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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1980
- **Citation:** 449 U.S. 1034

## Text

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.

Fe

TABLE OF CONTENTS

PAGE

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as ie Show nova 60s si6 6 Sond oc vescsse 2
SE PIE AD icc rect civeveesscavesestase 2
Se EEE ew Oe ans 6s bbageledeongesves 2

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

SS. tee eeLAs bes pve shee ec dde.ee os 12
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EE i Sheri se hile e506 0.4 20a Ph ew eee ene Mab p ie 3a
I lr ards 6s bce EKER onaee so whobish 82a
IASI SE: SC er ee 83a
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PRECEDING PAGE WAS BLANK

iv

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,
Re: SEE Or Rac sks oe Mae tA stave ahhe ocsk 2

GER i toes o cule Oke by een neh Fens asm y x
SAMS) . avs Veachewergpaeeeeecatie Seee ea hoe 4

vi
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).

2

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

4

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.

5

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

6

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.

9

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.

10

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).

4

12

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.

A

13

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)

A

14

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

la

APPENDIX A

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

No. 79-7057

HONOLULU SPORTING Goops, INC.,
A SusBstpDiARY OF ZALE Corp., Petitioner

v.
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.

<<

2a

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.

i

3a

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-

4a

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.

Sa

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.

\

6a

~

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).

7a

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.

9a

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.

77

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).

i

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

I

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.

(c) In any like or related manner interfering with,
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.”’

7%

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.

(c) Notify the Regional Director for Region 20, in
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.

i.

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

By
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, f

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0565%3A1. Public record. Not legal advice.