Petition — Behring International, Inc. v. National Labor Relations Board

Supreme Court brief1984

Ask Donna

What actually matters in this document.

Text

DEC 5 1993

Ocroper Term, 1983

BEHRING INTERNATIONAL, INC.,

Petitioner,

NATIONAL LABOR RELATIONS BOARD,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

Rosert W. DELVENTHAL,

Crummy, Det Deo, Dotan & PURCELL

A Professional Corporation

Gateway I

Newark, New Jersey 07102

(201) 622-2235

Counsel for Petitioner

Behring International, Inc.

Rosert W. DELVENTHAL,

Rosert E. Dav,

On the Petition.

Dated: December 5, 1983

Adams Press Corp., 50 Park Place, Newark, New Jersey 07102—(201) 623-8611

Statement of the Issue Presented

Whether, in light of this Court’s recent decision in

NLRB vy. Transportation Management Corp., US.

——,, 76 L. Ed. 2d 667 (1983), Section 10(c) of the National

Labor Relations Act, 29 U.S.C. $160(c), permits the Na-

tional Labor Relations Board to shift to an employer

charged with violating Section 8(a)(3) of the National

Labor Relations Act, 29 U.S.C. §158(a)(3), the burden to

establish by a preponderance of the evidence that the em-

ployee discharges would have taken place even in the ab-

sence of protected conduct, where the employer denies that

the discharges were unlawfully motivated and has met and

neutralized the General Counsel’s weak prima facie case

by uncontradicted evidence of an independent, economic

justification for the discharges, and where the National

Labor Relations Board has failed to articulate a valid

reason for rejecting the employer’s evidence of an inde-

pendent, economic justification for the discharges and

where the National Labor Relations Board has failed to

come forward with any evidence in support of its rejection

of the employer’s proofs.

TABLE OF CONTENTS

STATEMENT OF QUESTION PRESENTED .....

TABLE OF AUTHORITIES .......

TTT

Statutory Provisions INVOLVED .............-.

STATEMENT OF THE CASE .

A. Substantive history .....

B. Procedural history .................-....-.

Reasons FoR GRANTING THE WRIT ...

ConcLusIon

z APPENDIX:

A—Judgment of the United States Court of

Appeals for the Third Circuit, dated Sep-

I IRI SIE ati crenpsordageiescocevveniadeebeiets

B—Opinion of the United States Court of Ap-

peals for the Third Circuit on Remand from

the Supreme Coart of the United States filed

ITED b, ssditsicaesiiboviieotinesinisininiatlinegivintes

C—Judgment of the Supreme Court of the

United States, dated June 20, 1983 ............0.

D—Opinion of the United States Court of Ap-

peals for the Third Circuit filed April 7,

1982

TABLE OF CONTENTS iii

PAGE

E—Judgment of the United States Court of

Appeals for the Third Passe: dated June

A, TOD cssscsects naleeg 24a

F—Decision and Order of the N.L.R.B. dated

September 26, 1980 and Decision of the

Administrative Law Judge .......ccccsccsesessesees 29a

G. Answer filed on Behalf of Behring Inter-

national, Inc. Before the N.L.R.B. cesses 76a

H—Excerpts from Transcript of Hearing Before

Se 8 | a re SF Aas f 8la

iv TABLE OF AUTHORITIES

PAGkK

Table of Authorities

Cases Cited

American Thread Co. v. NLRB, 631 F. 2d 316 (4th

Cir. 1980) 15

Behring International, Inc. v. NLRB, 675 F. 2d 83

+ ERR AC rE 2,8

Behring Intern. v. Imperial Iranian Air Force, 475

F. Supp. 383 (D. N. J. 1979) 8

Behring Intern. v. Imperial Iranian Air Force, 475

F. Supp. 396 (D. N. J. 1979) 8

Harper & Arterburn Co. v. NLRB, 605 F. 2d 402

(4th Cir. 1981) ...... 15

McLean Trucking Co. v. NLRB, U. S. Court of Ap-

peals, Fourth Cireuit, No. 82-1455 (October 6,

1983), 98 LC 10,487 16, 17

NLRB v. Brown, 380 U.S. 280 (1965) 14

NLRB vy. Great Dane Trailers, 388 U.S. 24 (1968)... 14

NLRB v. Gulf States United Tel. Co., 694 F. 2d 92

(5th Cir. 1982) 15

NLRB v. Harry Berggren & Sons, Inc., 406 F. 2d 239

(8th Cir, 1969) 15,17

NLRB vy. Jones & Laughlin Steel Corp., 301 U.S. 1

(1937) 13

NLRB v. Kiawah Island Co., Ltd., 650 F. 2d 485 (4th

Cir. 1981) 15

NLRB vy. Mueller Brass Co., 509 F. 2d 704 (5th Cir.

1975) 14, 15

TABLE OF AUTHORITIES v

PAGE

NLRB vy. Transportation Management Corp., ——

U.S. —— 76, L.Ed. 2d 667 (1983) 00... i, 9-13, 16, 20

Stein Seal Co. v. NLRB, 605 F. 2d 703 (3d Cir. 1979) 15

Universal Camera Corp. v. NLRB, 340 U.S. 474

EET SESE Ee STEER Ae eNO ee eS 20

Wright Line, a Division of Wright Line, Inc., 251

N.L.R.B. No. 150, 1980 CCH N.L.R.B. 917,356

(1980), enforced, 662 I°. 2d 899 (1st Cir. 1981), cert.

denied, 50 U.S.L.W. 3695 (March 2, 1982) ........ 8, 9, 12, 13

Hoaglands Estate, In re, 126 Neb. 377, 253 N.W. 416 14

Statutes and Regulations Cited

5 U.S.C. §556(d), Administrative Procedure Act ...... 14

28 U.S.C. $1254(1) 222-0202 2

29 U.S.C. §151 et seq. National Labor Relations Act 20

Section 7, 29 U.S.C. $157 ................ 2

Section 8(a), 29 U.S.C. §158(a) 2

Section 8, 29 U.S.C. §158(a) (1) 3

Section 8, 29 U.S.C. §158(a) (3) ............. i, 3, 4, 8, 9, 11,

13, 14, 17, 20

Section 10, 29 U.S.C. §160(c) i, 3,13

Section 10, 29 U.S.C. §160(e) 3, 20

29 C.F.R. §101.10(b) 14

Other Authority Cited

Black’s Law Dictionary (4th ed. 1951) 14

NO.

IN THE

Suprene Court of the United States

Octroser Term, 1983

BEHRING INTERNATIONAL, INC.,

Petitioner,

NATIONAL LABOR RELATIONS BOARD,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

Behring International, Inc. petitions for a writ of certi-

orari to review the judgment of «he United States Court

of Appeals for the Third Circuit in this case.

Opinions Below

The judgment of the court of appeals was entered on

September 12, 1983. See Appendix (attached hereto) of

Petitioner, Behring International, Inc., in support of Peti-

tion of Behring International, Inc., for a Writ of Certiorari

2 4

to the United States Court of Appeals for the Third Cir-

cuit, at pages la-2a (hereinafter cited to as, e.g., “(la-

2a)”). The most recent opinion of the court of appeals

is dated August 17, 1983 (3a-5a). The judgment of this

Court remanding the instant matter to the court of ap-

peals for disposition is dated June 20, 1983 (Ga-7a). The

earlier opinion of the court of appeals denying enforce-

ment of the National Labor Relations Board’s (herein-

after “NLRB”) Order is reported at 675 F. 2d 83 (Sa-

23a). The earlier judgment of the court of appeals deny-

ing enforcement of the NLRB’s Order is dated June 14,

1982 (24a-28a). The decision and order of the NLRB

(29a-34a) and the decision of the administrative law judge

(35a-75a) are reported at 252 N.L.R.B. 354.

Jurisdiction

The jurisdiction of this Court is invoked under 28 U.S.C.

§1254(1).

Statutory Provisions Involved

Section 7 of the National Labor Relations Act, 29 U.S.C.

§157, provides in pertinent part as follows:

Employees shall have the right to self-organiza-

tion, to forma, join, or assist labor organizations, to

bargain collectively through representatives of their

own choosing, and to engage in cther concerted ac-

tivities for the purpose of collectively bargaining

or other mutual aid or protection * * *.

Section S(a) of the National Labor Relations Act, 29

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

It shall be an unfair labor practice of an em-

ployer—

Frat ch

= weer ls.

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

in the exercise of the rights guaranteed in section

[7] of this title;

. . .

(3) by discrimination in regard to hire or tenure

of employment of any term or condition of employ-

ment to encourage or discourage membership in any

labor organization * * *.

Section 10(c) of the National Labor Relations Act, 29

U.S.C. §160(¢), provides in pertinent part as follows:

* * * If upon the preponderance of the testimony

taken the Board shall be of the opinion that any

person named in the complaint has engaged in or is

engaged in any such unfair labor practice, then the

Board shall state its findings of fact and shall issue

and cause to be served on such person an order re-

quiring such person to cease and desist from such

unfair labor practice, and to take such affirmative

action including reinstatement of employees with or

without back pay, as will effectuate the policies of

this [Act]: * * * No order of the Board shall re-

quire the reinstatement of any individual as an em-

ployee who has been suspended or discharged, or

the payment to him of any back pay, if such indi-

vidual was suspended or discharged for cause * * *

Section 10(e) of the National Labor Relations Act, 29

U.S.C. §160(e), provides in pertinent part as follows:

questions of fact if supported by substantial evi-

dence on the record considered as a whole shall be

conclusive.

Statement of the Case

A. Substantive history.

The events underlying this action occurred in the con-

text of an organizational campaign conducted by Local

Union No. 478, International Brotherhood of Teamsters,

Chauffeurs, Warehousemen and Helpers of America (here-

inafter “Local 478”) in the spring cf 1977 at a warehouse

in Edison, New Jersey (hereinafter “tiie warehouse”)

which was leased by petitioner, Behring International, Inc.

(hereinafter “Behring”).

Local 478 began an organizational campaign at the Beh-

ring warehouse on March 13, 1977 (9a). A petition for a

consent election was filed on behalf of Local 478 on March

22, 1977 and the election was held on April 25, 1977 (9a,

38a). A majority of the warehouse employees voted against

the Union and no objections to the election or the conduct

of the campaign were filed (9a). Thereafter, three ware-

house employees were laid off on May 6, 1977 (9a, 59a)

because the wareliouse was overstaffed at that point in

time. '

On May 26, 1977 Behring executed a contract to subcon-

tract the warehouse work to an independent, outside con-

tractor known as ESP, Inc. (9a, 59a at n.33). Five of the

remaining warehouse employees were laid off on June 3,

1977 as a result of Behring’s decision to subcontract for

replacement labor with an outside firm (9a, 59a). The Ad-

ministrative Law Judge (hereinafter “the A.L.J.”) found,

and the NLRB (hereinafter sometimes referred to as “the

Board”) agreed, that the layeffs of May 6 and June 3, 1977

violated Section 8(a)(3) of the National Labor Relations

Act, 29 U.S.C, §158(a)(3) (1976) (hereinafter “§8(a) (3)”)

because they were discriminatorily motivated (lla). Beh-

ring has at all times adamantly denied that the layoffs

ane

were discriminatorily motivated, and has maintained that

the layoffs were caused by a managerial decision to sub-

contract the warehouse labor, which was in turn dictated

by an uninterrupted series of business reversals at the

warehouse (76a-80a). In fact, the warehouse has been com-

pletely shut down for several years now (22a, 3la, at

n.4).

The historical context of the layoffs of May 6 and June

3, 1977 rebuts any inference that the layoffs were discrim-

inatorily motivated and fully supports the contrary infer-

ence that they were motivated by legitimate business rea-

sons. Behring entered into a contract with the Imperial

Iranian Air Force (hereinafter “the LLA.F.”) on August

11, 1975 to provide freight forwarding services to the

LILA.F. purchasing mission in the United States (36a-37a).

Behring established the warehouse in November, 1975, pur-

suant to a freight forwarding contract with the LLA.F.,

to store and process for shipment to Iran material pur-

chased for the LI.A.F. (37a). The layoffs here at issue

and the decision of Behring to subcontract the warehouse

labor were directly caused by adverse business develop-

ments during the period November, 1975 through Janu-

ary, 1977.

In June, 1976 a change in I.1.A.F. operations required

Behring to interface with the I.LA.F. logistics system

(58a). As a result of this change Behring incurred in-

creased administrative costs and logged significantly more

computer time, without receiving any increased revenue

from the I.I.A.F. (58a-59a). In December, 1976 the L.I.A.F.

acquired a fleet of cargo carriers (58a). This resulted in

a substantial reduction in Civil Aeronautics Board commis-

sions that Behring had been earning on charter flights, re-

duction of ocean bookings and reduction of brokerage fees

for ocean bookings (58a). These changes simultaneously

inflicted upon Behring “shrinking revenues and mounting

administrative costs”, (22a). The fiscal hardship to Beh-

ring was very real, and “was substantiated by the ALJ’s

own findings and subsequent events, including closing of

the warehouse”. (22a).

These developments led George Murphy, the warehouse

manager, to recommend to Alan Newhouse, the President

of Behring, that a study of savings to be realized by sub-

contracting the work be initiated and that the warehouse

labor be subcontracted if the results of the study so indi-

cated (59a). This is documented by a cable that Mr. Mur-

phy sent to Mr. Newhouse on January 27, 1977 (58a), fully

two months before the election petition was filed, and at a

time when there was no organizational activity among the

warehouse employees.

The substantially reduced volume of activity at and level

of revenues flowing from the warehouse persisted through

the time of subcontracting, in June, 1977 (58a-59a). The

ALJ found that “business volume was low in the ware-

house” in the period preceding the layoffs (42a at n.12).

Thus, the record below indicates that in March, 1977 there

were no more than five or six hours per day for the ware-

house employees. See Appendix H hereto, F.xcerpts from

Transcript of Hearing Before N.L.R.B. (83a). The remain-

ing hours of the day were filled with cleanup work and

playing ping-pong, for which warehouse personnel were

also paid (83a). This state of affairs, coupled with “shrink-

ing revenues and mounting administrative costs” (22a),

served to dramatically highlight the need to do something

to reduce labor costs at the warehouse.

In May, 1977, the study of labor cost savings realizable

through subcontracting the warehouse work was completed

and forwarded to Mr. Alan Newhouse (57a, 59a). The

study indicated that Behring could realize substantial

labor savings if the warehouse work was subcontracted out

(57a; S4a-85a). The A.L.J. specifically recognized that

subcontracting the warehouse labor “could be financially

beneficial .. .” (69a) and that Behring “could have re-

duced its costs by laying off most of its own warehouse

employees and subcontracting their work”. (70a). Accord-

ingly, on May 26, 1977 Behring entered into a contract

with ESP, Inc., an independent subcontractor, to subcon-

tract the warehouse work (9a; 59a at n.33). The five

layoffs occurred one week thereafter, upon the recommen-

dation of George Murphy, warehouse manager, to Mr. New-

house (59a).

B. Procedural history.

Upon remand, following this Court’s judgment in this

ease, the court of appeals said that “[t]he General Coun-

sel did not present a strong case, but we cannot say it did

not establish a prima facie one.” (4a). At all times Beh-

ring has steadfastly denied that anti-union sentiment played

any role in the discharges (10a; 76a-80a). Behring met

the General Counsel’s uncompelling prima facie case by

producing substantial evidence that the decision to lay

off the warehouse employees and to subeontract the ware-

house labor had been contemplated by Behring well before

the advent of the representation campaign, in response

to a continuous decline in revenues and activity at the

warehouse over the course of the preceding year (58a-

59a).* The General Counsel has never rebutted Behring’s

economic justification for the layoffs or otherwise shown

that it was pretextual. Thus, the initial permissive infer-

*As is more fully explained in Behring’s brief in connection

with the earlier appeal herein the Edison warehouse was estab-

lished and maintained solely to provide procurement and freight

forwarding services to the Government of the Shah of Iran. The

(Footnote continued on following page)

{

«ites «ae aoa

ence of discriminatory motivation arising from the General

Counsel’s priya facie case was neutralized by the con-

trary inference of non-discriminatory business justifica-

tion arising from Behring’s proofs (2la-22). The Board

has never articulated a valid basis for discrediting Beh-

ring’s economic proof, nor has the Board come forward

with any evidence which might provide a valid basis for

discrediting Behring’s economic proof.

Con hat tlie option of subcontracting had been

stu by Behring for years (58a; 69a) and that the deci-

sion to subcontract was economically justified (69a), the

A.L.J. ruled that the layoffs and discharges nonetheless

violated §8(a)(3) because they were “in part” motivated

by Behring’s alleged anti-union animus (69a-70a).

By contrast, the Board held that Behring had “failed

to substantiate that [economic] defense with probative

evidence that it would have subcontracted out its opera-

tions at the time it did had it not feared the resumption

of organizational activities.” (32a) (Emphasis added).

Relying upon its recent decision in Wright Line, A Divi-

sion of Wright Line, Inc., 251 N.L.R.B. 1083, enforced, 666

F.2d 899 (1st Cir. 1981), cert. denied, 60 U.S.L.W. 3695

(March 2, 1982), the Board held that Behring had not

met the burden of persuasion to substantiate its economic

defense by a preponderance of the evidence because Beh-

ring could “point to no contemporaneous event which might

(Footnote continued from preceding page)

warehouse shut down completely and never reopened after the

revolution in Iran in 1979. This fact is a matter of record in

this case and is also a matter of public record, as Behring las been

embroiled in protracted litigation with the Government of Iran

in connection with the Edison warehouse (22a; 30a-3la at n.4). See,

e.g., Behring Intern. v. Imperial Iranian Air Force 475 F. Supp.

383 (D. N.J. 1979); Behring Intern. v. Imperial Iranian Air

Force, 475 F. Supp. 396 (D. N.J. 1979).

Sag ~

—*

have motivated the layoffs at that time.” (32a). The

Board has never articulated any reason for deeming the

timing of the layoffs suspect.

Behring petitioned and the Board cross petitioned the

United States Court of Appeals for the Third Circuit re-

garding enforcement of the Board’s reinstatement order

and the propriety of the Board’s practice of shifting the

burden of persuasion to the employer. In an Opinion en-

tered in this matter on April 7, 1982 (published at 675 F. 2d

83), the Third Circuit panel ruled, inter alia, that the Board

had improperly shifted the burden of proof to Behring

(21a-22a).

The Board filed a petition for a Writ of Certiorari with

the United States Supreme Court, seeking review of that

portion of the April 7, 1982 Opinion which held that

the Board acted improperly in concluding that Behring

violated Section 8(a)(3) because Behring allegedly failed

to prove by a preponderance that it would have dis-

charged the employees at its Edison, New Jersey ware-

house (hereinafter “the warehouse employees”) even if

they had not engaged in protected activity. The Board

simultaneously presented a similar issue to the United

States Supreme Court in a case emanating from the United

States Court of Appeals for the First Cireuit, NLRB v.

Transportation Management Corp., No. 82-168.

In an Opinion announced on June 15, 1983 in NLRB v.

Transportation Management Corp., No. 82-168, (reported

at — U.S. —, 76 L. Ed. 2d 667 (1983)) this Court affirmed

the Board’s burden shifting practice, announced in Wright

Line, A Division of Wright Line, Inc., supra. That prae-

tice (hereinafter referred to as “the Wright Line rule”)

provides that when the General Counsel has presented

sufficient evidence to permit an inferenee that an employee

has been discharged in violation of Seetion 8(a)(3), an

employer may avoid liability by establishing by a pre-

ponderance of the evidence an affirmative defense that the

employee would have been discharged even in the absence

of protected conduct.

By Judgment dated June 20, 1983 in No. 82-438, this

Court reversed the Third Circuit’s April 7, 1982 Opinion

and remanded this case to the Third Circuit for considera-

tion in light of this Court’s holding in Transportaticn Man-

agement, supra, (6a-7a). After requesting and reviewing

submissions from the Board and from Behring, the United

States Court of Appeals for the Third Cireuit issued a per

curiam opinion on August 17, 1983 enforcing the Board’s

earlier reinstatement order and stating in pertinent part

as follows:

In the case at hand, the Board found that the eco-

nomic defense proferred by the employer failed to

rebut the prima facie case presented by the General

Counsel. After reviewing this finding in light of the

burden of proof placed on the employer by Trans-

« portation Management, we conclude that the deci-

sion of the Board will be sustained and its order en-

forced.

As we observed in our earlier opinion, the deci-

sion as to which party bears the ultimate burden can

be determinative in a case us close as this one. The

Generai Counsel did not present a strong case, but

we cannot say it did not establish a prima facie one.

Similarly, although we might have resolved the issue

differently had we heard it in the first instance our

limited seope of review requires us to accept the

Board’s conclusion that the employer did not meet

the burder assigned to it. (4a).

Thus, it is clear that the court of appeals, applying the

Wright Line rule in the matter sub judice, has confused

the burden of rebuttal and the burden of persuasion and

has relieved the Board of its obligation to articulate a

valid reason for rejecting an employer’s proofs in eco-

nomic justification of a discharge. As applied by the

court below, the Wright Line rule will, in every case,

require each employer to carry the burden of persuasion

rather than the lesser burden of merely meeting and neu-

tralizing prima facie evidence of an alleged §8(a)(3)

violation.

Reasons for Granting the Petition

The Court is respectfully urged to grant this petition to

resolve important legal questions in the aftermath of

Transportation Management, supra, (i) concerning the cir-

cumstances in which it may be inappropriate to shift the

burden of persuasion to an employer, and (ii) to forestall

conflict among the courts of appeals (a) with respect to

the General Counsel’s burden of persuasion regarding al-

leged violations of Section 8(a)(3) and (b) concerning an

employer’s right to meet and neutralize a prima facie dis-

criminatory discharge case upon less than a preponder-

ance of the evidence.

In its recent decision in NLRB vy. Transportation Man-

agement Corp., supra, this Court ruled that the Board

may shift the burden of persuasion to an employer charged

with having violated Section 8(a)(3). However, as ap-

plied in the matter sub judice, although Behring’s eco-

nomic proofs satisfied its initial burden by demonstrating

a purely economic basis for management's decision to

discharge employees, the General Counsel did not come

forward with evidence to rebut Behring’s proofs, and 1 the

Board failed to articulate any valid reason based upon

substantial evidence in the record as a whole for reject-

ing Behring’s economic proofs. This practice is im-

proper because (i) it effectively prevents a reviewing

court from evaluating whether the Board properly re-

jected Behring’s economic proofs and (ii) it allows the

Board to find an employer in violation of Section 8(a) (3)

upon /ess than a preponderance of the evidence.

The question presented in this case is whether such a

shifting of the burden relieves the Board of the express

statutory requirement of proving unfair labor practice

charges by a preponderance of the evidence in a situation

where, as here, (i) the General Counsel has merely made

a weak prima facie showing, barely adequate to permit

an inference of discriminatory intent, (ii) the employer

has denied that anti-union animus contributed in any

measure to the layoffs, (iii) the employer has asserted

that the layoffs were caused by economic factors, (iv)

the employer’s economic justification has not been showr:

to be pretextual, and (iv) the employer’s unrebutted proofs

have met and neutralized the General Counsel’s prima

facie case.

It is clear that, as applied by the Court of Appeals in

this matter, the Wright Line rule requires an employer to

do more than meet the General Counsel’s prima facie case.

It allows the employer to “rebut” a prima facie case only

by proving an affirmative defense by a preponderance of

the evidence, without imposing upon the General Counsel

and the Board the reciprocal burden of articulating a

valid reason for rejecting the employer’s proofs and com-

ing forward with evidence in support of the articulated

reason for such rejection.

This practice confuses the important distinction between

successful rebuttal of a prima facie case and the greater

burden of establishing an affirmative defense. Even where,

as in the instant case, the emplover’s proofs meet and neu-

tralize the General Counsel’s prima facie case, under

Wright Line, supra, and Transportation Management,

supra, as applied by the court below, the employer will

still be held liable unless it can demonstrate by a prepond-

erance of the evidence that it would have taken the same

action even absent protected activity.

Whether described as lessening the General Counsel’s

burden or as enhancing the employer’s burden, the prac-

tical result of Wright Line as here applied is to enable the

Board to find a discriminatory discharge on less than a

preponderance of the evidence. Notwithstanding the clari-

fication rendered by this Court's opinion in Transportation

Management, supra, with respect to the allocation of the

burdens of proof in mixed motive discharge cases, it may

be anticipated that particular cases will repeatedly raise

the question of whether the Board’s burden shifting prac-

tice has in fact operated in derogation of the requirement

of Section 10(¢) of the Act, 29 U.S.C. $160 (¢).

1. The National Labor Relations Act, 29 U.S.C. $151 et

seq. (hereinafter “the Act”) places the burden of persua-

sion upon the General Counsel to establish that a viola-

tion of §8(a)(3) has occurred. In this regard §10(¢) pro-

vides in pertinent part as follows:

If upon the preponderance of the testimony taken

the Board shall be of the opinion that any person

named: in the complaint has engaged in or is engag-

ing in any such unfair labor practice, then the Board

shall state its findings of fact ...

29 U.S.C. §160(¢) (1976) (emphasis added.)* The Board’s

own regulations state that “(t]he Board’s attorney has the

* Section 10(c) of the Act clearly preserves management’s his-

torical ive to discipline and discharge employees “for

cause.” 29 U.S.C. §160(c) (1976). See NLRB v. Jones & Laughlin

Steel Corp., O01 U.S. 1, 45-46 (1937) (Act dovs not interfere

with normal exercise of managerial cliscretion with respect to

hiring and firing).

aly,

burden of proof of violations of Section 8 of the National

Labor Relations Act.” 29 C.F.R, §101.10(b) (1981). Fur-

thermore, Section 7(c) of the Administrative Procedure

Act, 5 U.S.C. §556(d) (1976), provides in pertinent part

that “[e]xcept as otherwise provided by statute, the pro-

ponent of a rule or order has the burden of proof.”

A prima facie case has been defined as “one which is

established by sufficient evidence, and can be overthrown

only by rebutting evidence adduced on the other side.”

Black’s Law Dictionary (4th ed. 1951) (quoting in re Hoag-

land’s Estate, 126 Neb. 377, 253 N.W. 416). The concept

of the prima facie case refers to the minimal quantum of

proof upon which a plaintiff may prevail on its complaint,

assuming no rebuttal.

The prima facie case concept is distinct from the bur-

den of persuasion concept. One may have established a

prima facie case which, because it has been met and neu-

tralized by rebuttal evidence does not meet the burden of

persuasion.

When an employer is charged with violating Section 8

(a)(3) the prima facie case requires the General Counsel

to establish each of the following elements: (1) an em-

ployee who engaged in protected activity; (2) was dis-

charged or laid off; (3) by an employer with knowledge

of the protected activity; and (4) because of having en-

gaged in protected activity. NLRB v. Great Dane Trailers,

388 U.S. 24, 26 (1968). Proof that the employer’s alleged

anti-union sentiment or animus caused the employee to be

discharged is the crucial factor rendering the discharge un-

lawful. NLRB v. Brown, 380 U.S. 280, 287 (1965).

Mere “[h]ostility towards the Unior . . . is not an unfair

labor practice.” NURB v. Mueller Brass Co., 509 F. 2d 704,

709 (5th Cir. 1975) (emphasis added). An employer may

“harbor anti-union feelings ... and not transgress the

statutory prohibition .aerely by discharging his em-

ployees.” Stein Seal Co. v. NLRB, 605 F. 2d 703, 709 (3d

Cir. 1979).

“Tilegal motivation for an employment decision is not to

be lightly inferred.” NLRB y. Gulf States United Tel. Co.,

694 F. 2d 92, 95 (5th Cir. 1982). The Board may not simply

reject out of hand the employer's explanation of the dis-

charge as pretextual. NLRB y. Kiawah Island Co., Ltd.,

650 F. 2d 485, 491 (4th Cir. 1981). Similarly, “[t]iming

alone ‘is not sufficient evidence to sustain an unfair labor

charge.” Harper & Arterburn Co. v. NLRB, 692 F. 2d 402,

403 (6th Cir. 1982) (mere temporal proximity between pro-

tected activity and discharge was insufficient basis for re-

jecting employer’s explanation).

As part of the prima facie case, the General Counsel

must establish the crucial link of causation by positive evi-

dence, and not by negative inference.

“The Board must sustain its burden of showing

evidence on the record as a whole which establishes

a reasonable inference of causal connection between

the employer’s anti-union motivation and the em-

ployee’s discharge.”

NLRB vy. Mueller Brass Co., 509 F. 2d supra at 711. See

also NLRB v. Gulf States United Tel. Co., supra; American

Thread Co, v. NLRB, 631 F. 2d 316, 321 (4th Cir. 1980) ;

NLRB vy. Harry F. Berggren & Sons, Inc., 406 F. 2d 239,

246 (Sth Cir. 1969) (“An inference that a discharge ...

was motivated by his union activity must be based upon

evidence, direct or circumstantial, not upon mere suspi-

cion.”)

Very recently, the United States Court of Appeals for

the Fourth Circuit refused to enforce a reinstatement

order which was based upon the Board’s arbitrary rejec-

tion of an employer's explanation for a challenged dis-

charge. In McClean Trucking Co. v. NLRB, United States

Court of Appeals for the Fourth Circuit, No. 82-1455

(October 6, 1983), 98 LC { 10,487, a two to one decision,

the court ruled that the Board may not choose between

the employer’s and General Counsel’s competing explana-

tions for a discharge unless the Board articulates reasons

for its choice which are based upon substantial evidence in

the record as a whole. The employer offered unrefuted

evidence of the discharged employee’s six year history of

poor work performance as the real reason for the dis-

charge. Invoking the “shifting defenses” doctrine, the

Board found that the work performance explanation was

a pretext and the employer’s anti-union animus was a

factor in the decision to discharge the employee.

The court, affirming the Board’s finding that the employ-

er bore anti-union animus which influenced its attitude

towards the discharged employee, nevertheless denied en-

forcement of the Board’s order because the Board had

failed to “articulate its rationale” for rejecting the em-

ployer’s justification for the discharge. Jd. The majority

acknowledged that 7'ransportation Management, supra, set

forth the governing law regarding alleged dual motive dis-

charges:

(N)othing turns on the concept of shifting burdens

of proof here. We accept implicitly in our analysis

the proposition that McLean bears the burden to es-

tablish that it could have discharged Daniels even if

he had not engaged in any activities protected by

the labor laws. Jd. at n. 1.

However, without articulating a persuasive reason why the

employer rejected the good cause and chose the bad cause

for the discharge “the Board’s decision is, in essence, a

declaration that “the discharge was ‘pretextual.’... [That

is] ‘all too easy to say.’” Id. (citations omitted).

Just as the court below in the matter sub judice dis-

missed the Board’s rejection of Behring’s economic justi-

fication for the subcontracting decision, (2la-22a) the ma-

jority in McLean Trucking Co. v. NLRB, supra, rejected

the “shifting defenses” doctrine as a valid basis for de-

claring the employer’s explanation pretextual. The major-

ity in McLean held tliat, even though the General Counsel

had established a prima facie §8(a)(3) violation it was

obliged to deny enforcement of the Board’s Reinstatement

Order in light of the employer’s evidence that the sole rea-

son for discharge was legitimate and the General Coun-

sel’s failure to demonstrate that the employer’s explana-

tion was pretext. Id.

2. In the instant matter the General Counsel rejected

Behring’s economic justification on the basis of “mere sus-

picion.” NLRB vy. Harry F. Berggren & Sons, Inc., 406

F. 2d supra.

The General Counsel produced no direct evidence that

the discharges were motivated by Behring’s alleged anti-

union animus. Rather, the General Counsel relied exclu-

sively upon remote inferences drawn principally from evi-

dence regarding pre-election events to attempt to estab-

lish the critical element of the General Counsel’s case, to

wit, that discharges which occurred well after the union

lost the election were caused by Behring’s alleged desire

to forestall a union victory in the next possible representa-

tion election, which lay one year in the future. (22a).

Behring’s response to the General Counsel’s case relied

upon the fact that the discharges were the result of man-

agement’s decision to reduce overhead costs and to sub-

contract the warehouse labor for purely economic reasons.

Accordingly, Behring introduced evidence of the eeonomic

justification for subeontracting to rebut the General Coun-

sel’s proofs. In other words, Behring’s unrebutted eco-

nomic proofs were offered to show that the inference of

discriminatory motivation with respect to which the Gen-

eral Counsel had the burden of persuasion was totally

unfounded, and that the layoffs were not in any measure

caused by anti-union animus (76a-S0a).

Longstanding business reversals caused by forces over

which Behring had no control rendered maintenance of the

warehouse labor force increasingly unprofitable (22a; 58a-

59a). These trends had already prompted Behring’s man-

agement to begin studying the economic feasibility of sub-

contracting months before the union ever established a

liason with the warehouse employees (58a). Upon comple-

tion of this study, following the representation election,

Behring decided to proceed with the subcontracting plan

(57a; 59a). Because it was unable to rebut the foregoing

facts, “(t]he Board held that Behring failed to substantiate

its economic defense because it could not justify the timing

of the discharges. The relevance of that observation is not

clear from the Board’s decision. The lay-offs occurred soon

after the election and, therefore, could not have affected it.

Although the ALJ referred to testimony that the company

was afraid that the union would try for another election

in the following year, the lay-offs could hardly have been

further removed in time from that possible eventuality.”

(2l1a-22a) (Emphasis added).

The General Counsel never demonstrated that Behring’s

economic justification was pretextual. In fact, the ALJ con-

ceded that Behring would derive economic benefit from sub-

contracting (22a; 69a). Additionally, the Court below re-

jected out of hand the General Counsel’s curious argument

that the timing of the decision to subcontract somehow

undercut the admittedly vaiid proofs concerning the eco-

nomie justification for subcontracting (21a-22a).

In light of the extreme paucity of the General Counsel's

showing with respect to causation it is beyond doubt that

Behring’s economic evidence at the very least met and neu-

tralized the General Counsel’s attempt to establish that the

discharges were discriminatorily motivated. Thus the Gen-

eral Counsel failed to meet its burden of persuasion. Hav-

ing at least placed the General Counsel’s case in eqnipoise,

Behring was not required to co any further in its proofs,

e.g., to establish by a preponderance of the evidence an

affirmative defense that the economic justification was a

supervening cause for the discharges.*

The General Counsel’s evidence that animus contrib-

uted to the discharge muet, of necessity, be weighed against

the employer’s rebuttal evidence to determine whether the

General Counsel has established by a preponderance of

the evidence that anti-union animus contributed to the

discharge. To impose a burden of persuasion on the em-

ployer in this situation would improperly relieve the Gen-

eral Counsel of its statutorily mandated burden of persua-

sion.

This is precisely what the Board has done here. The

Board has mistakenly claimed that it reasonably found that

Behring’s alleged anti-union animus contributed to the dis-

charges. The Board’s determination appears reasonable

only when the General Counsel's scant evidence is viewed

in a vacuum. Yet to so view the General Counsel’s evi-

dence in support of this finding clearly runs afoul of the

requirement that the Board's factual findings must be

based upon substantial evidence in the record as a whole.

29 U.S.C. §160(e) ; Universal Camera Corp. v. NLRB, 340

U.S. 474, 488 (1951). When the General Counsel’s evidence

in support of this finding is weighed against Behring’s re-

buttal evidence (i.e., the subcontracting proofs), it is in-

stantly apparent that the Board’s finding is unreasonable.

The Board has failed to establish the sine qua non of the

§8(a)(3) violation, that the employer decided to discharge

on the basis of anti-union animus. In these circumstances,

Transportation Management, supra, does not warrant a

finding that Behring violated Section 8(a)(3) or imposi-

tion of a requirement that Behring exonerate itself from

the alleged illegal discharges by demonstrating by a pre-

ponderance that it would have discharged the warehouse

employees even absent their union activity.

Behring has never admitted that the alleged anti-union

animus played any part in the decision to discharge the

employees. Behring has never characterized its evidence

regarding the decision to subcontract as an affirmative de-

fense to the Section 8(a)(3) charge (78a-80a). In light of

the foregoing and particularly in light ot the General

Counsels’ obvious failure to establish by a preponderance

of the evidence that alleged anti-union animus contributed

in any degree to the discharges, it would be grossly unfair

to characterize Behring’s evidence regarding the economic

basis for the decision to subcontract the warehouse labor as

an affirmative defense. To do so would be the equivalent

of requiring Behring to shoulder the General Counsel's bur-

den of persuasion. Neither the Act, 29 U.S.C, $151 et seq.,

nor the recent decision of the Supreme Court of the United

States in NLRB v. Transportation Management Corp.,

supra, require or sanction such a practice.

Clearly, the General Counsel utterly failed to rebut any

portion of the evidence introduced by Behring to estab-

lish that the diseharges were the result of the decision to

subcontract the warehouse labor, which was in turn, an

economically prudent decision dictated solely by external

forces.

CONCLUSION

For all of the foregoing reasons, it is respectfully

requested that the Court grant this Petition for a Writ

of Certiorari to the United States Court of Appeals for

the Third Circuit.

Respectfully submitted,

Rosert W. DeLVENTHAL,

Crummy, Det Deo, Dotan & PuRCELL

A Professional Corporation

Gateway I

Newark, New Jersey 07102

(201) 622-2235

Counsel for Petitioner

Behring International, Inc.

Rosert W. DeLvENTHAL,

Rosert E. Davin,

On the Petition.

Dated: December 5, 1983

APPENDIX A

Judgment of the United States Court of Appeals for the

Third Circuit, dated September 12, 1983

UNITED STATES COURT OF APPEALS

For tue Turep Circuit

No, 81-1937

_—

BEHRING INTERNATIONAL, INC.,

Petitioner,

NATIONAL LABOR RELATIONS BOARD,

Respondent.

JUDGMENT

Before: Gibbons, Weis and Garth, Circuit Judges.

THIS CAUSE was originally before this Court upon a

petition filed by Behring International, Inc. to review an

order of the National Labor Relations Board issued against

said Petitioner, its officers, agents, successors, and as-

signs on September 26, 1980, and upon a cross-application

filed by the National Labor Relations Board to enforce said

[la]

Appendix A

Order. This Court on April 7, 1982, issued its opinion en-

forcing in part, vacating in part and remanding the case

in part to the Board for further proceedings, and on June

14, 1982, entered a judgment in conformity with that opin-

ion. Thereafter, the Supreme Court entered its judgment

on June 20, 1983, which vacated and remanded the case to

the Third Circuit for further consideration in light of

NLRB y. Transportation Mfg. Co. The Third Circuit issued

its opinion on August 17, 1983, denying the petition for

review and enforcing the Board’s order. In confromity

therewith, it is hereby

ORDERED AND ADJUDGED by the United States

Court of Appeals for the Third Circuit that the said order

of the National Labor Relations Board in said proceeding

be enforced, and that Petitioner, Behring International,

Ine., its officers, agents, successors, and assigns, abide by

and perform the directions of the Board in said order con-

tained.

Dated: September 12, 1983

BY THE COURT

Wels

Circuit Judge

APPENDIX B

Opinion of the United States Court of Appeals for the

Third —, = 3 “yrs from the Supreme Court of the

es filed August 17, 1983

UNITED Stes COURT OF “APPEALS

FOR THE THIRD CIRCUIT

No. 81-1937

BEHRING INTERNATIONAL, INC.,

Petitioner

NATIONAL LABOR RELATIONS BOARD,

Respondent

ON REMAND FROM THE SUPREME COURT

OF THE UNITED STATES

No. 82-438

Before: GIBBONS, WEIS and GARTH, Circuit Judges

Opinion Filed August 17, 1983

Robert W. Delventhal, Esquire

Crummy, Del Deo, Dolan &

Purcell

Gateway 1

Newark, New Jersey 07102

Attorney for Petitioner

Elliott Moore, Esquire

Deputy Associate General

Counsel

National Labor Relations

Board

1717 Pennsylvania Ave., N.W.

Washington, D.C. 20570

Attorney for Respondent

Appendiz B

OPINION OF THE COURT

PER CURIAM.

On April 7, 1982, we filed an opinion and order di-

recting that this case be remanded for further proceed-

ings because the Board had misallocated the burden of

proof. Behring International Inc. v. N.L.R.B., 675 F.2d

83 (3d Cir. 1982). The Supreme Court granted certiorari

on that issue, vacated our judgment, and remanded to

this court for further consideration in light of N.L.R.B. v.

Transportation Management Corp., 462 U.S.

(1983), 51 U.S.L.W. 4761 (U.S. June 15, 1983).

N.L.R.B. v. Behring International, Inc., U.S.

51 U.S.L.W. 3901 (U.S. June 20, 1983).

In Transportation Management, the Court held

that, in a dual-motive discharge case, the Board could

place the burden of proof on the employer after the Gen-

eral Counsel establishes a prima facie case. We had held

that statutory constraints require the burden of persua-

sion to remain with the General Counsel.

In the case at hand, the Board found that the eco-

nomic defense proferred by the employer failed to rebut

the prima facie case presented by the General Counsel.

After reviewing this finding in light of the burden of

proof placed on the employer by Transportation Man-

agement, we conclude that the decision of the Board will

be sustained and its order entorced.

As we observed in our earlier opinion, the decision

as to which party bears the ultimate burden can be de-

terminative in a case as close as this one. The General

Counsel did not present a strong case, but we cannot say

it did not establish a prima facie one. Similarly, although

we might have resolved the issue differently had we

heard it in the first instance, our limited scope of review

requires us to accept the Board's conclusion that the em-

ployer did not meet the burden assigned to it

Appendiz B

We previously rejected the employer's other two

challenges to the Board's decision. 675 F.2d at 85-86.

Accordingly, the employer's petition for review will be

denied and the Board’s order will be enforced.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

APPENDIX C

Judgment of the Supreme Court of the United States,

dated June 20, 1983

81-1937

SUPREME COURT OF THE UNITED STATES

No. 82-438

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

Vv.

BEHRING INTERNATIONAL, INC.,

On Writ or Certrorari to the United States Court of

Appeals for the Third Circuit.

Tuis Cause having been submitted on the petition for a

writ of certiorari and response thereto,

On ConsiperaTiON Wuerror, it is ordered and adjudged

by this Court that the judgment of the said United States

Court of Appeals in this cause be, and the same is hereby,

vacated, and the case is remanded to the United States

Court of Appeals for the Third Circuit for further consid-

Appendiz C

eration in light of National Labor Relations Board vy.

Transportation Management Corp., 462 U.S, —— (1983).

June 20, 1983

A true copy Alexander L. Stevas

Test:

Clerk of the Supreme Court of the

United States

Certified the 20th day of July, 1983

By: James J. Cantor

Chief Deputy

my APPENDIX D

Opinion of the United States Court of Appeals for the

Third Circiut filed il 7, 1

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 81-1987

BEHRING INTERNATIONAL, INC., PETITIONER

Vv.

NATIONAL LABOR RELATIONS BOs *D, RESPONDENT

ON PETITION FOR REVIEW AND CROSS-APPLICATION

FOR ENFORCEMENT OF AN ORDER OF THE

NATIONAL LABOR RELATIONS BOARD

DATED SEPTEMBER 26, 1980

(NLRB No. 22-CA-7824)

Argued February 2, 1982

Before: GIBBONS, WEIS and GARTH, Circuit Judges

(Opinion filed April 7, 1982)

OPINION OF THE COURT

WEIS, Circuit Judge.

One of the most persistent sources of labor litigation

is the controversy that arises when an employee’s dis-

charge is based on dual motives—one being a legiti-

mate business consideration and the other antiunion an-

imus. In an effort to resolve the recurring controversy

over its approach to this problem, the National Labor

Relations Board adopted a rule which permits a finding

of a violation if the employee would not have been dis-

charged but for his union activity. Wright Line, a Divi-

sion of Wright Line, Inc., 251 N.L.R.B. 1083 (1980). As

part of its rule, the Board shifts the burden of proof on

this issue onto the employer after the General Counsel

has established a prima facie case. We conclude that

the Board’s causation test is right, but that the proce-

dural aspect is wrong because it runs afoul of statutory

provisions on the burden of proof. Since the Board

misallocated the burden in this case, we remand for fur-

ther consideration.

On March 12, 1977, Teamsters Local No. 478 began

an organizing campaign at a warehouse operated by

Behring International in Edison, New Jersey. A major-

ity of the warehouse employees voted against the union

in the election held on April 25, and no objections were

filed. About ten days after the election, however, three

employees were laid off, followed by five more on June

3. Meanwhile, on May 26, Behring subcontracted for re-

placement labor with an outside firm.

On July 26, the union charged Behring with unfair la-

bor practices and, after a hearing, an ALJ found

against the company. The Board affirmed the findings

of the ALJ, issued a cease and desist order and, in addi-

tion, directed reinstatement of the employees with back

pay.

The ALJ found that the company violated § 8(a)(1)

of the National Labor Relations Act, 29 U.S.C.

§ 158(a)(1) (1976), on several occasions before and

shortly after the election.! In one instance, two employ-

ees, acting as agents for the company, convened a

meeting of their fellow workers during business hours

at the warehouse. The two employees told the workers

1 Section 8(a)(1) makes it an unfair labor practice for an em-

ployer “to interfere with, restrain, or coerce employees in the

exercise of the rights guaranteed in section 157 of this title. Sec-

tion 7 of the Act, 29 U.S.C. § 157 (1976), provides in part: “Em-

ployees shall have the right to self-organization, to form, join or

assist labor organizations . . . and to engage in other concerted

activites for . . . other mutual aid or protection. . . .”

10a

that they would be better off without a union, and said

that the company would subcontract their work or close

the plant if the union were voted in. They also solicited

a document requesting that the union petition be

withdrawn.

After the meeting, the company established a griev-

ance committee, an action which the ALJ categorized

as a pre-election benefit. The company had already

reclassified three receiving clerks to higher-paid posi-

tions in the week after the election petition was filed,

and later granted an across-the-board pay raise at a

point when objections to the election would still have

been timely.

Another § 8(a)(1) violation was found to have oc-

curred when the company diverted freight to a facility

owned by a different firm in order to emphasize that

work was slow and jobs were in jeopardy. The company

also intimated that the employees might jose their stock

option and profit-sharing plans, as well as their pension

benefits, if the union won the election. Finally, three

days before the election, a supervisor interrogated an

employee to discover the names of the persons who had ©

started the union’s organizing effort and to learn how

each of the employees would vote.

The ALJ also found that the eight discharges and the

decision to subcontract violated § 8(a)(3) of the Act, 29

U.S.C. § 158(a)(3) (1976).2 Behring had argued that its

actions were prompted by a severe decline in business

at the warehouse, and the ALJ agreed that “subcon-

tracting the warehouse labor ultimately could be finan-

cially beneficial.” Nevertheless, he concluded that “al-

though the Respondent eventually could have reduced

2 Section 8(a)(3) makes it an unfair practice for an employer

“by discrimination in regard to hire or tenure of employment or

any term or condition of employment to encourage or discourage

membership in any labor organization”.

lla

its costs by laying off most of its own warehouse em-

ployees and by subcontracting their work . . ., the Re-

spondent was motivated, at least in part, in so doing at

that time by a desire to reduce the possibility of an-

other union election in the future.”

With one minor exception, the Board affirmed the

findings of the ALJ and adopted his recommendations,

determining that the company’s economic defense to

the § 8(a)(3) charges “failed to rebut the General Coun-

sel’s prima facie case” of unlawfully motivated dis-

charges. To support this conclusion, the Board referred

tw its ruling in Wright Line, a Division of Wright Line,

Inc., 251 N.L.R.B. 1083 (1980).

Behring raises three contentions on appeal. First, it

claims that the § 8(a)(1) findings are not supported by

substantial evidence and rest upon erroneous credibility

determinations by the ALJ. Second, it asserts that it

was denied a fair hearing because the ALJ revoked a

subpoena duces tecum served on a Board agent who

had investigated an earlier charge against the company.

Third, it attacks the Board’s Wright Line test for

§ 8(a)(3) violations as improperly shifting the burden of

proof on the issue of the company’s motive for discharg-

ing its employees and subcontracting its work.

We see no need to discuss the § 8(a)(1) violations at

length. Behring strongly contests the finding of the

ALJ and we might well have come to a different conclu-

sion had we tried the case in the first instance. Our

role, however, is limited to determining whether there

is substantial evidence in the record as a whole to sup-

port the Board’s findings of fact. 29 U.S.C. § 160(e)

(1976). Similarly, credibility resolutions generally rest

with the ALJ when he considers all the relevant factors

in his explanation. Edgewood Nursing Center, Inc. v.

NLRB, 581 F.2d 3638, 365 (8d Cir. 1978). Since we can-

not say that substantial evidence is lacking here, we

Suiiags reject the company’s challenges to the § 8(a)(1)

12a

As for the subpoena, Behring surmised that the testi-

mony and notes of the Board agent would reveal admis-

sions impeaching the credibility of the General Coun-

sel’s witnesses. The agent had secured statements from

employees in the course of investigating an earlier

charge that had been withdrawn for cause. At the hear-

ing, however, the ALJ revoked the subpoena after the

company was given access to the statements obtained

from the witnesses. The Board upheld the ALJ’s action

because the information sought by Behring fell within

the “‘limited evidentiary privilege which protects the

informal investigatorial and trial-preparatory processes

of regulatory agencies such as the NLRB,’ Stephens

Produce Co., Inc. v. NLRB, 515 F.2d 1373, 1376 (8th

Cir. 1975),” and the company had not shown a substan-

tial reason to disregard the privilege.

Behring contends that the subpoena should not have

been quashed because the material it sought from the

agent is available under the Freedom of Information

Act. But see, New England Medical Center Hospital v.

NLRB, 548 F.2d 377 (1st Cir. 1976). We need not ad-

dress the provisions of the FOIA however, for the com-

pany never made a request for disclosure. Since

Behring was furnished with the witnesses’ prior state-

ments and no prejudice resulted, we do not believe that

the Board erred in finding that a limited evidentiary

privilege justified the ALJ’s action.

Of far greater concern to us is the Board’s treatment

of the lay-offs. An employer accused of discharging

workers in violation of §8(a)(3) may assert, as did

Behring here, that it was motivated by legitimate busi-

ness considerations rather than antiunion bias. When

this occurs, the Supreme Court has said, “i]t is the

‘true purpose’ or ‘real motive’ in hiring or firing that

constitutes the test” whether the statute has been vio-

lated. Local 357, International Brotherhood of Team-

sters v. NLRB, 365 U.S. 667, 675 (1961). It is essential

that the Board ascertain the true reason for the em-

ployer’s action in these “dual motive” cases, since “[tJhe

13a

Act does not interfere with the normal exercise of the

right of the employer to select its employees or to dis-

charge them ... and... the Board is not entitled to

make its authority a pretext for interference with the

right of discharge when that right is exercised for other

reasons than. . . intimidation and coercion.” NLRB v.

Jones & Laughlin Steel Corp., 301 U.S. 1, 45-46

(1937).%

Despite this directive, for many years the Board took

the position that a discharge violated § 8(a)(3) as long

as it was motivated “in part” by antiunion animus. See

cases collected in Wright Line, 251 N.L.R.B. at 1084.

The Board’s “in part” test received a mixed recepition

among the courts of appeals. The First Circuit rejected

it, saying that “[t]he mere existence of antiunion ani-

mus is not enough” to establish that a discharge vio-

lated § 8(a)(3) when a legitimate business reason for

the employer’s action also existed. NLRB v. Billen

Shoe Co., 397 F.2d 801, 808 (1st Cir. 1968). Instead, the

court required the Board to show that the employer’s

“dominant” or actual motive was hostility towards the

employee’s union activity. See NLRB v. Lowell Sun

Publishing Co., 320 F.2d 835 (1st Cir. 1963) (Aldrich,

J., concurring). The rationale was that an employee

who engaged in organizational activity should not be

3 We recognize that there is a distinction between “pretext”

and “dual motive” cases. In Lippincott Industries, Inc. v.

NLRB, 661 F.2d 112, 114 (9th Cir. 1981), however, the court

observed that “in terms of the proper legal standard to be ap-

plied, the difference between these two types of cases is of little

importance.” It explained: “In either instance, the employer has

asserted justifiable, legitimate business reasons for the dis-

charge. The difference is that in a pretext case the employer’s

reasons are discredited or otherwise rejected, leaving only the

impermissible reason, while in a mixed motive case the relative

causative force of the employer’s reasons is compared against

the impermissible reason to determine whether the latter is the

moving cause behind the discharge.” Jd.

l4a

entitled to immunity if another worker similarly situ-

ated except for the union activism would be subject to

discharge.

The Supreme Court confronted an analogous situa-

tion in Mt. Healthy City School District Board of Edu-

cation v. Doyle, 429 U.S. 274 (1977). There, a school

board did not rehire a teacher after his contract ex-

pired, in part because it was offended by his exercise of

First Amendment rights and in part because of other

reasons. The Court decided that it was necessary to

formulate “a test of causation which distinguishes be-

tween a result caused by a constitutional violation and

one not so caused.” Jd. at 286. Since the “constitutional

principle at stake is sufficiently vindicated if such an

‘employee is placed in no worse a position than if he had

not engaged in the [protected] conduct,” id. at 285-286,

the employer was free to show that it would have

reached the same decision even in the absence of the

teacher’s First Amendment activity.

In Wright Line, 251 N.L.R.B. at 1087, the Board

recognized that the Supreme Court’s causal analysis in

Mt. Healthy “represent a rejection of an ‘in part’ test

which stops with the establishment of a prima facie

case or at consideration of an improper motive.” Even

though Mt. Healthy was not an National Labor Rela-

tions Act case, the Board decided to adopt the Supreme

Court’s approach because it saw “the advantage of

clearing the air by abandoning the ‘in part’ language in

expressing our conclusion as to whether the Act was vi-

ole.ed.” Jd. at 1089. Henceforth, the Board announced,

it would employ a new causation test in all cases

turning on employer motivation:

“First, we shall require that the General Counsel

make a prima facie showing sufficient to support

the inference that protected conduct was a ‘moti-

vating factor’ in the employer’s decision. Once this

is established, the burden will shift to the employer

l5a

to demonstrate that the same action would have

taken place even in the absence of the protected

conduct.”

Id. at 1089.

The Wright Line test has both substantive and proce-

dural components. Substantively, it analyzes the con-

nection between an employee’s discharge and an em-

ployer’s antiunion animus in terms of “but for”

causation. To find a § 8(a)(3) violation, the Board must

determine that the employee would not have been dis-

charged but for his protected union activity. No viola-

tion exists if the employer would have made the same

decision to discharge the employee in any event, absent

the shielded conduct.

The Board’s adoption of the “but for” test is a wel-

come development which should reduce the confusion in

this controversial area of labor law. The “but for” test

satisfies this court’s requirement that the Board seek

the “real motive” or “real cause” for an employee’s dis-

charge. See, NLRB v. General Warehouse Corp., 6A3

F.2d 965, 972 (3d Cir. 1981). In Edgewood Nursing

Center, Inc. v. N.L.R.B., 581 F.2d 363, 368 (3d Cir.

1978), we said:

“(I}f the employee would have been fired for cause

irrespective of the employer’s attitude toward the

union, the real reason for the discharge is

nondiscriminatory. In that circumstance there is no

causal connection of any anti-union bias and the

loss of the job.”

Or, as we put it in Gould Incorporated v. NLRB, 612

F.2d 728, 734 (3d Cir.), cert. denied, 449 U.S. 890

(1980), “if it is found that the employee would have

been disciplined for proper cause notwithstanding the

employer’s attitude toward the union, the discipline

must be held to be nondiscriminatory, because in that

case the causal relationship between the anti-union bias

l6a

and the discipline would be insufficient to support a

conclusion that the discipline was administered ‘because

of the protected activity... .”

There are difficulties, however, with the procedural

aspect of the Wright Line rule. As mentioned earlier,

the Board first requires the General Counsel to make “a

prima facie showing sufficient to support the inference

that protected conduct was a ‘motivating factor’ in the

employer’s decision.” 251 N.L.R.B. at 1089. Once this

is done, the burden shifts onto the employer to “demon-

strate” that the same action would have taken place

even in the absence of the protected conduct. Jd. By

“demonstrate,” the Board means that the burden of

persuasion shifts to the employer, not merely the bur-

den of going forward with evidence to rebut the prima

facie case. Consistent with this, the Board “views the

employer’s asserted justification as an affirmative de-

fense.” Jd. at 1084 n.5, 1088 n. 11.

The shifting burden of persuasion undermines the

“but for” test and reintroduces the confusion which

Wright Line purported to eliminate. To understand

why, it is only necessary to realize that in establishing a

prima facie case, the General Counsel need not prove

that antiunion discrimination was the “real cause” of

the employee’s discharge. Instead, the Wright Line

procedure only requires the General Counsel to show

that antiunion animus was “a” motivating factor in the

employer’s decision. If the employer then proffers a le-

gitimate reason for its action, but does not do so with

enough weight to carry the burden of persuasion, the

Board would rule that the § 8(a)(3) charge had been

proved. This would be so despite the fact that two

factors—neither outweighing the other—had been ad-

vanced as causes, and the Board never determined

which was the real one. As such, the procedural aspect

of the rule is plainly at odds with the “but for” test.

The Board relies on the Supreme Court’s decision in

Mt. Healthy to support its allocation of the burden of

proof. The employer there was required to prove by a

17a

preponderance of the evidence that the same decision

not to rehire an employee would have been reached

even absent his constitutionally-protected activity. 429

U.S. at 287. Mt. Healthy is inapposite in its burden-

shifting phase, however, because the Board is bound by

statutory limitations which foreclose the issue. The Act

itself imposes the burden of proving an unfair labor

practice on the General Counsel. Section 1c) of the

Act, 29 U.S.C. § 160(c) (1976), provides in part:

“If upon the preponderance of the testimony taken

the Roard shall not be of the opinion that the per-

son named in the complaint has engaged in or is en-

gaging in any such unfair labor practice, then the

Board shall state its findings of fact and shall issue

an order dismissing the said complaint.”

As interpreted by the Board’s own regulations, this

means that “[t]he Board’s attorney has the burden of

proof of violations of section 8 of the National Labor

Relations Act.” 99 C.F.R. § 101.10(b) (1981). More-

over, § 7(c) of the Administrative Procedure Act, 5

U.S.C. § 556(d) (1976), states that “[e]xcept as other-

wise provided by statute, the proponent of a rule or or-

der has the burden of proof.” Since none of these statu-

tory or regulatory provisions were applicable in Mt.

Healthy, the Supreme Court was free to allocate the

burden of proof. The Board, on the other hand, has no

power to shift that burden onto the employer.

We believe that the more appropriate precedent is

found in the line of recent Supreme Court decisions

outlining the procedure to be followed in Title VII em-

ployment discrimination cases. 7'exas Department of

Community Affairs v. Burdine, 450 U.S. 248 (1981);

Board of Trustees of Keene State College v. Sweeney,

439 U.S. 24 (1978); and Furnco Construction Corp. v.

Waters, 438 U.S. 567 (1978). In those cases, the Court

emphasized that the ultimate burden of proving dis-

crimination rests upon the plaintiff; it never shifts to

the defendant. If the plaintiff establishes a prima facie

18a

case, the defendant must articulate some legitimate,

nondiscriminatory reason for its action. The Court

stressed that this is only a burden of going forward, not

of persuasion. Should the defendant carry this burden,

the plaintiff must then prove by a preponderance of the

evidence that the legitimate reasons offered by the de-

fendant were not its true reasons.‘

Discrimination in employment because of race, reli-

gion, or nationality is often as subtle and as difficult to

ferret out as that resulting from antiunion bias. The Su-

preme Court recognized the problems of proof in the

Burdine line of cases, but concluded that only the bur-

den of production, and not persuasion, shifts to the de-

fendant. Since the same considerations are present

where the discrimination is based on union activity, the

Board should follow the Burdine procedure in those

cases as well.

The Wright Line test was thoughtfully and thorough-

ly analyzed when it reached the United States Court of

Appeals for the First Circuit. NLRB v. Wright Line, a

Division of Wright Line, Inc., 662 F.2d 899 (1st Cir.

1981), cert. denied, 50 U.S.L.W. 3695 (March 2, 1982).

As we do today, the court welcomed the adoption of

“but for” causation and rejected the Board’s attempt to

shift the burden of proof onto the employer. The court

“The Burdine opinion noted that the distinction between

burden of proof and burden of production is a traditional feature

of the common law. The Court said, “{iJn a Title VII case, the

allocation of burdens and the creation of a presumption by the

establishment of a prima facie case is intended progressively to

sharpen the inquiry into the elusive factual question of inten-

tional discrimination.” 450 U.S. at 255 n.8. Since the employer

presumably is most likely to be in possession of evidence show-

ing the real reason for its action, it must produce that evidence

to rebut plaintiff's prima facie showing of discrimination.

Nevertheless, the ultimate burden of proof remains on the dis-

criminatee. We found the reasoning in the Burdine line of cases

to be persuasive and applied it in a Title VI context. See,

NAACP v. Medical Center, Inc., 657 F.2d 1322 (3d Cir. 1981).

19a

also noted that the Board has mischaracterized the em-

ployer’s burden of producing rebuttal evidence as an af-

firmative defense, which it in no way resembles. Jd. at

905 n.9. We agree with the First Circuit, and believe

that the Board failed to take into account the General

Counsel’s statutory burden to prove the unfair labor

practice.

Before the First Circuit, as it does here, the Board

relied on language in NLRB v. Great Dane Trailers,

Inc., 388 U.S. 26 (1967), to support its allocation of the

burden of proof. In that case, the employer discrimi-

nated between strikers and nonstrikers with respect to

vacation pay. The Supreme Court said:

“(Ojnce it has been proved that the employer en-

gaged in discriminatory conduct which could have

adversely affected employee rights to some extent,

the burden is upon the employer to establish that

he was motivated by legitimate objectives since

proof of motivation is most accessible to him.”

Id. at 34. The First Circuit distinguished Great Dane

because it involved “a challenge to an overall policy of

the employer rather than to a single discharge.” 662

F.2d at 904 n.8. We think a similar distinction applies

to the case at hand.

More importantly, Great Dane was not concerned

with the difference between the burden of production

and the burden of persuasion, and terms applicable to

both are used somewhat interchangeably throughout

the opinion. For example, in the sentence preceding the

one quoted above, the Court said that “an antiunion

motivation must be proved to sustain the charge if the

employer has come forward with evidence of legitimate

and substantial business justifications for the conduct.”

388 U.S. at 34. The Court then held that an unfair labor

practice was proved because “the company came for-

ward with no evidence of legitimate motives for its dis-

criminatory conduct. ... The company simply did not

meet the burden of proof... .” Jd. Notably lacking is

20a

the precision the Court later applied in Burdine when

it addressed the specific issues of the burdens of pro-

duction and persuasion. On the whole, then, we are

convinced that Great Dane does not run counter to the

result reached by the First Circuit and us.5

From a practical standpoint, it is unlikely that the de-

cision in many cases will turn on whether the employ-

er’s burden is characterized as being one of persuasion

or production. Nevertheless, as the Board recognized in

Wright Line, 251 N.L.R.B. at 1087, “[tJhis distinction

is a crucial one since the decision as to who bears this

burden can be determinative.” We think that fewer er-

rors will result if the distinction is properly cbserved.®

5 In Wright Line, the Board seized upon a few remarks in the

legislative history of the 1947 amendment to § 10(c) of the Act

to support shifting the burden of proof. 251 N.L.R.B. at 1088.

The First Circuit found this legislative history to be inconclu-

sive, 662 F.2d at 904 n.8, and we are inclined to agree. In any

event, we think there is little need to consult the legislative his-

tory because the statute is clear on the General Counsel’s bur-

den of proof and the Board’s regulation is a significant expres-

sion of agreement on that point.

® Other Courts of appeals that have reviewed the Wright Line

test have reacted to it with general approval, but only the First

Circuit has scrutinized the burden-shifting issue in depth.

In the Fifth Circuit, TRW, Inc. v. NLRB, 654 F.2d 307 (5th

Cir. 1981), is consistent with the First Circuit view. Two other

cases, NLRB v. Charles H. McCauley Associates, Inc., 657

F.2d 685 (5th Cir. 1981), and NLRB v. Robin American Corp.,

654 F.2d 1022 (5th Cir. 1981), merely recite the Wright Line

test. In Red Ball Motor Freight, Inc. v. NLRB, 660 F.2d 626

(5th Cir. 1981), petition for cert. filed, 50 U.S.L.W. 3773 (U.S.

Mar. 23, 1982) (No. 81-1605), an employer’s challenge to the

shifting burden of proof is rejected without analysis.

In the Sixth Circuit, Charge Card Association v. NLRB, 653

F.2d 272 (6th Cir. 1981), held that the Board failed to prove its

case under either the “dominant motive” test or the Wright

Line rule. In NLRB v. Consolidated Freight Ways, 651 F.2d

436 (6th Cir. 1981), the court also denied enforcement. In

NLRB v. Lloyd Fry Roofing Co., 651 F.2d 442 (6th Cir. 1981),

the court recited the Wright Line test but did not analyze it.

2la

In summary, the Board’s Wright Line test repre-

sents a substantial improvement over its prior practice

and, except for its shifting burden of persuasion, meets

with our approval. Under our formula, once the Gener-

al Counsel has established a prima faciecase of discrim-

inatory discharge, the employer should rebut this with

evidence of a legitimate business reason for its action.

The ultimate burden of proof does not shift from the

General Counsel and does not devolve upon the employ-

er at any stage. Therefore, no violation may be found

unless the Board determines that the General Counsel

has proved by a preponderance of the evidence that the

employer’s antiunion animus was the real cause of the

discharge.

This case must be remanded for reconsideration be-

cause the burden of proof was misallocated. The Board

held that Behring failed to substantiate its economic de-

fense because it could not justify the timing of the dis-

charges. The relevance of that observation is not clear

The Seventh Circuit said that it was adopting the Wright

Line rule in Peavey Co. v. NLRB, 648 F.2d 460 (7th Cir. 1981).

The court seemed concerned only with its substantive phase,

however, and the Board’s petition for enforcement was denied.

The same result occurred in NLRB v. Eldorado Manufacturing

Corp., 660 F.2d 1207 (7th Cir. 1981).

In NLRB v. Fixtures Manufacturing Corp., ___. F.2d ___..

No. 81-1398 (8th Cir. Jan 14, 1982), the Eighth Circuit rejected

the First Circuit’s approach and approved the Board’s burden-

shifting rule as within the latitude it should have in structuring

its fact-finding process. The court did not discuss the con-

sticints placed on the Board by the burden of proof assigned to

the General Counsel by the Act, the Administrative Procedure

Act, and the Board’s own regulations.

In NLRB v. Nevis Industries, Inc., 647 F.2d 905 (9th Cir.

1981), the Ninth Circuit approved Wright Line’s procedural

shift, but again without discussion of the General Counsel’s stat-

utory burden of proof. See also, Doug Hartley, Inc. v. NLRB,

ae F.2d ___, Nos. 81-7368 and 81-7457 (9th Cir. Feb. 17,

22a

from the Board’s decision. The lay-offs occurred soon

after the election and, therefore, could not have af-

fected it.

Although the ALJ referred to testimony that the

company was afraid the union would try for another

election in the following year, the lay-offs could hardly

have been further removed in time from that possible

eventuality. Lay-offs were not limited to union activists

and the Board did not find a suspicious pattern in the

terminations. On the other hand, the company’s evi-

dence of shrinking revenues and mounting administra-

tive costs was not simply “poor mouthing,” but was

substantiated by the ALJ’s own findings and subse-

quent events, including closing of the warehouse.

The Board’s citation of Electrical Products Division

of Midland-Ross Corp. v. NLRB, 617 F.2d 977 (3d

Cir.), cert. denied, 449 U.S. 871 (1980), is not helpful.

In that case, the timing of the employer’s action was

significant because it could have had an influence on a

pending election. No such considerations are present

here. Since Behring did articulate a legitimate business

reason for the discharges, and the General Counsel did

not prove that the company’s real motive was antiunion

animus, the case must be remanded to the Board for

further proceedings consistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

23a

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 81-1937

BEHRING INTERNATIONAL, INC., PETITIONER

vU.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT

Present: GIBBONS, WEIS and GARTH, Circuit Judges

ORDER

It is ORDERED that the opinion heretofore filed in

this case be amended as follows:

Add a footnote* on page 9 of the slip opinion, at the

end of the carryover paragraph which ends “. . . the pro-

tected activity. ...” The footnote to read as follows:

In Herman Bros., Inc. v. NLRB, 658 F.2d 201 (3d

Cir. 1981) the employer argued that Wright Line is

inconsistent with Edgewood Nursing Center, Inc.

v. NLRB, and Gould Incorporated v. NLRB. The

court left the question open, however, saying “[w]e

need not decide here whether Wright Line and

Third Circuit law differ.” 658 F.2d at 208.

The succeeding footnotes will be renumbered

accordingly.

BY THE COURT

JOSEPH WEIS, JR.

Circuit

Dated: May 20, 1982

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

24a

APPENDIX E

Judgment of ae United States Court of — for the

ird Circuit, dated June 14,

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT ,

No. 81-1937

BEHRING INTERNATIONAL, INC., PETITIONER,

NATIONAL LABOR RELATIONS BOARD, RESPONDENT.

JUDGMENT

Before: GIBBONS, WEIS and GARTH, Circuit Judges

THIS CAUSE came on to be heard upon a petition

filed by Behring International, Inc., to review an order

of the National Labor Relations Board issued against

said Petitioner, its officers, agents, successors, and as-

signs, on September 26, 1980, and upon a cross-

application filed by the National Labor Relations Board

to enforce said order. The Court heard argument of re-

spective counsel on February 2, 1982, and has consid-

ered the briefs and transcript of record filed in this

cause. On April 7, 1982, the Court, being fully advised

in the premises, issued its opinion ordering enforce-

ment of the Board’s order in part and otherwise re-

manding the case to the Board for further proceedings

consistent with the Court’s opinion. In conformity

therewith, it is hereby

ORDERED AND ADJUDGED by the Court that

Petitioner, Behring International, Inc., Edison, New

Jersey, its officers, agents, successors, and assigns,

1. Cease and desist from:

(a) Coercively interrogating employees concerning

their union activities, sympathies, and desires, those of

other employees, and as to the identities of employees

active in bringing about Local Union No. 478, Interna-

tional Brotherhood of Teamsters, Chauffeurs, Ware-

25a

housemen and Helpers of America’s (hereinafter called

the Union) organizational campaign.

(b) Threatening employees that if the Union comes in

or a representation election is conducted their work will

be subcontracted or that the plant will be closed.

they support the Union.

(d) Promising and granting employees a wage in-

crease and other employment benefits to induce em-

ployees to abandon their support for the Union.

(e) Soliciting employees to request, in writing, with-

drawal of the petition for a representation election.

(f) Deliberately reducing the work available to its

employees in the period before a representation elec-

tion by diverting freight and using contract labor to dis-

courage employees from supporting the Union.

(g) Coercively informing employees that they would

be better off without the Union.

(h) In any like or related manner interfering with,

restraining, or coercing employees in the exercise of

rights guaranteed them under Section 7 of the National

Labor Relations Act (hereinafter called the Act).

2. Take the following affirmative action necessary to

effectuate the policies of the Act:

(a) Post at its Edison, New Jersey, location copies of

the attached notice marked “Appendix.” Copies of said

notice, on forms provided by the Regional Director for

Region 22 of the National Labor Relations Board

(Newark, New Jersey), after being signed by the Peti-

tioner’s authorized representative, shall be posted by

the Petitioner immediately upon receipt thereof, and be

maintained by it for 60 consecutive days thereafter, in

conspicuous places, including all places where notices to

employees are customarily posted. Reasonable steps

shall be taken by the Petitioner to insure that said no-

tices are not altered, defaced, or covered by any other

material.

26a

(b) Notify the aforesaid Regional Director, in writ-

ing, within 20 days from the date of this Judgment,

what steps the Petitioner has taken to comply

herewith.

IT IS FURTHER ORDERED AND ADJUDGED

that each party shall bear its own costs and that this

case be remanded in part to the Board for further pro-

ceedings consistent with the Court’s opinion.

By the Court

/s/. ; ae

JOSEPH F. WEIS, JR.

Circuit Judge

Dated: JUNE 14, 1982

Certified as a true copy and issued in lieu of a formal

mandate on July 6, 1982

Test: M. Elizabeth Ferguson

Chief Deputy Clerk,

United States Court of Appeals

for the Third Circuit

27a

APPENDIX

NOTICE TO EMPLOYEES

POSTED PURSUANT TO A JUDGMENT OF THE

UNITED STATES COURT OF APPEALS GRANT-

ING ENFORCEMENT OF THE BOARD’S ORDER

IN PART AND OTHERWISE REMANDING THE

CASE TO THE NATIONAL LABOR RELATIONS

BOARD

AN AGENCY OF THE UNITED STATES GOVERNMENT

After a hearing at which we were represented by our

attorney and presented evidence, it has been found that

we have violated the National Labor Relations Act in

certain respects. To correct and remedy these viola-

tions, we have been directed to take certain actions and

to post this notice.

WE WILL NOT question you concerning your activi-

ties, sympathies, and desires as to Local Union No.

478, International Brotherhood of Teamsters,

Chauffeurs, Warehousemen and Helpers of America, or

of the union activities and sympathies of other

employees.

WE WILL NOT ask you for the names of employees

who were active in bringing about the Union’s organiza-

tional campaign.

WE WILL NOT threaten that your work will be sub-

contracted or the warehouse closed if you support,

work for, or vote for the Union.

WE WILL NOT threaten to take away job-related

benefits if you support or vote for the Union.

WE WILL NOT promise or give you pay raises or

other economic or job benefits to persuade you to with-

draw your support for the above-named Union, or any

other labor organization.

WE WILL NOT solicit you to request withdrawal of

any petition for representation election or to withdraw

your support from the Union.

28a

WE WILL NOT seek to induce you to encourage our

other employees to withdraw their support from the

Union.

WE WILL NOT deliberately reduce the work avail-

able to you in the warehouse by diverting freight, using

contract labor or other means, to discourage you from

supporting the Union.

WE WILL NOT coercively inform you that your

[sic] are better off without the above-named Union or

any other labor organization.

WE WILL NOT in any like or related manner inter-

fere with, restrain, or coerce you in the exercise of your

rights under Section 7 of the National Labor Relations

Act, as amended.

BEHRING INTERNATIONAL, INC.

(Employer)

Dated __.___ By ipa

(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 ques-

tions concerning this notice of compliance with its pro-

visions may be directed to the Board’s Office, Federal

Building, Room 1600, 970 Broad Street, Newark, New

Jersey 07102, Telephone 201—645-2100.

29a

APPENDIX F

Decision and Order of the N.L.R.B. dated September 26,

1980 and Decision of the Administrative Law Judge

Behring International, Inc. and Union No. 478, In-

ternational Brotherhood of Teamsters, Chauffeurs,

Warehousemen and Helpers of America.

Case 22-CA-7824

September 26, 1980

DECISION AND ORDER

By CHAIRMAN FANNING AND MEMBERS

JENKINS AND PENELLO

On June 8, 1979, Administrative Law Judge Robert

M. Schwarzbart issued the attached Decision in this

proceeding. Thereafter, Respondent filed exceptions

and a supporting brief and a document marked “verifi-

cation petition supplementing the record below.”!

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

tional Labor Relations Act, as amended, the National

Labor Relations Board has delegated its authority in

this proceeding to a three-member panel.

The Board has considered the record and the at-

tached Decision in light of the exceptions and brief and

has decided to affirm the rulings,? findings,* and conclu-

' Respondent’s request for oral argument is hereby denied,

inasmuch as the record and brief adequately present the issues

to be decided.

? Respondent asserts that the Administrative Law Judge ex-

hibited bias against Respondent in certain of his rulings and

comments during the hearing. We have carefully examined the

record and find no merit in this contention.

Respondent asserts that it should have been allowed to ad-

duce testimony from Board Agent Susan Anderson concerning

“her investigation of the initial charge as well as certain affida-

vits and other material.” Respondent asserts that the testimony

and documents would have contained admissions from various

witnesses who testified, obtained when Anderson solicited a

withdrawal of the original charges filed against Respondent. At

the hearing, the Administrative Law Judge revoked the subpe-

na. We are satisfied that the testimony sought by Respondent

30a

sions* of the Administrative Law Judge and to adopt

his recommended Order, as modified herein.5

fell within the “limited evidentiary privilege which protects the

informal investigatorial and trial-preparatory processes of regu-

latory agencies such as the NLRB,” Stephens Produce Co., Inc.

v. N.L.R.B., 515 F.2d 1373, 1376 (8th Cir. 1975), and that Re-

spondent has shown no substantial reason to disregard this priv-

ilege. We note that, upon proper request, Respondent was giv-

en access to the prior statements by the General Counsel’s

witnesses following their testimony on direct examination. We

further find that the evidence sought to be adduced is irrelevant

to any issue in this proceeding. Accordingly, we conclude that

the Administrative Law Judge properly revoked the subpena «f

Board Agent Anderson.

3 Respondent has excepted to certain credibility findings

made by the Administrative Law Judge. It is the Board’s estab-

lished policy not to overrule an administrative law judge’s

resolutions with respect to credibility unless the clear prepon-

derance of all of the relevant evidence convinces us that the res-

olutions are incorrect. Standard Dry Wall Products, Inc., 91

NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have

carefully examined the record and find no basis for reversing his

findings, with one exception.

In fn. 17 of his Decision, the Administrative Law Judge cred-

ited testimony by employee Michael Jaconski, which was denied

by Station Manager James Waters, to the effect that a hand-

written employee petition was signed by employees and taken

to Waters, and that Waters then asked that the petition be

typed. We note that Jaconski, whose testimony was generally

discredited by the Administrative Law Judge, was the only

witness who testified to the signing of a handwritten petition,

and that both the General Counsel’s witnesses and Respondent’s

witnesses testified specifically that only the typed petition was

signed by employees. We therefore find that only the typed pe-

tition was signed before Waters received it, although this find-

ing does not detract from our finding, in agreement with the

Administrative Law Judge, that Respondent instigated the

meeting and the formulation of an employee petition requesting

the withdrawal of the petition for an election.

* We take administrative notice of the fact that, following the

close of the hearing herein, a change occurred in the leadership

—=_ *

3la

In finding that Respondent unlawfully laid off its em-

ployees and subcontracted out its work, the Adminis-

trative Law Judge observed that Respondent had not

established any reason for taking these actions at the

time it did. Thus, he noted that the layoff and sub-

contracting occurred shortly after unlawful threats and

grants of benefits in response to an organizing cam-

paign. Moreover, the employees at the facility in ques-

tion had been praised recently for the quality of their

work. The Administrative Law Judge noted that two

employees who attempted to forestall the election were

retained at higher rates of pay following the subcon-

tracting, while those employees who had not distin-

guished themselves by their opposition to the

organizing effort, as well as those employees who had

of Iran, Respondent's primary customer at its Edison facility.

In its “verified petition supplementing the record below,” Re-

spondent alleges that, as a result of this change, it reduced and

later closed its operations at the Edison warehouse. We shall

leave to the compliance stage of these proceedings the determi-

nation of the timing and nature of the impact of Iran’s change in

leadership on the operations at the facility involved herein, as

well as the period during which employees would have worked

had it not been for Respondent’s unlawful layoff of employees

and the subcontracting of its operations.

5 The Administrative Law Judge found that the instant viola-

tions go “to the very heart of the Act” and recommended that

Respondent be ordered to cease and desist from “in any other

manner” interfering with, restraining, or coercing employees in

the exercise of their protected Section 7 rights. In our recent

Decision in Hickmott Foods, Inc., 242 NLRB 1357 (1979), we

held that such broad injunctive language is warranted only

when a respondent has been shown to have a proclivity to vio-

late the Act, or has engaged in such egregious or widespread

misconduct as to demonstrate a general disregard for the em-

ployees’ fundamental statutory rights. Inasmuch as the instant

violations do not meet this test, we shall narrow the recom-

mended Order and notice to proscibe only “like or related”

conduct.

32a

supported the Union, were laid off. Finally, Respond-

ent can point to no contemporaneous event which might

have motivated the layoffs at that time. Accordingly,

although Respondent has proffered an economic de-

fense, we find that Respondent has failed to substanti-

ate that defense with probative evidence that it would

have subcontracted out its operations at the time it did

had it not feared the resumption of organizational activ-

ity.© For this reason, we find that Respondent has

failed to rebut the General Counsel’s prima facie case

and, like the Administrative Law Judge, we therefore

conclude that Respondent unlawfully laid off its ware-

house employees and subcontracted its warehouse

work.

ORDER

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

tions Act, as amended, the National Labor Relations

Board adopts as its Order the recommended Order of

the Administrative Law Judge, as modified below, and

hereby orders that the Respondent, Behring Interna-

tional, Inc., Edison, New Jersey, its officers, agents,

successors, and assigns, shall take the action set forth

in the said recommended Order, as so modified:

1. Substitute the following for paragraph 1(i):

“(j) In any like or related manner interfering with,

restraining, or coercing employees in the exercise of

rights guaranteed them under Section 7 of the Act.”

2. Substitute the attached notice for that of the Ad-

ministrative Law Judge.

® For a general discussion of the burden of going forward once

a prima facie case of unlawful discrimination has been made

out, see Wright Line, a Division of Wright Line, Inc., 251

NLRB No. 150 (1980).

33a

APPENDIX

NoTICE TO EMPLOYEES

POSTED BY ORDER OF THE

NATIONAL LABOR RELATIONS BOARD

An Agency of the United States Government

After a hearing at which we were represented by our

attorney and presented evidence, it has been found that

we have violated the National Labor Relations Act in

certain respects. To correct and remedy these viola-

tions, we have been directed to take certain actions and

to post this notice.

WE WILL NOT question you concerning your ac-

tivities, sympathies, and desires as to Local Union

No. 478, International Brotherhood of Teamsters,

Chauffeurs, Warehousemen and Helpers of

America, or of the union activities and sympathies

of other employees.

WE WILL NOT ask you for the names of employ-...

ees who were active in bringing about the Union’s

organizational campaign.

WE WILL NOT threaten that your work will be

subcontracted or the warehouse closed if you sup-

port, work for, or vote for the Union.

WE WILL NOT threaten to take away job-related

benefits if you support or vote for the Union.

WE WILL NOT promise or give you pay raises or

other economic or job benefits to persuade you to

withdraw your support from the above-named Un-

ion, or any other labor organization.

WE WILL NOT solicit you to request withdrawal

of any petition for representation election or to

withdraw your support from the Union.

WE WILL NOT seek to induce you to encourage

our other employees to withdraw their support

from the Union.

WE WILL NOT deliberately reduce the work

available to you in the warehouse by diverting

34a

freight, using contract labor or other means, to dis-

courage you from supporting the Union.

WE WILL NOT coercively inform you that you are

better off without the above-named Union or any

other labor organization.

WE WILL NOT subject you to discharge or layoff

because of your support for the above-named Un-

ion or any other labor organization.

WE WILL NOT in any like or related manner in-

terfere with, restrain, or coerce you in the exercise

of your rights under Section 7 of the National La-

bor Relations Act, as amended.

WE WILL offer Ray Stromberg, Eric Stromberg,

Clara Kitson, Michael Lanza, Eugene Colacino,

Anthony Ippolito, Edmund Ringen, and Joseph

Sanders immediate and full reinstatement to their

former jobs or, if such jobs no longer exist, to sub-

stantially equivalent positions, without prejudice to

their seniority or other rights and privileges previ-

ously enjoyed, and WE WILL make each of them

whole, with interest, for losses they may have suf-

fered by reason of our discrimination against them.

35a

BEHRING INTERNATIONAL, INC.

DECISION

STATEMENT OF THE CASE

ROBERT M. SCHWARZBART, Administrative Law

Judge: This case was heard in Newark, New Jersey, on

a complaint based upon a charge and first amended

charge filed by Local Union No. 478, Internationa!

Brotherhood of Teamsters, Chauffeurs, Warehousemen

and Helpers of America, herein called the Union. The

complaint, as amended at the hearing, alleges that

Behring International, Inc., herein called the Respond-

ent, violated Section 8(a)(1) of the National Labor Rela-

tions Act, as amended, herein called the Act, by coer-

cively interrogating certain of its employees concerning

their membership in, activities on behalf of, and sympa-

thies for the Union; by offering, promising, and grant-

ing its employees wage increases and other employ-

ment benefits in order to undermine their support for

the Union; by warning its employees that they would

be discharged if they became or remained union mem-

bers; and by coercively informing its employees that

they would be better off without a union; and violated

Section 8(a)(3) and (1) of the Act by discriminatorily

laying off a total of eight employees on May 6 and Jens

8, 1977, and replacing them with employees of an inde-

pendent contractor.? With respect to certain of these al-

legations, the General Counsel, contrary to the Re-

spondent, contends that Robert Lesniakowski and

Michael Jaconski, warehouse employees, acted as

1 All dates hereinafter are 1977 unless stated to be otherwise.

2 The Employees laid off on May 6 were Ray Stromberg,

Clara Kitson, and Michael Lanza. The employees laid off on

June 3 were Eugene Colacin{o], Anthony Ippolito, Edmund

Ringen, Eric Stromberg, and Joseph Sanders.

36a

agents on behalf of the Respondent within the meaning

of Section 2(11) of the Act.

The Respondent, in its answer, denied the commision

of any unfair labor practices. Counsel for the General

Counsel and the Respondent have filed briefs which

have been carefully considered.

Upon the entire record, including my observation of

the witnesses, I make the following:

FINDINGS OF FACT

I. THE BUSINESS OF THE RESPONDENT

The Respondent, a Texas corporation, is engaged in

the business of providing warehousing and related serv-

ices at its place of business in Edison, New Jersey, its

only facility involved in this proceeding. In the course

and conduct of the Respondent’s business operations

during the 12 months preceding issuance of the com-

plaint herein, a representative period, the Respondent

caused to be purchased, transferred, and delivered to

its Edison warehouse goods and materials valued in ex-

cess of $50,000, of which goods and materials valued in

excess of $50,000 were transported to said warehouse

in interstate commerce directly from States of the

United States other than the State of New Jersey.

In accordance with the foregoing conceded facts, I

find that the Respondent is an employer engaged in

commerce within the meaning of Section 2(6) and (7) of

the Act.

Il. THE LABOR ORGANIZATION INVOLVED

The Union is, and has been at all times material here-

in, a labor organization within the meaning of Section

2(5) of the Act.

Ill. THE ALLEGED UNFAIR LABOR PRACTICES

A. Background

The Respondent operates a warehouse in Edison,

37a

New Jersey,® where with its New York, New York, of-

fice it serves as the purchasing, storage, and freight-

forwarding arm of the air force of a foreign government

which, during the time relevant herein, obtained much

of its material in the United States. Equipment pro-

cured by the customer government, often with the as-

sistance and support services of the Respondent, would

be received and stored at the Edison warehouse prior

to transshipment to the purchasing country. This oper-

ation was under the general supervision of George Mur-

phy, the Respondent’s vice president and director of

military programs. Murphy, who reported to the Re-

spondent’s president, Alan Newhouse, was responsible

for both the New York City and Edison facilities and

had established the Edison warehouse in November

1975. In 1977, during the events considered herein,

James Waters was the Edison station manager in im-

mediate charge of that warehouse’s operation, and

Thomas (Wier) Wiercizewski was the warehouse super-

visor and Waters’ assistant. The parties are in agree-

ment that all of the above-named individuals are super-

visors within the meaning of Section 2(11) of the Act.

With the assistance of employee Eric Stromberg,

who had made initial contact in February, the Union

began its organizing campaign among the Respondent’s

warehouse employees, conducting its first meeting on

March 13 at a restaurant near the Edison warehouse.

This was attended by Union Business Representative

John Senick and about 9 of the Respondent’s 14 ware-

house employees. Among those who attended that

meeting and signed union authorization cards were

Lesniakowski and Jaconski, both who were both em-

ployed by the Respondent as_ rank-and-file

warehousemen.

3 Nationally, the Respondent also operates about eight other

warehouses.

38a

On March 22, the Union filed the petition in Case

22-RC-7093 for a representation election among the Re-

spondent’s warehouse employees and, pursuant to an

Agreement for Consent Election approved on April 7,

an election was conducted on April 25. Although the

Union was not successful in the election and here ques-

tions certain of the Respondent’s preelection conduct,

no objections to the election were filed.

B. Alleged Acts of Interference, Restraint, and

Coercion

1. The employee meeting of March 31

Evelyn Barbato® testified that, on March 31 at ap-

proximately 9 a.m., she and all the other warehouse

employees were called by Lesniakowski and Jaconski to

an immediate meeting in the conference room. No su-

pervisors were present.

When assembled, Lesniakowski told the employees

that he and Jaconski had spoken with Waters, and that

Waters had stated that he was going to either subcon-

tract the work or close down the warehouse if the Un-

ion were voted in. In the discussion that followed,

various employees asked if Lesniakowski was certain of

this and all wanted to know why he and Jaconski had

gone to the office themselves without having asked any-

one else. Barbato recalled that Lesniakowski left the

conference room on several occasions during the meet-

ing, returning each time. On one occasion after leaving,

he returned and announced that, if the employees

wrote and signed a petition against the Union, then

* The agreed-upon unit included all warehouse employees em-

ployed by the Respondent at its Raritan Center, Edison, New

Jersey, facility, but excluding all office clerical employees, pro-

fessional employees, managerial employees, and guards and

supervisiors as defined in the Act.

5 Barbato was employed by the Respondent in various ware-

house positions from October 1975 to May 4, 1977, when she was

terminated for reasons unrelated to this proceeding.

39a

Station Manager Waters would not do anything to

them; there would be no retribution. They could keep

their jobs if the petition could stop the Union. Barbato,

in longhand, then wrote a document rejecting the forth-

coming election, which was dictated to her by someone

present. Jaconski took the page from her, left the room,

and returned with the following typed version of Bar-

bato’s draft:®

3-31-77

To: Jim Waters, Station Manager

From: Whse.

Subject: N.J. [sic] Labor Board

We, the Whse. of Behring International agree to

withdraw our union petition from the N.J. [sic] La-

bor Board.

Before signing the petition, however, the employees

agreed that they did not want Lesniakowski and

Jaconski to take the paper by themselves to Waters’ of-

fice but that someone else should go with them. It gen-

erally was agreed that Barbato should accompany the

two men to Waters’ office when they took him their pe-

tition. The employees then signed the typed page in al-

phabetical order and broke for lunch at or about noon.

Lesniakowski and Jaconski, who ate together, had

agreed to meet Barbato in the conference room after

lunch and go together to Waters’ office. However,

when Barbato returned at or about 1 p.m., she found

that Lesniakowski and Jaconski had already gone to

Waters’ office without her. She went to the office area

in search of then and encountered Warehouse Supervi-

sor Wier in the reception room. Wier told Barbato that

Lesniakowski and Jaconski were in Waters’ office. The

door to that office was closed. When Barbato replied

that she was supposed to be in Waters’ office with

® The record reveals that the document had been typed on the

Respondent’s stationery by an expeditor. Jaconski testified that

he had had Barbato’s draft typed at Waters’ insistence.

40a

Lesniakowski and Jaconski, Wier told her that they

were not to be disturbed. Barbato persisted that she

was supposed to be in Waters’ office with them and

Wier repeated that Waters said that he did not want to

be disturbed. Barbato returned to the conference room

where the other employees had reassembled after their

lunch break to await the return of Lesniakowski and

Jaconski.

Jaconski and Lesniakowski, on reentering the confer-

ence room, replied to Barbato’s question as to why they

had not waited for her by stating that Waters would

not have spoken in front of her. The employees then be-

gan to draw up a list of items they wanted from the Re-

spondent, including overtime pay after an 8-hour work-

day,’ a grievance committee, equal pay to all employees

for equal work, and no repercussions because of the em-

ployees’ previous support for the Union. These propos-

als were written by Ray Stromberg.®

According to Barbato, Lesniakowski took the em-

ployees’ proposals out of the room and later returned

stating that Waters had said that he was not certain as

to what could be done with regard to a grievance com-

mittee but would give the employees an answer to that

matter later. Waters could not himself decide whether

the other items could be granted but would have to

seek approval from the Respondent’s main office in

Houston, Texas. The meeting then broke up at approxi-

mately 3:30 p.m.

Barbato’s account of the March 31 meeting was sub-

stantially corroborated by employees Eric Stromberg,

Edmund Ringen, Eugene Colacino, and Anthony Ippo-

lito, all of whom recalled that Lesniakowski and Jacon-

ski had called the meeting, at which Lesniakowski had

7 At that time, overtime premium pay was available only af-

ter an employee had worked for 40 hours in a given week, al-

though he may have worked more than 8 hours on a given day.

*Employees Eric and Ray Stromberg are brothers.

4la

announced that he and Jaconski, concerned about their

jobs, had been talking to Waters, who had informed

them that there was a good chance that if the employ-

ees voted for the Union the Respondent would close the

warehouse or subcontract the work. If the employees

would sign a paper to end the union election, there was

a good possibility that the two men could talk Waters

out of attempting to close the warehouse or subcontract

the work. Ippolito, however, recalled that the employ-

ees had attempted unsuce(clessfully to condition their

signing the request to withdraw the representation

election petition on Waters’ agreement in writing to the

employees’ list of demands from the Company. Lesnia-

kowski, however, had reported to the group that

Waters would [not] agree to the list of employee pro-

posals in writing, as, the situation being what it was,

Waters did not want his name to appear on aything

written.®

Ippolito and Eric Stromberg recalled that, before the

meeting ended on March 31, the employees elected a

three-member grievance committee, which included the

two Strombergs and Sanders. In addition, Stromberg

and Jaconski recalled that Waters personally came to

the March 31 meeting shortly before it ended. Strom-

berg related that Waters encouraged the employees to

elect a grievance committee, which was done, and also

discussed various grievances with the committee and

the other employees, including the matter of equal pay

for equal work, agreeing that all should be paid on an

equal basis for the same warehouse work.?°

* These employees signed the election petition withdrawal re-

quest although Waters did not grant all their demands because,

after some discussion, it was concluded that they still would be

better off signing and hoping for the best.

10 Jaconski’s recollection of the March 31 meeting of which he

clearly was a cosponsor and principal participant was so uncon-

vincingly poor and his testimony so evasive that absent inde-

pendent corroboration he is not credited where his testimony

conflicts with that of other witnesses. As the other witnesses to

42a

The employees were paid for the time spent at the

March 31 meeting, their signed request for withdrawal

of the election petition was retained by Waters, and the

March 31 meeting conducted by and among employees

without supervisors, which consumed the time of the

entire warehouse staff for virtually the whole workday,

was unprecedented at the Edison warehouse.!!

Lesniakowski testified that immediately before tell-

ing the employees to go to the meeting on March 31 he

and Jaconski had asked Waters for the use of the con-

ference room to discuss with the employees what was

happening in the warehouse, the union problem, and

other matters. Waters had told them to use the confer-

ence room if it was all right with Warehouse Supervisor

Wier, who thereafter assented to the meeting after be-

ing assured that Waters had not objected.

Lesniakowski related that he and Jaconski then gath-

ered all the warehouse employees into the conference

room where he did most of the talking. Lesniakowski

told the group that the way everything was going’? it

was very possible that the Company would subcontract

the work. It was also possible that it would close up.

Lesniakowski stated that the Respondent could do ei-

ther one of the two and the employees would all be out

of work and collecting unemployment. Accordingly,

Lesniakowski stated his belief that, if the employees

the March 3I meeting did not testify that Waters had come to

the conference room toward its end and as Stromberg, the only

other witness to agree with Jaconski on this point also showed a

poor general recollection of events, I find from the weight of the

evidence that Waters did not appear at the March 31 meeting,

— that a grievance committee was elected which thereafter

was recognized by management, and which processed griev-

ances in the time Lever before the election.

44 That night, Eric Stromberg reported the meeting to

Senick, the union representative, who told him not to worry.

12 At the time of the meeting, business volume was low in the

ouse.

43a

drew up a petition to withdraw the union election while

they still had jobs, everything would continue and the

employees would have work. If they did not do this and

the Union came in, nobody knew what was going to

happen. Accordingly, Lesniakowski stated that the un-

ion matter was an important thing to resolve and the

employees should settle down, go back to work, and

keep their jobs.**

Lesniakowski conceded that while the conference was

in session he left the room several times for various

reasons, but asserted that he went to Waters’ office

only after the petition was signed to take it to him. In

this, he was accompanied by Jaconski and Barbato.

However, when they arrived in the office area, Waters’

assistant, Joyce Hesse, informed them that Waters was -

out to lunch. Accordingly, Lesniakowski left the peti-

tion on Waters’ desk and they all returned to the con-

ference room. While still in the conference room, some-

one reported that Waters had returned from lunch and

13 Lesniakowski denied that he had used Waters’ name as the

source of his concern and proposed antiunion document, but

testified as to two reasons for telling the employees on March 31

that if an election were held the Respondent would subcontract

their work. The first was his knowledge that at the time in

question freight which otherwise would have been delivered to

the Respondent’s Edison warehouse was being diverted to the

nearby warehouse of Summit Associates, whose employees

were handling it, and, second, because of an incident about 3

days before the March 31 meeting. At that time, while seated

two stools down from Warehouse Foreman Christopher Houli-

han at a bar, Lesniakowski overheard Houlihan tell an acquaint-

ance that the freight was being diverted to the Summit building

and that it looked as though “they” were going to subcontract

out the work if the Union came in. Contrary to the Respond-

ent’s argument, I find that, although this incident occurred in a

public place, Lesniakowski was sufficiently near to Houlihan for

the latter to have been aware of his presence when he spoke,

and, in view of Houlihan’s other conduct found below, it is con-

cluded that Houlihan intended that Lesniakowski hear his

44a

was in his office. It was then that Lesniakowski, accom-

panied by Jaconski, returned to the office.

On being reassured by Waters that he was too busy

to see them, Lesniakowski picked up the petition,

which was still on Waters’ desk, and stated that every-

one inthe warehouse had drawn up a petition to with-

draw from the Union. Waters replied that he could not

answer any questions but would give the petition to

someone to examine.

Lesniakowski, too, recalled that of [sic] overtime,

paid medical benefits, a grievance procedure, and equal

pay for equal work were discussed at the March 31

meeting.

Lesniakowski and Jaconski both denied that they had

‘acted as agents for the Respondent in conducting the

meeting and that they had interrogated any employees

concerning their union sympathies or activities. '5

Waters testified that he had told Jaconski and Les-

niakowski that they could use the conference room for

the employees’ meeting when they had requested its

use so that the employees might discuss the union mat-

ter among themselves. He told them that it was their

conference room as well as everyone else’s but refused

to talk to them about the Union. By his estimate, about

15 minutes after this conversation, Waters left for

lunch. '¢

14 Lesniakowski testified that, approximately 3 days after

giving Waters the petition on March 31, he encountered Waters

in the warehouse and asked if Waters thought that the petition

was the right way. Waters told Lesniakowski that he had a

right to do whatever he wanted.

15 As noted, both Lesniakowski and Jaconski earlier had

signed authorization cards at the union meeting of March 13.

16 Waters denied Jaconski’s account that, during the lunch pe-

riod that day, Jaconski and Lesniakowski had encountered him

at a nearby restaurant at which time the two employees had

told Waters that the employees had signed the petition. As

45a

When Waters returned to the office, he found the pe-

tition signed by the employees on his desk. Although

the petition had been typed on the Respondent’s sta-

tionery, Waters testified that this was the only copy of

the petition that he had seen and did not know how it

had come to be typed.??

Waters conceded that he never checked on how long

the meeting had lasted either personally or by asking

his supervisors. His only conversation that day with

Jaconski and Lesniakowski was when he gave them

permission to use the conference room.

In evaluating the evidence herein, I do not find

Waters to be a credible witness. In spite of his clear in-

volvement in authorizing the March 31 meeting and the

general testimony of his dealings with Lesniakowski

and Jaconski while it was in progress, he testified that

he had no knowledge of the meeting’s substance and du-

ration, although it occupied his entire work crew for

nearly a full day. As the weight of evidence, as will be

discussed below, established Waters as a participant in

much of the activity found unlawful herein, his testimo-

ny is not deemed reliable.

2. The preelection diversion of freight from the Re-

spondent’s warehouse

The General Counsel contends that in April, during

the weeks preceding the election, the Respondent re-

routed freight destined for the Edison warehouse to a

Jaconski’s testimony, noted above, is genera'ly discredited,

Waters’ denial of this incident is accepted.

17 This denial contradicts Jaconski’s testimony that the hand-

written petition originally brought to Waters war typed at

Waters’ insistence. While Jaconski’s testimony generally is not

credited, his testimony in this regard is accepted as the almost

daylong meeting certainly required company approval and as it

appears most unlikely that a warehouseman could have required

an expeditor to type the document on company stationery with-

out supervisory authorization. RAEN, & Rees Cae te

petition was typed at Waters’ direction.

46a

facility 1 block away, owned and operated by another

company, Summit Associates, and that this had been

done to further drive home the message of the March

31 meeting that work in the warehouse was scarce and

that if the employees voted in the Union their jobs

would be in jeopardy. The Respondent, in turn, con-

tends the freight was diverted to Summit to reduce the

content of the warehouse and thus make room for the

application of a sealant to the warehouse floor to end a

dust problem.

Thomas Wier, who at the time of the events herein

was warehouse supervisor,’® testified that about a

week before the April 25 election Waters had told him

that the Respondent was going to start subcontracting

.work to Summit Associates and had instructed Wier to

send trucks arriving with freight at the Respondent's

receiving dock to the Summit warehouse where it was

to be received and unloaded. Waters told Wier that the

Respondent wanted the men to see an empty ware-

house and to let them think a bit on the union matter.

The General Counsel argues that, in the context of

Waters’ testimony that April was part of a slow period

at the Edison warehouse and that studies were then be-

ing made to determine how labor costs could be re-

duced, the Respondent’s manner of preparing for the

floor sealant application was singular. Although Waters

testified that the Respondent did not receive a cost

breakdown for the respective storage and labor serv-

ices furnished by Summit during this priod, but, rather,

received an all-inclusive bill, Respondent’s Exhibit 11,

which evidences the arrangement for these services, re-

veals that Summit billed the Respondent at a stated

rate for the space in minimum units of 1,440 square feet

and also for separate labor costs of $9.10 per hour,

18 Wier, called as a witness by the Genera! Counsel, was em-

ployed by the Respondent from November 1975 until severed on

about October 7, 1977.

; 47a

which rates were substantially higher than that paid by

the Respondent to its own warehouse employees. The

Respondent’s determination to use Summit labor al-

most exclusively to handle the diverted incoming

freight during this period and to use its supervisors to

move in-house inventory from the floor area to be

sealed to other parts of the warehouse proceeded in the

face of Waters’ statement that the Respondent’s em-

ployees did not at that time have enough work.

The sealant was applied on Apvil 16 and sometime af-

ter that but before the election the Respondent stopped

diverting freight to Summit.

Waters in turn testified that it had been necessary to

divert this freight in order to reduce the quantity of

material in the warehouse and to enable inventory al-

ready in the warehouse to be moved out of the way so

that the warehouse floor could be chemically sealed in

response to a dust problem. Although it only took 1 day

to apply the sealant, which dried in 48 hours, additional

weeks had been needed in advance in order to make the

necessary preparations. These included emptying and

cleaning the warehouse so that the sealant would take

and moving freight out of the way as required. Waters

related that he first had authorized the contractor to do

the sealing work in February but the start was delayed

by uncertainty as to how much of the warehouse floor

was to be sealed. Whatever was done in preparation for

the floor sealing, including the diversion of freight and

the rearrangement of in-house material, had been done

at the contractor’s instructions.

Waters explained that his decision to use Summit la-

bor was not unusual as in the past the Respondent, had

done business with Summit Associates, as the situation

required. From the time the Respondent had assumed

the foreign air force account in November 1975, when

the Edison warehouse opened, through April 1976, a

busy interlude, the Respondent had augmented its own

work force by using three to six employees provided by

45a

Summit. In that interval Summit employees worked at

the Respondent’s warehouse with the Respondent’s

own employees sorting freight and driving two trucks.

In the slower periods which followed, the Respondent —

discontinued the use of outside labor as unnecessary,

and did not again resort to Summit until March 1977 in

connection with the Respondent’s floor sealing opera-

tion.'® In March and April no freight was transferred

from the Respondent’s warehouse to Summit, but in-

coming shipments were diverted to the Summit ware-

house and stored there until shipped to the customer

country.

3. The alleged unlawful pay raises and other improve-

mer.is in job benefits

The General Counsel contends that in the preelection

period the Respondent promised and granted various

unlawful pay increases to discourage employee support

for the Union.

Specifically, the General Counsel argues that the Re-

spondent, in the preelection period, reclassified and

granted accompanying pay increases to Michael Jacon-

ski, Clara Kitson, and Michael Lanza. In late March

these three employees, without evaluation, were

reclassified by the Respondent from the designation of

receiving clerk to warehouseman.”° All three employ-

ees testified that, while working as receiving clerks in

parcel post, their jobs had been to consolidate and seg-

regate freight by priority and to containerize the goods.

Their duties remained the same after their reclassifica-

tions, which involved only the change of title to ware-

19 Waters’ testimony that the Respondent began to use Sum-

mit in February and March in connection with the floor sealing

procedure is contradicted by the Respondent’s arrangement for

Summit’s services, which is dated March 28 and by its terms

— that Summit’s services would be rendered in the

ture.

2° Kitson and Lanza were reclassified effective March 26 and

Jaconski on March 28.

49a

housemen and the increased compensation.”! The expla-

nation given to the employees by Waters for their

reclassification at that time was that the receiving clerk

classification was being eliminated.

Waters testified that under the Respondent’s pay

policy as it was in the first half of 1977 employees re-

ceived salary and performance evaluation 90 days after

employment, and thereafter received evaluations and

warranted pay increases, consecutively, 6 months after

the anniversary date of their employment, 1 year after

the anniversary date, and every 6 months thereafter.

Under this evaluation system, employees could receive

either no raises for bad performance or could receive in-

creases of 4, 6, or 8 percent, respectively, depending

upon how highly they were rated, until they reached

the highest pay rate available for their job classifica-

tions. Accordingly, employees Eric Stromberg and San-

ders both were evaluated by the Respondent in Janu-

ary and, respectively, were found to merit pay

increases of 4 percent. However, they were informed at

the time that, as they had reached the top of the pay

scale for their respective jobs, they would receive no in-

crements. However, both Sanders and Stromberg later

received pay increases effective April 27, made retroac-

tive to their January evaluation dates. The April 27 in-

creases, part of a general across-the-board raise for all

employees, was given without use of the Respondent’s

evaluation procedures. ??

21 In being reclassified to warehousemen, Kitson received a

monthly increment of $207 while Jaconski and Lanza each re-

ceived $238.80 a month.

22 | find no merit to the General Counsel’s contention that em-

ployees Anthony Ippolito, Edmund Ringen, and William Tide-

mann, all of whom received pay increases on April 9, had re-

ceived them unlawfully because they were given in the

preelection period. Rather, the payroll evidence shows that

they each had received their previous increments on October 9

and at like intervals before then. It is therefore concluded that

their raises of April 9 were consistent with the Respondent’s

Bef

| ie

50a

In addition to granting the foregoing preelection

raises to Lanza, Kitson, and Jaconski, the General

Counsel contends that the Respondent also unlawfully

promised a general across-the-board wage increase be-

fore the election, which was paid shortly after the elec-

tion was conducted.

Employee Ippolito testified that, in the period be-

tween the filing of the petition in the representation

case and the conduct of the April 25 election, Waters,

at a meeting of employees, promised to provide such an

across-the-board increase. On that occasion, Waters

told the employees that he was trying to fight for equal

pay for equal work in the warehouse and that $300 per

week per employee was a justifiable wage. Although

Ippolito agreed that the concept of equal pay for equal

work had been discussed before the petition was filed

and again after the election, this was the first instance

where the specific figure of $300 had been mentioned.

The Respondent’s payroll recurds reveal that a gen-

eral across-the-board pay increase was given to all

warehouse employees effective April 27, bringing their

pay rate to the uniform scale of $300 per week or $1,300

per month. At the same time, the three parcel post em-

ployees who worked in the small package area, Ringen,

Barbato, and William Tiedemann, were raised to ap-

proximately $280 per week or $1,217.88 per month.

Waters testified that 1 or 2 days after the April 25

representation election he conducted a meeting in the

conference room with the entire warehouse staff.

Waters asked the employees if they had any complaints

and suggested that the employees should submit any

ideas for improved conditions in the warehouse to him

longstanding policy of affording pay raises at 6-month intervals

as warranted by its calculations.

*3 The reason for paying less money to the employees in the

smal] package area was that their work was lighter and less de-

manding. These positions were usually filled by older male and

by female employees.

5la

and he would see what he could do. Waters emphasized

that he could not guarantee anything. A few days later

Waters received a handwritten list itemizing the em-

ployees’ proposals. Included in this list were employee

requests for equal pay for work, paid hospitalization in-

surance, a grievance committee, and other unrecalled

items.

On the day Waters received the list he read it to the

Respondent’s vice president, Murphy, who, in turn, re-

ported its contents to the Respondent’s president,

Newhouse. Within 4 or 5 days of receiving the list from

the employees, Murphy informed Waters that certain of

the items on the list had been agreed to by the Re-

spondent and some were unacceptable. Among the

items approved by the Respondent was a provision for

overtime pay at time and a half after 8 hours per day

rather than after 40 hours per week, the grievance

committee, and equal pay for equal work at the above-

referred rates for warehouse and parcel post employ-

ees. According to Waters, the raises were to become ef-

fective 2 to 3 weeks after the election and were not to

be retroactive.

The Respondent denies that any of the pay raises and

reclassifications were granted as a result of or to coun-

‘ter the Union’s organizational campaign, and argues

that the across-the-board increase and other benefits

did not become effective until after the election,

which no objections had been filed.?5

24 The Respondent did not agree to the employee proposal for

paid hospitalization insurance.

25 Waters’ testimony with regard to the timing of

the-board pay increase, as noted, is contradicted

that

effective on April 27, the date that Waters

arte

ute

ruil

Hists

ff Fic;

Hie

52a

As indicated in the General Counsel’s brief, the Re-

spondent produced no evidence of a general across-the-

board pay increase for employees at any location other

than the Edison warehouse.

4. The alleged threatened loss of job benefits

Employee Edmund Ringen testified that in March or

early April, after the filing of the representation case

petition, he and other warehouse employees were sum-

moned to a meeting called by the Respondent’s vice

president, Murphy. Ringen recalled that Murphy told

the employees that he had been to the National Labor

Relations Board, that a date for an election had been

agreed upon, and that he would like everyone to vote.

If the vote resulted in a tie, the Company would win,

‘and that was what he hoped for.2® Employee Anthony

Ippolito related that Murphy on that occasion had an-

nounced that he had just returned from the road and

was looking for more contracts for the Respondent as

the Company just could not depend on the one (foreign

air force) contract that it had. Murphy said that that

there was a chance they might get some new contracts

and, if the employees did not organize things looked

good.27

would have been unlawful. See Belcor, Inc., d/bia Modesto Con-

valescent Hospital, 235 NLRB 1059, 1063 (1978).

53a

Ringen also testified that in April, before the elec-

tion, he and the other warehouse employees attended a

meeting called by Station Manager Waters and his as-

sistant, Joyce Hesse. On that occasion Waters asked

the employees what their problem was. When there

was no answer, Waters said that if the employees did

vote for a union he probably would handle the negotia-

tions and there was a good chance, that they would

loose their stock option plan, profit-sharing plan, and

pension benefits. Ringen interjected that as the em-

ployees had vested rights how could they lose these

benefits? Waters did not reply.

Employee Michael Lanza averred that at a preelec-

tion meeting of all warehouse employees Waters de-

scribed the Respondent’s stock plan, telling the employ-

ees that if they were employed for 2 years they would

receive stock in the Company. After a while, the em-

ployees would start to own the Company. Waters told

the employees that the Respondent’s branch in New

York had a union but did not have the stock plan.

Before the election, Waters also met with the ware-

house staff, divided into separate groups, to discuss

employee grievances. Ringen testified that he and

members of his group, when they met with Waters,

told him of their desire for overtime pay after 8 hours

of work each day and of their wish for more pay.

Waters stated his agreement with the employees but

told them that they were dealing with a southern-based

formance, and called them the best warehouse employees in the

Respondent's organization.

o4a

outfit. He said that he would see what he could do when

he went to the Respondent’s Houston headquarters.?®

Waters, in turn, testified that before the election he

conducted two meetings with the warehouse staff. The

first was in the beginning of April at which time he

merely read verbatim a prepared statement to the

staff, saying nothing more than what was contained

therein. The statement announced the coming election,

the date and time, and advised the employees of their

right to participate therein, and reassured them that no

effort would be made by management to harass or in-

timidate anyone involved in the election procedure. The

General Counsel does not contend that the verbatim

statement assertedly read to the employees contained

_unlawful language.

Waters described a second meeting of all warehouse

personnel conducted later in April when he told the em-

ployees of the profit-sharing and stock option plans, the

existing hospitalization, sickpay, and other benefits. On

that occasion, employees asked questions as to the

available fringe benefits. Waters denied having threat-

ened employees with the loss of existing benefits if they

voted for the Union.

5. The alleged unlawful interrogations

Warehouseman Sanders testified that on April 22,

just 3 days before the election, he stopped for a drink at

a nearby bar and restaurant where he joined Supervi-

sor Houlihan and Lesniakowski at a table. After several

minutes of general discussion, Lesniakowski asked San-

ders what he thought about the Union and how he was

going to vote. Sanders replied that he would vote “no,”

2® Ringen’s testimony on this point is, in substance if not in

time, corroborated by that of Jaconski, who related that, when

Waters came to the conference room at the conclusion of the

31 meeting, he promised the employees that he would

on main Houston office on the matter of obtaining

them.

55a

as he did not believe the Union was going to win.

Lesniakowski then asked how Sanders thought every-

one else was going to vote. Sanders answered to best of

his knowledge.

About 35 minutes later, Lesniakowski departed,

leaving Sanders and Houlihan alone at the table. San-

ders testified, still without contradiction, that Houlihan

asked what was the matter with those people. When

Sanders asked if he meant the people at Behring, Hou-

lihan replied “Yes.” Houlihan declared that he did not

understand why those people could possibly want the

Union, repeating this statement. Houlihan noted that

the Respondent was a good company to work for with

profit-sharing and stock ownership plans. Employees

were not pushed by the supervisors to work harder and

if anyone asked for time off they received it. Sanders

replied that he guessed that the employees felt that

they needed the time off because they did not receive

overtime pay after 8 hours’ work and had to work over-

time on Saturdays and Sundays when the warehouse

was busy. Sanders declared that people were complete-

ly fed up with the conditions there. Houlihan then

asked Sanders how he felt the other employees were

going to vote and how Sanders would vote, the same

questions earlier put to him by Lesniakowski. Again,

Sanders stated that he was going to vote “no,” and

gave his estimate of how the various other employees

were going to vote. Houlihan then asked who had

started the Union. Sanders replied that Eric Stromberg

had started the Union along with his brother, Ray, the

two having contacted the union delegate.

As a sequel to the above incident, Eric Stromberg

testified that after work on June 3, the day he was laid

off, he went out for the evening with Houlihan and a

number of the Respondent’s employees. Later, after

dinner and a number of drinks, he was left alone with

Houlihan at a bar. In the course of their conversation,

56a

Houlihan told Stromberg that it was all Stromberg’s

fault that everyone was getting laid off and the whole

union thing. Stromberg said that it was not, that the

Union was not his idea alone, but that actually it was

Houlihan’s fault. Houlihan had hired three men into the

warehouse at pay rates higher than several incumbent

warehouse employees were receiving at the time.

Stromberg told Houlihan that he had been approached

by Lesniakowski and Jaconski about bring in the Un-

ion, which was what had started the ball rolling.

Houlihan, however, persisted that the Union was

Stromberg’s fault. As Houlihan was becoming increas-

ingly belligerant, Stromberg left.

6. The alleged unlawful layoffs and postelection

contracting

On May 6 the Respondent laid off Ray Stromberg,

Clara Kitson, and Michael Lanza and on June 3 laid off

Eugene C[oJlacino, Anthony Ippolito, Edmund Ringen,

Eric Stromberg, and Joseph Sanders, all warehouse

employees, while concurrently contracting for labor

services to be provided by ESP, Inc., an outside firm.*°

The record also reveals that Lesniakowski and

Jaconski, the sponsors of the March 31 employees’

meeting, were not laid off but were assigned to work

under a new supervisor in quality control. The record

reveals that in their new quality control assignment

their duties remained what they had been as ware-

housemen except that they also were responsible for

training new warehouse personnel provided and em-

ployed by ESP, Inc.*!

%° ESP, Inc., had been established by two men not connected

with Summit Associates, one of whom earlier had worked for

the Respondent on an efficiency report.

31 Ringen testified that after the election and subsequent to

the start of the layoffs Jaconski, passing by, had told Ringen

and another employee that he was on his way to the office.

When Ringen asked who the Company was laying off, Jaconski

57a

Former Warehouse Supervisor Wier testified that

about 2 weeks after the election he and the other super-

visors attended a meeting called by Waters, who told

them that as of Friday of that week all the men would

be laid off, and beginning with the following week the

Respondent was going to use an outside agency to do

all the warehouse work. Wier asked when he should in-

form the employees. Waters replied that Wier should

tell the em: .-yees on Friday, when they were paid at

the end of '*. week, and to give them a week’s notice

at that time. Waters explained that the layoffs were be-

ing effectuated because it was estimated that the Com-

pany could save $50,000 a year by going to an outside

agency in that it would not have to pay employee bene-

fits, pensions, and other related expenditures. Waters

also stated that the Respondent did not want the threat

of the Union hanging over its head because in all prob-

ability the employees would go union in another year

from that time when a new election could be held.

Waters told the group that the Respondent’s president,

Newhouse, would probably close the Edison terminal if

the men did go union. The Company wanted to remain

nonunion.

Both Murphy and Waters described a series of stud-

ies they, respectively, had made in May on the compar-

ative costs of subcontracting the warehouse labor upon

which the estimated savings were based.*?

Murphy testified that the Respondent had followed a

practice of subcontracting its work and that he, in fact,

had first recommended subcontracting work in the

Edison workhouse to the Respondent’s Houston head-

quarters office in 1975. Later, in January 1977, because

of the financial problems then extant, he requested au-

thority to investigate subcontracting the warehouse

work in order to reduce costs. He reasoned that

subcontracting would give him control of the number of

employees to work at a given time so that, based on

fluctuating work volume, only those employees actually

required would be used. This could provide substantial

savings over the need to employ a fixed group as done

with the Respondent’s own employees.

_ Murphy testified that the Respondent’s financial situ-

ation continued to worsen in that its contract with the

customer air force underwent two changes in scope.

The first major change occurred in June 1976 when the

Respondent was required to interface with the custom-

er air force’s logistics system, which resulted in in-

creased costs to the Respondent. The second major

change occurred when the customer air force acquired a

fleet of large air cargo carriers which it began to oper-

ate as a wing of its own air force. This reduced the

number of charter flights for which the Respondent had

been contracting, and thus the Respondent lost a previ-

ously earned 5-percent CAB commission on all such

flights. In addition, the customer’s newly acquired

airlift capacity resulted in a reduction of ocean bookings

costing the Respondent an additional decline in reve-

nues generated through brokerage fees for these ocean

voyages.

A final factor increasing the Respondent’s costs at

that time was the need to install a computer, which was

done in May or June, to enable the Respondent to keep

costly than it , as before the 6 four

Saeco eraplapate hod eallisious eavvten to be clighte to pest

59a

current with the customer air force’s requirements. The

air force refused to renegotiate its contract to allow the

Respondent to recover any part of these lost earnings

or higher costs.

Based upon a financial reversal in December 1976,

the above-described factors which served to further re-

duce the Respondent’s earnings, and his economic anal-

ysis, Murphy again recommended to Newhouse that the

warehouse work be subcontracted and that five ware-

house employees be laid off with severance pay and

vacation allowances.

On May 6 the first layoffs—of Ray Stromberg,

Kitson, and Lanza—were accomplished. These, how-

ever, were not a part of the subcontracting decision,

but were based on Waters’ statement to Murphy about

2 weeks earlier that he thought it was possible to re-

duce his warehouse work force by three. Murphy ap-

proved this action and the three employees were laid

off

Murphy testified that the June 3 layoffs of Colacino,

Ippollito, Ringen, Sanders, and Eric Stromberg oc-

curred pursuant to the decision to subcontract the

work, which thereafter was done by employees of ESP,

Inc., the contractor. The ESP personnel, in turn, there-

after were trained for their work by Lesniakowski and

Jaconski,™ who, as noted, had been assigned to work in

quality control after the election under a new supervi-

sor. They were the first assistants to be assigned to

%3 The contract with ESP, Inc., the contractor who finally as-

sumed the warehouse work, was not executed until May 26 and

no costs were executed under it until June 6.

% Jaconski temporarily his with the Respondent

seeld sates aie eaitn Ut came: aaee ten ee

;

60a

that area, which previously had been handled by one

man.

C. Analysis and Concluding Findings

1. The March 31 employees’ meeting

The General Counsel, contrary to the Respondent,

contends that, in conducting the meeting of the entire

warehouse staff on March 31 in the absence of supervi-

sors, Lesniakowski and Jaconski acted as agents of the

Respondent and that their acts in connection with that

meeting were binding on the Respondent. The Re-

spondent denies that they acted as agents, indicating

their general rank-and-file status.

To determine such agency, it is not necessary to find

‘direct evidence that the activities of Lesniakowski and

Jaconski actually were authorized or subsequently

ratified. Rather, agency may be inferred from the cir-

cumstances.**

Summarizing the credited evidence in this area,

Lesniakowski and Jaconski were the first employees al-

lowed to call a meeting of other employees during

working hours when no supervisor was present, receiv-

ing permission from Waters for the same in order to

discuss “the union matter.” Although the meeting

occupied the great bulk of the workday of all the Edison

Warehouse employees, all were paid for the time spent

at the meeting and none were questioned or repri-

manded with respect to their long absences from their

work stations. The antiunion petition drafted and

signed at that meeting was typed at Waters’ insistence

on company stationery and delivered to Waters. Later

that day Lesniakowski and Jaconski also brought to

%5 See Razco, Inc., dia Hit ‘N Run Food Stores, 231 NLRB

660, 669 (1977); Associates, Inc., dbia

Nursing Home, 234 596, 599 (1978); Birmingham

ae a

6la

Waters the employees’ list of requested improvements

and benefits prepared in the context of their having

signed the request for withdrawal of the election peti-

tion. To some employees, these proposals represented a

hoped-for exchange for the antiunion petition. The list

included requests for overtime after 8 hours of work,

paid hospitalization, equal pay for equal work, and es-

tablishment of a grievance procedure. The grievance

committee members were elected on March 31 and

were recognized and dealt with by management before

the election. Subsequently, Waters pursued the re-

maining proposals with management and all but paid

hospitalization were eventually granted.

In these circumstances, noting particularly that

Waters had allowed the unprecedented meeting and

had accepted the employees’ signed request for with-

drawal of the union petition and their list of requested

job improvements which had evolved from the meeting,

that he subsequently granted most of the employees’

requests, and that it is inconceivable that the meeting

could have lasted for as long as it did without disci-

plinary action by the Respondent unless conducted with

_ the direction, assistance, and encouragement of man-

agement, I find that Lesniakowski and Jaconski acted

as the Respondent’s agents in conducting the March 31

meeting and that their statements to the warehouse

62a

2. The preelection diversion of freight

In concluding that the Respondent, in the preelection

period, was utilizing and building upon a slow period in

the warehouse to impress upon its employees the mes-

sage of the March 31 meeting that work was slow and if

they supported the Union their jobs would be in jeop-

ardy, I note former Warehouse Supervisor Wier’s testi-

mony that in April, before the election, Waters, in di-

recting him to divert incoming freight to the Summit

warehouse, had told him that the Respondent wanted

the employees to see an empty warehouse and let them

think a little bit on the matter.

Although Wier, on cross-examination, continued to

adhere to this testimony, the Respondent contends that

- Wier, who was subsequently severed by the Company,

was a disgruntled witness whose testimony against the

Respondent should not be credited. Wier testified that

in the course of his employment he had received three

disciplinary letters from the Respondent relating to his

job performance, and that in September he was told by

Hesse that she had learned from Waters that Wier

would be laid off in 1 month. In connection with his lay-

off the Respondent offered to give Wier 1 month’s sev-

erance pay and bear the cost of the forthcoming mater-

nity hospitalization for Wier’s wife if Wier signed a

letter of resignation. If Wier refused to sign he would

receive nothing. Although Wier did not sign the resig-

nation letter, he did receive the severance pay and also

Union at that time, this is a separate form of interference

vena byw eng Agee 7 of the Act, to be considered be-

that this constituted interrogation would strain

63a

Although Wier was not pleased at his treatment by

the Respondent, I find him to be a credible witness. His

testimony is consistent with the general fact pattern of

this case, which, as will be discussed below, shows a de-

termined effort by the Respondent to defeat the Union

by extreme tactics which are de: »iled in this Decision.

While Wier may have lost his position by the time of

the hearing, he had received at least 1 month’s sever-

ance pay and still hoped to obtain hospital coverage

from the Respondent for his wife’s maternity period.

Accordingly, as Wier’s testimony adverse to the Re-

spondent was inconsistent with his interest in receiving

the hospitalization payment, his account of the events is

afforded additional credence.

However, Wier’s testimony as to the significance of

the empty warehouse is corroborated by other factors

indicated above. Although the dust accumulation in the

warehouse which led to the floor sealing operation had

been a problem for some time, it was decided to deal

with it only in a preelection period. The warehouse

staff, underutilized at the time, was not assigned to

move the in-house inventory from the area to be sealed,

but, rather, this work was assigned to the supervisors,

who did this work after the regular work hours. Even

accepting, arguendo, the Respondent’s assertion that it

was necessary in the preelection period to have leased

the space from Summit to reduce the freight level in its

own warehouse in preparation for the floor sealing, the

record reveals that it would have been less costly for

the Respondent to merely have leased the space at

Summit and used its own employees to handle the di-

verted frieght on Summit’s premises. Instead, the Re-

spondent hired both space and labor from Summit while

retaining its own employees. That the Respondent was

free to have assigned its own employees to work at the

Summit warehouse is clear from the fact that in this pe-

riod it actually did assign Lesniakowski and two others

to that location to work with the Summit crew. The Re-

64a

spondent as part of its antiunion campaign, as particu-

larly evidenced by the remarks of Lesniakowski at the

March 31 meeting, specifically called attention to the

lack of work in the warehouse and the threat of possible

future layoffs as its means of inducing employees to

give up the Union. That this was intended is corrobo-

rated by Wier. While the floor sealing operation may

have abated the dust and solved a real problem for the

Respondent, the way the matter was handled served to

provide an atmosphere continually supportive of the

March 31 threats of layoff or shutdown.

Although the use of the freight division before the

election, at least in part, to make its employees appre-

hensive about supporting the Union was not alleged as

.a violation in the complaint, the matter was fully liti-

gated at the hearing and is closely related to matters

actually alleged. Accordingly, I find this conduct to be

violative of Section 8(a)(1) of the Act.

3. The alleged unlawful promises and granting of wage

increases and other benefits

The General Counsel, contrary to the Respondent,

contends that various pay increases were granted un-

lawfully in the preelection period to discourage union

support and activity by Respondent’s employees.

From the credited evidevce, including the Respond-

ent’s payroll records, it is concluded that on March 26

Michael Lanza and Clara Kitson and on March 28 Mi-

chael Jaconski, _Tespectively, were unlawfully

65a

new classification and wage scale in response to an or-

ganizational drive is unlawful,®® I find, under the cir-

cumstances herein, that the reclassification of these

three employees to higher paying positions is violative

of Section 8(a)(1) of the Act. Waters’ explanation that

the reclassifications had occurred because the receiving

clerk job was being eliminated as all warehouse employ-

ees were doing the same work illustrates the Respond-

ent’s timing as this situation apparently had been true

for some time before.

Crediting the testimony of employee Ippolito, I con-

clude that Waters, at a preelection meeting of all ware-

house employees in April, announced that he was try-

ing to fight for equal pay for equal work and that $300 a

week was a justifiable wage.*° This raise was actually

given but 2 days after the election at a time when ob-

jections to the election could still have been timely

filed.

In my view, Waters’ statement to the employees, as

described by Ippolito, constituted a promise of a pay in-

crease in the stated amount, and apparently was a pre-

election response to the list of employee proposals sent

to him by them on March 31 in consideration of their

having signed the petition withdrawing their support

for the Union. Contrary to Waters’ testimony that in-

creased wages and other benefits were not requested

until 2 days after the election when the request was

processed, the Respondent’s own records, as noted,

show that the across-the-[bJoard increment became ef-

fective 2 days after the election. Accordingly, I find

that the Respondent had announced and undertaken to

obtain the pay raise well before the election was con-

ducted in violation of Section 8(a)(1) of the Act.

2° Frymaster Corporation, 233 NLRB 619 (1977).

* At that time, the most highly paid warehouse employees

earned a weekly raise of $289.

66a

The only other job benefit granted by the Respond-

ent in the preelection period was the establishment and

recognition of the three-member grievance committee

formed at the March 31 meeting and as a result thereof.

Although this committee took its inception from the

employees’ request for such representation, the com-

mittee received its validity and standing from the

Respondent as part of the consideration for the

employee-signed petition requesting withdrawal-of the

representation election petition. In that sense, the

grievance committee was an unlawful job benefit given

before the election to encourage the employees to aban-

don their support for the Union and to seek redress of

their job-related problems and grievances through the

alternative thus provided. Accordingly, it is concluded

‘that, in recognizing the grievance committee under the

circumstances herein, the Respondent violated Section

8(a)(1) of the Act.

4. The alleged unlawful threat of loss of job benefits

In accepting the testimony of employee Edmund

employees in April, Waters declared that if the employ-

gotiations and that there was a good chance that they

is not credited as, for reasons set forth above, he is not

deemed a reliable witness.

The Respondent contends that, even if Waters had

made the remarks attributed to him by Ringen in

threatening the loss of job benefits, such comments

67a

scribe the relevant situation, as only 4 of the approxi-

mately 14 employees who heard Waters that day had

vested rights to these benefits. Accordingly, it is con-

cluded that, in threatening the loss of such benefits, the

Respondent violated Section 8(a)(1) of the Act.

5. The alleged unlawful interrogation

From the uncontradicted testimony of Joseph San-

ders, it also is found that about 3 days before the elec-

tion, at a bar, Warehouse Supervisor Houlihan, in vio-

lation of Section 8(a)(1) of the Act, had asked Sanders,

in effect, why the employees wanted a union, how he

and each of the other employees would vote in the

forthcoming election, and who had started the Union.

Two other incidents involving Houlihan, referred to

above and not specifically alleged in the complaint, also

are worthy of note. First, Lesniakowski testified, also

without contradiction, that about 3 days before the

March 31 meeting, while but two bar stools away, he

overheard Houlihan tell an acquaintance that the work

was being diverted to the Summit warehouse and that

it looked as though the Company was going to subcon-

tract out the work if the Union came in. Lesniakowski

gave this incident as a motivating factor in his decision

to seek the March 31 meeting. The second undisputed

occurrence is taken from Eric Stromberg’s testimony

that on the night of June 3 immediately following his

layoff, while Stromberg also was in a bar with

Houlihan, the latter told him that the layoffs and the

68a

these events were not alleged in the complaint and, if

found, would not materially affect the remedy found

herein.

6. The alleged unlawful layoffs

In agreement with the General Counsel, the econom-

ic defense offered in justification of the layoffs on May 6

and June 3, respectively, of eight employees must be

considered in the context of the union animus shown by

the Respondent. At the March 31 meeting employees

were told that if the Union came in or an election were

conducted their work would be subcontracted or the

warehouse would be closed and thus were persuaded to

sign a written request for withdrawal of their represen-

tation petition. In the critical period before the election

‘the Respondent also gave and promised to give pay in-

creases, recognized an employee grievance committee,

and conducted meetings of employees where, at various

times, they were told by members of management that

if they did not organize business prospects looked good,

and if the employees became unionized there was a

good chance that they would lose their profit-sharing

plan, stock option plan, and pension benefits. To create

a sense of anxiety among its employees during the

preelection period, the Respondent magnified a slow

period in the warehouse by diverting incoming freight

to a contractor’s premises where it was handled by that

employer’s crew, and used its own supervisors after

hours to move inventory away from the floor area to be

sealed, although the Respondent’s own employees were

underutilized at the time. As Wier credibly testified, a

purpose of the strategem was to let the employees see

an empty warehouse and think about the union matter.

After the last layoffs occurred, on June 3, Houlihan told

Eric Stromberg, the employee union activist,

that the layoffs and the Union had been Stromberg’s

** As noted, Houlihan also, at various times after the repre-

(Continued next page— |

69a

While subcontracting had been considered by the Re-

spondent for years and some contractor labor had been

utilized during the first 6 months of the warehouse’s op-

eration, no subcontracting was again done until the Un-

ion began to organize the Respondent’s employees.

Although the General Counsel argues with regard to

Waters’ study that, adjusting for the salaries and fringe

benefits of employees Lesniakowski, Jaconski, and

Tiedemann, who was omitted therefrom, the cost to the

Respondent of operating the warehouse with ESP labor

for the 4-week period between the weeks ending June 4

to June 25 was nearly $3,000 more than it had cost to

run the operation with its own employees between the

4 weeks ending April 15 and May 6, this would not nec-

essarily be a valid projection for future comparative

costs. Most of the benefits considered herein, including

the across-the-board pay raise and liberalized overtime

pay policy, became effective only on or after April 27,

and were not factors during most of the earlier 4-week

period referred to by the General Counsel. As the Re-

spondent, in subcontracting, could reduce or expand

the work force according to need with greater flexibili-

ty, would be spared the processing of employee griev-

ances and payment of fringe benefits, and could keep

fewer records, I am prepared to accept the Respond-

ent’s position that subcontracting the warehouse labor

ultimately could be financially beneficial.

However, noting that the layoffs began on May 6,

only about 1% weeks after the effective date of the

[Footnote continued— |

sentation petition was filed, deliberately stated in Lesniakow-

hearing that the work was being diverted to Summit and

70a

testimony that Waters, in directing the start of the lay-

offs, had told him and the other supervisors of the Re-

spondent’s continuing concern that the Union would try

for another election in the following year when one

could again be conducted, in the context of Newhouse’s

words of praise for the work of the Edison staff, it is

concluded that, although the Respondent eventually

could have reduced its costs by laying off most of its

own warehouse employees and by subcontracting their

work to ESP, the Respondent was motivated, at least

in part, in so doing at that time by a desire to reduce

the possibility of another union election in the future.*?

Accordingly, I find that the employee layoffs on May 6

and June 3, respectively, were in violation of Section

8(a)(3) and (1) of the act.*

IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES

UPON COMMERCE

The activities of the Respondent set forth in section

III, above, occurring in connection with its operations

described in section I, above, have a close, intimate,

and substantial relationship to trade, traffic, and com-

merce among the several States, and tend to lead to la-

bor disputes burdening and obstructing commerce and

the free flow thereof.

42 The treatment of the laid-off employees contrasts markedly

with that afforded Lesniakowski and Jaconski, who were kept

on at the new higher pay rate in apparent reward for their serv- —

ices to the Respondent in having conducted the March

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.