12

NLRB vy. Pacific Southwest Airlines, 550 F.2d 1148 (9th

Ct PEER cb +. ca hMENG Cote Sot caWh ar naWe ay sss Unease 5

NLRB vy. Pilgrim Foods, 591 F.2d 110, 117 (ist Cir.

HERPES Raber ere are, Gat COS oe a 6-7, 8, 10

NLRB v. Rapid Manufacturing Co., 612 F.2d. 144, 150

RN Rane APTN Woden Ven kOU RE RR aC Rd eals vat adawwen a 7

NLPB \. Jischler, 615 F.2d 509 (9th Cir. 1980) ........ 5

ViKB v. Western Drug, 600 F.2d 1324, 1325 (9th Cir.

PTE huhic kocEX poe Re A Reiethes.s Csaba eens cae 5% s ;

Peerless of America, Inc. v. NLRB, 484 F.2d 1108, 1118

CH Ga HPO s cis 66s Kec eed a 8 44c0 50d castes 8

Peoples Gas System v. NLRB, _____._ F.2d _____., 104

LRRM 2224, 2231-2232 (D.C. Cir. 1980) ......... 7,10

Rapid Manufacturing v. NLRB, 612 F.2d 144 (3rd Cir.

Pr aes sy nie he REG Dh ae ob 0 Se aso oa «dees 9

Reed Seismic Company, 182 NLRB 158 (1970), enf’d as

modified, 440 F.2d 598 (Sth Cir. 1971) .............. 8

(/niversal Camera Corp. v. NLRB, 340 U.S. 474 (1951) .

Walgreen Company, 221 NLRB 1096 (1975) ........... 8

STATUTES:

National Labor Relations Act as amended (61 Stat 16,

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Table of Authorities Continued

MISCELLANEOUS: PAGE

‘After All, Tomorrow is Another Day’’: Should Subse-

quent Events Affect the Validity of Bargaining

Orders? 31 Stanford L. Rev. 505 (1979) ...........

°%

IN THE

Supreme Court of the United States

OcTOBER TERM, 1980 |

No. 80-

HONOLULU SPORTING Goops COMPANY, LTD.,

A Division OF ZALE CORPORATION, Petitioner,

Vv.

NATIONAL LABOR RELATIONS BOARD, Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

Honolulu Sporting Goods Company, Ltd., a Divi-

sion of Zale Corporation, (‘‘Honsport’’), petitions for a

writ of certiorari to review the judgment of the United

States Court of Appeals for the Ninth Circuit.

OPINIONS BELOW

The opinion of the Court of Appeals issued on May

5, 1980, (Appendix A, infra, pages la through 2a), not

yet reported, enforced a Decision and Order of the Na-

tional Labor Relations Board (Appendix B, infra, pages

3a through 8la reported at 239 NLRB No. 173 (1979).

JURISDICTION

On July 9, 1980, the Court denied the company’s

Petition for Rehearing and in the Alternative Rehearing

en banc (Appendix C, infra, page 82a). The judgment

below is reproduced as Appendix D, pages 83a to 86a)

had been filed June 2, 1980. Juridiction of this Court is

invoked under 28 U.S.C. §1254(1).

STATUTE INVOLVED

The provisions of the National Labor Relations Act

as amended (61 Stat 16, 29 USC §151 ef seq.) are set

forth in Appendix E, infra, at page 87a.

‘STATEMENT OF THE CASE

After the Administrative Law Judge of the NLRB

found the company innocent of any unfair labor prac-

tices, the National Labor Reiations Board reversed. It

ordered the company to bargain with Local 996 of the

Teamsters Union, because it implemented a lawfully

timed wage increase, the amount of which had not been

announced to employees prior to the advent of the

union. The Board concluded that while the timing of the

announcement of the wage increase was lawful, the

amounts of the increases, calculated in accordance with

preexisting company policy, were, nevertheless, overly

generous and thus violated §8(a)(1) of the Act. In its

opinion, the Board offered no explanation for its is-

suance of a bargaining order (Appendix B, pages 3a to

26a).

A. The Facts

Honsport is a subsidiary of Zale Corporation, which

has headquarters, including personnel officials, in

Dallas, Texas. Its sporting goods division, which includ-

°%

ed Honsport, underwent national management changes

in early 1976. The new managers ordered revisions to

compensation schemes for various groups of employees

in Honolulu. During April, local Honolulu management

met with and evaluated warehouse employees for

periodic wage increases, and sent their recommendations

to Dallas. The employees were then told to expect wage

increases; the amounts were not specified. Honsport’s

actual recommendations were rejected as ‘‘inadequate’’

in Dallas and were returned back to Honolulu later in

April. Dallas began a survey of Honolulu wages by con-

tacting Sears and Penney’s. (App. B, pages 7a to 24a).

In May, before the revised wage schedule was

calculated, Local 996 obtained authorization cards from

5 warehouse employees. The union notified Honolulu

management of a majority claim on May 11, 1976, hav-

ing filed a petition for an election with the NLRB on

May 10, 1976. Upon learning of the petition, Zale sent

its labor relations attorney to Honolulu. He recommend-

ed, because denial of the increase could be considered a

reprisal, that Honsport complete the revision to its

‘*inadequate’’ wage scale. Substantial wage increases

resulted for some employees in the petitioned-for unit.

These increases were announced prior to any election

being scheduled, and prior to any hearing to resolve

questions of voter eligibility. Affected employees were

told the raise had nothing to do with the union and that

they were free to vote as they wished.

There was no anti-union campaign whatsoever, no

interrogation, and no discrimination based on union

activity.

After an NLRB hearing to determine voter eligibili-

ty, its Regional Director, on July 1, 1976, directed an

election. She included among the eligible voters an

employee named Schubach, who had been hired before

the union’s advent to fill in for another employee,

James, who was.on leave for pregnancy at all material

times. Thus, at the time the union made its majority

claim, there were 10 eligible voters under existing NLRB

election rules, and the union had at best only 5

authorization cards; it lacked a clear majority.

After the NLRB directed an election in a unit which

expressly included Schubach by name (App. F), the

union filed its unfair labor practice charge alleging that

the granting of the wage increases violated the Act, and

withdrew its petition. The employees never voted.

B. The Board’s Decision and Order

The Board, reversing its udministrative law judge,'

found that the company violated §8(a)(5) and (1) of the

Act by granting wage increases in an amount greater

than the wage scale deemed ‘‘inadequate’’ in April, and

by refusing to bargain with the union in May. The

Board, in substance, held that while the timing of the

employer’s announcement of wage increases was not

unlawful, the employer’s announcement of wage in-

creases higher than those finally calculated before the

union’s bargaining demand violated the Act.’

' Judge Maurice M. Miller concluded in his December 15, 1977

opinion:

In short, Respondent’s partial nonconformity with newly defin-

ed wage increase criteria — which Vice President Gart had ap-

proved — carries no persuasive implication, within my view,

that statutcrily proscribed ‘‘interference’’ with Complainant

Union’s campaign was intended, rather than valid raises.

Stated conversely, nothing within the relevant ‘‘totality of cir-

cumstances’’ which surrounded Respondent’s final June 1976

retroactive raise payments would, preponderantly, warrant a

determination that such raises had not been validly granted.

(App. B, p. 78a).

* The election process preferred by Congress may now be

repeatedly frustrated by carefully timed petitions which coincide

with pending wage reviews.

C. The Decision Of The Court Of Appeals.

The Ninth Circuit rejected Honsport’s contention

that the Board must articulate some reason why a

bargaining order should issue, particularly where the

employer has been found guilty of only one violation of

§8(a)(1), and where the employer’s acts lacked any of the

serious types of misconduct ‘‘which usually are the

hallmarks in cases where bargaining orders issue.’’

NLRB v. Jamaica Towing, 602 F.2d 1100, 1104 (2nd

Cir. 1979). The Court of Appeals sanctioned the Board’s

‘‘per se’’ issuance of a bargaining order without the

analysis of the factors which Gissel deemed pivotal in

deciding a secret ballot election could not be held. In so

doing, the panel of the Ninth Circuit, citing NLRB v.

Tischler, 615 F.2d 509 (9th Cir. 1980), NLRB v. Laars

Engineers, 332 F.2d 664 (9th Cir. 1964), cert. den. 374

U.S. 930 (1964), and NLRB v. Pacific Southwest

Airlines, 550 F.2d 1148 (9th Cir. 1977).

The detailed analysis of factors deemed important

by this Court over ten years ago in Gisse/ is thus reduced

to a mere tautology:

The evidence also supports the Board’s findings that

. the unlawful wage increase undermined the

Union’s strength and prevented a fair election. Ac-

cordingly, we affirm ... its selection of a bargain-

ing order as the appropriate remedy.(App. A, p.

2a).

The Ninth Circuit Court has thus sanctioned the

Board’s refusal to apply the Gisse/ criteria in a case

where no pattern of employer misconduct exists, and

where, after an election was directed in a unit larger than

that first sought by the union, the election petition was

withdrawn. The lack of close analysis of the facts in

Circuit Judges Hug, Schroeder and Pregerson’s opinion

is manifest: while the Board expressly found the raises

lawful as to their timing, the Court considered the ‘‘tim-

ing and nature’’ of the raises in upholding the Board.

(App. A, p. la, 2a).

REASONS FOR GRANTING THE WRIT

I. The Decision Below Conflicts With This

Court’s Decision In Gissel And With The Cor-

rect Application Of Gissel Adopted By The

First, Second, Third, Fourth, Fifth, Sixth,

Seventh And District Of Columbia Circuits,

While Joining The Eighth And Tenth Circuits

In Condoning Disregard Of The Gissel Factors.

This case presents questions of substantial and

recurring importance involving the denial to employees

of their opportunity to vote by secret ballot to select or

reject collective bargaining representatives and the

repeated and unreasoned substitution of NLRB litigation

as the path to Union representation.

Through such ad hoc reversals of its own Ad-

ministrative Law Judges, the NLRB may be expected to

increasingly deny employees of their opportunity to vote

in NLRB elections through the devise of the ‘‘per se’’

bargaining order,’ without regard to evaluating the

specific factors set forth in Gissel.

Most circuit courts insist that the Board’s imposition

of bargaining orders include an analysis of the efficacy

of conventional remedies. See, NLRB v. Pilgrim Foods,

‘ Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951) pro-

vides the standard by which bargaining orders as well as violations

should be evaluated. NLRB v. General Stencils, Inc., 438 F.2d 894

(2nd Cir. 1971).

591 F.2d 110, 117 (Ist Cir. 1979); NLRB v. Jamaica

Towing, 602 F.2d 1100, 1104-1105 (2nd Cir. 1979);

NLRB v. Rapid Manufacturing Co., 612 F.2d 144, 150

(3rd Cir. 1979); NLRB v. Appletree Chevrolet, 608 F.2d

988, 1000 (4th Cir. 1979); First Lakewood Associates v.

NLRB, 582 F.2d 416, 423 (7th Cir. 1978); Donn Prod-

ucts v. NLRB, 613 F.2d 162, 167 (6th Cir. 1980):

Peoples Gas System v. NLRB, ____._ F.2d , 104

LRRM 2224, 2231 (D.C. Cir. 1980)

In 1969-70, this Court in NLRB v. Gissel Packing

Co., 395 U.S. 575 (1969) sanctioned the use of bargain-

ing orders in place of secret ballot elections in two

limited situations: (a) where the employer has committed

egregious and pervasive unfair labor practices (clearly

not applicable here) or (b) where the unfair labor prac-

tices are not so severe and outrageous but still have the

tendency to undermine a previously demonstrated show-

ing of majority support for a union. In the latter situa-

tion, this Court held that Board may issue a bargaining

order if the Board finds that the effects of the unfair

labor practice are indelible and that on balance, majority

support for the union as expressed through authorization

cards would be best protected through a bargaining

order.

Since Gissel was decided ten years ago, the Courts

of Appeals have split as to the requisite specificity of

Board findings necessary to substitute a bargaining order

for the preferred secret ballot method of Employee

choice. The time has come to resolve this conflict.‘

This case presents the ideal vehicle for doing so,

because it presents both unreasoned judicial approval as

well as the NLRB’s refusal to apply the Gisse/ criteria

where only one inferential unfair labor practice was

found.

‘The Board itself has conceded that this conflict needs to be

resolved. Chandler Motors, Inc., 236 NLRB 1565, 1566 n. 8 (1978).

The Board’s unreasoned issuance of bargaining

orders when it disapproves only the amount of the

employer’s otherwise lawful wage increase during a

union campaign does not comport with the very limited

disenfranchisement of employees contemplated in

Gissel.*

The Seventh Circuit has

[Consistently held that Gissel contemplates that the

Board must make ‘“‘specific findings’’ as to the im-

mediate and residual impact of the unfair labor

practices on the election process and that the Board

must make ‘‘a detailed analysis’’ assessing the

possibility of holding a fair election in terms of any

continuing effect of misconduct, the likelihood of

recurring misconduct, and the potential effectiveness

of ordinary remedies.

Peerless of America, Inc. v. NLRB, 484 F.2d 1108, 1118

(7th Cir. 1973); Accord, First Lakewood Associates v.

NLRB, 582 F.2d 416 (7th Cir. 1978).°

The Fourth Circuit also requires specific findings

and analysis as outlined in Peerless of America, Inc. v.

NLRB, supra, Appletree Chevrolet v. NLRB, 608 F.2d

988 (4th Cir. 1979). The Sixth Circuit subscribes to this

view, Donn Products v. NLRB, 613 F.2d 162 (6th Cir.

1980), as does the First Circuit, NLRB v. Matouk In-

dustries, 582 F.2 125 (ist Cir. 1978); NLRB v. Pilgrim

Foods, 591 F.2d 110 (Ist Cir. 1979).

‘Indeed, the Board has not itself been consistea: in issuing

bargaining orders where a unilateral wage increase was granted. See

Reed Seismic Company, 182 NLRB 158 (1970), enf’d as modified,

440 F.2d 598 (Sth Cir. 1971), American Leather & Suede Cleaners,

189 NLRB 652 (1971), Walgreen Company, 221 NLRB 1096 (1975).

* When the issuance of a bargaining order is based on a single

violation of §8 (a)(1) of the Act, the need for such findings is in-

creased. First Lakewood, 582 F.2d at 424 n. 5.

Recently the Fifth Circuit had to undertake its own

analysis of the record since ‘‘the Board has ignored the

specificity requirement of Gissel.’’ Chromailoy Mining v.

NLRB, F.2d , 104 LRRM 2897, 2995 (Sth

Cir. 1980).

In NLRB v. Jamaica Towing, 602 F.2d 1100 (2nd

Cir. 1979) the Second Circuit refused to enforce ‘‘the is-

suance of a bargaining order in the absence of express

consideration of those factors which, ,in the Board’s

view, preclude reliance on the preferred remedy of a sec-

ond election.’’ 602 F.2d at 1103-1104

The Third Circuit similarly believes:

In light of the general and highly desirable practice

in industrial relations of selecting bargaining

representatives through traditional election pro-

cesses, a rule requiring the Board to set forth a

reasoned analysis justifying a bargaining order

under Gisse/ is salutary. For the reasons set forth

hereinafter, we adopt it.

NLRB vy. Armcor Industries, 535 F.2d 239, 244, Accord,

Kenworth Trucks of Philadelphia v. NLRB, 580 F.2d 53

(3rd Cir. 1978), Rapid Manufacturing v. NLRB, 612

F.2d 144 (3rd Cir. 1979).

The District of Columbia Circuit agrees:

{Blefore we will enforce a bargaining order, we

must be able to determine from the Board’s opinion

(1) that it gave due consideration to the employees’

section 7 rights, which are, after all, one of the fun-

damental purposes of the Act, (2) why it concluded

that other purposes must override the rights of the

employees to choose their bargaining representatives

and (3) why other remedies, less destructive to

employees’ rights, are not adequate.

Peoples Gas System v. NLRB, i Ae

LRRM 2224, 2231-2232 (D.C. Cir. 1980).’

In Pilgrim Foods , the First Circuit admonished the

Board for its summary conclusions:

Looking at the language in the Board’s decision,

we discover that it charged that the Company

‘‘undermined the Union’s m-jority status’’ and that

their practices were ‘‘so pervasive and widespread

that their coercive effects cannot be eliminated by

traditional remedies’ and ‘‘a fair election is im-

possible.”’ Although the language glows with

Supreme Court sanctioned terms, the Board failed

to go beyond semantics and give specific examples

and precise reasons for this extreme remedy.

The Board’s conclusion in this case only ‘‘glows’’ — it

does not illuminate:

As previously stated, the General Counsel con-

tends that under the principles set forth in Gissell

Packing Company, supra, a_ bargaining order

remedy should be granted in this case. We agree, as

the unfair labor practice committed by Respondent

was so pervasive and extensive that the possibility of

erasing its effects on the employees and insuring a

fair election by the use of traditional remedies is

slight. And, therefore employee sentiment, as ex-

pressed by authorization cards, is best protected by

a bargaining order.

(App. B, p. 18a, 19a) Not only is this the exact type of

conclusory language condemned by most Circuits, but

also, such a conclusion of ‘‘indelibility’’ is unsupportable

on its face where the Board reached its conclusion 13

’ The D.C. Circuit has noted that ‘‘other courts have encountered

the same problem with the Board's perfunctory conclusions that a

bargaining order is appropriate’ Peoples Gas, 104 LRRM at 2232

n. 22; NLRB v. Matouk Industries, supra.

months after its own ALJ had dismissed the complaint,

and over 30 months after the union withdrew the

petition.

To approve such a procedure would be to approve

in effect the automatic issuance of bargaining orders

in any case where the Board declared the miscon-

duct of the employer to be ‘‘pervasive and

egregious.’’ Such. a procedure would not accord

with the standards declared in Gissell . . .

NLRB vy. Appletree Chevrolet, 608 F.2d 988, 998 (4th

Cir. 1979).

In conflict with the foregoing, the Tenth, Eighth

and Ninth Circuits sanction bargaining orders issued

with a mere ‘‘glow’’ of the ‘‘right’’ terms.'

The frustration of the Courts of Appeals since

Gissel manifest,’ and the Board’s persistent refusal to

‘In Ann Lee Sportswear, Inc. v. NLRB, 543 F.2d 739 (10th Cir.

1976), the Tenth Circuit announced that it would accord ‘‘con-

siderable discretion’’ to the Board and would enforce a bargaining

order that was ‘‘within its discretionary zone.’’ The Eighth Circuit

similarly grants the Board undue latitude, even where the record is

silent on the justification for such a drastic remedy. Arbie Mineral

Feed Co.v. NLRB, 438 F.2d 940, 945 (8th Cir. 1971), Accord, Drug

Package, Inc. v. NLRB, 570 F.2d 1340 (8th Cir. 1978).

* **Lastly, in the absence of any reference by the Board to the

specific guidelines it follows in deciding whether to issue a bargain-

ing order, there is an inadequate safeguard against precipitous or

arbitrary action by the Board. . . The seeming inconsistencies in the

Board’s case law give rise to the impression that it is making ad hoc

decisions on a matter of considerable importance in the fair ad-

ministration of the National Labor Relations Act. This impression

can only be dispelled if the Board, before issuing or declining to

issue a bargaining order, sets forth the relevant standards as they

have evolved in its decisional law and describes the applicability of

these standards to the facts of the case at hand.’’ Jamaica Towing.,

602 F.2d at 1104-1105 (citations omitted).

justify bargaining orders will inevitably burden the

Courts and this Court with continual protests until the

conflict is resolved.'® Now, ten years after Gisse/, the

Board must be required to preserve the election process

in the absence of serious employer misconduct genuinely

precluding a fair election. A wrong judgmental choice

between “‘reprisal’’ and ‘‘benefit’’ is not such miscon-

duct.

II. By Excluding An Eligible Voter From The Unit

For Purposes Of Calculating A Card Majority,

The NLRB Departed From All Known Prece-

dent Which Constitutes A Clear Abuse Of

Discretion.

In arbitrarily excluding employee Schubach, (ex-

pressly declared eligible to vote by the Regional Direc-

tor,) (App. F) from the bargaining unit for purposes of

calculating a majority, the Board sua sponte'' decided

that she did not count. To accomplish the exclusion of

an employee present in the unit, both when the union’s

demand and the subsequent wage increase occurred, the

Board had to ignore the two established tests for inclu-

sion of an employee in a bargaining unit.

The first test is known as the ‘‘reasonable expecta-

tion test’? and focuses on the employee’s reasonable ex-

pectation of permanent re-employment. NLRB v. New

England Lithograph, 589 F.2d 29 (Ist Cir. 1978). The

other ‘‘date certain test’? examines whether a definite ter-

'° See generally, ‘‘After All, Tomorrow is Another Day’’:

Should Subsequent Events Affect the Validity of Bargaining

Orders? 31 Stanford L. Rev. 505 (1979).

'' The ALJ never fully discussed the majority issue, finding that

no unfair labor practice had been committed.

mination date has been set for a temporary employee.

The Ninth Circuit has acknowledged the existence of

these two tests without adopting either,'? and here ig-

nored both.

The Board applied the reasonable expectation test to

James, who was on leave of absence and included her in

the unit. (App. B 9a, n.11, 17a, n.21.) But no legal test

is used to exclude Schubach, whom the Regional Direc-

tor expressly included.'* In a case such as this one where

the union’s majority, if it does exist, is a naked one, the

Board should be required to announce why it so clearly

ignored the two tests it had heretofore employed in elec-

tion cases.

This anomaly underscores the Board’s excessive zeal

to issue bargaining orders, in disregard of employees’

right to vote.

'? NLRB v. Western Drug, 600 F.2d 1324, 1325 (9th Cir. 1979).

' As a matter of law, James’ expected date of return from a

leave for childbearing could not be presumed. Cleveland Board of

Education, v. LaFleur, 414 US 632 (1974)

CONCLUSION

For the foregoing reasons, the Petition for a Writ of

Certiorari should be granted.

Respectfully submitted,

JARED H. JossEmM

RICHARD M. RAND

700 Bishop Street

Honolulu, Hawaii 96813

Of Counsel:

Attorneys for Petitioner,

NORMAN LanDA, Esq. Honolulu Sporting Goods

3000 Diamond Park Co., Ltd., A Division

Dallas, Texas 75222 of Zale Corporation

APPENDIX

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 79-7057

HONOLULU SPORTING Goops, INC.,

A SusBstpDiARY OF ZALE Corp., Petitioner

NATIONAL LABOR RELATIONS BOARD, Respondent.

MEMORANDUM

Petition to Review an Order

of the National Labor Relations Board

Before: HuG, SCHROEDER, and PREGERSON, Circuit Judges.

The National Labor Relations Board found that

Honolulu Sporting Goods, Inc. (‘‘the Employer’’) violated

section 8(a)(1) & (5) of the National Labor Relations Act by

refusing to bargain with Hawaii Teamsters Local 996 (‘‘the

Union’’) and by granting an unusually large wage increase

after the Union demanded recognition and petitioned for an

election. Among other remedies, the Board ordered the

Employer to bargain with the Union. The Employer petitions

this court for review of the Board’s order, and the Board

cross-petitions for enforcement of the order.

The Board disagreed with the Administrative Law Judge

in this case, but that does not change the standard of review.

See NLRB vy. Tischler, No. 78-3435, slip op. at 2359 (9th Cir.

March 19, 1980). Although we give special weight to the

credibility findings of the Administrative Law Judge, we must

enforce the Board’s order if the Board correctly applied the

law and if the Board’s findings of fact are supported by

substantial evidence. See id.

In light of the timing and the nature of the wage in-

crease, we hold that substantial evidence supports the Board’s

finding that the Employer shifted the wage schedule upward

for the purpose of undermining support for the Union. Cf.

NLRB vy. Laars Engineers, Inc., 332 F.2d 664, 667 (9th Cir.),

cert. denied, 379 U.S. 930 (1964) (inference of unlawful pur-

pose drawn from coercive timing of otherwise lawful wage in-

crease). The Board properly found a violation of section

8(a)(1) of the Act.

The evidence also supports the Board’s findings that the

Union enjoyed majority support at the time that it demanded

recognition, and that the unlawful wage increase undermined

the Union’s strength and prevented a fair election. According-

ly, we affirm the Board’s findings of a violation of section

8(a)(5) and its selection of a bargaining order as the ap-

propriate remedy. See NLRB v. Pacific Southwest Airlines,

550 F.2d 1148 (9th Cir. 1977).

The petition to enforce the order of the Board is granted.

APPENDIX B

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

Case 37—CA—1273

HONOLULU SpoRTING Goops Co., LTD.,

A Supstpiary OF ZALE CORPORATION

AND

HAWAII TEAMSTERS AND ALLIED WoRKERS, LOCAL 996, IN-

TERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS OF AMERICA

DECISION AND ORDER

On December 15, 1977, Administrative Law Judge

Maurice M. Miller issued the attached Decision in this pro-

ceeding. Thereafter, the General Counsel filed exceptions and

a supporting brief, and Respondent filed limited cross-

exceptions and an answering brief.

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

Labor Relations Act, as amended, the National Labor Rela-

tions 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 Ad-

ministrative Law Judge only to the extent consistent herewith.

Shortly after the Charging Party (the Union) requested

recognition and filed a petition for an election in a unit of

Respondent’s warehouse, employees, Respondent granted

those employees a massive pay raise which encompassed both

small step increases based on merit and longevity and a

radical upward revision of the entire applicable wage struc-

ture. The Administrative Law Judge found the entire pay

raise lawful, and not vilative of Section 8(a)(1) of the Act, on

the grounds that: (1) prior to gaining knowledge of the

Union’s organizational campaign, Respondent conducted per-

formance reviews for some of its employees and informed

them that wage increases based thereon had been recommend-

ed; and (2) the complete revision of the basic wage structure

was consistent with a provision in the policy and practice

manual of Respondent’s parent corporation which states that

Company pay ranges reflect the prevailing pay scale in the

local geographic area and are based on wage surveys taken in

the region involved. We find merit in the General Counsel’s

exceptions to these findings of the Administrative Law Judge

because, although it is clear that the employees would have

been granted their small step increases without regard to the

existence of their union activity, we are convinced from the

record evidence that, but for the Union’s organizational cam-

paign, Respondent would never have instituted the major

revision in its basic wage structure during that particular

period of time.

1. Respondent,' a subsidiary of Zale Corporation, is

engaged in the retail and wholesale distribution of sporting

goods equinment in the State of Hawaii wherein it operates

four retail stores and the Honolulu warehouse facility which is

the subject of this proceeding. Zale, headquartered in Dallas,

Texas, operates over 1,600 retail outlets nationwide, ad-

ministering them through a number of merchandising groups

and operating divisions — Honsport being under the ad-

ministrative control of Zale’s Sporting Goods Division.’ Dur-

ing the time period relevant to the unfair labor practices alleg-

ed herein, Miles Baidack served as Respondent's general

manager with supervisory authority over all Honsport

employees. He, in turn, was immediately responsible to

William Gart, the Division’s vice president for operations.

The record’ shows that, during the latter half of 1975,

General Manager Baidack formulated pay scales for Respon-

' Also referred to hereinafter as Honsport.

* Referred to hereinafter as the Division,

‘In setting forth the facts hereinafter, we rely on record

testimony which either stands uncontradicted or was specifically

credited by the Administrative Law Judge.

dent’s warehouse employees.‘ Subsequently, these proposed

pay scales were approved by the Division’s president, with a

designated effective date of October 1, 1975. Although Zale’s

policy and procedure manual states that company pay ranges

reflect prevailing wages paid in the local area and are based

on wage surveys conducted therein, the record herein shows

that no survey of wages paid by other Nonolulu employers

was conducted by Respondent, by the Division’s personnel

department, or by Zale’s wage and salary section.’ And, in

fact, the pay scales adopted set forth wages which were well

below the local prevailing rate.

On March 8, 1976,* Zale officials, Blumenthal and Gart

(the Division’s president and vice president, respectively), paid

a week’s visit to Hawaii for the purpose of conducting an in-

depth review of Honsport’s operations and conferring thereon

with Baidack. While there, Gart specifically inquired as to the

wages earned by each warehouse employee. Later that week,

he instructed Baidack to immediately place Honsport’s retail

sales employees on a commission-based pay plan, but never

suggested, or even discussed, any change in the wage structure

for warehouse personnel. He did, however, direct Baldack to

initiate promptly performance reviews for the. warehouse °

*One pay scale, designated for warehousemen provided for a

$2.40-per-hour starting rate, $2.55 after a 3-month probationary

period, and thereafter, eight set increments of 10 or 15 cents each

(up to a maximum or $3.70). The other pay scale, for warehouse

clerks and a truckdriver, started at $2.60 (after 3 months prior

Honsport employment), with ten 15-cent increments (up to a max-

imum of $4.10).

* Zale’s manual states, in pertinent part, as follows: ‘‘To insure

that employees are paid fairly, most jobs are included in a

systematic pay program developed by the Wage and Salary Section

of the Corporate Personnel Department and administered by Divi-

sion Personnel Departments. The pay program bases the pay range

for each job on the rates paid for similar jobs in the community.”’

* All dates hereinafter are in 1976, unless otherwise indicated.

employees and to forward such reviews to him in Dallas,

together with recommendations for pay raises based thereon.’

On March 25, after his return to Zale’s Dallas head-

quarters, Gart sent Baidack an 11-page memorandum setting

forth detailed directions for a wide variety of changes in

Honsport operations, but, again, nothing concerning

warehouse wage rates was mentioned—although reference

was made to the implementation of sales commission

payments for retail personnel.

On April 10, Honsport’s warehouse manager conducted

performance reviews for five of the nine warehouse

employees, after which he told them that they would receive

wage increases—the amounts of which were not specified.

These reviews were then submitted to Baidack who, based

thereon, made pay raise recommendations (ranging from 10

to-30 cents per hour)’ on the appropriate company forms

which he then forwarded to Gart in Dallas. However, con-

trary to his instructions, Baidack failed to attach the related

performance reviews to the forms which contained his recom-

mendations. Approximately April 15, Gart returned Baidack’s

forms with a note stating that the raise recommendations were

inadequate and asking Baidack, upon receipt thereof, to

notify him so that they could discuss the matter further.

Thereafter, about May 10, Baidack inquired of Jerry Mar-

tin—the Division’s controller who was visiting Honsport

operations at the time—as to why his pay raise recommenda-

’ As found by the Administrative Law Judge, Gart had previous-

ly instituted a policy mandating twice-yearly performance reviews to

be completed in September and March, with pay raises based

thereon to be effective on October | and April | of each year.

* The record indicates the amount of the pay raise recommenda-

tions with respect to only four of those employees, which were as

follows: employee Yamamoto—10 cents (from $2.60 to $2.70);

employee Hasegawa—30 cents (from $2.40 to $2.70); employee

Takahara—10 cents (from $4 to $4.10); and employee Leomo—15

cents (from $2.55 to $2.70).

tions had been rejected and Martin replied that, ‘‘They’ll get

back to you on it.’’ Then, on May 12, Gart sent Baidack

another memorandum in which he criticized with specificity,

and made information requests relative to, Baidack’s recom-

mended pay raises and pay structure for department heads

and assistant managers in Honsport’s retail stores. But, once

more, no reference whatever was made to the warehouse pay

structure or to Baidack’s earlier recommendations for

warehouse employee pay raises.

On May 10 or 11, Harlan Reed, the Union’s business

agent, initiated a telephone conversation with Baidack during

which he claimed to represent a majority of Honsport’s

warehouse employees, requested recognition, and stated that a

representation petition had been filed with the Board’s

Subregional office. Baidack answered that, when received, he

would refer the representation petition to Zale’s management

representatives for response. -

About May 13, when Baidack received formal notifica-

tion from the Board that the representation petition had been

filed, he informed Gart and other Zale officials as to what

had transpired with respect to Reed’s telephone call and the

petition. Their response was to tell Baidack that Norman Lan-

da, Zale’s assistant general counsel for labor relations, would

come to Honolulu to look into the matter and that, in the in-

terim, Baidack should refrain from taking any action which

might ‘‘create problems.”’

Landa arrived in Honolulu on May 24. Before leaving

Dallas, however, he secured from Zale’s wage and salary ad-

ministrator comparative data on the warehouse wage rate

structures utilized by Sears, Roebuck & Company and J. C.

Penney Company at their Honolulu facilities, as well as data

on Zale’s own wage structure for its Dallas warehouse person-

nel. The record testimony of Respondent’s witnesses sheds no

light on the reason or motivation for this inception of Zale’s

interest in Honsport’s warehouse wage structure. None of the

consultations and exchanges of memorandums between Gart

and Baidack during the previous 3 months even touched on

P 8a

this subject, although comments and instructions pertaining to

the wage structure for retail store employees and managers

had been made on a number of occasions.

Upon his arrival in Honolulu on May 24, Landa had a

discussion with Baidack on the situation generated by the

Union’s petition. Landa expressed concern that the wage in-

creases promised some employees in conjunction with their

April performance reviews had not been implemented, stated

that the warehouse employees appeared underpaid, and told

Baidack to contact the personnel directors of other local

businesses for the purpose of conducting an area wage survey.

Baidack testified without contradiction, that this was the first

occasion on which he had been instructed to perform an area

wage survey.

Later that same morning, Landa addressed a meeting of

the warehouse employees. He told them, inter alia, of the

Union’s petition, of the possibility that an election would be

held, and that the law protected them in their right to vote for

or against representation. In response to an employee question

as to how Honsport determined its compensation schedule for

warehouse employees, Landa replied that company policy was

to pay ‘‘competitive rates’’ within the local area.

During May 24 and 25, Landa and Baidack took swift

action. They contacted other Honolulu employers, gathered

data, drew up an area wage survey, and fully drafted com-

pletely new wage structures covering the two categories of

Honsport warehouse employees. Their proposed new pay

scales set forth wages which, varying somewhat with each

longevity step, ranged from 33 to 40 percent above the wages

provided for in the then-current schedules.’

* The new pay scale for warehousemen provided for a $3.30-per-

hour starting rate, $3.47 after probation, and, thereafter, eight in-

crements set at 6-month intervals and ranging from 17 to 24 cents

each (up to a maximum of $5.11). The raise for warehouse clerks

and the truckdriver started at $3.57 (after 3 months prior employ-

ment), with 10 set 6-month increments ranging from 18 to 27 cents

each (up to a maximum of $5.75). For comparison with the rates

then current, see fn. 4, supra.

The next day, May 26, Landa telephoned Gart in Dallas.

He told him the results of the wage survey, stated his view

that Honsport warehouse wages were low, read out the details

of the proposed new wage schedules, and requested an im-

mediate decision by Gart on authorizing implementation of

the new rates. Gart then gave his approval.

Subsequently, Landa and Baidack determined specific

new hourly wage rates for individual employees by applying

the appropriate step of the new schedu'es in accord with each

employee’s length of service with Honsport. On this basis,

most employees were awarded new rates which encompassed a

rise of one or two longevity steps on the pay schedule p/us an

additional increase derived from the 33 to 40 percent upward

revision in the schedules themselves.. Employees Yamamoto,

Hasegawa, Leomo, Culkin, and James were granted rates

which ranged from 44 to 48 percent above those which they

had previously received; and employees Ragasa and Takahara

were raised by approximately 36 percent,'® all such raises be-

ing made retroactive to May 1.'' By way of contrast, the

'° The two remaining employees, Alvin Moratin, Jr., and Richard

Moratin, are the sons of Honsport’s warehouse manager. Although

Moratin, Jr.’s new wage rate was set at, or near, the appropriate

longevity step of the applicable schedule, his total raise amounted

to only 10 percent. This lesser increase was probably a result of the

fact that his earlier rate of $3.40 per hour appears to have been ar-

bitrarily set—as it failed to match any designated rate step on the

old schedules. With respect to Richard Moratin, he only commenc-

ed Honsport employment on May 4 and, as the new schedules were

made effective retroactive to May 1, the record data on his wage

rates only reflects the new schedule. Thus, the difference between

the rate he was to be paid when initially hired and the rate which

later became retroactively effective is unknown.

'' As employee James was on maternity leave during all of May

and June, her pay raise did not become effective until her return to

work in July. Her temporary replacement, Karen Schubach, was

given no increase whatever and Respondent presented no evidence

relating to her level of compensation.

7 o

10a

record indicates that the rate schedules and merit increases

adopted by Honsport in October 1975 yielded the warehouse

employees total pay raises which ranged from 4 to 8 percent.

On May 28—just 4 days after Landa’s arrival in

Honolulu—the employees were called to a meeting where

Baidack told them that they would receive pay raises which

were the product of both their April performance reviews and

a revised wage structure based on a survey of comparable jobs

in Hawaii. He said nothing to connect these raises with the

Union’s organizational campaign. Rather, he asserted that—at

the time the April performance reviews were conducted—Zale

officials in Dallas were reviewing and reworking the wage rate

structure for all warehouse facilities. And that the revised

wages were being applied retroactive to May 1 because the

new rate structure had not been completed on time.

We conclude that Baidack’s above-noted assertions to the

warehouse employees concerning the origin of Honsport’s

revised wage structure were patently false. Respondent did not

produce a shred of evidence indicating that Zale was, in fact,

reviewing or reworking the warehouse wage structure in April.

To the contrary, the record evidence establishes that no action

was taken in that regard until after Zale officials, including

both Landa and Gart, learned of the Union’s demand for

recognition and the filing of its representation petition. It is

also clear from the record testimony that, when determined

on May 25, the step increase component of the pay raise was

based soleiy on length of service and was not a merit increase

based on performance reviews.'?

With respect to the granting of employee step increases,

Zale’s policy and procedure manual stipulates that employees

should be given performance reviews at least once every 12

months and that, if their performance so warrants, a pay raise

recommendation should then be forwarded to higher manage-

It is noted that only tive of Honsport’s nine warehouse

employees received performance reviews in April or thereafter.

lla

ment. Further, as detailed at footnote 7, supra, the Ad-

ministrative Law Judge found that Gart had instituted a

policy mandating that such reviews and pay raise determina-

tions be made twice yearly. And, as the previous pay raise

was made effective on either October 1 or November 1,

1975,'’ both employees and management could reasonably be

expected to anticipate that the next set of pay raise recom-

mendations would become effective on or about May |.

Moreover, as Gart directed Baidack in March to make such

recommendations and Baidack did so in April, it is establish-

ed that Respondent took steps to implement its performance

review/pay increase policy prior to the May 6 advent of the

Union’s organizational campaign. Therefore, to the extent

that the pay raise at issue herein encompassed step increases

based on merit and/or employment longevity, we conclude

that such grant did not interfere with the Section 7 rights of

the employees and was not, by itself, violative of Section

8(a)(1).

With regard to Respondent’s 33- to 40-percent upward

revision in its basic wage schedules, however’ we conclude to

the contrary. The Administrative Law Judge, in holding that

Respondent’s wage schedule revisions were lawful, found that

Landa, in initiating the wage survey and formulating the new

schedules, was merely pursuing to completion the course of

conduct which Baidaeck should have .pursued before the

Union’s campaign began and, therefore, Respondent’s wage

schedules cannot be found to have been altered by virtue of

the Union’s presence. We disagree, as such finding is based

on a mechanistic reading of Zale’s written policy statements

‘’ While the prior pay schedules had October 1, 1975, as their

designated effective date, the employee pay records introduced into

evidence indicate that the employees may not, in fact, have received

any pay raises until November 1, 1975. The record does not

establish the extent to which such raises resulted from individual

employee step increases, new pay schedules, or a combination of

both.

12a

which ignores the considerable evidence, discussed infra, per-

taining to the manner in which those policies were actually

implemented in the past. We also note that, although Baidack

formulated the October 1975 wage schedules without conduc-

ting the appropriate area wage survey, such schedules were

nevertheless approved by the division’s president. And when

Gart, upon inquiry in March, was informed as to the wages

paid each warehouse employee, he indicated no concern as to

whether they reflected the locally prevailing rates. By way of

contrast, during the same period of time he did initiate action

and assert critical suggestions relative to the pay structures for

retail store managers, department heads, and sales personnel.

While Zale’s policy and procedure manual does provide,

as the Administrative Law Judge found, that employee pay

ranges should reflect local prevailing rates and be based on

area wage surveys, it sets forth no criteria as to how often (or

under what circumstances) such rates should be reviewed or

such surveys should be taken. Moreover, Respondent’s

witnesses, Landa and Richard Horton," testified that Zale

had no policy respecting the frequency of area wage surveys,

and that, in practice, such surveys are taken in response to in-

dications of excessive employee turnover, employee inquiries

on the subject, or specific suggestions from management of-

ficials. Here, there was no indication of excessive employee

turnover, and inquiries by employees and management of-

ficials were only made in response to the Union’s organization

campaign. Thus, while the process used for determining the

rates set forth in Honsport’s revised pay schedules, i.e., the

taking of an area wage survey, was in conformance with com-

pany policy, there was no company policy which mandated

the revision of schedules or the taking of surveys at the time

such actions were taken herein. Further, the record establishes

that—wholly apart from the statements in the policy

‘* At the time of the hearing herein, Horton was Baidack’s suc-

cessor as Honsport general manager. Previous to that, he served for

over 6 years in various Zale management positions.

l3a

manual—no management official took any action directed at

securing wage-schedule revisions or the taking of area wage

surveys relative to warehouse employees until after the Union

requested recognition and filed its petition. And the, such ac-

tion was initiated by Landa, an attorney whose responsibilities

were in the area of labor relations, rather than by officials

whose responsibilities normally included wage, salary, or per-

sonnel administration.

The validity of wage increases or other benefits during

the pendency of represen tation petitions turns upon whether

they are granted ‘‘for the purpose of inducing employees to

vote against the union.’’'* And a lawful purpose is not

established by the fact that the employer who took such ac-

tion did not expressly relate the granted wage increases to the

organizational campaign. For, as the Supreme Court observed

in N.L.R.B v. Exchange Parts Company, supra at 410, ‘‘the

absence of conditions or threats pertaining to the particular

benefits conferred’’ is not ‘‘of controlling significance’’ Under

settled Board policy, a grant or promise of benefits during the

critical preelection period will be considered unlawful unless

the employer comes forward with an explanation, other than

the pending election, for the timing of such action.'® No such

explanation can be found in the present record.

As previously indicated, we agree with Administrative

Law Judge that the decision to grant step increases was made

before the advent of the Union’s campaign and was not in

response to the Union’s efforts. However, in view of all the

facts and circumstances set forth above—particularly the tim-

ing and extensive nature of the upward revisions in Respon-

dent’s basic warehouse rate structures—we find that the May

28 pay raise (effective retroactive to May jy was granted in

response to the Union’s campaign and was, therefore,

violative of Section 8(a)(1) of the act.'’

‘* Tonkawa Refining Co., 175 NLRB 619 (1969), citing N.L.R.B.

v. Exchange Parts Co., 375 U.S. 405, and Russell-Newman Mfg.

Co., Inc. v. N.L.R.B., 370 F.2d 980 (Sth Cir. 1966).

* The Singer Company, 199 NLRB 1195 (1972).

* Montgomery Ward & Co., Incorporated, 220 NLRB 373 (1975)

enfd. 554 F.2d 996 (10th Cir. 1977).

l4a

2. The General Counsel asserts that, as of the date of its

recognitional demand, the Union represented a majority of

Respondent’s employees; and because Respondent thereafter

undertook a course of unlawful conduct to defeat the Union’s

representative status, its failure to recognize and bargain with

the Union violated Section 8(a)(1) of the Act—requiring a

bargaining order remedy within the principles set forth in

N.L.R.B. v. Gissel Packing Co., Inc., 395 U.S. 575 (1969).

We agree with the Administrative Law Judge, for the

reasons stated by him, that, as of May 10, the Union had

secured signed aurhorization cards from five of the employees

in the appropriate bargaining unit,'* and that, immediately

thereafter,'® it claimed majority status and made its demand

'* The parties are in agreement that the appropriate unit herein is:

All full-time and regular part-time warehousemen and

truckdrivers employed by Respondent at its facility located at

2868 Kaihikapu Street, Honolulu, Hawaii; excluding office

clerical employees, guards and supervisors as defined in the’

Act. & |

This is the unit found appropriate by the Regional Director in her

Decision and Direction of Election in Case 37-RC-2245 (issued July

1, 1976). In further accord with that decision, the parties also agree

that the warehouse freight claims clerk and inventory control clerk

are plant clerical employees and, accordingly, also included in the

unit.

Subsequent to the issuance of the complaint herein, the Regional

Director dismissed the representation petition in Case 37-RC-2245,

subject to reinstatement, if appropriate, upon the Union’s applica-

tion after disposition of the instant unfair labor practice pro-

ceeding.

'* The Administrative Law Judge credited testimony which dated

the Union’s demand for recognition as occurring during either the

mid-afternoon of May 10 or the morning of May 11. We do not

find it necessary to determine which of those two dates is correct.

However, for purposes of reference, we shall hereinafter use the

date of May 11, which is the date alleged in the complaint.

15a

for recognition. But to properly evaluate the above-noted

assertions of the General Counsel, additional issues must be

considered and resolved. For Respondent contends that: (1)

the five employees who signed union authorization cards did

not constitute a majority of the appropriate unit’s employees;

(2) the authorizations were tainted because the Union offered

to waive initiation fees in exchange for employee signatures

on the cards; and (3) even if Union represented an employee

majority and Honsport’s grant of wage increases was violative

of Section 8(a)(1), under the circumstances of this case a

bargaining order is not justified.

At all times relevant herein, there have been a total of

nine job positions in the bargaining unit. For a number of

years, one of those positions has been filled by employee

Carol James, the inventory control clerk’ However, sometime

in April James was granted maternity leave under the provi-

sions of Zale’s maternity leave policy as set forth in its policy

and procedure manual. She subsequently returned to work on

July 1. During her absence, Karen Schubach was hired to

replace her temporarily and held that position on both the

date of the Union’s recognitional demand the date on which

Respondent announced the wage increases found herein to

have been unlawful. Schubach resigned her employment by

mid-June. Neither James nor Schubach signed authorization

cards and their inclusion or exclusion from the unit is,

thereby, relevant only in determining the number of

employees in the bargaining unit.

The parties agree that James is properly includable in the

unit as she had, at all relevant times, a reasonable expectancy

of reemployment. However, Respondent would include

Schubach as well, while the General Counsel and Charging

Party would exclude her as a temporary employee.

Baidack, Honsport’s general manager at the time these

events occurred, testified that Schubach was hired by office

manager Penny Austin, his immediate subordinate, who

reported to him that Schubach was hired as a temporary

employee who would remain employed until James’ return

16a

from leave; and that a tentative return date of July 1 had

been set for James. Respondent’s witness, Landa, conceded

that his understanding was that Schubach was hired to replace

James until she came back to work, but denied knowing

whether Schubach was or was not to be terminated at that

time. However, he further admitted that the pay raises an-

nounced on May 28 (and made effective retroactive to May 1)

for all regular employees were never granted to Schubach; and

none of Respondent’s management witnesses asserted any in-

tent or plan for employing more than nine employees in the

Honolulu warehouse facility.

On the subject of maternity leave policy, Zale’s manual

States, in part, as follows:

When an employee requests a maternity leave, the

employee’s job should not be permanently filled during

such leave unless the job is of such a nature that it must

be filled and can only he filled if filled by a permanent

replacement. The job may be filled on a temporary basis,

but any individual hired on such a temporary basis must

be informed that the job is a temporary one due to a

maternity leave.

Respondent contends, in effect, that this provision is of no

significance because the issue of whether a replacement is a

temporary or permanent employee is determined under the

facts of each particular case and it has not been established

whether or not James’ position was one which could only be

filled on a permanent basis. However, Respondent, although

presumably in possession of its own employment records”

and other personnel data, makes no assertion that James’ job

had to be filled by a permanent replacement or that Schubach

was hired on anything but a temporary basis.

*® We note that the record herein contains copies of Respondent’s

basic employment records—setting forth pay rates, job titles, dates

of hire, labor grades, and other related information—for every

employee in the bargaining unit, except Schubach.

°°

17a

Considering, cumulatively, Baidack’s testimony as to the

circumstances of Schubach’s hire, the provisions of Zale’s

maternity leave policy, Landa’s admissions — particularly the

withholding from Schubach of the wage increases given all

regular employees — and the failure of Respondent to show

that anyone in management ever even considered retaining

Schubach after James’ return, we conclude that Schubach was

hired as a temporary employee and that she held such status

as of the date the Union demanded recognition and

thereafter.*' See Fearn v. International, Inc., Eggo Foods

Division, 209 NLRB 232 (1974). Accordingly, we find that the

bargaining unit consisted of nine employees as of that date

and the Union’s majority status, or lack thereof, must be

measured against this number.

In N.L.R.B. v. Savair Manufacturing Co., 414 U.S. 270

(1975), the Supreme Court held that, where signed authoriza-

tion cards are the basis for an election, a union may not pro-

mise initiation fee waivers to those who sign cards before the

election and withhold such waivers from others. Respondent

asserts that the authorization cards herein are tainted because,

in soliciting employee signatures thereon, Union Business

Agent Reed contravened Savair principles. In our view,

however, the record fails to support that assertion.

At the hearing, only two witnesses testified with respect

to Reed’s solicitation. Taken in isolation, the testimony of

employee Hasegawa, paraphrasing Reed’s remarks, attributes

to him statements on the subject which appear ambiguous.

*' We find no merit in Respondent's contention that the Regional

Director’s Decision and Direction of Election in Case

37—RC—2245 found that Schubach, as an individual, should be in-

cluded in the bargaining unit. It is clear from the context of that

decision, that the Regional Director only found that the position

held by Schubach at the time of the representation hearing, that of

inventory control clerk, was a plant clerical position and, therefore,

properly includable in the warehouse bargaining unit. No issue as to

her temporary or permanent status was either raised or discussed.

18a |

However, we find more convincing Reed's clarifying and un-

contradicted testimony that he told the card signers that: ‘‘all

employees, before the contracted is signed, will pay no initia-

tion fee’’ and ‘‘nobody is going to pay any initiation fee until

a contract is signed, and all new employees tha! is hired after

the contract is signed between the union and the company will

be paying initiation fees.’’*? Accordingly, we find that the

record establishes that prospective card signers were not told

that initiation fees would only be waived for those who

signed.

In view of the above, we find that Respondent employed

nine employees in the appropriate bargaining unit on May 11,

the date of the Union’s demand for recognition — five of

whom had signed authorization cards. Their cards were iden-

tified and authenticated by the employees themselves, by the

union representative who soli cited their signatures, or by

fellow employees who were present when the cards were sign-

ed. Further, it is clear from the testimony that the employees

were told that the cards would be used to request the Union’s

recognition and, if that failed, for an election. At no time

were the employees told that the cards would be used solely

for an election. Considering these circumstances, we conclude

that, as of May 11, a majority of employees in the ap-

propriate unit had validly selected the Union as their bargain-

ing representative.

As previously stated, the General Counsel contends that

under the principles set forth in Gissel Packing Company,

supra, a bargaining order remedy should be granted in this

*' The Administrative Law Judge made no findings or credibility

determinations relative to this issue. However, with respect to other

issues On which there were testimonial conflicts, Reed's testimony

was found to be the more reliable and, accordingly, was specifically

credited, Conversely, in one instance where Hasegawa’s testimony

differed from that of another witness, the Administrative Law

Judge found Hasegawa’s testimony to reflect confusion and, accor-

dingly, specifically credited the account given by the other witness.

19a

case. We agree, as the unfair labor practice committed by

Respondent was so pervasive and extensive that the possibility

of erasing its effects on the employees and insuring a fair elec-

tion by the use of traditional remedies is slight. And,

therefore employee sentiment, as expressed by authorization

cards, is best protected by a bargaining order.

Under the Gisse/ doctrine, a bargaining order becomes

appropriate where a union’s majority is established by cards

and the nature and extent of the employer's unfair labor prac-

tices appear to make a free choice by the employees pro-

blematical. Here, there was but a single unfair labor practice,

but it encompassed a massive wage increase whose scope and

timing were clearly designed to undermine the Union's majori-

ty status. The following statement from Tower Enterprises,

Inc.,d/b/a Tower Records, 182 NLRB 382, 387 (1970), enfd.

79 LRRM 2736, 67 LC Para. 12,453 (9th Cir. January 21,

1972), is directly applicable to the facts herein:

It is a fair assumption that in most instances where

employees designate a union as their representative, a ma-

jor consideration centers on the hope that such represen-

tative may be successful in negotiating wage increases.

Certainly this appears to have been an important con-

sideration in the instant case. A unilateral award of a

wage increase by an employer following a union’s de-

mand for recog nition results in giving the employees a

significant element of what they were seeking through

union representation. It is difficult to conceive of conduct

more likely to convince employees that with an important

part of what they were seeking in hand union representa-

tion might no longer be needed. An employer may have

the right to persuade the employees that representation is

not in their best interests, but it does not have the right

to threaten them or confer benefits on them which are

designed to influence the employees against choosing a

representative. When, as here, an employer does so, free

choice in a subsequent election becomes a matter of

speculation, so long as the effects of the interference re-

main unremedied. 9

20a

In its defense, Respondent asserts that, rather than being

motivated by a desire to undermine the Union, its grant of

wage increases was intended merely to fulfill the promises it

had made its employees prior to the commencement of the

Union’s campaign; and that it was fearful, because of its

earlier promises. that the withholding of wage increases might

also be judged unlawful. We find no merit in these assertions,

for the unspecified increases promised four or five employees

in April were clearly intended to be step increases — most

probably within the 4- to 8-percent range of the previous in-

creases granted 6 months earlier. Instead, Respondent com-

bined the expected step increases with a massive upward revi-

sion in the basic wage structure which yielded most employees

total wage raises ranging from 36 to 48 percent. Further,

while Respondent's parent corporation, Zale, had a policy

which, on paper, mandated the payment of prevailing area

wages, the record evidence establishes that such policy was

not systematically implemented and no precedent was shown

for any upward revision of the entire wage scale approaching

the magnitude of the one effectuated herein.

We are similarly unimpressed with Respondent’s attempt

to give ameliorating weight to the fact that it refrained from

telling its employees that the wage increases were related to

the Union’s campaign. On May 24, Landa, Zale’s labor

counsel, came from Dallas to Honolulu where he spoke to

employees concerning the Union's representation petition.

Four days later, the entire wage structure was raised between

33 and 40 percent. The fact that other company officials, not

Landa, informed employees of the good news would not, in

our view, prevent them from getting the message that the in-

crease was Respondent's response to the Union’s efforts. Fur-

ther, we note that, when Landa initially spoke on union-

related matters at an employee meeting on his first day in

Honolulu, one of the principal questions asked of him was

what basis was used in determining the wage scale. Landa’s

answer referred to ‘‘competitive’’ rates, which he then pro-

ceeded to implement in the next few days.

2la

In Skaggs Drug Centers, Inc., 197 NLRB 1240 (1972),

enfd. 84 LRRM 2384, 72 LC Para. 13,951 (9th Cir. August

13, 1973), we granted a bargaining order where the only unfair

labor practice found was a general pay increase which, while

substantial, was of considerably more modest degree than the

one implemented herein. There, we fully explicated our

reasons for finding our traditional remedies to be insufficient

for the purpose of adequately remedying this type of unlawful

employer activity. The identical considerations are applicable

herein.

Accordingly, we find that by refusing the bargaining re-

quest of the Union which represented a majority of its

employees in an appropriate unit and, thereafter, granting

wage increases under the circumstances described above,

Respondent violated Section 8(a)(S) and (1) of the Act, and

that a bargaining order is necessary and appropriate to protect

the majority sentiment expressed through authorization cards

and to otherwise remedy the violation committed. We further

find that under the principles set forth in Trading Port, Inc.,

219 NLRB 298 (1975), and The Kroger Co., 228 NLRB 149

(1977), Respondent had a duty to bargain with the Union as

of May 28, 1976, the date on which Respondent committed its

unfair labor practice which undermined the Union’s majority

status and made the holding of a fair election improbable.”

>’ Member Truesdale would date the bargaining order from May

11, 1976, the date on which the Union, with a card majority, re-

quested recognition and bargaining, which request Respondent |

declined. Chandler Motors» Inc., 236 NLRB No. 186 (1978).

22a

CONCLUSIONS OF LAW

1. Respondent is an employer engaged in commerce

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

2. The Union is a labor organization within the meaning

of Section 2(5) of the Act.

3. By interfering with, restraining, and coercing its

employees in the exercise of rights guaranteed by Section 7 of

the Act, as found above, Respondent has engaged in unfair

labor practices within the meaning of Section 8(a)(5) and (1)

of the Act.

5. The aforesaid unfair labor practices are unfair labor

practices affecting commerce within the meaning of Section

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

THE REMEDY

Having found that Respondent engaged in certain unfair

labor practices, we shall order it to cease and desist therefrom

and to take certain affirmative action designed to effectuate

the purposes and policies of the Act.

Having found that Respondent unlawfully refused to

bargain with the Union as the exclusive representative of its

employees in an appropriate unit, we shall order it, upon re-

quest, to bargain collectively with the Union and, in the event

an understanding is reached, embody such understanding in a

signed agreement.

ORDER

Pursuant to Section 10(c) of the National Labor Rela-

- tions Act, as amended, the National Labor Relations Board

hereby orders that the Respondent, Honolulu Sporting Goods

Co., Ltd., a subsidiary of Zale Corporation, Honolulu,

Hawaii, its officers, agents, successors, and assigns, shall:

1. Cease and desist from:

(a) Granting wage increases to its employees for the pur-

pose of influencing their selection of a labor organization as

23a

their bargaining representative; provided, however, that

nothing herein shall be construed as requiring Respondent to

vary or ahandon any benefits heretofore established.

(b) Refusing to bargain with the Union as the exclusive

representative of a majority of its employees in the below

described bargaining unit, found appropriate under Section

9(b) of the Act: All full-time and regular part-time

warehousemen and truckdrivers employed by Respondent at

its facility located at 2868 Kaihikapu Street, Honolulu,

Hawaii; excluding office clerical employees, guards and super-

visors as defined in the Act.

restraining, or coercing its employees in the exercise of the

rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to ef-

fectuate the policies of the Act.

(a) Upon request, recognize and bargain with the Union

as the exclusive bargaining representative of the employees in

the above-described appropriate unit and, if an understanding

is reached, embody such agreement in a written signed

contract.

(b) Post at its warehouse facility in Honolulu, Hawaii,

copies of the attached notice marked ‘‘Appendix.’’’* Copies

of said notice, on forms provided by the Regional Director

for Region 20, after being duly signed by a representative of

Respondent, shall be posted immediately upon receipt thereof,

and shall be maintained by it for 60 consecutive days

thereafter, in conspicuous places, including all places where

** In the event that this Order is enforced by a Judgment of a

United States Court of Appeals, the words in the notice reading

‘**POSTED BY ORDER OF THE NATIONAL LABOR RELA-

TIONS BOARD”’ shall read ‘‘POSTED PURSUANT TO A JUDG-

MENT OF THE UNITED STATES COURT OF APPEALS EN-

FORCING AN ORDER OF THE NATIONAL LABOR RELA-

TIONS BOARD.”’

24a

notices to employees are customarily posted. Reasonable steps

shall be taken by Respondent to insure that said notices are

not altered, defaced, or covered by any other material.

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

steps Respondent has taken to comply herewith.

Dated, Washington, D.C. January 15, 1979

John A. Pennello

Member

Betty Southard Murphy

Member

John C. Truesdale

Member

NATIONAL LABOR

RELATIONS BOARD

(SEAL)

25a

APPENDIX

NOTICE TO EMPLOYEES

Posted by Order of the National Labor Relations Board An

Agency of the United States Government

WE WILL NOT grant our employees wage increases for

the purpose of influencing their choice of a labor organization

as their bargaining representative.

WE WILL NOT refuse to bargain with Hawaii Teamsters

and Allied Workers, Local 996, International Brotherhood of

Teamsters, Chauffeurs, Warehousemen and Helpers of

America, as the exclusive representative of our employees in

the appropriate unit noted below, with respect to rates of pay,

wages, hours, or any other terms or conditions of

employment.

WE WILL NOT in any like or related manner interfere

with, restrain, or coerce our employees in the exercise of any

rights guaranteed to them by the National Labor Relations

Act, as amended.

WE WILL, upon request, bargain collectively with the

said Local 996, as the exclusive representative of our

employees in the appropriate unit noted below, with respect to

rates of pay, wages, hours, and all other terms and conditions

of employment and, if an understanding is reached, embody

such understanding in a signed agreement. The appropriate

unit is:

All full-time and regular part-time warehousemen and

truckdrivers employed by us at our warehouse facility

located at 2868 Kaihikapu Street, Honolulu, Hawaii; ex-

cluding office clerical employees, guards and supervisors

as defined in the Act.

26a

All our employees are free tu become, remain, or refrain

from becoming or remaining members of the above-named or

any other labor organization.

HONOLULU SPORTING

Goops Co., Ltp., A

SUBSIDIARY OF ZALE

CORPORATION

Employer

Dated Representative Title

This is an official notice and must not be defaced by

anyone.

This notice must remain posted for 60 consecutive

days from the date of posting and must not be altered,

defaced, or covered by any other material. Any

questions concerning this notice or compliance with its

provisions may be dircted to the Board’s Office,

Federal Building, Room 13018, 450 Golden Gate

Avenue, San Francisco, California 94102, Telephone

415-556-0335.

27a

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

DIVISION OF JUDGES

BRANCH OFFICE

SAN FRANCISCO, CALIFORNIA

Case No. 37-1273

HONOLULU SPORTING Goops Co., LTD.,

A SUBSIDIARY OF ZALE CORPORATION

AND

HAWAII TEAMSTERS AND ALLIED WoRKERS, LOCAL 996, IN-

TERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS OF AMERICA

Miss Eileen H. Hamamura, Honolulu, Hawaii, for General

Counsel.

Messrs. Jared H. Jossem, Honolulu, Hawaii, and Norman

Landa, Dallas, Tex., for Respondent.

Van Bourg, Allen, Weinberg and Roger, by Mr. David

Rosenfeld, San Francisco, Calif., for Complainant Union.

DECISION

Statement of the Case

MAURICE M. MILLER, Administrative Law Judge:

Upon a charge filed July 22, 1976 and duly served, the

General Counsel of the National Labor Relations Board caus-

ed a Complaint and Notice of Hearing dated November 29,

1976 to be issued and served upon Honolulu Sporting Goods

Co., Ltd., designated as Respondent or Honsport within this

decision. Therein, Respondent was charged with the commis-

sion of unfair labor practices within the meaning of Section

8(a)(1) and (5) of the National Labor Relations Act. 61 Stat.

136, 73 Stat. 519. Respondent’s answer, duly filed, conceded

certain factual allegations within General Counsel’s complaint,

but denied the commission of any unfair labor practice.

Pursuant to notice, a hearing with respect to this matter

was held on February 22nd and 23rd, 1977 in Honolulu,

28a

Hawaii before me. The General Counsel and Respondent were

represented by counsel. When the hearing began, General

Counsel’s representative moved to amend certain jurisdic-

tional allegations within her complaint; Respondent’s counsel,

thereupon, conceded the correctness of particular allegations

which the permitted amendment had modified. Each party

was, thereafter, afforded a full opportunity to be heard, to

examine and cross-examine witnesses, and to introduce

evidence with respect to pertinent matters. Since the hearing’s

close, briefs have been received from General Counsel’s

representative and Respondent’s counsel; these briefs have

been duly considered.

FINDINGS OF FACT

Upon the entire testimonial record, documentary evidence

received, and my observation of the witnesses, I make the fol-

lowing findings of fact:

I. Jurisdiction

Respondent raises no question, herein, with respect to

General Counsel’s present jurisdictional claims. Upon the

Complaint’s relevant factual declarations — more particular-

ly, those set forth in detail within the lately amended second

paragraph thereof — which Respondent’s counsel currently

concedes to be correct, and upon which I rely, I have con-

cluded that Respondent herein was, throughout the period

with which this case ‘s concerned, and remains, an employer

within the meaning of Section 2(2) of the Act, engaged in

commerce and business activities which affect commerce

within the meaning of Section 2(6) and (7) of the statute.

Further, with due regard for presently applicable jurisdictional

standards, | find assertion of the Board’s jurisdiction in this

case warranted and necessary to effectuate statutory

objectives.

29a

Ii. Complainant Union

Hawaii Teamsters and Allied Workers, Local 996, Inter-

national Brotherhood of Teamsters, Chauffeurs,

Warehousemen and Helpers of America, designated as Com-

plainant Union within this decision, is a labor organization

within the meaning of Section 2(5) of the Act, as amended,

which admits certain of Respondent’s employees to

membership.

Ill. The Unfair Labor Practice Charged

Issues A.

This case presents two closely-related substantive ques-

tions, both of which have been thoroughly litigated. For pre-

Sent purposes, these questions may be summarized, generally,

as follows:

1. Whether Respondent’s management representatives

granted Honolulu warehouse workers and their firm’s

truckdriver substantial wage increases consistentiy with a

revised wage progression schedule bottomed upon job

tenure — despite the firm’s receipt of prior notification

that Complainant Union had petitioned this Board for

certification as such workers’ collective bargaining

representative — for the purpose of forestalling the

designation of Complainant Union, by such workers, as

their representative.

2. If so, whether Respondent should be directed to

recognize and bargain collectively with Complainant

Union herein — retroactively from the date when the

challenged wage increases were granted — bottomed

upon that organization’s prior procurement of designa-

tion cards signed by a majority of Respondent’s workers

within a warehouse and truckdriver unit concededly ap-

propriate for collective bargaining purposes.

With respect to General Counsel’s first contention, Respon-

dent concedes that various challenged wage increases were

30a

granted, but seeks a determination that such wage increases

had been previously promised, and would have been granted

consistently with Respondent’s commitment and previously-

followed practice, without regard for the pendency of Com-

plainant Union’s representation petition. Further, Respondent

contends that General Counsel’s presentation provides no per-

suasive support for Complainant Union’s majority representa-

tion claim; that Complainant Union had never formally re-

quested recognition; that, consequentially, Respondent’s

management representatives have never specifically refused to

recognize Complainant Union herein; and that Respondent’s

management, therefore, should neither be directed nor re-

quired to bargain collectively with the labor organization

designated.

B. Facts

1. Background

a. Respondent’s Business

Honolulu Sporting Goods Company, Ltd., a Hawaii cor-

poration, is engaged in the retail and wholesale distribution of

sporting goods, equipment and related items. Since 1972, ap-

proximately, the firm has been a Zale Corporation subsidiary.

Zale Corporation maintains substantially diversified retail

merchandising establishments throughout the United States,

Puerto Rico, Guam, and England. The firm’s retail opera-

tions are conducted through merchandising groups, each of

them headed by a group vice president. Within each merchan-

dising group, Zale maintains operating divisions, each with its

own president and staff; these management representatives are

charged with responsibility for divisional operations, subject

to defined company policies and procedures. Throughout the

period with which this case is concerned, Zale Corporation

maintained some seventeen divisions. Among these, the

firm’s Sporting Goods Division maintained and operated

3la

more than thirty sporting goods stores, which provided a full

line of sporting goods and other leisure-time products.

Honolulu Sporting Goods Company, Ltd., functioning within

its parent corporation’s Sporting Goods Division, currently

maintains four retail stores within the State of Hawaii; two

are located on Oahu, one on Maui, and one in Hilo. The

firm, likewise, maintains a wholesale ‘‘team sales’’ office,

located within its Honolulu warehouse facility.

For present purposes, we are concerned, solely, with cer-

tain developments, during the late spring months of calendar

year 1976 specifically, which concerned Respondent’s

Honolulu warehouse personnel.

b. Managerial Personnel

Throughout the period with which this case is concerned,

Zale Corporation’s group vice president, Marvin Rubin, held

managerial responsibility, inter alia, for both the firm’s Spor-

ting Goods and Jewelry divisions. Between 1974 and March,

1976, Vernor Zinik, president of Zale Corporation’s Sporting

Goods Division, functioned as Rubin’s direct subordinate.

William Gart, the Division’s vice president in charge of opera-

tions, reported to Zinik, in Zale Corporation’s managerial

chain of command.

Within the corporation’s Sporting Goods Division,

throughout the period with which this case is concerned, Miles

Baidack, Honsport’s regional supervisor, functioned as

Respondent’s general manager. Between his November, 1974

designation and March 1, 1976 Baidack reported directly to

Zinik, Zale Corporation’s divisional president. Lawrence

Yamaguchi functioned as Baidack’s assistant; he was con-

sidered primarily responsible for Honsport’s retail store

operations. Alvin Moratin, Senior was, throughout the period

with which this case is concerned, Honsport’s warehouse

manager.

32a

c. Respondent’s Performance Review and Pay Raise Policy

With respect to wages and salaries, Zale Corporation’s

policy and procedure manual provides, generally, for the pay-

ment of competitive wages based on area wage surveys. The

manual mandates a systematic pay program, with pay ranges

for each job based on the rates paid for similar positions

within the local community. In this connection, the manual

declares that: —

Surveys are conducted in various geographic areas to

determine the proper pay range for the [relevant labor]

grades. The pay ranges will vary throughout the country

depending on the prevailing pay scale in the local area

(bracketed language supplied for clarity).

Zale Corporation’s manual, further, requires performance

reviews for employees, which their supervisors must conduct,

periodically. The precise calendar ‘‘intervals’’ between perfor-

mance reviews may vary within the divisions; corporate

policy, however, dictates such formal reviews at least once per

year. Should a given worker’s performance be deemed suffi-

cient to qualify him or her for a pay increase, supervisors are

directed to make recommendations to management, con-

sistently with their determinations.

Pursuant to Zale Corporation’s policy mandate,

Honsport’s management representatives, Baidack and

Yamaguchi, had — shortly before the period with which this

case is concerned — formulated pay scales for their firm’s

warehouse personnel. The pay scales, with a designated Oc-

tober 1, 1975 effective date, had been separately drafted for

warehousemen, on the one hand, and for Respondent’s

warehouse clerks and truckdriver, on the other. For

warehousemen, Respondent’s management had set a $2.40 per

hour starting rate, which matched the State of Hawaii

statutory minimum rate; nine hourly rate increments, rising to

$3.70 per hour after ‘‘51’’ months of full-time service, had

been established. The first step, which provided for a .15 raise

33a

following completion of the warehouseman’s three month

probationary period, was to be ‘‘automatically’’ granted; fur-

ther raises at six-month intervals were to be based upon merit,

with set increments for personnel who might be considered

worthy, pursuant to Respondent’s six-month performance

reviews.

(These reviews were to be conducted on April Ist and Oc-

tober Ist, yearly. Employees with six months of service

following their last previous raise could, thereby, qualify

for a further raise, within the rate range previously

noted.)

With respect to Respondent’s head shipping clerk,head receiv-

ing clerk, and truckdriver, Baidack and Yamaguchi had set a

$2.60 hourly rate payable after three months, with ten raises

within the range possible at six-month intervals thereafter; the

maximum $4.10 hourly rate was to be payable after ‘‘63’’

months of full time service. All raises, within this rate range,

were to be merit raises.

While a witness, Baidack conceded that, when his firm’s

October 1, 1975 warehouse pay scale was formulated, he had

‘‘combined’’ a rate structure which had been developed,

several months previously, for Zale Corporation’s Dallas,

Texas warehouse personnel, with a rate structure which

Warehouse Manager Alvin Moratin, Senior had provided. So

far as the record shows, however, Respondent’s October, 1975

pay scale formulations had not been derived from surveys

calculated to determine prevailing pay scales for warehouse

personnel, specifically within Honolulu, Hawaii’s labor

market.

d. Zale Corporation’s Managerial Reorganization

On March 1, 1976 Jerrold Blumenthal replaced Vernor

Zinik as Zale Corporation’s Sporting Goods Division presi-

dent. Concurrently, certain changes were effectuated with

respect to divisional line supervision; inter alia ay cena

general manager, who had previously reported to [ ivisional

“ib.

34a

President Zinik directly, was notified that he would be im-

mediately responsible to William Gart, the division’s vice

president.

e. Zale Corporation’s Management Representatives Visit

Respondent

Between March 8th and March 14, 1976 President

Blumenthal and Vice President Gart visited Hawaii, where

they reviewed Honsport’s situation. They visited Respondent’s

stores and conferred extensively with General Manager

Baidack and Respondent’s subordinate managerial personne!.

The subjects canvassed compassed regional operations, per-

sonnel, compensation levels, performance reviews, and mer-

chandise problems.

During their first conversation — so Gart credibly

testified — Respondent’s general manager reported that he

had not yet conducted his scheduled semi-yearly performance

reviews. His divisional supervisor directed him to review

Respondent’s personnel promptly; further, Baidack was

directed to forward his reviews, plus Zale Corporation’s

‘*Form 515’s’’ containing his recommendations with respect to

raises, so that Respondent’s parent corporation could take

proper steps in that regard.

(Vice President Gart, so his credible testimony shows,

had — some time previously, following his 1973 designa-

tion presumably — decreed a divisional policy whereby

workers would be reviewed twice yearly in March and

September, so that recommended pay changes could be

effectuated during April and October pay periods. When

he learned that General Manager Baidack had schedu!ed

April and October performance reviews, Gart directed

him to ‘‘get on to the division schedulei65 forthwith, and

to transmit his performance reviews and Form 515’s

thereafter.)

Respondent’s general manager was directed, inter alia, to put

Honsport’s retail store sales personnel on commission. So far

as the record shows, however, Respondent’s October, 1975

35a

rate ranges for Honolulu warehouse personnel were never

specifically discussed.

Before their Hawaii visit concluded, Blumenthal and Gart

notified Respondent’s general manager that his future perfor-

mance would be scrutinized closely, and that he should

‘shape up’’ forthwith, failing which he might find his future

with the Company jeopardized.

On March 25th, following his return to Dallas, Vice

President Gart prepared a comprehensive eleven page

memorandum, directed to both Baidack and Yamaguchi;

therein, he detailed various merchandising and managerial

‘problem areas’’ which, within his view, required considera-

tion and correction. With respect to Respondent’s Honolulu

warehouse, Baidack was directed to make certain physical

changes, and to modify certain merchandise storage, handting

and security procedures. No comments were proffered,

however, with regard to warehouse personnel compensation

levels.

f. Respondent’s Performance Review and Pay Raise

Recommendations

On April 10th, Respondent’s warehouse manager con-

ducted some performance reviews which covered four of

Respondent’s five warehousemen, together with Honsport’s

single truckdriver. These reviews, however, did not cover

Respondent’s complete warehouse complement.

(Those reviewed were Warehousemen Hasegawa, Leomo,

Ragasa, and Yamamoto, plus Truckdriver Takahara. The

firm’s fifth warehouseman, Timothy Culkin, had been

hired for regular part-time work less than a month

previously; he had not yet completed his probationary

period. “Honsport’s two warehouse clericals, likewise,

were not reviewed. Carol James, the firm’s inventory

control clerk, was, presumably, then on maternity leave.

However, no rationale for Moratin, Senior’s failure to

review Alvin Moratin, Junior, then Honsport’s freight

claims clerk, has been proffered for the present record.)

36a

Moratin, Senior’s reviews were, promptly, submitted to

Respondent’s general manager. Thereupon, I find, Baidack

prepared Form 515’s which — presumably — reflected his pay

raise recommendations for Respondent’s warehouse person-

nel. Meanwhile, however, Honsport’s warehouse manager,

following his April 10th performance reviews, had promised

his warehouse subordinates wage increases; Moratin, Senior

had cited no specific raise figures.

Within a short time after April 10th, Respondent’s

general manager transmitted Form 515’s for Honsport’s

warehouse personnel to Vice President Gart; however, these

‘‘Employee Status Record Forms’’ were transmitted without

their supportive performance reviews.

g. Zale Corporation’s Reaction

While a witness, Vice President Gart testified — without

effective contradiction — that Baidack’s Form 515’s, submit-

ted for Respondent’s warehouse personnel, were returned to

Honolulu by mail — on or about Thursday, April 15th —

with his personal, handwritten note declaring that Respon-

dent’s general manager had recommended ‘‘inadequate’’

warehouse raises, within his view.

(The Sporting Goods Division vice president, concededly,

kept no copy of his covering note. His failure, in this

respect, reflected a deviation from his regulai practice.

When Baidack’s Honsport files were reviewed, subse-

quently, Gart’s handwritten note could not be found.

Arguably, Respondent’s failure to produce _ such

documentation, supportive of Gart’s testimony, might

warrant some present doubt regarding that testimony’s

probative weight. The record, however, reflects no for-

thright or credible denial, proffered by Baidack, that his

submitted Form 515’s, for warehouse personnel par-

ticularly, had, indeed, been returned. He conceded, while

a witness that he had subsequently asked Controller Mar-

tin why his recommendations had been rejected. Upon

this record, Vice President Gart’s testimony, generally,

37a

impressed me favorably; his proffered recollections, in

this regard, have therefore been credited.)

Within a memorandum dated April 30th, Baidack finally

replied to Vice President Gart’s previously forwarded March

25th communication. With respect to his superior’s directives

and suggestions, related to Honsport’s warehouse specifically,

Respondent’s general manager reported that ‘‘all changes

designated in the warehouse’? were currently in process.

Regarding two matters which Zale Corporation’s vice presi-

dent had discussed, specific replies were proffered; Baidack’s

memorandum, however, made no reference to compensation

recommendations for warehouse personnel.

On May 10th, approximately, Jerry Martin, Zale Cor-

poration’s Sporting Goods Division vice president and con-

troller, left Dallas, Texas for Hawaii. The record, herein, pro-

vides no comprehensive recapitulation with regard to his

visit’s purpose; Respondent’s testimonial and documentary

presentation, however, warrants a determination — which I

make — that among other things, Martin hand-carried ‘‘some

515’s’’ which Baidack had previously submitted.

Within a subsequent May 12th memorandum, directed to

Baidack, Gart complained that — despite the April 30th

memorandum which Respondent’s general manager had sent

him — he still lacked ‘‘information’’ with regard to certain

questions raised during his [Gart’s] March visit and subse-

quent March 25th communication. J/nter alia, the Sporting

Goods Division’s vice president noted that ‘‘some 515’s’’ had

been returned, through Vice President and Controller Martin,

because he [Gart] did not understand them. The record,

however, warrants a determination — which I make — that

Gart’s questions were specifically related to Baidack’s propos-

ed compensation adjustments for assistant managers and

department heads. The vice president’s May 12th memoran-

dum made no reference to Honsport’s proposed warehouse

compensation changes.

38a

2. Complainant Union’s Representation Petition

a. Complainant Union’s Contact with Respondent’s Workers

Shortly before these several company developments, some

time on Thursday, May 6, 1976, Business Agent Harland

Reed of Complainant Union had spoken with several

Honsport warehouse workers. While conversing with Union

members within a nearby completely unrelated facility, whom

Complainant Union represented, Reed had been notified that

Respondent’s warehouse personnel lacked a collective bargain-

ing representative. He had, thereupon, visited Respondent’s

warehouse, where he had conferred, briefly, with several

workers. Reed had distributed Union designation cards, and

had suggested a further meeting, at 4:00 o’clock that same

day, within a nearby drive-in restaurant.

Four Honsport warehousemen met with Complainant

Union’s business representative, pursuant to his suggestion,

following the conclusion of their May 6th working day. Reed

discussed Complainant Union; detailed some Union benefits;

and described his organization’s designation card. He declared

that — should a sufficient number of cards be signed — he

would request Complainant Union’s recognition, but that a

representation election would ‘‘probably’’ be necessary.

(Inter alia, Reed directed Respondent’s warehousemen to

disregard his designation card’s reverse side; thereon,

language whereby a different — though related — labor

organization would, purportedly, have likewise been

‘‘authorized’’ to represent card signers had, mistakenly,

been printed.)

Further, so the record shows, Reed discussed Complainant

Union’s initiation fees. Warehouseman Hasegawa testified

that Complainant Union’s business representative had

declared, with respect thereto, that ‘“‘if we [Respondent’s

warehouse workers] turned the company union”’ initiation fee

payments would be waived, and that ‘‘after the company

39a

turned union’’ anybody else would be required to pay. Reed,

when queried further by General Counsel’s representative,

testified as follows: —

Initiation fee? I told them that nobody pays initiation

fees if we go through the — if they don’t recognize us,

we go through an election and we win, we start to

negotiate for them, and nobody is going to pay any in-

itiation fee until a contract is signed, and all new

employees that is hired after the contract is signed bet-

ween the union and the company will be paying initiation

fees. | also told them, ‘‘Because you are the ones who

wanted this union in there, in here, that’s why the union

don’t charge you initiation fee.”’

During this meeting, three warehousemen — Hasegawa,

Yamamoto, and Ragasa — completed, signed and dated

Union designation cards. Warehouseman Leomo had already

partially completed and signed his card, but added the date,

plus his job classification, during their drive-in restaurant

discussion. Complainant Union’s business representative,

then, collected four completed cards.

b. Complainant Union’s Petition Filed

Shortly after noon on Monday, May 10th, Reed filed a

representation petition [Case No. 37-RC-2245] with this

Board’s Sub-Regional Office; therein, Complainant Union

sought certification within a bargaining unit defined to com-

pass ‘‘regular full time and part time truckdrivers and

warehousemen”’ within Respondent’s Honolulu warehouse,

save for ‘‘office’’ clericals and certain conventionally excluded

classifications. Complainant Union described its petition as

constituting its request for recognition, within the bargaining

unit previously defined.

Respondent’s warehouse personnel, following the comple-

tion of their May 10th shift, met with Complainant Union’s

business representative, for a further discussion, within

Jumbo’s Drive-In restaurant. The record warrants a deter-

mination, which I make, that the firm’s fifth ‘regular part

40a

time’? warehouseman, Timothy Culkin, was present. Follow-

ing a brief discussion — during which Complainant Union’s

business representative substantially recapitulated his May 6th

remarks regarding a designation card’ significance — Culkin,

1 find, signed a card.

(Respondent’s counsel, when he cross-examined Reed and

Hasegawa particularly, sought to impugn their testimony

that Culkin had, indeed, signed and delivered his designa-

tion card on May 10th, correctly dated. Since Complai-

nant Union’s business representative never submitted

Culkin’s card to this Board’s Sub-Regional Office

representative before their next subsequent contact four

months later, the card in question could — conceivably

— have been completed, signed and back-dated, shortly

before its September 10th submission. When requested to

report what Culkin looked like, Reed provided a

generalized, somewhat questionable description, with

respect to which Hasegawa’s witness-chair recollection

varied. Considered in totality, however, the record does

warrant a determination — which I make — that Culkin

signed a May 10th designation card. Reed’s explanatory

testimony — that Culkin’s card had been retained within

his ‘‘organizing’’ file at Complainant Union’s head-

quarters because the representation petition which it

would have supported had already been filed; because

that petition, when filed, had been supported with four

designation cards which he [Reed] considered, then, suffi-

cient to demonstrate the organization’s majority represen-

tative status; and because he believed, therefore, that no

further ‘‘showing of interest’? would be required — rings

true. General Counsel and Complainant Union cannot be

faulted for their failure to provide Culkin’s corroborative

testimony. Rather, I note Respondent counsel’s failure to

produce testimony from Culkin, presumably a readily

available witness, calculated to contradict Reed’s pro-

ffered recollection and documentary submission.)

4la

Following his receipt of Culkin’s signed card, Complainant

Union’s business representative, so I find, cautioned

Honsport’s warehousemen that they should ‘‘watch out’’ for

company questions and maneuvers calculated to subvert their

presumptive desire for Union representation. Upon this note,

the meeting concluded.

Sometime subsequently, I find, Complainant Union’s

business representative telephoned Baidack; Respondent’s

general manager was notified that Complainant Union’s

representation petition had been filed. Reed’s testimony, with

regard to their further conversation, which | credit in this

connection, warrants a determination — which I make — that

Complainant Union’s spokesman claimed to represent a ma-

jority of Honsport’s warehouse workers; Respondent’s

recognition of Complainant Union was requested.

(Reed’s proffered recollection, particularly with regard to

this telephone conversation with Respondent’s general

manager, was — within my view — sufficiently positive.

He testified that he communicated with Baidack shortly

following a fruitless personal visit to Respondent’s

premises, either during the mid-afternoon of May 10th,

or sometime during the morning of Tuesday, May 11th.

While a witness, Baidack could not, himself, recall the

date on which Complainant Union’s business represen-

tative telephoned, precisely; nor could he “‘recall’’

whether Complainant Union’s recognition had been re-

quested. Upon this record, Reed’s testimony, within my

view merits credence.)

In material part, Respondent’s general manager notified Reed

that, when Respondent received its copy of Complainant

Union’s representation petition, that document would be

referred to Zale Corporation’s management representatives,

for whatever response they might consider necessary.

42a

c. Respondent’s Notification Given to Zale Corporation’s

Management

Respondent’s general manager, testifying consistently

with his best recollection, recalled that Honsport received its

formal notice with respect to Complainant Union’s petition

two days after Business Agent Reed’s telephone call — thus,

on Thursday, May 13th, presumably. Thereupon, with a telex

message, he promptly notified his Zale Corporation superiors.

(Previously, within this decision, reference has been made

to Zale Corporation’s Sporting Goods Division con-

troller, Jerry Martin, who — so the record shows — had

reached Hawaii several days previously. The present

record is silent with respect to any communication bet-

ween Martin and Respondent's general manager regar-

ding Reed’s telephone call or Complainant Union’s

petition.)

On Friday, May 14th, Vice President Gart placed a con-

ference call to Respondent’s general manager, with President

Blumenthal of Zale Corporation’s Sporting Goods Division

and Norman Landa, Zale Corporation’s assistant general

counsel for labor relations, participating.

Inter alia, Baidack was queried with regard to when he

had first heard about Complainant Union’s petition; further,

he was asked why he had not telephoned Vice President Gart,

promptly. Respondent’s general manager replied — so Gart’s

credible testimony shows — that he had not considered the

matter ‘“‘important’’ before he received the Board Sub-

Regional Office’s official document. Baidack was notified

that Assistant General Counsel Landa would visit Honolulu

shortly. He was directed to refrain from questioning

Honsport’s workers, and to take no action, whatsoever, which

might ‘‘create problems”’ while ‘‘sitting tight’? pending

Landa’s arrival.

43a

3. Respondent's Reaction to Complainant Union's Petition

a. Norman Landa Visits Hawaii

On Sunday, May 23rd, Landa, pursuant to Vice Presi-

dent Gart’s prior suggestion plus President Blumenthal’s con-

firmatory directive, reached Honolulu; he brought with him,

from Zale Corporation’s Dallas headquarters — so I find —

some wage rate data supplied by the corporation’s home of-

fice wage and salary administrator, which purportedly

reflected wage rate ranges currently being utilized for

warehouse workers by Sears, Roebuck & Company and J.C.

Penney Company, Inc. within their Honolulu facilities.

(The record, herein, warrants a determination — which |

make — that various management representatives, within

Zale Corporation’s several divisions, have, historically,

solicited such wage rate data from their particular area’s

competitive firms. Pay schedules for divisional personnel

— bottomed upon such solicited date — have periodical-

ly, been drafted and revised conformably with a company

policy which calls for the payment of so-called

‘“competitive rates’’ within a particular facility’s relevant

labor market.)

The wage data which Assistant General Counsel Landa had

procured, a priori, from his Dallas, Texas source, however —

with particular reference to Sears and Penney’s Honolulu

warehouse rate ranges — had reflected merely their entry-level

and maximum pay rates. The record warrants a determina-

tion, which I make, that Landa expected to procure further,

more detailed, data.

During a May 24th Monday morning conversation with

Baidack, Landa discussed the situation which Complainant

Union’s representation petition had generated. He declared his

concern because Honsport’s warehouse personnel had been

promised wages — during the course of their prior April per-

formanance reviews — which had.not yet been granted. Hav-

44a

ing reviewed Respondent’s various pay scales currently in

force — for sales people as well as warehouse workers —

Landa declared his view, inter alia, that Honsport’s

warehouse personnel were underpaid; he suggested a current

wage survey. Zale’s assistant general counsel named certain

persons, connected with several local business operations, with

whom he proposed to communicate; Baidack was requested to

provide further names — specifically, personnel directors con-

nected with other local businesses which maintained

warehouse facilities.

With particular reference to Complainant Union’s

representation petition, Baidack testified that Landa had

declared — during that conversation — his belief that

Respondent would not ‘“‘lose this case’? which Complainant

Union has brought. Further, Baidack recalled a comment by

Zale’s assistant general counsel that ‘‘in all likelihood we

would commit unfair labor practices’ while winning the case.

(When General Counsel’s representative first sought to

question Baidack, with regard to Landa’s May 24th

remarks, Respondent’s counsel noted a protest in his

client’s behalf, contending that Assistant General Counsel

Landa’s statements constituted confidential communica-

tions between Zale Corporation’s lawyer and Respon-

dent’s general manager, with respect to which Respon-

dent could — now — properly claim privilege. General

Counsel contended that no privilege could be claimed

since Landa’s remarks had been closely related to

Respondent’s developing plan for the commission of un-

fair labor practices. Respondent’s claim of privilege was

denied. Federal Rules of Evidence, Rule 501. Upon

reconsideration, my ruling is reaffirmed. Regardless of

my determination’s correctness, however, | note — fur-

ther — that Respondent’s counsel subsequently proffered

Landa’s testimony, both with respect to this May 24th

conversation and with regard to relevant developments

thereafter. Thereby, clearly, Respondent’s claim of

privilege — whether or not meritorious — was conscious-

ly waived.)

4Sa

Then, so Baidack testified. Landa provided him with a

booklet which described contrasting statements and conduct

considered permissible and/or proscribed, for management

representatives concerned with union representation cam-

paigns. Respondent’s general manager was told to comply

with the booklet’s directives. When queried further, with

regard to Landa’s precautionary remarks, Baidack recalled

statements:

... that we could not talk directly to the people pro or

con on the union; we could only state the case of the

company and list the benefits that the employees derived

working for the Zale Corporation. More points along

those lines . . . He gave me the Zale Corporation booklet

on how to deal with labor unions which have all the do’s

and don’ts in it....

Landa, when subsequently summoned as_ Respondent’s

witness, conceded a conversational ‘‘unfair labor practice’’

reference, but denied making any comment that Respondent,

confronted with Complainant Union’s petition, would tran-

sgress permissible limits. When requested to detail his May

24th conversation with Baidack, Landa testified as follows:

We were talking about giving the increases, and I told

him that again, that we were between a rock and a hard

place; that if we gave the increases we could face possible

unfair labor practice charges, and that if we didn’t give

them we could face unfair labor practice charges... .

Q. And[do] you recall what, if anything, Mr. Baidack

said in response? A. Shrugged his shoulders.

Q. Did you tell Mr. Baidack, ‘‘We’re going to commit

unfair labor practices?’ A. I did not.

” + +

Q. During your conversation with Mr. Baidack, did you

give him any reference materials with respect to do’s and

don’ts? A. Yes, i did.

46a

Q. And did you give him any advice with respect to

what he should not do in dealing with the employees? A.

| did ... That happened on the 24th, Monday, in Mr.

Baidack’s office. I told him and Mr. Moratin [Senior]

that they could not promise the employees benefits or

grant increases to dissuade them from going union; they

could not threaten them with plant closing or make any

other threats. They could not talk to the employees or

ask questions concerning their union sympathies, and that

they could not discriminate against them because of their

union activities if they knew of them. . . I told them that

if an employee wanted to talk to them voluntarily and

freely, they could listen, but they could not draw the

employee out. I told them that if the employees asked

them any questions with regard to their personal feelings,

that they could go ahead and comment as long as there

was no promise or threat contained.

With matters in this posture, I am satisfied that Baidack’s

specific testimony, regarding Landa’s conceded ‘unfair labor

practice’? comment reflects a misconstruction of that com-

ment’s purport and thrust. Possibly, Respondent’s general

manager may have misconstrued Landa’s comment when it

was made; possibly, however, his testimonial recapitulation

really reflects a currently rationalized recollection derived

from less-than-perfect memory, which subsequent

developments may have colored. Whatever the situation, | am

satisfied that Landa’s proffered recollection, particularly with

regard to their May 24th morning conversation, merits

credence.

Between 9:00 and 10:00 ~’clock, after his conversation

with Respondent’s general manager, Landa spoke to

Honsport’s warehouse workers. Following Baidack’s introduc-

tion, Landa reported Complainant Union’s petition; noted the

possibility that a representation vote would be conducted;

declared that a Board hearing would be held to determine

who would vote and who would not vote; notified his listeners

that they were free to vote for or against Union representa-

47a

tion; and declared that the law protected them in their right to

do so.

(Warehousemen Yamamoto and Hasegawa, together with

Respondent’s general manager, were questioned with

regard to this meeting. Their composite recollections with

respect to what transpired, however, were limited. My

factual determinations, herein, derive from Landa’s com-

prehensive testimony.)

Before the meeting concluded, I find, Truckdriver Takahara

questioned Landa with respect to how Respondent determined

its compensation schedule for warehouse work. Zale’s assis-

tant general counsel replied — so I find — that the Com-

pany’s policy was to pay ‘‘competitive rates’’ within the area

where compensable work was being performed.

(Originally, while a witness, Hasegawa recalled Takahara

questioning Landa with regard to how he could compare

Honsport’s warehouse pay ‘scale with ‘*mainland”’

warehouse rates. He [Hasegawa] could not recall,

however, how the subject had been raised; his recollec-

tion with regard to Landa’s reply was not solicited. Upon

this record. Landa’s recollection, with respect to the mat-

ter, has been credited.)

Takahara, so Zale’s assistant general counsel recalled, profer-

red no further comment. Upon this note, presumably, the

meeting concluded.

Directly thereafter, Landa placed a long distance

telephone call to Vice President Gart. The Lawyer’s credible,

corroborated testimony, with regard to the substance of his

verbal report, reads as follows:

| told Mr. Gart that I had arrived in Honolulu, that we

met with the employees in a meeting that morning; that

we had meetings, further meetings [set for] that after-

noon with members of [Respondcat’s Honolulu] law

firm; that based on what we had previously obtained

from Penney’s and Sears, that I thought that the wage

rates we were paying in Honolulu were low, and that |

48a

would get back to him (bracketed material interpolated to

promote clarity).

The Sporting Goods Division’s vice president requested Lan-

da, merely, to keep him informed, with respect to further

developments.

b. Respondent’s New Wage Survey

Throughout the balance of Monday, May 24th, and the

following day, Assistant General Counsel Landa, with

Baidack’s help, sought to determine prevailing rates of pay

and rate ranges, within the Honolulu labor market, for

warehouse personnel. Inter alia, they communicated with a

Hawaii Employer’s Council representative; they were provided

with data which compassed certain ‘‘low, median and high”’

rates currently being paid truckdrivers and warehousemen by

five designated retail establishments. Further, both men con-

ferred face-to-face, with local personnel managers or directors

for Sears, Woolworth’s and J.C. Penney stores. With their

survey completed, Baidack and Landa proceeded to formulate

new rate ranges for Honsport’s warehousemen, warehouse

clerical workers and truckdriver.

c. Landa’s Report to Zale Corporation’s Management

Thereafter, on Wednesday, May 26th, Landa telephoned

the Sporting Goods Division’s vice president. When queried

with regard to Landa’s report, General Manager Baidack

testified that Gart was told: —. . . [It] looked like we would

have to grant a substantial increase to these [warehouse] per-

sonnel, and there was no way to get around it; that we were,

in fact, underpaying according to equivalent jobs in the area;

and that if we would stand any chance against the union, this

would be the only way we could do that.

Further, Baidack testified that Landa supplied Gart with pro-

posed ‘‘low’’ and “‘high’’ hourly rate figures for both of

Respondent’s required warehouse rate ranges, merely. He

[Baidack] declared that Gart had not signified his concurrence

49a

directly, but that he had — ultimately — communicated his

‘‘approval’’ during a subsequent May 27th or May 28th

telephone conversation.

During cross-examination, however, Baidack could not

recall, precisely, how many times Landa had telephoned his

divisional superior. He speculated that ‘“‘two to four’’ calls

had been placed. He could not recall specific conversations,

r specific phrases, conceding that he could merely

recapitulate the ‘‘general content’? of Landa’s telephoned

reports.

When summoned, later, in Respondent’s behalf, Zale’s

assistant general counsel testified at length — with Vice Presi-

dent Gart’s substantial corroboration — regarding these

telephone calls. His proffered recollections read as follows.

1 told Mr. Gart that we had obtained the results of the

Hawaii Employer Council survey; that along with the

Penney’s and Sears rates we had obtained, that I feit we

were low. I made a recommendation that the wage rate

be adjusted, and then I read off what I suggested or what

| recommended to Mr. Gart. . . . Mr. Gart asked me if it

would be competitive. I told him we would probably not

be the highest paid warehouse in Honolulu, but we would

be in the ballpark. He then asked me, ‘‘Are we going to

have any problems with it?’’ I told him that we were real-

ly between a rock and a hard place. The employees had

been previously reviewed, that they were expecting raises,

and that if we did not give them raises, that there was a

good possibility that unfair labor practice charges would

be filed for not giving the raises. On the other hand, |

told him that if we gave the raises, we could also face the

possibility of unfair labor practice charges, but that in

my opinion the risk of the latter was lesser than the risk

of the former because it was within the company’s policy

of making the surveys, that the employees, themselves,

had been told that they were free to vote either way that

they wanted,and that no election was imminent. I also

told him that because we had given the einployees — The

50a

employees had been reviewed and had been promised

wages, that that was also a factor; that it was my legal

opinion that if we did we would not be committing an

unfair labor practice ... Mr. Gard asked me ‘‘Can we

wait’’ I said ‘‘No. I would like a decision immediately”’

He replied, ‘‘Go ahead and make the change’’

Confronted with patent discrepancies between Baidack’s and

Landa’s proffered recollections, I find the assistant general

counsel’s testimonial recapitulation more worthy of credence,

for several reasons. First I note Baidack’s final concession-

despite his purportedly positive direct testimony — that he

could not recall Landa’s specific language, but merely its

general tenor.

(When queried during General Counsel’s redirect ex-

amination, with respect to whether Landa had said

anything regarding a union, Baidack could merely recall

the lawyer’s comment that, ‘‘there was a good possibility

the election would happen’’ with results which could not

be gauged.)

Second: Vice President Gart’s notes, taken during the conver-

sation in question, reveal — despite Baidack’s contrary

recollection — that Landa had, then, presented him with two

completely detailed rate ranges for Honsport’s warehouse per-

sonnel, rather than with their minimum and maximum rates,

merely. Third: | note that, some seven months before this

case was heard — during July, 1976, specifically — Baidack

had resigned his position as Honsport’s regional supervisor.

The record, considered in totality, warrants determinations —

which I make — that Vice President Gart had long before his

regional supervisor’s resignation, strongly criticized the latter’s

performance record; that Baidack’s subsequent dealings with

Zale Corporation’s management representatives, and some

Honsport personnel, following his resignation had — tem-

porarily, at least — been marred by tension; and that Respon-

dent’s former general manager had, for a time, considered

himself seriously aggrieved thereby. Baidack’s witness chair

demeanor — which I have retrospectively evaluated with these

S5la

developments in mind — persuasively suggests that his

testimonial recapitulations, wherever they differ from

Landa’s, may reflect his rationalized recollections, merely bot-

tomed upon some memories which personal ‘‘afterthoughts’’

could have colored. Landa’s version of his May 26th conver-

sation with Vice President Gart merits credence, within my

view.

d. Respondent’s Contacts With Concerned Workers

Respondent’s revised pay scales for warehouse person-

nel,with respect to which Vice President Gart had noted

Zale’s concurrence, provided substantial raises for Honsport's

concerned workers. These changes should be noted.

With respect to warehousemen, Respondent’s previously

defined starting rates [$2.40/hour] was raised by $.90, becom-

ing $3.30 per hour. For nine successive steps, set at six-month

intervals thereafter, Respondent replaced successive $.15 hour-

ly rate raises with a progressively graduated series of rate in-

crements ranging from $.17 to $.24 per hour. The firm’s new

rate range maximum, payble after ‘‘51’’ months of full-time

service, became $5.11; this represented a $1.41 increase,

beyond the firm’s previously defined $3.70 rate range

maximum.

With respect to Honsport’s warehouse clerks and

truckdriver, comparative entry-level rates, derived from the

firm’s previously defined and revised rate ranges, have not

been provided for the present record. For eleven successive

steps, set at six-month intervals thereafter, however, Respon-

dent replaced successive $.15 hourly rate raises with a pro-

gressively graduated series of rate increments ranging from

$.18 to $.27 per hour. The rate payable after three months of

service became $3.57; this represented a $.97 raise over the

defined $2.60 hourly rate previously declared payable after

Respondent’s probationary period. Honsport’s new rate range

maximum, payable after ‘‘63’’ months of full-time service,

became $5.75; this represented a $1.65 raise beyond the firm’s

previously defined $4.10 maximum hourly rate.

52a

For Respondent’s warehousemen, the various rate range

modifications noted reflected prospectively payable gross

hourly rate increases, varying from 33 percent to 38 percent

of the firm’s previously defined rate range steps. With respect

to Honsport’s warehouse clerks and truckdrivers, new step

rates, which would range from 34 percent to 40 percent higher

than comparable steps within the firm’s previously defined

rate range, were promulgated.

Having procured Gart’s permission to raise warehouse

compensation levels consistently with these newly formulated

pay scales, Landa suggested that Respondent’s general

manager should meet with Honsport’s warehouse personnel to

describe their newly-formulated rate range structure. Pursuant

to Landa’s suggestion, Baidack drafted some notes, which

would cover his prospective remarks. Then, on Friday, May

28th, Respondent’s general manager summoned his firm’s

warehouse personnel. They were reminded that their perfor-

mance records had been reviewed during April, 1976, and that

they had ‘‘al!l’’ been recommended for merit raises. Baidack’s

listeners were told, further, that — when their April 10th per-

formance reviews were conducted — the wage schedules for

Honsport’s warehouse were being reviewed at Zale Corpora-

tion’s Dallas headquarters; Respondent’s general manager

commented that, while a revised wage rate structure had not

been completed in timely fashion, their new rates would be

made effective retroactively, with a May Ist date. Additional-

ly, Respondent’s warehouse workers were told that their new

rate structure, based upon a survey of comparable jobs,

would be competitive with wage rates payable for similar posi-

tions, within the State of Hawaii specifically.

No references to Complainant Union’s pending represen-

tation petition, or some possible representation vote, were

made, however, during the meeting now under consideration.

Summoned as General Counsel’s witnesses, both Baidack

and Warehouseman Hasegawa testified that — while Respon-

dent’s general manager had addressed the group — both Lan-

da and Warehouse Manager Moratin had been present. While

Sh ie

53a

testifying subsequently in Respondent’s behalf, however, Zale

Corporation’s assistant general counsel declared, categorically,

that he had deliberately refrained from attending this par-

ticular conference. When queried, then, with regard to his

reason, Landa testified as follows

I had previously spoken to the employees on Monday.

We were talking about giving raises. | had spoken to

them about the possibility of the union election, that they

were free to vote either way they wanted to, and I didn’t

want to be there when they were discussing the raises

because I did not want them to think the union had

anything to do with it ... 1 had told them on Monday

about the union petition, that there was going to be a

hearing to determine who would vote and who would not

vote. At that time I told them that they were free to vote

for [the] union or against the union, but the law pro-

tected them in their rights to do so, and I did not want to

be present at the time the raises were announced because

of my previous meeting with the employees.

Baidack’s testimonial reference to Landa’s presence, during

this May 28th meeting, struck me as purely perfunctory; his

recapitulation, with respect to what was said, reflects no com-

ments chargeable to Zale’s assistant general counsel. And

Hasegawa’s testimony — particularly with regard to

Takahara’s question and Landa’s purported reply — reflects

some possible confusion, on his part, between what transpired

during Respondent’s May 24th meeting and May 28th

developments. Landa’s testimonial denial that he was present

on May 28th, within my view, merits credence.

Directly following their May 28th meeting, Warehouse

Manager Moratin told Honsport’s warehouse workers —

separately — what their new wage rates would be, based upon

Respondent’s wage survey, the firm’s newly formulated rate

ranges, and their respective periods of service. Warehouseman

Yamamoto, Respondent’s sole worker questioned in this con-

nection, could not recall any reference to Complainant Union,

by Moratin, Senior, while he [Yamamoto] was being notified

regarding his raise.

54a

e. Respondent Processes Takahara’s Loan Application

With respect to certain related developments, during the

May 24th — May 28th period with which we are now con-

cerned, Baidack testified — without contradiction — that

Landa, during one conversation, had asked whether he

{Baidack] felt there was any reason ‘‘other than monetary”’

that might have persuaded Honsport’s warehouse workers to

seek Union representation. Respondent’s general manager had

replied that he did not know, but ‘‘believed’’ there were no

other reasons. When Zale’s assistant general counsel asked,

then, whether he knew who might have ‘‘gone to the union’’

seeking unionization, Baidack had speculatively noted the

possibility that Truckdriver Takahara might have done so.

(According to Baidack, Landa had commented, then,

that they ‘‘really couldn’t go out and find out directly’’

whether Takahara had been responsible. Assistant

Manager Yamaguchi, so Baidack testified, had —

thereupon — been requested to determine ‘‘indirectly’’

what Takahara’s role, if any, had been.)

The following day, Baidack notified Zale’s assistant general

counsel — so his undenied testimony shows — that Takahara

had applied for a loan, one week previously, from Zale Cor-

poration’s Dallas-based employees’ credit union. According to

Baidack’s recollection:

Mr. Landa said that if we pushed the loan through, it

would probably go a long way to swaying Tommy

Takahara if he had been, in fact, the one involved in

seeking the union. At which time a phone call was made

to Dallas by Mr. Landa. I do not recall specifically who

he spoke to . . . He told [the party called] that we had a

union problem or potential union problem here in

Hawaii; that it appeared that Tommy Takahara could be

influential in the case; that it would behoove us to put

through this loan as quickly as possible.

The record warrants a determination, which I make, that

Takahara’s loan application — which might, otherwise, have

pa”

55a

been processed, routinely, within a two or three week period

— was thereupon given expedited consideration. The

truckdriver’s loan check, from the credit union, reached

Baidack’s desk on Monday, May 3lst.

While a witness, Vice President Gart testified — credibly

and without contradiction — that before this, he, personally,

had sometimes taken action calculated to speed up credit

union processes in connection with personal loan applications.

The Sporting Goods Division’s vice president cited several in-

stances when he had ‘‘walked a check through’’ personally,

after being notified that some ‘“‘problem’’ existed, and that

the loan applicant needed his requested funds forthwith. Gart

disclaimed any knowledge with regard to Takahara’ loan, par-

ticularly, but declared that I.anda’s conduct had not lacked

precedents.

Nothing within the present record, however, would war-

rant a determination that Truckdriver Takahara was ever told

his loan application had been processed with particular

expedition.

4. Representation Case Proceedings

On June 1, 1976, pursuant to notices previously given,

this Board’s Sub-Regional Office conducted a hearing on

Complainant Union’s representation petition. The parties

stipulated that Respondent’s full-time and regular part-time

warehousemen and_ truckdrivers, within its Honolulu

warehouse facility, save for ‘‘office clerical’? employees,

guards and statutory supervisors, constituted a unit ap-

propriate for collective bargaining purposes. Complainant

Union contended, however, that Warehouseman Richard

Moratin, newly hired, and Freight Claims Clerk Alvin

Moratin, Jr. should be excluded because they are the sons of

Alvin Moratin, Senior, Respondent’s warehouse manager.

Respondent, sought their inclusion, contrariwise.

Respondent’s representatives contended, ft 'rther, that

Freight Claims Clerk Moratin, Junior, together with Inven-

tory Control Clerk Karen Schubach, should be included

56a

within their firm’s warehouse unit as plant clericals. Complai-

nant Union took no position with regard to these contentions.

(When the complaint case, with which we are now con-

cerned, was heard, testimonial and documentary evidence

revealed that Karen Schubach had ceased working for

Respondent within a few weeks after this Board’s hearing

on Complainant Union’s representation petition. She had

been hired, so the records show, to replace — temporari-

ly — Honsport’s regular inventory control clerk, Carol

James then on maternity leave.

Subsequently, within a July Ist Decision and Direction of

Election, issued by the Board’s Regional Director with

jurisdiction, Warehouse Manager Moratin, Senior’s sons were

found ‘‘includable’’ within Complainant Union’s petitioned-

for bargaining unit; both plant clerical workers, previously

noted, were likewise found properly included within

Honsport’s warehouse complement.

5. Complainant Union’s Reaction

a. Respondent’s Workers Receive Their Raises

Throughout the period with which we have been concern-

ed, Respondent maintained bi-weekly pay periods, which —

so the record shows — terminated on alternate Fridays; on

the following Thursdays « Fridays, Respondent’s warehouse

workers received their paychecks.

During the period with which we are presently concerned,

Respondent’s bi-weekly pay periods terminated on May 28th

and June 11, 1976, respectively. The record warrants a deter-

mination — which | make — that, presumably on June 3rd,

Respondent’s warehouse workers were paid, for the two-week

period which had ended May 28th, on the basis of their

‘‘old’’ pre-April 10th rates of pay. However, with respect to

their next pay period — namely, the two-week period with a

June 11th closing date — the firm’s warehouse workers were

57a

paid consistently with Respondent’s newly formulated rate

ranges; their checks, further, included retroactive pay for two

prior pay periods running back to May Ist, separately com-

puted at their newly-set rates.

(Honsport’s five senior warehousemen received hourly

rate raises, dependent upon their periods of service,

which ranged from $.92 to $1.22. per _ hour.

Warehouseman Richard Moratin, with a May 4, 1976

date of hire, was granted Respondent’s newly formulated

service entry rate. Takahara, Respondent’s truckdriver,

received a $1.48 raise. Alvin Moratin, Junior, received a

$.35 wage increase. The record does not reveal Inventory

Control Clerk Schubach’s modified pay; when Carol

James subsequently resumed work in Respondent’s

warehouse, on July 5, 1976 she received a $1.31 raise

over her previous pay rate.)

Herein, General Counsel’s documentary submission — derived

from Respondent’s records — reveals that the firm’s wage

rate adjustments, in some cases, may have deviated, slightly

from those which its newly formulated rate ranges would,

presumably, have required. Warehousemen Yamamoto and

Ragasa, so the record shows, were granted raises within

Honsport’s relevant rate range, for their job classification,

properly geared to their periods of service; Richard Moratin

was correctly granted compensation which matched the firm’s

new entry-level rate. Timothy Culkin, however, was granted a

rate properly payable after three months of service, though he

had not, by May Ist, finished his probationary period.

Warehouseman Hasegawa and Leomo were given raises, cor-

rectly geared to their periods of service, but derived from

Respondent’s revised warehouse clerical rate range; the record

suggests, however, that, subsequent to May Ist, they may

have been performing clerical duties. Alvin Moratin, Junior,

with two years, eight months of prior service, in totto, had

worked slightly more than three months before May Ist, as

Respondent’s freight claims clerk; nevertheless, he was assign-

ed a wage rate, within the clerical rate range, purportedly

58a

payable after nine months of service. Together with these

presumptively beneficial wage level changes, however,

Respondent’s management made two less generous miscalcula-

tions. Takahara, despite eleven years of service, was raised to

a compensation level, within his rate range, payable after

**57’’ months of service; he was not granted his rate range

maximum, which he should have been granted, until six mon-

ths later. Carol James, with a nominal ‘‘21’’ month gross ser-

vice record when she resumed work in July, 1976, was granted

a raise, commensurate with her service record, within the

warehousemen’s rate range; consistently with Respondent’s

new clerical rate range, she could have been given $.10 more

per hour.

Complainant Union’s business representative testified,

credibly and without contradiction, that, following the June

Ist -epresentation case hearing, he continued to call Jumbo’s

Di :-In restaurant meetings, for Respondent’s warehouse

workers. However, when these workers finally received their

retroactive raises — so Business Agent Reed’s credible

testimony shows — they no longer responded when notified

of Complainant Union’s scheduled meetings. According to

Reed, only one worker, whose name he could not recall,

reported.

b. Complainant Union’s Charge

On June 21, 1976 Complainant Union’s Business

Representative signed a formal Board charge, wherein

Respondent was charged with the commission of Section

8(a)(1) and (5) statutory violations, dating back to June I1Ith

specifically. The Board’s record, however, shows that this

charge was filed on July 22nd. No rationale for Complainant

Union’s presumptive failure to file its charge, promptly, has

been proffered for the present record.

(Conceivably, the charge’s date notation, showing that

Business Agent Reed had signed it on June 21st, may

reflect a simple draftman’s or typist’s mistake. The

charge could have been signed on July 21st; then, it could

59a

have been filed the following day. While a witness,

however, Reed proffered no such contention.)

On January 10, 1977, this Board’s Regional Director notified

Complainant Union’s counsel that — since a Complaint and

Notice of Hearing has been issued, based upon Complainant

Union’s July 22, 1976 charge — the representation petition

previously filed would be dismissed — subject to reinstate-

ment, should such action be deemed appropriate, upon Com-

plainant Union’s application following some disposition of the

present complaint proceeding.

c. Discussion and Conclusions

Consistently with well-settled decisional doctrine, this

Board has noted — frequently — that wage increases granted

during union organizational campaigns may not be con-

sidered, per se, statutorily proscribed. The Board’s conclu-

sions, as to whether such wage increases, or benefits confer-

red, have transgressed permissible limits, must derive —

rather — from subsidiary determinations, bottomed upon

each case’s particular cirumstances, with respect to whether

the concerned employer’s grant was calculated to interfere

with the self-organizational rights of workers, or to thwart a

labor organization’s campaign for representative status.

N.L.R.B. v. Exchange Parts Company, 375 U.S. 405; Cen-

tralia Fireside Health, Inc. 233 NLRB No. 31 (Slip Opinion,

p. 4), and cases therein cited. Mr. Justice Harlan, within the

Supreme Court’s Exchange Parts decision, noted that:

The precise issues [which this case presents] is whether

[Section 8(a)(1)] prohibits the conferral of [economic]

benefits, without more, where the employer’s purpose is

to affect the outcome of the [representation] election .. .

We think the Court of Appeals was mistaken in con-

cluding that the conferral of employee benefits while a

representation election is pending, for the purpose of in-

ducing employees to vote against the union, does not

‘‘interfere with”” the protected right to organize. ... We

have no doubt that [Section 8(a)(1)] prohibits not only in-

60a

trusive threats and promises but also conduct immediately

favorable to employees witich is undertaken with the ex-

press purpose of impinging upon their freedom of choice

for or against unionization and is reasonably calculated

to have that effect. (Bracketed material inserted to pro-

mote clarity. Emphasis supplied.)

This Board, with judicial concurrence, has long recognized

that the statute, thus construed, places many concerned

employers in difficult positions, when business circumstances

would dictate some revision of their wage structures following

their receipt of notice with respect to representation pro-

ceedings filed. McCormick Longmeadow Stone Co., Inc. 158

NLRB 1237, 1241-1243. Compare Sta-Hi Division, Sun

Chemical Corporation v. N.L.R.B. (C.A. 1, August 16, 1977)

96 LRRM 2051, 2055; The Singer Company, Friden Division,

199 NLRB 1195, 1196. In McCormick Longmeadow Stone,

Trial Examiner Reel defined the statute’s mandate — with

Board concurrence — positively; his formulation read as

follows:

An employer’s legal duty in deciding whether to grant

benefits while a representation case is pending is to deter-

mine that question precisely as he would if a union were

not in the picture. If the employer would have granted

the benefits because of economic circumstances unrelated

to union organization, the grant of those benefits will not

violate the Act. On the other hand, if the employer’s

course is altered by virtue of the union’s presence, then

the employer has violated the Act, and this is true

whether he confers benfits because of the union or

withholds them because of the union (emphasis supplied).

However, determinations thus required, with respect to

whether some particular benefit had been conferred ‘‘because

of economic circumstances unrelated to union organization’’

or derived from a concerned employer’s decision which had

been ‘‘altered by virtue of the union’s presence’’ primarily —

cannot be lightly reached. When financial rewards — pay

raises or fringe benefits — have been granted workers, within

6la

a situational context which reflects statutorily’ proscribed

statements or conduct, conclusions regarding the concerned

employer’s statutorily proscribed ‘‘purpose’’ may be readily

drawn. Likewise, when managerial declarations or conduct —

which might not, themselves, call for statutory proscription —

nevertheless reflect a concerned employer’s campaign to

forestall unionization, the presence of some forbidden motive,

for benefits conferred during a representation case’s penden-

cy, may reasonably be deduced. In Exchange Parts, the

Supreme Court declared, with respect to such determination,

that:—

It is true, as the court below pointed out, that in most

cases of this kind the increase in benefits could be regard-

ed as ‘‘one part of an overall program of interference

and restraint by the employer,’’ . . . and that in this case

the questioned conduct stood in isolation. Other unlawful

conduct may often be an indication of the motive behind

a grant of benefits while an election is pending, and to

that extent it is relevant to the legality of the grant; but

when as here the motive is otherwise established, an

employer is not free to violate Section 8(a)(1) by conferr-

ing benefits simply because it refrains from other more

obvious violations (Emphasis supplied).

And this Board has, frequently, found benefit grants properly

subject to statutory proscription — consistently with this

Supreme Court language — because their ‘‘nature’’ and ‘‘tim-

ing’’ presuasively demonstrated their character as responses to

some labor organization’s representation campaign. See, e.g.,

Montgomery Ward & Co., Inc., 220 NLRB 373, enfd. 554

F.2d 996 (C.A. 10); cf. Laars Engineers, Inc. 142 NLRB

1341, 1344-1345, enfd. on this point, 332 F.2d 664 (C.A. 9),

in this connection.

In recent years, however, several decisions have reflected

this Board’s recognition, with judicial concurrence, that its

decisional principle — whereby concerned employers, con-

strained to determine whether benefits should be granted dur-

ing a representation case’s pendency, must determine that

62a

question precisely as they would if a union were not in the

picture — will sometimes generate managerial dilemmas. See,

e.g., Sta-Hi Divison, Sun Chemical Corporation, Vv.

N.L.R.B., 560 F.2d 470 (C.A. 1), enfg. 226 NURB No. 123;

The Singer Company, Friden Division, 199 NLRB 1195,

1196. In Sun Chemical, the Court of Appeals commented

that: —

We are not unsympathetic with an employer who, having

decided to increase his employee’s wages, finds himself

trying to navigate a ‘‘perilous’’ course between the Scylla

of a violation of the Act for granting a wage increase to

his employees when a representation election is pending,

and the Charybdis of a violation of the Act for

withholding such an increase when an election is pending.

This Board’s decisions, however, have suggested several

‘““escape’’? routes whereby such putative dilemmas may be

avoided. For example, the Board notes, within its Singer

Company decision, that — while grants or promises of

benefits during a critical preelection period will be considered,

prima facie, statutorily proscribed — concerned employers

may escape statutory sanctions, by coming forward with some

explanation, other than a representation vote’s pendency, for

the timing of their particular benefit’s grant or proclamation.

See, for example, Centralia Fireside Health, Inc., 233 NLRB

No. 31 (Slip Opinion, p.4), Micro Measurement, 233 NLRB

No. 6 (Slip Opinion, pp.2-3), Aircraft Hydro Forming, Inc.,

221 NLRB 581, 585-586. In short: Whenever General

Counsel’s presentation, regarding some particular . benefit’s

nature, significance and timing, can be considered sufficient

to provide a prima facie demonstration of statutorily proscrib-

ed interference, the ‘“‘burden of proceeding” will necessarily

be shifted; respondent firms, then, must — first — establish

that their challenged benefit grant was consistent with a

previously formulated program or prior practice, and —

secondly — justify the temporal coincidence between some

labor organization’s bid for representative status and their

benefit’s conferral. Compare Colonial Haven Nursing Home,

Inc., 218 NLRB 1007, 1008 [fn. 5] 1017, enfd. in material

part 542 F.2d 691 (C.A. 7), in this connection.

63a

To put the matter differently, respondent firms charged

with benefit grants presumptively conferred for some ‘‘express

purpose’”’ statutorily proscribed, must demonstrate that such

grants, regardless of their nature and timing which could be

suspect, really reflect no prior ‘‘course alteration’’ motivated

by a labor organization’s presence.

In most cases, such defensive demonstrations have com-

passed testimonial and documentary proffers calling for deter-

minations: First, that challenged benefit conferrals had been

based upon the designated respondent’s regular practice, or

based upon plans specially formulated before any labor

organization’s campaign had commenced, or became known;

Second, that some notice, regarding a prospective grant, bot-

tomed upon such a respondent’s previously formulated plan

or regular practice, had been communicated to concerned

employees, preferably before any labor organization’s known

advent; Third, that procedures subsequently followed, and

benefits finally conferred, had been consistent with the par-

ticular respondent firm’s regular practice, or previously for-

mulated program

2. Respondent’s Pay Raises

The present record, clearly, warrants a determination —

which I make — that, during the period with which we are

concerned, Respondent’s compensation policy did, indeed,

derive from established practices and procedures, which

predated Complainant Union’s representation bid. Zale Cwr-

poration’s policy and procedure manual, throughout the

period with which we are concerned, had called for periodic

performance reviews, pursuant to which qualified workers

might be granted raises within prescribed rate ranges. Those

rate ranges — formulated to be generally ‘‘competitive’’ with

_ prevailing wage rates currently being paid for comparable

positions within the local community — have, historically,

been derived from area wage surveys.

(Zale Corporation’s manual, so far as the record shows,

prescribes no fixed time interval within which wage

64a

surveys previously conducted should be reviewed, recon-

sidered or brought up to date. Presumably, renewed

surveys have been conducted whenever, within manage-

ment’s judgment, conditions within a particular labor

market have persuasively suggested their desirability.)

At Honsport, General Manager Baidack had, consistently

with Zale Corporation’s manual directive, formulated Oc-

tober, 1975 rate ranges for Honolulu warehouse personnel.

Those ranges had, ostensibly, been bottomed upon previously

collected ‘‘survey’’ data.

(The fact that Baidack’s purported survey data may not

have reflected, correctly, the local pay scales prevailing,

for warehouse personnel, within Honolulu’s labor market

specifically, cannot — within my view —- detract from

their presumptively ‘‘objective’’ character; their validity,

however, will be considered further, within this decision.)

Respondent’s written ‘‘Warehouse Personnel Pay Scales’’

policy had, finally, provided for semi-yearly April Ist and Oc-

tober Ist performance reviews, which would be prerequisites

for raise recommendations. While the present record provides

no persuasive clue, relative to Honsport’s prior October, 1975

compliance with its formally promulgated compensation

policies, there can be no doubt that such policies do provide a

quintessential background for subsequent developments, with

which we are presently concerned.

Directly following Warehouse Manager Moratin’s April

10th performance reviews, Respondent’s warehouse workers

had been notified that raises, bottomed upon their meritorious

performance records, would be grantea. Concededly, no

specific raise figures had been mentioned. When Baidack,

shortly thereafter, sent Vice President Gart his pay raise

recommendations, however, wage increments computed in

conformity with Honsport’s October, 1975 rate ranges had

been specified.

(These developments had, clearly, preceded Business

Agent Reed’s initial May 6th conferences with Respon-

65a

dent’s warehouse workers. Vice President Gart could,

conceivably, have ‘‘acquiesced’’ promptly, with respect to

Baidack’s April 10th raise recommendations; had he done

so, no problem worthy of present Board cognizance

would, subsequently, have been generated. When Zale’s

Sporting Goods Division vice president returned

Baidack’s recommendations, however, while declaring

them ‘‘inadequate’’ within his view, his determination

necessarily set the stage for subsequent developments,

which have generated the present controversy.)

With matters in this posture, there can be no doubt that — so

far as Honsport was concerned — two generally recognized

preconditions for wage increases, free of statutory taint, had

been satisfied. Raises for Honolulu warehouse personnel had

been recommended, conformably with a previously — deter-

mined company policy — and Respondent’s concerned

workers had been told that wage increases, bottomed on

merit, would be forthcoming — long before Honsport’s

management learned that Complainant Union claimed

representative status.

Considered in totality, however, the present record clearly

warrants a determination, which I make, that Respondent’s

warehouse raises — when finally granted — derived from

substantially revised rate ranges, formulated, concededly, dur-

ing a representation petition’s pendency. Since most of the

firm’s raises, granted under such circumstances, ran con-

siderably higher than the step increases which Respondent’s

general manager had previously recommended, General

Counsel’s representative seeks a determination, substantially,

that such raises — when granted — had not been ‘‘consis-

tent’’ with Honsport’s previously promulgated performance

review and compensation program.

(Respondent’s counsel contends, nevertheless, that his

client’s various raises had been granted in conformity

with ‘‘established company policy’? whereby workers

were supposed to be paid at rates competitive with those

being received by other workers performing similar work,

within their local communities. This contention, within

66a

my view, raises a different question, which I purpose to

discuss, further, within this decision.)

And, mindful of this situation, General Counsel’s represen-

tative would, now, have this Board simply infer that Respon-

dent’s course of conduct had been specifically designed to per-

suade concerned employees that wage increases had been

granted, and would be granted, thereafter, without any

necessity for Union representation.

Upon this record, however, General Counsel’s conten-

tion, within my view, carries no persuasive thrust. While

Respondent’s rate range revisions, coupled with raises pur-

portedly granted consistently therewith, may have followed

hard upon management’s acquisition of knowledge, with

respect to Complainant Union’s campaign, the factual record

— within my view — will not, preponderantly, sustain a

determination that the firm’s challenged course of conduct

had been consciously ‘‘undertaken’’ with a statutorily pro-

scribed ‘‘express’’ purpose. My conclusion, substantially, that

Respondent’s defensive presentation, with regard to manage-

ment’s motive for challenged conduct, has persuasively over-

come General Counsel’s prima facie case, derives from several

considerations.

First: | note that Respondent’s May 28th wage increases,

with May Ist retroactive dates — though concededly ‘‘sub-

stantially greater than many increases [which warehouse

employees} had received’’ previously — derived from revised

rate ranges, bottomed upon Assistant General Counsel

Landa’s concluded wage survey; that survey had been con-

ducted, consistently with Zale Corporation’s previously

established policy, specifically to facilitate the formulation of

rate ranges which could be considered ‘‘competitive’’ with

those governing the compensation of warehouse workers,

generally, within the Honolulu labor market. Essentially,

therefore, Respondent’s raises, when promulgated, reflected

corporate management’s ‘‘lawful attempt to correct an inequi-

ty’’ which General Manager Baidack’s prior neglect had

generated.

67a

(When formulating his October, 1975 rate ranges,

Baidack had, so he testified, relied upon Zale Corpora-

tion’s previously determined rate range for Dallas, Texas

Grade 12 warehousemen, plus further data, never

specified, which Warehouse Manager Moratin had pur-

portedly supplied. The present record, however, warrants

no determination, whatsoever, regarding the identity of

Moratin’s presumably local sources; nor will it warrant

determinations with respect to his data’s then current

relevance or reliability. With respect to Baidack’s pur-

ported reliance upon Zale Corporation’s Dallas, Texas

warehouse scale, I note record documentation which

reveals the corporation’s September 1, 1975 rate range,

for *‘Grade 12’’ Dallas warehousemen; that previously

determined range was substantially higher than Baidack’s

October 1, 1975 formulation. In Dallas, Zale’s newly-

hired warehousemen were, then, being paid $3.14 hourly;

Baidack had, nevertheless, set a $2.40 statutory minimum

rate. His promulgated October, 1975 warehouse rate

range provided for compensation after twenty-seven mon-

ths of service which matched Dallas’ minimum rate.

Dallas warehousemen could qualify for Zale Corpora-

tion’s maximum $3.69 hourly rate following thirty mon-

ths of service; in Honolulu, Honsport warehousemen

could not qualify for their compensation schedule’s max-

imum $3.70 hourly rate, until after fifty-one months of

service. Thus, should this Boayd consider a determination

warranted, arguendo, that Respondent’s general manager

might reasonably have considered current Dallas, Texas

pay scales relevant — when drafting his October, 1975

rate ranges — there would be clear warrant for a further

determination that Baidack must have relied upon patent-

ly obsolete data. Further, I note — officially — that the

Federal Government considers Honolulu, Hawaii a high

cost-of-living area, wherein compensation levels, general-

ly, run higher than ‘‘mainland’’ rates paid for com-

parable work. From all this, | conclude that Baidack’s

October, 1975 warehouse pay scales, when formulated,

68a

were clearly less than competitive, within the Honolulu

labor market; certainly, six months later, their gross

failure to provide competitive compensation, consistently

with corporate policy, could have been readily perceived.

However, Respondent’s general manager, so far as the

record shows, never considered a renewed warehouse

wage survey, centered on local firms — which might con-

ceivably dictate rate range revisions — necessary.)

Vice President Gart had, during his March, 1976 visit, noted

Baidack’s previously tolerated deviation from the March-

September performance review schedule which — pursuant to

his direction — Zale’s Sporting Goods Division generally

followed. He had specifically directed Respondent’s general

manager to ‘‘get on to the division schedule’’ forthwith;

Baidack, however, had not complied. When Honsport’s

belated April 10th, Form 515 raise recommendations were

finally submitted, Gart had’ — so I have found — labeled

them ‘‘inadequate’’ promptly; he had returned them for revi-

sion. The vice president’s reaction had predated Complainant

Union’s designation card solicitation; clearly his request for

more realistic raise recommendations had not been motivated

thereby.

Nevertheless, between April 15th and May 10th, Respon-

dent’s general manager had taken no steps whatsoever — so

far as the record shows — calculated to suggest compliance

with his divisional supervisor’s directive. Thus, when con-

fronted — shortly thereafter — with word of Complainant

Union’s representation bid, Zale Corporation’s management

representatives were presented with choices to be made bet-

ween three conceivable courses: One, Vice President Gart

could, conceivably, have reversed his April 15th decision;

Baidack’s previously recommended raises — despite their

derivation from two carelessly formulated rate ranges, and

their clear failure to match competitive Honoluly wage levels

— could, nevertheless, have been granted; Two, Respondent

could have decided to ‘‘postpone’’ or ‘‘suspend’’ all further

action with respect to warehouse raises — despite Moratin,

69a

Senior’s prior notice to subordinates that wage increases

would be granted — coupling that decision with some public

declaration which reflected its desire to avoid the appearance

of statutorily proscribed interference with a possible represen-

tation vote. Compare Sta-Hi Division, Sun Chemical Cor-

poration v. N.L.R.B., 560 F.2d 470, 96 LRRM 2051, 2055

(C.A. 1), enfg. 226 NLRB No. 123 (Slip op., JD, pp. 4-5),

The Singer Company Friden Division, 199 NLRB 1195, 1196.

Three, the firm could conduct a current up-to-date wage

survey, which Baidack had plainly neglected to conduct;

warehouse rate ranges, bottomed thereon, could then be

devised; and raises calculated conformably

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