# Petition — Behring International, Inc. v. National Labor Relations Board > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0726%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1984 - **Citation:** 464 U.S. 1071 ## Text D 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 I 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 la 6a 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 bo 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. 3 (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: * * © The findings of the Board with respect to 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 5 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 ~ Me 8 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 ~ —* Se 9 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 10 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 11 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 12 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, 13 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, 14 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 15 “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- 16 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). 17 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- 18 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 19 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. 20 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 21 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] 2a 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 3a 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 vz 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 4a 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 5a 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 6a 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 in ae 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- 7a 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 8a 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- 9a 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, v. 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. (c) Threatening employees with loss of benefits if 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. K ® 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. * 2 ~ 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 exp [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_0726%3A1. Public record. Not legal advice.