Petition for Writ of Certiorari — National Labor Relations Board v. Bata Shoe Co.

- Opinions below... dhibardnlinadodmint

: aor pinche FE RUSE AES APE Sotaea ‘

i The representation proceedings.‘

2. The unfair labor practice proceed- :

B. The decision of the court of appeals... __ |

' Reasons for granting the fbsdiideleanes endadswe -

‘Conelusion-_---__ swutiebatiias im neea seen ——

_ CITATIONS ©

Celanese Corp:, of America v. National lak

_ Relations Board 201 F. 2d. 224, certioeey

denied, 368 U.S. 925...5.....-.-../.....- 10, 12

. \ =, r)

*. 2SSBsrsy bo to no tA tom

“ %-

Comfort Slipper Corp., 112 NLRB 183....._ _—

Cross Co. v.. National Labor Relations Board,

288 F. 2d 188_____ DearS OT ONES AAS SRE a

-, DeVilbiss Company, The, 115 NLRB 1164... 15

" Graphic Arts Finishing Co. v. National Labor

: Relations Board (C.A. 4), decided. June 19,

PON TE ticatinRisincdadihicn Wen nre st ttere--5---- ° 13.

Gummed Products Co.,.112 NLRB 1002. .....;... 15

Hollywood Ceramics Co, Inc., 140 NLRB mal. 10, 15

“am1-94—07 a)

\\

~~

Cases—Continued P roiste fe eons

- Horder’s, Incorporated, 114 NLRB 751...

: ‘International Telephone & Telegraph Corp.. v..

eee National Labor Relations Board, 294 F. 2d

/

io

ies Pottery Co. v. Naiional Labor Relations

Board, April 18, 1967, 65 LRRM 2055._---

Merck & Co., 104-NLRB 891--------------

National Labor Relations Board v. Bonnie: En-’

terprises, 341 F. 2d 712_--------------+--

"National Labor Relations Board v. Donnelly

Garment Co., 330 U.S. 219. -.-<----------

National: Labor - Relations. Board v. Hearst

Publications, 322 U.S. 111--------------- :

National Labor Relations Board v. Houston ;

Chronicle Publishing Co., 300-F. 2d 273-- --

National Labor Relations Board v. National

Survey Seryice, Inc., 361 F. 2d 199.-------

Naliénet Labor Relations Board v. Schapiro &

~ Whitehouse, Inc., 356 F. 2d 675-_-=------- :

- National Labor’ Relations "Board v. Mattison ~

Machine Works, 365, U.S. 123-_---------- .

National Labor Relations Board v. Southern Air- 7

ways Co., 290 F. Oe BOR. hi wae codnccsten

National Labor Relations. Board v. Tower,

A.J. & Co., 329 U.S..324_--------- ‘12, 14,

: National Labor Relations Board v. Trancoa_

7 Chemical Corp., 303 F. 2d 456__.--- Oe |

National ‘Labor Relations Board v. ‘Waterman

Steamship Co., 309 US. OD ss Saaeeenen =

National Labor ‘Relations Board v, Worcester

Woolen Mills Corp., 170 F. 2d 13, certiorari

denied. 336 U.S. 903..-------------------

_ Packard Motor Car Co. v. National Labor Re-

lations regen US. Soe gros ca

<

17, 19

: B

14.

M Statute:

nN ational. Tabor’ Relations Ket, as ‘enuaded” 3

(61 Stat. 136, 73 Stat. 519, 29. U.S.C. 151, te

: OO icine one tcteeeeeenenen

iia!

Thirty-first ‘Annual Report. of the Nationa

Labor pekitions Board.-_.-._.. seabisabarecs : 18 é

; .

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20

Section. Ca SS Se ee ee 10, 20

. Section 8(a)(5)________ Prsedebeddacessen. IO

Section 9(a)..--2 eciemenser)* SO,

20:

~ Section We ovevensscccdcnutad ithe dn

Section 10(e) elsenteshichivhsaies ibaa edidibinitchadiiteid BR

eous: | |

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- an th epi dear of fhe ited Sis

| Octonrn Term, 1967 Hinge Mees

sahinianibe

| : 5 ad No. | . ‘<a

NATIONAL LaBor RELATIONS Boar, ehciraemed me

; 4 Vv. 4

Bata SHoe Co., INc,, AND Unrrep SHog fWeeathins OF

AMERICA, APL-O10.

» PETITION “FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS ven THE. — rae saiae icu

The Solicitor. General, ‘on behalf of the N ational :

Labor Relations Board, petitions for a writ of cer-

tiorari to review the judgment of the United States

_ Court: of Appeals for the Fourth Cireuit entered in

this case on ‘April 6, 1967.

OPINIONS BELOW

The opinion of the court of dppeali’ (Appendix B, .

infra, pp. 23-49) is not yet officialiy reported. . The ©

Board’s decision and order (J.A. nigel are reported

at 157 NLRB 1, .

Jv. RISDICTION

~The ‘teu of the court of appeals was cited on

April 6, 1967 (Appendix B, infra, pp. 49-50). On J ‘uly

6, 1967, Mr. J ustice ‘Brennan extended the time for

1“J_A.” refers to the joint appendix i in the court below; copies"

have been filed with the petition. : é

-@

a

filing a petition for a writ of saitisinit to ‘sal includ-

- Ing August’ 4, 1967. This Court has jurisdiction under

28 U.S.0. 1254(1) and Section 10(e) of.the National

| Labor Relations Act (29 U.S.C. 160(e)). |

< QUESTION PRESENTED

Whether the court below applied the wrong stand-

_ ard of judicial review in reversing.the Board’s déter-

mination that a representation election was held by |

the Board under circumstances which enabled the em-

ployees to make a free choice of representatives, and

afforded all eligible voters adequate tao to

“vote.

STATUTE INVOLVED

The relevant provisions of the National Labor Re-

lations Act (61 Stat. 136, 29 U.S.C. 151, et seq.), are

set forth in Appendix A, infra, pp. 20-22.

STATEMENT

A. THE BOARD’S DECISION AND ORDER

L: The representation proceeding—On March 9,

19€5, after the Union’ filed a petition for representa-—

tion with the Board, -the respondent Company and the

Union entered into an election agreement. This agree- -

ment, approved ‘by the Board’s Regional Director,

provided for an election to be held on April 23, to de- —

termine whether the production and maintenance

employees at the Company’s Belcamp, Maryland, plants *

_ wanted the Union to be their bargaining representa-

tive (J.A. 3-4; 126-129). |

During the subsequent pre-election period, both the.

Company and the Union vigorously stated their posi-

} 2 United Shoe Workers of America, AFL-CIO. —

3

_ tions in campaign leaflets distributed to the employees.

On April 22, the day beforé the election, the Union

distributed a leaflet, in the form of an open letter to

_ Company President Dolezal, which’ stated in- part

. (J.A. 125¢-125e): 3 :

WHY NOT BE FAIR AND GIVE THE

WORKERS THE TRUE FACTS, MR.

DOLEZAL — , |

You have been making many speeches about |

_ Union benefits in every department of the plant,

but you have never produced one shred of evi-’

_dence to prove what you say. When the worker-

asks to see the proof, you ask them to come to

your“ office and you will show it to them—SQ

_ FAR NOTHING BUT SPEECHES. -°

_ dn your New. York union contracts-which

your Attorneys Seligman and Seligman partici-

pated for some of the shoe companies, the fol-

lowing benefits are in effect:

Union benefits = - re IS ie

Hospital Room and Board—$30.00 per day - $17.00 per day. :

Dependents—Coverage for dependents paid Employees of Bata contribute for depend-

for entirely by the Company. The worker ency coverage. A

Pays nothing. - é

Clinic—For all union members and de Bata has no such clinic, and in fact punishes

Pendents: Includes free diagnosis—free Workers who are out sick. —

doctor—free drugs—free X-ray, etc.

Eye Glasses— Union members and depeni- Bata has no such thing.

ents receive free eye glasses and exami- }

nation. .

Pension Plan—Ours has been in effect | Bata is the sole Administrator and the

many years with a vesting provision at formula can be changed when they feel

and the Union have equal voting powers. forced to leave by the time he fs ready

Wages—Wage Increases and better benefits No general Wage Increases for their workers

for all employees and a qualified Union in spite of their PROFITS. Bata Per-

Representative to handle your griev- |: sonnel man handles grievances to the

| 4 eae,

THEREFORE, MR. DOLEZAL, SINCE:

YOUR HIGH PRICED ATTORNEYS, SEL-

IGMAN AND SELIGMAN, HAVE THESE

NEW YORK UNION AGREEMENTS,

_ WHY NOT BE FAIR AND SHOW THEM

' TO THEBATA WORKERS?

- The election was held as scheduled on April 23,

and the Union won, 1082 to 1036 (J.A. 4; 65)2 The

Company filed objections to the election, contending”

(1). that the April 22 leaflet circulated by the Union

misrepresented material facts which “coerced and in-

timidated the employees and so lowered campaign

standards that the uninhibited desires of the employ-

ees could not be determined” (J.A. 67), and (2) that.

- the Board improperly conducted the election so that

“eligible émployees were deterred and prevented from

. voting [and] ineligible ‘employees were permitted to:

_ vote” (J.A. 104).‘ Pursuant to the Board’s Rules and.

Regulations (29 C.F.R. § 102.69(¢)), the Board’s Rey

gional Director investigated the Company’s objections.

and issued a report thereon, finding as follows (J.A. °,

65-125) : | a Ss a

(a) The Regional Director found that with one ex-

_. ception, all the benefits referred to in the leaflet were

~ included in an existing contract between the Union

* Forty-one ballots were challenged but their validity was not

determined since they could not have affected the results of the

«The Company raised numerous other objections to the elec-

; tion, and to conduet affecting the results of the election ; but the

“eourt of appeals agreed with the Board that those objections —

+ were insufficient to invalidate the election (App. B.,.infra, pp-

38-87). sper | | *

5

and a New York shoe company, Andrew Geller, Ine.’

‘Fhe one exception was that the Geller contract did

not provide free clinic services “for all union members

- and dependents” as asserted in the leaflet; it provided —

free clinic services for union members and allowed a

: . 50 percent reduction in the normal fee for dependents

(J.A. 73). That contract also provided free “surgery

or other operative procedure”’ for both union members

_ and dependents (J.A.73). The Regional Director eon-

_ ¢luded that the assertions in the leaflet were. substan-

tially correct, and were not inaccurate in “any ma-

terial respect” (J.A. 73-74). Accordingly, he rejeeted

the Company’s contention that the leaflet. so misrepre-

sented material facts that “the uninhibited desires of |

the employees could not be determined” (J.A. 67, 73-

74). : ae

. (b) Respecting the conduct of the election, the Re-

gional Director’s investigation disclosed that a large

number of employees were still in line to vote when

the polls were scheduled te close at 5:15 p.m.* Shortly

_ before that time, the Board agent had an announce-

‘ment made over the plant public address system that

all eligible voters must be in the voting line by 5:15 in

*The Regional. Director noted, however, that another current

contract in the New York area “did not reflect all the benefits”

elaimed by the Union (J.A. 72). ;

*The long line was caused by-delays in balloting. These de-

lays were largely due to the difficulty in locating the names of

the voters on eligibility lists prepared by the Company for use

‘im the election. The Company compiled these lists by depart-

ments as of the stipulated eligibility date, but did not correct

‘the lists after a substantial number of employees were sub-

| sequently transferred to other’ departments (J.A. 106-107).

271-924—67—_-2

e .

haa i i Lees Me RCNA test Aan nt ane i ll dN Nt tir 2

6

order to vote. At 5:15, the voting line was so long the

agent could not keep it under observation, since he had

to be in the polling ‘area. Therefore, he instructed the

last three employees in line to inform any employees

who subsequently arrived that the line was closed,

and to direct therm to him in the polling area (J.A.

- 113). Later, the agent excluded one employee he ob-

served entering the line after 5:15,’ but 30 other em-

ployees entered the line unobserved by the agent or un-

- challenged by the employees instructed to guard the.

line (J.A. 113-114). No evidence was presented, and ——_-—

—~———none was discovered in the Regional Director’s investi-

gation, that any eligible employee, other than the ene. +

mentioned above; was turned away by the Board

agents or the employees at the end of the line (J.A.

114). Ninety percent of the eligible voters reporting

for work.on election day actually voted (J. A. 124).

On the basis of these facts, the Regional Director

rejected the Company’ s contention that eligible voters.

were deterred from: exercising their franchise (J:A.

124). Further, hé found no merit to the contention

that those voters getting into line after 5:15 were in-

eligible to vote, concluding (J.A. 124): :

- Moreover, the lists, which included 2,583 names of employees:

eligible to vote, were ofily partially alphabetized. In addition, *

some Company foremen sent. newly hired employees to vote

even though they were not on the eligibility lists and could not

vote, necessitating a. fruitless search of the eligibility lists for

_ their names. Also, rain forced employees to seek shelter to-

gether, thus mixing department groups which had’ been released

separately to vote (J.A. 106-111). The Regional Director con-

cluded that the Company, and not the Board, was largely re-

_ sponsible for the delayed balloting (J.A..111).

_.™The Regional Director’s investigation revealed that the ex-

cluded employee actually had properly | nae in line and was

’ 7 P "

The fact that otherwise eligible employees ap-

' pear’ to vote after the scheduled closing of the :

polls does not make them ineligible. The Board’s

_Imandate is to provide employees with an oppor-

tunity to vote.. While ‘Treasonableness requires

that polling periods be specified, the fact that

' eligible employees succeeded in ‘casting ballots

after the line was closed in this case but before

the polls were closed is not ground for setting —

. _ . aside the election. gets

_...__+The-Regional Director recommended that the Com-

pany’s objections to the election be overruled and that

_ the Union be certified as the bargaining representative

' of the employees in the unit (J.A. 125). The Company

filed timely execptions to the Regional Director’s re-

’ port (J.A. 131-172). On August 25, 1965, the Board,

after consideration of the Regional Director’s report

and the exceptions thereto, issued its Decision and Cer-

tification of Representative, adopting the Regional Di-

rector’s recommendations in full (J.A. 4). vee

_ 2. The unfair labor practice proceeding.—The Union

requested the Company to bargain, but’ the Company

refused to do so until there had been court review of

the certification (J.A. 4; 125x). The Union filed unfair |

labor practice charges, a complaint issued, and a

' hearing was held thereon (J.A. 2). At the hearing,

the parties stipulated that the Company had no pro-

duction employees in New York and no contract with

returning from the rest room when the Boatd agent saw him

-(J.A. 114-116),’ Although that employee should thus have been

allowed to vote, the ‘Regional Director found that his exclusion

was insufficient to affect the results of the election and hence

did not warrant setting aside the election (J.A. 116).

§

the Union there (J A. 9; 46-47) 2 ‘The Company ——

argued that these stipulated facts, which were not re-

flected in the Regional Directér’s Report on Objec-

tions, established that the April 22 leaflet (supra, pp.

3-4) misrepresented to the employees that the Com- ©

pany had contracts with the Union in New York con-

taining the benefits deseribed. It asserted that the mis-

_ representation was material, and that, since, it ‘had no

" opportunity .to reply, the election should. be set aside

" (JA. 10). ae | :

The Board, adopting the trial examiner’s decision

(J.A. 1), found that the reference in the leaflet to

®*This and other evidence was permitted to be introduced at

the unfair labor practice hearing although the Board generally

precludes relitigation in an unfair labor, practice proceeding of .

issues determmed in the representation proceeding. See, 2.7.;

National Labor Relations Board v. Worcester Woolen Mills

- Corp, Y10 F.-% 18, 16 (C.A. 1), certiorari denied, 336 U.S.

903; National Labor Relations Board vy. Southern Airways Co.,

290 F. 2a 519, 522 (C.A. 5); National Labor Relations Board v.

National Survey Service, Inc., 361 F. 2d 199, 204 (C.A. 7). The

: rule was relaxed here under the following circumstances:

REL Le oe ete 9 ,

“your New York union contracts which your Attor- _

neys Seligman and Seligman participated for some of

_the shoe companies’? was. ambiguous, at most, as

“your’’ referred to both employees andggmployer in

different places in the leaflet (J.A. 10). The Board -

further found that. the subsequent phrase “for some

of the shoe companies’’ dispelléd any ambiguity by

demonstrating that the reference was not to a New ~

_ York contract with. the Company (J.A. 10-11). More-

over, the Board noted that the remainder of the leaflet

contrasted ‘‘Union Benefits” and “Bata” benefits, and

nothing therein indicated that the “Union Benefits” |

‘applied to any employees of Bata (J.A. 11). Accord-

' ingly, the Board concluded that the reference to *‘your

union contracts” was at - worst “inartistically or

vaguely ‘worded arid. subject to different interpreta-

_ tions,” and was insufficient ‘to establish a misrepre-

sentation” as to the existence of contracts with the

Union in New York (J.A. 11). The Board therefore

affirmed its decision in the representation ease that the

Company’s objections provided no. basis for setting

aside the eleetion;° held that the Company’s refusal

S eenieenamneementeee

*In the unfair labor practice proceeding, the Company ‘also

sought, without presenting new evidence, to reargue its other

objections to the election which had been considered and. re-

_ jected by the Board (J.A. 4-17). The Board declined to recon-

sider these objections in the absence of new: evidence {J.A. 11).

In addition, the Company introdutéed into evidence a pre-elec-

tion agreement between the Company and the Union, which

limited the number of election observers to three for each party.

eo - 0 .

a) bargain with the duly certified Union violated Sec-

tion 8(a) (5) and (1) of. the Act; and ordered the —

Company to cease and desist from its unfair labor

_ practice and to bargain, upon request, with the Union

(J.A. 1, 17-20). -

B. THE DECISION OF THE COURT OF APPEALS

The court of appeals (with Judge Bell dissenting).

declined to enforce the Board’s order. At the outset,

the court’ quoted the statement in Celanese Corp. of

_ America v. National Labor Relations Board, 291 F, 2d

224, 225. (C.A. 7), certiorari denied, 368 U.S. 925, that

. the Board’s “wide discretion in establishing the proce-

dures and safeguards necessary to insure the fair and

free choice of bargaining representatives * * * lies

in the initial promulgation of rules and regulations”;

but that once those rules were ‘promulgated, it was the

court’s function, applying the substantial evidence «

standard, to “determine whether the record as a whole

supports the [Board’s] findings and conclusions re-

specting compliance” ‘therewith. (App. B, infra, pp. \

39-33). Noting that the Board had ruled that an elec-

-tion would not he set aside because of misrepresen-

‘tations in campaign statements unless ‘‘(1) there has

been a material misrepresentation of fact, (2) this”

misrepresentation comes from a party who had special

knowledge or was in an authoritative position to know

the true facts, and (3) no other party had sufficient

opportunity to correct, the misrepresentations before~

the election’’ (App. B, infra, p. 37, again quoting from

Celanese);° the court held that the Board’s conclu-

10 See Hollywood Ceramics Co., Inc., 140 NLRB 221, and the

discussion n. 13, infra. Deke gh and PEC

© core

sion that the leaflet did not. contain a material mis-

representation of fact, and thus did not interfere with

‘the employee free choice, was “not supported by sub-

stantial eviderice” (App. B, infra, p. 41)"

The court further ruled that the “irregularities. in.

election procedure caused by substantial omissions of

Board agents” required. a new election. In the court’s .

view, these irregularities “made it highly probable .

that eligible ‘employees were deterred from voting

' while at least thirty others’ were allowed to.vote after

the polls should have been closed” (App. B, infra,

pp. 41-43). & Bi ides Cain

- Judge Bell, dissenting, stated that the court had in-

vaded “an area which I think is peculiarly within the -

‘expertise of the Board to overthrow a result they oo.

not like” (App. B, infra, p. 48).

"REASONS FOR GRANTING THE WRIT

1. In setting aside the Board’s determination that

the union’s election leaflet neither contained material

misrepresentations nor interfered with the employees’

free choice in the election, the court of appeals, ap-

plied the wrong standard of review. As we show below,

In the court’s view, the leaflet contained a material misrép- |

resentation of fact, even if read as referring to contracts which -

the Union had with other companies in New York, because

“free medical benefits of dependents in New York did not ex-

tend generally to clinical services” (App. B, infra, pp. 38-39).

The court further found that: the leaflet created the false impres-

_ Sion that the. Company itself had contracts with the Union in

_ New York. Accordingly, although agreeing with the Board that

the “language in the leaflet admittedly injects some ambiguity,”

_ the court concluded that it was “inclined to agree with .the

Company on its view of the impact of this language” on the..

employees. (App. B, infra, pp. 39-40). 7

SP OSE LCE SAY ORIN ES PO RAING SO RR RE

» |

“12 . ae,

there is no dispute as to the facts involved in those

issues; the question is the propriety of the inference

that the Board drew from these undisputed facts that

_ the. election fairly and effectively enabted ‘fae em-.

ployees to record their wishes on the question of union

representation. This. Court has recognized that “Con-

gress has entrusted the Board with a wide. degree of

discretion -in establishing the procedure and safe-

; guards. necessary to insure the fair and free choice of ~

bargaining representatives: by employees” (Ni ational

Labor Relations Board v. A. J. Tower Co:, 329 U.S...

324, 330, emphasis’ added), and we ‘submit that the

propriety: of the Board’s exercise of that ‘discretion ©

; in a partionlar ease is not to be tested under the tra-

_ ditional substantial evidence rule. Rather, the Board’s |

@etermination in this area, like its “determination.

that specified persons are ‘employees’ undir this Act

is to be accepted if it has ‘warrant in the record’ and

a reasonable basis in law” (National Labor Relations

Board v. Hearst Publications, 322 U.S..111, 181) ; and

like its selection ‘of an appropriate unit for high.

- jng, it is,“rarely to be disturbed’’ (Packard Motor

- Car Co. v. National Labor Relations Board, 330 US..

485,491). - ¢

Tn the 1961 Term the Board asked this. Court to

review the same issue, but the Court dectined. Na-

tional Labor Relations Board v. Celanese Corp. of

America, 368 U.S. 925. Since then, there have been 4

number of cases in which both the court below and —

other courts of appeals have continued to apply an.

scotia standard of review, i.e, in setting aside: -

13; °°

Board determinations that Bae ‘union aie did. |

. Not. require. a new election; they have fajled: to rec-.

- ognize the Board’s wide digeretion and, the narrow.

4 seope of review.” This pattern, we. believe, is likely. 9:

continue if the decision below, stands. Since such ju-.

dicial supervision of Board. elections is likely, to have. .

a seriously adverse effect upon the: rights of employees. a

to bargain collectively: through representatives of their.

own choosing (see infra, pp.. 18-19), ‘we submit that,.

despite the denial of ¢ertiorari.in Celanese, it, would

_ now be appropriate for this Court to review the. issue.

a. The ultimate determination for the Board in. pass- ae

ing upon challenges to a representation election, is _

whether the election constituted a dependable expres-. |

sion of the employees’ free choice of a bargaining rep-.

resentative. That.determination involves two elements :~

(1) ascertaining the facts and (2) making a parma

as to the probable effect of those facts upon the exer-_

cise of the employees’ free choice. The first function

frequently requires the Board to make factual findings

upon such questions as what the union or the company

told the employees, whether those statements were true,

"8 See Graphic Arts Finishing Co. v. Nationa’ Labor Relations

Board (C.A. 4), decided June 19,1967 (reprinted. in App. C,

infra, pp. 51-58); National Labor Relations Board v. Bonnie

- Enterprises, 341 F. 2d 712 (C.A. 4); National’ Labor Relations °

Board v. Schapiro & Whitehouse, Inc., 356 F. 2d 675, 678-679

- (C.A. 4) 3 National Labor Relations Board v. Trancoa Chemical

Corp., 303 F. 2d 456 oere x4 National Labor Relations Board

v. Houston Chronicle hing Co.,-300 F. 2d 273 (C.A. 5). .

See also Cross Co. v. National Labor Relation Board, 288 F. 2a

. 188 (C.A..6). But cf. Macomb Pottery Co. v. National Labor ©

Relations Bogrd (C.A. 7), April 18, cat 65 LRRM 2055.

271-924-673 :

14

etc.—findings which properly are to be tested by the

‘substantial evidence standard. The second function,

however, involves the application of the Board’s ex-:

pertise, based upon its experience in conducting thou-

sands of representation elections every year (see tufra,

p. 18), to an area in which Congress has given the

agency wide discretion. See A. J. Tower, supra; Na-

tronal Labor Relations Board v. Waterman Steamship

Co., 309 U.S. 206, 226. The reviewing court, therefore,

_ should not disturb the Board’s conclusion that union

or company conduct did or did not interfere with the

employees’ freedom of choice in a ene ee

tion unless it is unreasonable.

b. _In the present case the Board’s refusal to order a

new election was not unreasonable. There was no dis-

pute as tothe facts, i.e., what the union did and said;

the only issué was whether the statements in the union

leaflet precluded a fair election. The record does not

contain evidence dealing directlywvith the effect of the

leaflet on the employees, and the very nature of that

issue indicates that direct evidence thereon would have

Tittle probative effect. See National Labor Relations

Board v. Donnelly Garment Co., 330 U.S. 219, 231.

Thus, in reviewing the’ Board’s conclusion that the _

. statements in the leaflet did not preclude the election

from dependably expressing the employees’ free

choice, the reviewing court should have asked whether

in all the circumstances, the Board’s conclusion was

reasonable. To frame the. issue in terms of substantial

evidence is likely to lead the court to substitute its

judgment for that‘of the Board on an issue committed

to agency discretion.

wy

f

15

That, we submit, is what the court did here in using

the substantial evidence test. Although the court pur-

ported to apply the Board’s own standards for deter-

mining whether to set aside an election for misrepre-

-Sentations in campaign statements (see supra, p. 10),”

a fair reading of the court’s opinion demonstrates, we

believe, that the court in fact made its own independ-

ent judgment as to whether the misstatements in the

leaflet were material, i.c., whether they were likely to

have had a significant effect upon how the employees

voted. Compare the majority and dissenting opinions

on this point. . :

ce. We submit that the Board acted reasonably in con-

_ ¢luding that the union’s leaflet did not mislead the em-

ployees. The basic charge in the leaflet was correct,

** The Board does not Set aside every election involving un-

truthful statements by one ‘of the parties.“ See, €.g., Horder’s,

Incorporated, 114 NLRB 751, 753; The DeVilbiss Company,

115 NLRB 1164, 1166-1167; Verson Mfg. Co., 114 NLRB, 1297;

Comfort Slipper Corp., 112 NLRB 183, 184-185. This policy of

nonintervention rests on the realistic premise that the employees,

‘as a result of their common sense and experience in political

elections, have learned that hyperbole and inaccuracies usually

accompany an intense campaign and therefore can be trusted to

evaluate. and discount claims that are made preliminary to a

representation election. Where ‘special circumstances occur, -how-

ever, which impair the ability of the employees to evaluate the

propaganda—e.g., where both a material ‘misrepresentation has

been made so soon before the election ‘that the other side could

not reply and the employees in all probability gave particular

weight tothe misrepresentation because the party making it

had special knowledge of the true facts—this premise is no

longer true, and the Board will ordinarily require a new elec-

tion. See Hollywood Ceramics Co., Ine.,:140 NLRB 221, 223-

224; Gummed Products Co., 112 N LRB 1092, 1093-1094; Merck

& Co., 104 NLRB 891, 892. iy,

16

1.€., that union employees of some “of the shoe com-

panies in New York received hetter benefits in terms

of wage increases, hospitalization, and pensions ‘than

Company employees, and that those union menibers

and their dependents received free surgical, clinical

‘and optical ‘services (benefits the Company did not

provide). The tnly respect in which the leaflet was

inaccurate, in describing the benefits given by other

shoe companies, was in stating that dependents re-

| ceived all clinical services free, whereas in: fact they

paid half the cost of such services. Dependents did,

ewever, obtain without charge complete hospitaliza- .

tion and surgical services. In these circumstances, the

Board was warranted in concluding that this rela-

tively minor misstatement did not impair the. em-

ployees’ free choice (J.A. 73-74). As Judge Bell ob-

served in dissent (App. B, infra, p. 48), “certainly

the Board is in better position to judge: than [the] ©

court which has only the opinion of an counsel

- to support its conclusion.”

The Board also amass concluded that the em-

ployees were not misled into believing the leaflet re-°

ferred to Company contracts with the union in New.

‘York, since the leaflet itself referred to contracts’ ‘‘for

some of the shoe companies” in New York (J.A._

10-11). As Judge Bell added (App. B, infra, p. 49),

the-court’s contrary conclusion is “speculation, and if

I were going to speculate I would assume that after

a long and bitter campaign, the employees would all

know whether the company had in fact signed advan-

7 tageous contracts with the union at other plants.”

In mm, it was clearly ‘‘within the Board’s province

' 47

to find’’ that the inaceuracy or ambiguity in the leaflet

did not affect the fairness of the election. See National - |

Labor Relations Board vy. Mattison Machine Works, .

365 U.S. 123. as aay is

2. In concluding that the election’ was invalid for

the further reason that there had been “maladminis-

_tration” of the mechanics of conducting it, the court

of appeals: similarly applied the wrong standard of

review. Here, too, the court improperly substituted

its judgment for that of the Board on a matter which

was particularly entrusted to the ‘agency. See Na-

tional Labor Relations Board v. A, J. Tower Co., 329

U.S. 324, 330. The Board found that 90 percent of the ._

eligible voters wo king on election day actually voted ;

that no eligible employee (save one, ‘whose vote would.

not have affected the result) was turned away from

the polls; that an opportunity to vote was afforded —

all employees who appeared at the polls; and that the

delays in the balloting were attributable to the Com-

pany, not the Board (J.A. 111, 113-114, 124).* On

these facts, the Board reasonably concluded that nei-

ther possible deterrence of eligible. voters nor voting

by employees who joined the line after it had been

closed but while the polls were still open, required a

new election (J.A. 124). The court of appeals, how-

ever, did not seek to determine whether this conclu- - *

sion was reasonable, but set aside the election on the

See International Telephone & Telegraph Corp. v. National

Labor Relations Board, 294 F. 2d 393, 395 (C.A. 9):

“Surely it would be vain for this court to hold that we are

better equipt than the NLRB to determined whether the op-

portunity given employees to vote was ‘adequate’ unless clear

‘ error was shown.”

: .

18

"basis of the Company’s contentions that it was

“highly probable that eligible employees were deterred

from voting’? and that “‘at least thirty others .were

allowed to vote after the polls should have been closed’

(App. B, infra, pp. 42-43). |

3. The Board conducted 8,324 siiiieediabilten elec- :

tions during the past fiscal year, and in 1,471 of these

the losing party filed objections to the election.” A —

large proportion of thesé objections involve claims

that there have been material misrepresentations dur-

ing the campaign or irregularities in the mechanics

of the election. The Board, on the basis of its extensive

experience in conducting elections, makes a judgment

as to whether the alleged misrepresentations or irreg-

ularities require a-new election; the number of cases

in which a new election is ordered is relatively small."

The decision below, however, by permitting the re-

viewing court to second-guess the Board on‘this issue, |

: undoubtedly will lead to a’ substantial increase in the

number of court challenges to Board election rulings.

Such rulings cannot be reviewed directly, but only in

connection with review of a subsequent unfair. labor

practice proceeding growing out of a refusal to bar-

‘gain because of-a claim. that the election was im- -

proper. Employers who are reluctant to fulfill their

statutory bargaining obligation thus are likely to re-

frain from bargaining after the union has won a close

election, in the hope of persuading the court of appeals

18 Thirty-first Annual Report of the- National ‘Labor Rela-

tions Board, p. 203 (G.P.O., 1967).

+ 16 See the Board’s ee ‘Annual Report, supra, n. 15,

p. 204. |

; 19

to invalidate it. The likely result would be to thwart |

the congressional purpose of avoiding industrial strife

by requiring. prompt collective bargaining between

_ employees and representatives selected by employees.

“Repeated appellate court litigation without allowing

considerable discretion on the: part of the NLRB

thwarts this policy by nurturing continuing uncer-

~ tainty and argument between the parties where deci-

sion—even occasionally erroneous decision—tends to

disperse. attention.” International’ Telephone case,

supra, n. 14; see A. J. Tower, supra.

CONCLUSION

For the foregoing reasons, this petition for a writ

of certiorari should be granted:

Respectfully submitted. 3

| THURGOOD MARSHALL,

| Mer Solicitor General.

ARNOLD ORDMAN,

General Counsel,

Dominick L. Manot,: -

| Associate General Counsel,

Norton J. Come,

Assistant General Counsel,

Wayne S. BisuHop,

Attorney,

National Labor Relations Board.

Avaust 1967.

APPENDIX ‘A |

The relevant provisions of the National Labor Re-

- Jations Act, as amended (61 Stat. 136, 73 Stat. 519,

29 U.S.C., Secs. 151, et. seq.) are as follows:

Sec. 8(a) It shall be an unfair labor practice

for an employer—

(1) to interfere with, restrain, or coerce em-—

ployees in the exercise of the rights guaranteed

in section 7; , :

a * 7 + *

(5) to refuse to bargain collectively with the

representatives of his employees, subject to the

provisions of section 9(a).

* * * ; *

Sec. 9(a) Representatives designated or se- ~

lected for the purposes of collective ‘bargaining

by the majority of the employees in a unit ap-

propriate for such purposes, shall be the ex-

elusive representatives of all the employees in

such unit for the purposes of collective bargain-

ing in, respect to rates of pay, wages, hours of

eniplopeat, or other conditions of employ- |

seems * FF oe

: * * * : * *

(c)(1) Whenever a’ petition shall have been

filed, in. accordance with. such regulations as

_ may be prescribed by the Board— _ .

-(A) by an employee or group of employees

or any individual or labor organization acting

- in their behalf alleging that a.substantial num-

ber of employees (i) wish to be represented for

- eollective bargaining and: that their employer

declines to recognize their representative as the

representative defined in section, 9(a), or. (it)

assert that the individual-or labor organization,

which has been certified or is being currently

‘recognized by their employer as the bargain- |

(20)

od

. , . : * .

Se es

_ ing representative, is no longer a représentative

as defined in section9(a);or ©. Ye

-(B) by an employer, alleging that one or :

more individuals or labor organizations have

presented. to him a claim to be recognized as the

representative defined in section 9(a) ; :

the Board shall investigate such petition and if

it has reasonable catise to believe that a ques- -

tion of representation affecting ecommerce exists .

shall provide for an appropriate hearing upon

due notice. Such hearing may be conducted by

_ an officer or employee of the regional office, who

shall, not make any recommendations with re-

spect thereto. If the Board finds upon the rec-

ord of such hearing that such a question of rep-'

resentation exists, it shall direct an election by

secret . ballot: and shall certify the results

~ thereof. ater os

* - & * * *

wee. 10:°° * © |

. + + ‘o_- * ee”

_ (e) The Board shall have power to petition

any court of appeals of the United States, * * *

within any circuit *-* * wherein the unfair (

labor practice in question occurred or wherein

such person resides or transacts business, for.

the enforcement of such order and for appro- ~

priate temporary relief or restraining order,

and shall file in the court the record in the pro-

_ ceedings, as provided in section 2112 of title

28, United States Code. Upon the filing of such

petition, the court shall cause notice thereof to

be served upon: such person, and thereupon

shall have jurisdiction of the proceeding and

of the question determined therein, and shall

have power to grant such temporary relief or

restraining order as it deems just and proper,

and to make and enter a decree enforcing,

modifying, and enforcing as so modified, or set-

ting aside in whole or in part the order of the

Board. No objection that has not been urged

before the Board, its member, agent, or agency,

271-924-6724.

22

shall be considered by the court, unless. the

failure or neglect to urge su@h objection shall

_. be excused because of extraordinary circum- \

stances. The findings of the Board with respect —

to —— of fact if supported \by substantial |

evidence on the record considered as a whole

shall be conclusive. If either party shall apply

to the court for leave to adduce additional

evidence @hd shall show to the satisfaction of

_ the court that such additional evidence is ma-

terial and that there were reasonable grounds for

the failure to adduce such evidence in the hear-

ing before the Board, its member, agent, or

agency, the court may order such additional

evidence to be taken before the Board, its mem-

ber, agent, or agency, and to be made a part of

the record. * * * Upon the filing of the record

with it the jurisdiction of the court shall be ex-.

elusive and its judgment and decree shall be final,

except that the same shall be subject to review

by the * * * Supreme Court of the United States

‘ upon writ of certiorari or certification as pro-

vided in section 1254 of title 28. —

| APPENDIX B _

United States Court of Appeals

for the Fourth Cireuit.

No. 10552 Je bara

wn *

NationaL Lazor Retations BoaRD, PETITIONER

. Vv. . . ‘

Bata SHor Company, Inc., RESPONDENT; UNITED SHOE

Workers oF AMERICA, AFL-CIO, InTERVENOR

On Petition for Enforcement of an Order of the

a National Labor Relations Board. |

Argued January 11, 1967—Decided April 6, 1967

Before Bryan, BELL and CRAVEN, Circuit Judges

Craven, Circuit J udge: The N ational Labor Rela-

tions Board petitions for enforcement of its order that

Bata Shoe Company enter into collective bargaining

' with the United Shoe Workers of America, AFL-CIO

hereinafter the. Union). Following a-consent election ?

on April 23,.1965,\the Union was certified as exclusive

Tepresentative for ‘production and maintenance em-

_ Ployees at the Company’s Beleamp, Maryland, plants.

The Company’s refusal to bargain with the Union en-

ables judicial review of the certification incident to the

Section 8(a)(5) unfair labor practice proceeding.’

*The election was condicted ‘pursuant to a “Stipulation for

Certification upon Consent Election”. entered into-by the Com- |

pany and Union. Seat as ;

* The Labor Board’s decision in the ubfair labor practice case

is reported at 61 L.R.R.M. 1364 (February 24, 1966).

‘ } \

(23) .

“

?

J

24 ’

The Company has challenged on a plethora of

grounds the election and certification of the Union.’

- The Company asserts generally that the integrity of

the election was impaired by misrepresentations in

Union campaign literature, coercive activity on the

part ef Union: adherents, and confusion accompanying

the conduct. éf the election.which prevented eligible

employees from exercising their franchise and im-

' properly permitted others to vote. —

The results. of the election show that 1,082 ballots

were cast for and 1,036 ballots against the Union, six.

ballots were voided, and. forty-one challenged. There |

were approximately 2,583 potential participants. No

resolution of the challenges was made since they were

not sufficient in number to affect the results of the .

election.

The Company filed with the Regional Diteetor for —

the Labor Board timely objections to the election in

accord with Board rules.‘ Following prescribed pro-

cedure in stipulated consent elections,’ the Regional

Director made an ex parte investigation of the objec-

tions and issued a written report in which he recom-

‘mended that the Company’s objections be overruled in

their entirety and that the Union be certified. After. |

consideration of the Regional Dire¢tor’s report and

the Company’s written exceptions—but without order-

| ing a hearing—the Labor Board rendered a decision

in which it adopted the Regional-Director’s recom-

mendations for the reasons setforth in his report and

certified the Union as exclusive bargaining representa-

8 In the conclusion to its “Exceptions to Regional Director's

Report on Objections” to the representation election, the Com-

pany sets out-twenty-three‘incidents which it maintains individ-

ually necessitate setting aside the election and cumulatively

“clearly compel” this action.

-4*NLRB Rules & Regs. § 102.69(a), 29 C. Fr. R. § 102. 69(a).

’ SNLRB Rules & Regs. FER, 29 C.F.R. a

F ith

She

it)

2

tive of the Company unit. The Labor Board, in decid-

.ing the election, questions on the written record neces-

sarily, under its own rules, determined at this junc-

ture that the Company’s exceptions did “not raise sub-

stantial and material issues with respect to ‘the con-

duct or results of theelection: ***77* hess

-.. Notwithstanding certification the Company contin-

ued its refusal to recognize and bargain with the. _

Union and a Section 8(a)(5) unfair labor practice ~

compaint was issued.’ In its answer to: the complaint

the Company alleged, in addition to misconduct in con-

nection with the election, that it had been denied a

hearing on substantial and material issues of fact and

law raised by its objections to conduct affecting the

results of the election and its exceptions to the Re-

gional Director’s report. an oe

' Section 102.69(e) of the NLRB Rules and Regulations pro-

vides that in cases involving consent élections pursuant to Sec-

tion . 102.62(b) (Stipulation for . Certification upori’ Consent

Election) : “If exceptions are filed, either to the report on chal-

lenged ballots or objections, or both if it be a consolidated re- -

port, and’ i appears to the Board that such ewceptions do not .

“raise substantial and material issues with respect to the conduct

or results of the election, the Board may. decide the matter

forthwith upon the record, or may make other disposition of the

case. If it appears to the Board that such exceptions raise

substantial and material factual issues, the Board may -direct

the regional director or other agent of the Board to issue and

cause tobe served on the parties a notice of hearing on said

exceptions before a hearing officer. * *'* Upon’ the close of

the hearing the agent conducting the hearing, if directed by the

Board, shall prepare and -cause to be served on the parties a

report resolving questions of credibility and coritaining findings

of fact and recommendations to thé, Board as to the disposition

of the challenges or objections or both if it be a consolidated |

report.” 29 C.F.R. § 102.69(e). [Emphasis added.] 20 hee

"Section 8(a) (5) of the National Labor Relations Act pro- - »

_ Vides that, it. shall. be an. unfair labor practice for an employer .

“to refuse to bargain collectively with Tepresentatives of his:

_ employees. * * #29 U.S.C.A. $158(a)(5).

S

— ;

ww.

Sal ct aaah net mand COR CAR at eM ei ama Sa th

26

Two days before the unfair labor practice hearing

the Company filed with the Labor Board a mvtion. to

rescind the certification, to recorsider and pernait the

Company to be heard in the representation case, and .

to postpone the unfair labor practice hearing until

_ final determination of the issues in the representation

ease. The Board by telegraphic order denied: the mo-

tion ‘“‘with leave to the Employer to request the Trial

- Examiner to permit the issues raised in the Employ-

ers Objections and Exceptions filed m [the repre-

sentation case] * * * to be heard * * * ”? in the un-

fair labor practice proceeding. The Board found

4‘(t}he Employers contention that litigation of such -

jssues in a complaint proceeding would substantially —

__ prejudice his rights. *- * * without merit.’ | ‘

~The 8(a) (5) hearing commenced with a discussion

~~ of the Labor Board’s instructions in whieh the Trial

Examiner conceded that he had not resolved the ques- .

tion of the extent of his responsibility in the repre-

sentation matter and suggested that this be argued’ to

him by the parties along with the other issues in the

proceeding. The essence of the Trial Examiner’s posi-

tion was, as stated to the parties at the hearing, that

the Company ue |

« ghould seek to do whatever‘it is you think ought

‘to be done in either the complaint case or the

misrepresentation case. * * * And I would as-

- gume since you seek to have this certification

set aside in effect, if not in fact in this pro-

ceeding by interposing your affirmative defenses

that you wish to raise in this proceeding any-

thing that you ‘might have legitimately raised

dn the representation proceeding. ;

At the invitation of the Trial Examiner, counsel

for the Company outlined the various objections which

had been set forth in its answer to the complaint, and

then reviewed in some detail the nature of the evi-

27

. dence the ‘Company was. prepared to offer of alleged

irregularities in’ the conduct of the representation

election. Although the Trial Examiner subsequently

reiterated that he would receive all evidence advanced

by the Company in support of its objections to the

election, the Company offered the oral testimony of

but a single witness on a minor matter* The Com- |

. pany explains its failure to. come forward with addi- -

tional evidence at the hearing on the ground that the

Trial Examiner had ‘no authority to act with respect

_to the certification in the case and, therefore, presenta-

‘tion of additional evidence would have been futile.

The Trial Examiner’s decision, which was adopted

by the Labor Board in its order to bargain, resolves

the question of his authority in the unfair labor prac-

tice proceeding. The Trial Examiner states in his deci-

sion that , ;

[iJn my view, .the initial question before me -

was whether Respondent [Company] has of-

fered me sufficient evidence to cause me to

conclude that the Regional Director and the

Board aeted on erroneous or incomplete mate-

rial findings, and the question of the merit of

the objections is before me only to the extent

that the evidence offered by Respondent [Com-

pany] requires reconsideration of the findings

and conclusions in the: representation case.

The Trial Examiner goes on to conclude in his deci-

sion that apart from one minor matter, the Company

adduced no evidence to controvert or supplement

the findings of the Regional Director with re-

spect to [its] ** * objections to the conduct

‘of the yromecte and, absent such evidence, I

consider ‘myself bound oo conclusions, pre-

viously reached by the Regional Director and

*Whether some documentary evidence was offered ig con-

sidered infra at page 38. !

affirmed by the Board in certifying the Union

as representative of Respondent’s employees. .

We are presented with a procedural question of con-

trolling importance. Was the. Company entitled to a

post-election hearing on its objections to the election

and if so entitled was it afforded a sufficient hear! ing -

‘in the Section 8(a) (5) proceeding ? *

’ Due process of law demands and the present Rules

and Regulations of ‘the Labor. Board provide that

where there is a substantial and material issue of fact

. relating to the validity of a representation election

that a hearing be conducted at some stage of the ad-

ministrative proceeding before the objecting party’s

rights can be affected by an enforcement order.

United States Rubber Co. v. NLRB, 64 L.R.R.M. 2393

(5th Cir. Feb. 20, 1967) ; NERB v. Lamar Elec. Mem-

bership Corp., 362 F. 2d 505 (5th Cir. 1966); NLRB

v. Capital Bakers, Inc., 351 F. 24.45 (3d Cir. 1965); ©

_ ©The present case involves an election pursuant to a “Stipula--

tjon for Certification Upon Consent Election.” See NLRB

Rules & Regs. § 102.62(b), 29 C.F.R..§ 102.62(b). This is.to be

distinguished from an election pursuant to an “Agteement for

Consent Election” in which the parties agree that objections

and chalienges are to be resolved by the Regional Director |

whose rulings “shall be final.” See NLRB Rules & Regs.

§ 102.62(a), 29 C.F.R. § 102.62(a). We need not in the present

. case decide whether a post-election hearing may be required fol-

‘lowing the latter type of consent election. In such cases the

‘Fifth Circuit has held that: due process requires a hearing.

NLRB vy. Sidran, 181 F. 2d 671 (5th Cir. 1950). Contra, ¢.g.,

Elm City Broadcasting Corp. v. NLRB, 228 F. 2d 483 (2d Cir.

1955); NLRB v. Standard. Transformer Co., 202 F. 2d 846 -(6th

Cir. 1953). But see NLRB v. Parkhurst Mfg. Co., 317 F. 2d 513

(8th Cir. 1963), distinguishing Sidran.. if, “Agreement for

_ Consent Election” currently in use by the’Labor Board provides

the “method of investigation of objections and challenges, in-

eluding the question of whether a hearing should be. held in

connection therewith, shall be determined by the Regional Di-

rector whose decision shall be final.” [Emphasis added. ]

ILGWU v. NERB, 339 F.2d 116 (2d Cir. 1964) ;

NLEB v. Ideal Laundry & Dry Cleaning Co., 330 F.

2d 712 (10th Cir. 1964); NLRB v. Joclin Nyjfo. Co.,

314 F. 2d 627 (2d Cir. 1963) ; NERB v. The Lord Bal- —

_ timore Press, 300 F. 2d 671 (4th Cir. 1962); NERB v.

‘Poinsett Lumber Mfg. Co., 221 F. 2d 121 (4th Cir.

1955); NLRB v. West Texas Utilities Co., 214 F. 2d

732 (Sth Cir. 1954); NLRB Rules & Regs. § 102.69;

29 C.F.R. § 102.69. To borrow the words of Judge

Brown, writing for the Fifth Circuit, ‘‘it is clear that

§ 8(a)(5) orders which rest on crucial factual deter-

‘mihations made after éx parte investigations and

without a hearing cannot stand.” NERB y. Air Con-

trol Prods. of St. Petersburg, Inc., 335 F. 2d 245, 249

(5th Cir. 1954). ‘

Conversely, there is no ‘tons constitutional

or otherwise, that there be a hearing in the absence of

substantial and material issues crucial to determina-

tion of whether NLRB election results are to be ac-.

cepted for purposes of certification. See NLRB v. Sun

Drug Co., 359 F. 2d 408 (3rd Cir. 1966); NERB v.

Nat’l Survey Serv., Inc., 361 F. 2d 199 (7th Cir, 1966) ;

NLRB v. Air Control Prods. of St. Petersburg, Inc.,

- 335 F. 2d 245 — Cir. 1964) ; NLRB v. J. J. Collins’

Sons, Inc., 332. F. 2d 523 (7th Cir. 1964); NERB v.

‘ Clearfield ‘Cheese’ Co., 322 F. 2d 89 (3d Cir. 1963) ;.

NLRB v. O. K. Van Storage, Inc., 297 F.2d 74 (5th -

+ Cir. 1961) ; see generally 1 Davis, Administrative Law:

§§ 7.01-.07 (1958). A: hearing is -unnecessary, there-

fore, where if all the facts contended for by ‘the ob-

jecting party ‘‘were credited no ground is shown which

would warrant setting aside the election.”” NLRB v.

Air Control Prods. of St. Petersburg, Inc., supra, 335

F, 2d at 249; accord, NERB v. Sun Drug Co.; supra,

359 F. 2d at 414; NLRB v. Wilkening Mfg.: Co. 207

F. 2d 98, 100 (3d ‘Cir. 1953). .

30°

It is settled that.the burden is on the.party object- - |

ing to the conduct of a representation election to prove —

that there has been prejudice to the fairness of the

election. NLRB v. Mattison Mach. Works, 365 U.S.

123 (1961). And in order to be entitled to a hearing on

its objections to an election the objecting party must

make a proffer of evidence ‘‘which prima facie would

warrant setting aside the election.”” NLRB v. O. K.

Van Storage, Inc., supra, 297 F. 2d at 75; see United

States Rubber Co. v. NLRB, supra, 64 L.R.R.M. at

9396. The determination, however, of whether substan-

tial and material factual issues have been raised so as

to necessitate a hearing is a question of law and ulti-

‘mately a question for the courts. See United States

Rubber Co. v. NLRB, supra; NLRB v. Sun Drug Co.,

supra; NLRB v. Ideal Laundry & Dry Cleaning Co.,

supra; NLRB v. Joclin Mfg. Co., supra; NLRB v.

Poinsett Lumber Mfg. Co., supra. pee ee

For reasons which are apparent from our subse-

quent discussion in this opinion,” we believe the Com-

pany’s objections ‘to the election and exceptions to the

report of the Regional Director raised material and

substantial factual issues which.entitled it to a hear-

ing. But we are of the opinion that a sufficient hearing

was accorded the Company in the. Section 8(a) (5)

proceeding. That’ the Company chose not to present ©

more evidence than it did in support of its previous

contentions does not entitle it-to another opportunity.

The Trial Examiner, as noted above, expressed his

willingness to receive all evidence offered and to re- —

‘consider the ea parte findings if the new evidence indi-

cated them to be incomplete or erroneous. —

This court is in accord with other circuits in reject-

ing the Company’s contention that: it is entitled to

1° See, ¢.g., discussion, infra, at pages 16-17.

31 : a

* i

wiiiabaly litigate the peanuts issues. Adjudi- .

eation of such issues in the 8(a) (5) proceedings does _

not, we think, substantially prejudice the company’s

rights. In NLRB v. Poinsett Lumber & Mfg. Co. this

court stated that where the objecting party raising

material and substantial factual issues does not have

an opportunity to be heard before the 8(a)(5) hear-

ing it ‘‘was entitled to present its evidence at the un-

fair labor. practice hearing before the Trial Exami--

_her..* * *”? Supra, 221 F.2d at 123; accord, e.g.,

NLRB v. Capital Bakers, Inc., supra; NLRB v. Ideal

Laundry & Dry Cleaning Co., supra; NLRB v. The —

Lord Baltimore Press, supra; see Inland Empire Dist.

Council v. Millis, 325 U.S. 687 (1945). So long as the

objecting party. (and his election adversaries) is given

the opportunity to be heard, to call and cross-examine

those who are the source of Board evidence, and to

present pertinent evidence of its own the hearing is

fundamentally fair and satisfies the requirements of

due process. :

The intervenor Union argues to this court, as it

urged upon the Trial Examiner, that the 8(a) (5)

proceeding was a hearing to receive and consider

evidence de novo. We do not agree, but think with

the Labor Board that in hearings on objections to the

conduct of representation elections the findings of the

‘Regional Director, here embodied in his “Report on

Objections,” will be prima facie “sufficient against’

which to consider the evidence adduced at the hearing

and need not be reproved [sic] in what might other-

wise become protracted hearings.” To hold otherwise

would invite protracted delay in the certification —

process.”

4 “[T]t is implicit in the [Labor] Act that questions sinitliiee

nary to the establishment of the bargaining relationship be

expeditiously resolveed. * * *” NLRB v. O.K. Van Storage, Inc.,

supra, 297 F.2d at 76. The importance of expeditiously dealing

. 82

Pei Ly ee ioc ent |

We. now turn to a consideration of the facts of

- -yeeord, which include those developed at the unfair

labor practice proceeding. and in the Regional Di-

rector’s “Report on Objections’”’ to the election,” to.

‘determine whether the Labor Board’s certification of

the union and consequent finding of an 8(a)(5) vio-

‘lation were based on facts supported by substantial

evidence and on the application of correct legal stand-

ards. We think not and deny enforcement. |

We approach the merits of this case fully cognizant

‘that Congress has entrusted the Labor Board ‘‘with

a wide degree of discretion in establishing the pro-

_eedure and safeguards necessary to insure the fair

‘and free choice of bargaining representatives by em-

with questions in the certification process is compounded by the-

sheer number of representation elections conducted by the

Board. The Board conducted 7,974 such elections during the

1966 calendar year. Experience shows that objections are filed

in approximately nine percent of the elections and some seven-

teen percent of those in which objections are filed are set aside:

by the Board. In over thirty percent of the re-run elections,

the results differ from those in the original election. See Pollitt,

_NLIRB Re-Run Elections: A Study, 41 N.C.L. Rev. 209 (1963).

22 Congress has provided in Section 9(d) of the ‘National

Labor Relations Act, as amended, 29 U.S.C.A. § 159(d) :

‘“(d) Whenever an order of the Board made pursuant to sec-

tion 10(c) is based in whole or in part upon facts certified fol-

_ lowing an investigation pursuant to subsection (c) [providing

for representation elections and certification] of this section

and there is a petition for the enforcement or. review of sych

order, such certification and the record of such investigation

shall be’ included in the transcript of the entire record required

to be filed under section 10(¢) or 10(f), and thereupon the

decree of the court enforcing, modifying, or setting aside in

whole or in part the order of the Board shall be made and

entered ‘upon the pleadings, testimony, and proceedings set

forth in. such tqaneeript. “¢ Ee |

/

/

/

/

/

/

/

ployees.”” NLRB vA. J. Tower Co., 329 U.S. 324,”

330 (1946) ; accord, NLRB v. Watermann S.S. Corp.;:

309 U.S. 206, 226 (1940). However, as has been said:

by the Seventh Circuit, Dr, a

There is no conflict or contradiction between |

eas the substantial evidence rule determinative of

the scope of review and the principle where-

under the Board is entrusted with wide dis-

cretion in establishing the procedures and safe-

guards necessary to insure the fair and. free °

choice of bargaining representatives as enun-

ciated in National Labor Relations Board v.

A. J, Tower Co. These rules do not conflict be-

cause they affect differing spheres of activity.

The Board’s wide discretion lies in the initial

promulgation of rules and regulations, while

the court exercises its duties in reviewing deci-

sions involving application ‘of the Board’s

rules. Judicial review in these cases is not con- |

cerned. with the policy but must determine

whether the record as a whole supports the

’. findings and conclusions respecting compliance

with the policies, rules, and regulations ro

gated by the Board. Celanese Corp. v. NL} B,

291 F. 2d 224 (7th Cir. 1961) (Citation

omitted). page

The Company’s principal objections to the conduct

of the election may be divided broadly between, those.”

relating to campaign literature and thoseminvolving

procedural irregularities. The Company argues first

that the election should be set aside because of ma-

terial misrepresentations in Union literature during

the pre-election period‘ which prevented employees

from making a “‘free choice.” See General Shoe Corp.,

77 N.L.R.B. 124, 126-27 (1948). 3 ee.

‘The Company points to Union materials concern-.

ing the role of the Government on the Union’s behalf -

which were «distributed on February 3, March 10,

April 22, and April 23, the day of the election. Typical _

of the statements made is the following distributed

on April 22: — mo )

Some of the workers have-asked if they will

lose any benefits they now have if they vote

- for the union! The answer is NO! Our Govern-

ment protects the workers’ benefits that are

‘now in effect. Your Union will negotiate to add

_ to these benefits!” . 2

! The Regional Director’s Report on Objections, the

recommendations and reasoning in which were adopted

by the Labor Board, found these were “material mis-

representations and not merely artless statements of

the function of the * * *”? Labor Board. Notwith-

standing this specific finding, mitigating conditions

were thought sufficient to reject this challenge to the

fairness of the election. The mitigating circumstances

enumerated were the experience of the Company em-

ployees who had been through a number of NLBB elec-

tions, including one in December 1963; the Company’s

18 Other statements ‘included :

“Union members know benefits ‘achieved * * * through their _

. union * * * cannot be chiseled away or forgotten, because they

are spelled out in union contracts which have’ the backing of

the U.S. Government and the strongest, shoe workers union in

the country. * * * [W]e suggest you sign and mail yours [au-

thorization card] immediately. THE SOONER YOU DO— .

THE SOONER USWA AND UNCLE SAM CAN GO TO

WORK FOR YOU.’ (February 3).” | | |

“Benefits gained by union members ‘are more than company

whims and promises. They are real because they are contained

in union contracts which have been signed by the company and

the union with the backing of the U.S. Government.’ (March

10).” : : ae

. “They know the difference between promises and a union

contract. They know—as Bata workers know—that Company

promises made before an election mean nothing unless they are

contained in a union contract and guaranteed by the Govern-

ment of the United States. (April 23).” | ;

35

_ letter to its employees of February 4, 1965; asserting ©

that the Union was trying to “mislead’’ émployees into

believing it is somehow tied into the United States

Government and noting that this is “untrue” and that

the Government “specifically rejected all the Union’s

claims in the last election;’’ the further opportunity

for a Company reply to the Union’s letter of March 10;

and the fact that the pertinent statements in Union:

literature distributed on Apri] 22 and- 23 raised no

new issues in addition to those which the Company _

responded to on February 4 or could have responded ~

to subsequently had it elected to do so.

The Company also singles out a Union leaflet dis-.

‘tributed: on April 20, two days before the election.

The leaflet, which is. entitled “How Bata Cheats -

-You”’ and closes with “Vote Yes Stop the Cheat-

ing,” compares what is described as the “‘Bata’’ and

“Union contract” ways of computing compensation

for piece rate workers and asks whether any Bata

worker.knows how overtime is figured by the Com-

pany on Saturdays. The Company maintains _ that

| this literature contained material misrepresentations

_ which mislead the employees. But. the Regional Di-

rector found that the Company had adequate oppor-

tunity in which to respond to any misrepresentation

and «in addition possessed the most comprehensive

knowledge of the facts presented as “Bata’s Way”’.

' The Company, however, failed to discuss this leaflet

in in its newspaper published on April 22 and devoted

entirely to anti-Union propaganda. Moreover, the

Regional Director found that “because most of the

employer’s production employees are piece workers,

the employees themselves would be in an excellent

. position to evaluate the truth or falsity of “‘Bata’s

Way’’. The Regional Director also concluded that on

pA ALAN SA AALS SO OEE A OAL ANTENA A ELAR EBL LLNS AL AB A

<4

~

’ 36 :

the facts. before him the statements regarding the

Union’s way were not misrepresentations. :

‘The Company labels untrue and inflammatory a

charge first made in a Union leaflet of April 8 that

the Company was flooding the plant with J apanase

insoles. The charge was repeated in Union literature

issued April 14 and 20, and was mentioned in a com- —

munity newspaper article on April 22. The Regional.

Director reasoned, however, without considering

whether the Union’s allegation was true, that the

Company “could and in fact did refute this charge

on April 9 and 14, 1965.” The Company newspaper

on April 9 characterized the Union’s charges on April ~——

8 as “deliberate lies,” assured Company employees

that the only Japanese insoles imported by Bata were

for testing purposes in 1963, and announced that

Company officers would contribute $1,000.00 to the

- Blood Bank of Maryland. if the Union could suppert

_ its elaim. A letter from the Company president to

employees on April 14- called their attention to the

_ faet that the Union had failed to sypport its charge

- and, therefore, should itself pay the $1,000.00 to the

Blood Bank. , é

We do not quarrel with the conclusions of the Re-

- gional Director or Labor Board. in respect to their

treatment of: the literature discussed above. We be-

lieve the Board has applied correctly the.applicable

principles. The true rule is not “‘that when false state-

ments are made they constitute an interference with

free choice, but that when false statements are made

which constitute an interference with free choice, for

or against a bargaining representative, an election

should be set aside.” Anchor Mfg. Co. v. NLRB, 300

7B, 2a 301, 303 (Sth-Cir. 1962). Misconduct must be

shown to have prejudiced the fairness of the election. -

See NLRB v. Mattison Mach. Works, supra.

| 37 ate

; The policies of, the Labor Board are e well niteia to’ =

implement this principle. Election results are not: to

be disturbed when challenged because of misrepresen-

’ tations in campaign propaganda unless “(1) there has.

been a material misrepresentation of fact, (2) this

7 misrepresentationccomes from a party who had ‘spe-

cial knowledge or was in an authoritative position to

know the true facts, and (3) no other party had

sufficient opportunity to correct the misrepresenta-.

tions hefore the election.” Celanese Corp. v. NLRB,

291 F: 2d 224, 226. (7th Cir. 1961); see NLRB vy.

Bonnie Enterprises, Inc., 341 F. 2d 712, 714 (4th. -

Cir. 1965) ; Annot., 3 ALR. 3d 889 (1965) ; cf. Linn

v. United’ Plant Genel Workers, 383 U.S. 53, 60.

(1966) ; ; see generally. Bok, The Regulation of Cam-

paign Tactics in Representation Elections Under the

National Labor Relations Act, 78 Harv. L. Rev. 38,

82-92 (1964) ; Fuchs, Pre-election, Campaign Propa-

ganda c: Activities Before the National Labor Rela-

tions Board, 4'B.€. Ind. & Com. L. Rev. 485 (1963).

The Company’s challenge to the content of a leaflet

distributed by the Union on’ the.eve of the election,

April 22, presents the most important attack on the

integrity of the proceeding. This leaflet, was addressed .

to Mr. Dolezal, Conipany president, and stated in part:

‘In your New York union contracts which .

your attorneys Seligman, and Seligman par- °

ticipated for some of the shoe companies, the

following benefits are in effect; -

* [Union benefits’ and ‘‘Bata”’ health,

pension and wage benefits are contrasted in a

columnar presentation]

THEREFORE, MR. DOLEZAL,| SINCE:

YOUR HIGH PRICED ATTORNEYS, SE-

LIGMAN AND SELIGMAN, HAVE THESE

. NEW YORK UNION AGREEMENT WHY

NOT BE FAIR AND SHOW THEM: TO.

BATA EMPLOYEES? [Italics added. ] af

na SOE

. a . , ee

ad 8

38

. ‘The Company urges before this court that the “ben- a

efits” listed in this leaflet-were in large part misrep-

-resentations of fact. We agree with the Board that to

the extent this Company objection relates to the bene-

fits set dyt'as those of the Bata employee it is not per. |

. guasive. Company employees may be presumed in this

instance to have sufficient knowledge of their own

work conditions so as not to be materially mislead.

- However, we are unable to agree with the Board

that the list of benefits “[{i]n your New York con-

tracts which your attorneys Seligman and Seligman

participated for some of the shoe companies * * *”

did not constitute a material misrepresentation. We

believe this is so even assuming arguendo, as the

Board ‘concluded, that the réference is not to Bata

Union contracts but labor agreements of other: com-

_ panies with the Union in New. York. The Board itself

specifically found that at least one pertinent contract’ )

placed in evidence by the Company “‘did not reflect all

the benefits claiméd by the * * *’’ Union in its leaflet. 7

The most important “Union” health benefit listed

was “Clinic—For all union members and dependents:

- Includes free diagnosis—free doctor—free drugs—free

X-ray, ete.” The Board ignored that free medical

benefits of dependents in New York did not extend

generally to clinical services. The Board knew, ‘or

should have known, that this representation was_sub- aes

_. stantially incorrect because the Company offered in

~~ evidence. at the 8(a)(5) proceeding a major agree- -

ment providing limited clinical benefits for depend- “a

- ents of employees in New York locals.‘ The same

ij

A

Te were

4 The transcript of the hearing before the Trial Examiner

below shows that counsel for the Company after the hearing

was well under way and after certain exhibits of General Coun-

- gel had been received answered “yes” when asked by the Exam-

39

agreement was furnished the Regional Director by

both the Company and the Union. ”

In our opinion any misrepresentation. of fact in

respect to medical benefits in the New York contracts

would be material—for this is a-matter of vital con-

cern to the ordinary worker. Especially is this so if

as claimed in an adjacent column in the same leaflet

the-Company then “had no such clinic, * * *” More-

over, because the present leaflet was distributed on

‘the eve of the election, there was insufficient time for

the Company to make an effective reply. *

Furthermore, the Company asserts that this leaflet

sought to convey to employees the false impression

that the Company had contracts with the Union in ©

New York. Indeed, the Company insists that “the

iner, “Witli respect to the Boro Medical Center Agreement you

wish to put that in evidence here. * * *” This is an adequate .—

proffer of evidence under any modern code of civil procedure

and should suffice in an administrative proceeding.

**The Labor Board adopted the decision of the Regiona

Director that the representation in respect to free medical

sérvices was “substantially correct”. The Regional Director re-

lied in making this finding entirely on a clause from the agree-

ment between. the ‘Boro Medical Center. and the Union’s New

‘York “Welfare Plan”, to which employers contributed by

reason of their cdllective bargaining agreements. This reliance,

however, was erroneous since the clause provides only for free

. Surgical—not clinical—services. A second clause in the same

agreement, set ovit by the Company in its exceptions to the

Regional Director’s report, specifically requires dependents to

pay fifty percent of the regular fee for clinic diagnostic serv-

ices. Counsel for the Labor Board does not dispute the accuracy

of this clause. S , ae

*© The question of. the accuracy of the statements made in this

leaflet was concretely raised in the Company’s execptions to the

. Regional Director’s Report on Objections and entitled the Com-

pany to. litigate the question at the Section. 8(a) (5) hearing...

40

only reasonable construction that can he placed upon

- it—is that the company has [favorable] contracts with

the Union in New. York.’’: The Labor Board found,

however, that the reference to “‘your’’ union contracts

“is at worst ‘inartistically or vaguely worded and

‘ subject to different interpretations,’ and will not

suffice, to establish a misrepresentation . . .”” of fact

sufficient to set aside the election. :

We are inclined to agree with the Company in its

view of the impact of this language on the Bata

employee,” although swhsequent language in the leaflet

admittedly injects some ambiguity. If we accept the

' ‘position of the Board that your was used in this con-

text “by way of designating a class” then the lan-

guage used implies that all New York contracts with:

the Union contain the listed benefits. Thé Board found

asa fact that this is not true and, therefore, even

under the Board’s theory there would be a material

misrepresentation of fact. See NLRB v. Bonnie

Enterprises, Inc., supra. ; | .

‘We conclude that the Labor Board erred in not

setting aside the. election under. its own standards:

there was a material misrepresentation of fact made

by a party in an authoritative position to know the

truth in circumstances which prevented an effective

reply prior to the election. That all New. York Union

contracts: contain superior health, pension and wage

benefits, matters of importance to employees, and that

Bata has contracts with organized units in New York

which afford workers there substantially greater bene-

it The Company’s position that “your” is reasonably under- —

stood to refer to the Company’s New York contracts is

strengthened by the use in the preceding paragraph of the

‘Jeaflet of you five times in addressing the Company: president

and your as a possessive pronoun in conjunction . with office

to.refer to the president’s office. : + %

41.

fits than enjoyed. by unorganized Maryland employees.

are both. represéntations which when false may sub-

stantially prejudice the Company. When made without

adequate time for answer by one’s adversary, where as

few as three votes can alter the election result,” such.

statements constitute an interference with employee

free choice. The Labor Board’s conelusion to the con-

trary in the present case is not supported 7 sub-

stantial evidence.

III

Aside from our decision that. the Union. literature

distributed on April 22 prejudiced, the fairness of the

election, irregularities in election procedure caused .by

substantial omissions of Board agents responsible for

ballotting are. themselves sufficiently serious to compel

invalidation of the results.” The present case is clearly

18 The ballots cast against the Union added to the number

of challenged ballots combine to come within five votes of

the total for the Company. In the last representation election,

conducted in December 1963, the Union lost when the Board

found all those who had cast challenged ballots eligible to vote

and ail had voted against the Union.

® The Company’s objections to the mechanical aspects of the .

-election are summarized by the Regional Director in his report:

“Election conditions were such that a number of eligibles

sufficient to affect the outcome of the election were deterred

from voting and ineligibles were permitted: to vote by: (1)

Inadequate arrangements for processing the number of voters

involved compounded by inclement weather; (2) Improper

control of the voting lines; (3) Erroneous instructions by

Board Agents with respect to the eligibility date; (4) Inade-

quate notice to eligibles as to the time employees must be in

line in order to vote; (5) Improper delegation of authority

to employees to cut off the voting line and a resulting situa-

tion where employees who were in line in time were disen-

franchised and latecéomers were permitted to vote.”

&

one where “the Board agents nodded when they should .

have been alert and. active’. Shoreline Enterprises,

Inc. v. NLRB, 262 F. 2d 933, 946 (Sth Cir. 1959).

A fair and equal opportunity for all Company .

employees to vote was precluded by actions of the

Board agent responsible for the election. The stipu-

lated and publicized closing hours for voting was 5:15

P.M. The Board found that shortly before this time

the agent in charge of the election caused an announce-

ment to be made on the plant public address system

‘that to be eligible employees must be in line. by

5:15 P.M.” At 5:15 the Board agent instructed three

employees at the end of the line ‘‘that the line was

closed:and that if anyone attempted to get in line

after them such persons should be directed to * * *

the agent.”’ |

The Board found, heeeel, “that as many as 30

employees got on the end of the line” after 5:15 and

“Tojne employee states that he did not get in line until

about 6:30 P.M. and voted without question.’’ At the

same time the Board found that at least one other. a

employee, Frank . Chenoweth, was improperly pre-

vented from voting. Chenoweth was in line before

5:15 but stepped off to enter the washroom and when

he returned was, according to the Board, “dénied

the opportunity to east eyen a challenged ballot by |

the agent in charge.”

We agree with the Company that the maladminis-

tration of the election * made it highly probable that

20Tn addition to confusion surrounding the closing of the

polls, the Board found that “soon after the opening of the

polls at the instant election it-was necessary to release depart-

ments at a time later than that designated on the ‘posted re-

leasing schedule because the line cf. voters extended well over

100 feet in length. From 10:00 A. M. to 4:15 P.M. a number of

:

43.

, eligible employees were deterred from voting while at

least thirty others were allowed to vote after the polls

should have been closed. When considered along with

the fact that Chenoweth was improperly prevented.

from voting, in view of the. very close results, it is }

our opinion :that the. Board .abused its discretion @ in

| refusing to set aside the election. Cf. Shoreline Enter-

prises, Inc. v. NLRB, 262 F. 2d 933, 943-46 (5th Cir.

1959); NLRB v. West Texas Utilities Co., 214 F. 2d

732, 740-42 (5th Cir. 1954) NLRB v. Wilkening M f9-

Co., 207 F. 2d 98 (3rd Cir. 1953). : |

It is unnecessary to. consider the“remainder of the

Company’s objections to the election. We conclude

that the Board’s order is not. supported by substantial

: evidence. | aie :

| : Enforcement Denied.

: - AtBerT V. Bryan, Circuit. Judge, concurring spe-

| cially:. Clearly, the Board’s order should not be en-

forced, for the reasons, at the least, assigned in the —

Court’s opinion. It discards as a ground of decision,

however, what seems to me is a fundamental infirm-

ity in the Board’s procedure—the denial of an oppor-

tunity for the employer to be heard on decisive issues

- in the case before they are decided. This deprivation .

occurs frequently and, for me, is so destructive of due

first-shift yoters spent an hour in line before receiving a ballot.”

‘ Two employees stated that they did not goto the polls “because

the line was too long and it was raining.” The Board itself

denies responsibility for the slow processing ‘of voters and con-

cludes that “it must lie with the Employer who furnished the

eligibility list out-of-date-with respect to transfers.” /

- ° .% This circuit has held that it is “for the Board, and it is

not for this court, to exercise discretion as to ‘whether or not

the election should be set aside for irregularities in procedure.’ ”

NLEB vy. Jesse Jones Sausage Qo., 309 F. 2d 664, 667 (4th

Cir. 1962) (quoting from NZRB vy. National Plastics Prods. :

Co., 175, F. 2d 755 (4th Cir, 1949). -

44:

process: that it should, be unequivocally disapproved.

I start with the warranted finding in the opinion

that here the employer’s “objections to the election

and exceptions to the report’’ of the Regional Direc-

tor did in truth pose “substantial and material issues

with respect to the conduct or results of the election”.

The Board ex parte, i.e. without a hearing, had held

otherwise. Incidentally, this decision was founded on

the report of the Regional Director, who made his: in-

‘yestigation of the objections’ ex parte and overruled

them ex parte. => |

I heartily agree with the Court that “Due process

of law demands and the present Rules and Regula-

tions of the Labor Board provide that where there is

a substantial and material issue of fact relating to

- the validity of a representation election that a hearing

be conducted at some stage of the administrative pro-

ceeding ‘before the objecting party’s rights can: be

affected by an enforcement order’’. I am mindful, too,

that there can be no judicial hearings as to the elec-

tion’s validity ahead of the refusal-to-bargain proceed-

ing; the hearing I insist-upon is a fair administrative

hearing only. My departure ‘from the opinion of the

Court is in its conclusion that since the company after

the decision of the Board had an opportunity to pre-

sent evidence before the Examiner, the company was

thus afforded a ‘‘sufficient hearing”’.

“Hearing”, it is hornbook, presupposes an unpre-

judged judgment on the issues at stake. Otherwise it is.

an obvious mockery of due process. The procedure,

‘instantly amounted to just that. Admittedly, the “‘sub- *

stanti@l’ and material issues’”—validity of the elec-

tion—were completely and finally decided by the

Board, ex. parte, long before the hearing of the em-

ployer by the Examiner. It had been put-aside-by the

Board as definitely settled, until the unfair practice

—_p ties ’ cE :

. ‘ a “ ¥ a .

}

_ ¢ase came on before. the Examiner. The company was *

then, for the first time, allowed to put on evidence

_ about the election, and then only before a subordinate .

of the Board who was thus called upon to review his

superiors’ determination. This post-decision “hearing” .

is now, I think erroneously, held to be a “sufficient

hearing’. any pe ile

The Board’s procedure cannot be justified as anal-

ogous to the -practice of courts to rule upen motions

for reconsideration or rehearing witheut the pres-

ence of the parties or the presentation of further

evidence or arguments. ‘In eourt such metions and >

' rulings have been preceded by a full hearing when

the issues, as the Court declares instantly, are sub-

stantial and material. But presently the sole and ex-

clusive chance accorded the employer-to submit its

case fully was the hearing before the Examiner, some

time after the Board’s determination of the issue.

The Examiner was then to decide whether the Board’

had been right—a decision to be made “‘under the

gun’’ of the Board. It is as if an appellate court had

rendered an opinion witheut a hearing and then,

without vacating it, had given .permission to the’ un-

successful litigamt to ask the lower court to allow a —

hearing and decide whether the appellate ruling _

should stand—this in turn to be re-reviewed by the

appeals court. :. |

Curtailment of a party’s rights in an administrative

proceeding in this manner was condemned in Morgan

_v. United States, 304 US 1 (1938). In discussing the

fundamental requisites of an administrative hearing,

with particular reference to the conduct of the Sec-

retary of Agriculture under the Packers and Stock

Yards Act, strikingly similar to the procedure of the

Board here, the Chief Justice said: ° | :

46

The right to a hearing embraces not only the

ight. to present evidence but also a reasonable

opportunity to know the claims of the opposing

_ part and to meet them. The right to submit

' argument implies that opportunity; otherwise

the right may be but a barren one. Those who -

are brought into contest with the Government .

in a quasi-judicial proceeding aimed at the con-

trol of their activities are entitled to -be fairly —

advised of what thé Government proposes and

to be heard upon its proposals before it issues -

its final command. 304 US at 18. (Accent |

added.) | |

* -* . * . 4 * *

Congress, in requiring a ‘‘full hearing,’’: had

regard to judicial standards,—not in any tech-

nical sense but with respect to those funda-

mental requirements of fairness’ which are of

the essence of due process in a proceeding of .a

judicial nature. If in an equity cause, a special |

master or the trial judge permitted the plain-

tiff’s attorney to formulate the findings upon

‘the evidence, conferred ex parte with the plain-

tiff’s attorney regarding. them, and then

adopted his _ without affording an op-

. portunity to his,opponent to know their contents

.and present objections, there would be no hesita-

_ tion in setting aside the report or decree as hav-

ing been made without a fair hearing. The

requirements of fairness are not exhausted in the

taking or consideration of evidence but extend to

the concluding parts of the procedure as well as

to the beginning and intermediate steps. 304

US at 19-20. . | :

This same thesis was expounded, and applied by re-

fusal to enforce the Board’s order because passed upon ~

a contrary procedure, in Russell-Newman Mfg. Co. v.

NLRB, 370 F. 2d 980, 984 (5 Cir. 1966), the Court

-. gaying:

47

Due proce$s in an administrative hearing in-

cludes a fair trial, conducted in accordance with

fundamental principles of: fair play and ap-

plicable. procedural standards established ‘by

mwee? ie , Tied ;

_ Nor ean an employer be treated in this cavalier

fashion on the score of expedition. Rights cannot be

. Sacrificed in the name of dispatch. Nor is it legalized

because the adjudicating tribunal cannot devise a bet-

ter process. Cf. Russell-Newman M fg. Co. v. NLRB,

supra, 370 F.2d 980, 984; NLRB v. T'rancoa. Chemical

Corp., 303 F. 2d 456, 461 (1 Cir. Bee); 6.

When the Court found, as it has, that the objec-

tions and exceptions of Bata were not frivolous but .

nevertheless had been disposed of. ex parte, then the

Court should have immediately set aside the Board’s

order. N& only was this a clear refusal of due proc-

ess; it wA€ irremediable under the Board’s established

procedures. A post-decision “hearing” hardly fulfills...

the ‘‘hearing at some stage of the proceedings” now |

demanded by the Court and by the precedents it cites. .

In consequence a court cannot properly en-

force an order finding an employer guilty of an

unwarranted refusal to bargain with a union.cer-

tified in an election if it appears, with. respect

to challenges ‘affecting the result, either that

they were disposed of erroneously as a matter

of law or that the employer raised ‘substantial

and material factual issues’ under the Regula-. »

tions and was denied a hearing that he sea-

sonably requested. * * * N.L.R.B. v. Joclin

Mfg. Vo., 314 F. 2d 627, 631-32 (2 Cir. 1963).

- This withdrawal of due process from the proceed-_

"ing was aggravated in the present case by the nature

of the so-called sufficient hearing. Thé’ company is held

to have forfeited its protestations of an unfair elec-

_ tion because it failed to put on.evidence to that effect

€

48

before the Examiner. It is small. wonder that the com-

pany abstained. The Examiner had not even been di’

reeted by the Board to hear the employer. By tele-

gram the company was merely given “Jeave * * *

to request the Trial Examiner to permit” it to be

heard. (Accent added:) Aside from-this casualness of

the Board toward the*interest of the employer, the

Examimer himself was so perplexed as to his authority

and duties that he asked for argument from the -

ties as to what he should do.- -

True, finally he invited the employer to reiterate its

objections and exceptions and to submit its evidence,

but the Examiner was net sure of- what could be done

-with it, even if it preponderated in favor of the com-

pany. Notfting could have been accomplished; the

game was over before it began. Was it reasonable to

expect the Examiner to reverse the Board? Yet the

employer. is cast in judgment for default in not pui-

7 suing this expectation.

_ I join im the result of the Court’s opinion, but I

- regret it endorses the Board’s procedure.

J. SPENCER BELL, Circuit Judge," digsenting: —

re again my colleagues invade an area whieh I think

is pecoharly within the expertise of the Board to over-

throw a result, they do not like. It is, I think, quib-

_bling to use ba two points they have chosen to find

the Board clear ly in error on the representation issue. .

The first is that the union misrepresented the fact

that New: Yerk, union contracts offered clinical serv-

ices to the ies of union members. There was no

, evidence ‘that this representation in fact changed a

vote, and certainly the Board is in better position _

to judge than this court which has.only the opinion

of of company counsel to support its conclusion. The

"+ Fndge Bell prepared this _— before his death on March

19, 1967.

- 49

~ second is that the leaflet addressed to.the company be- p

ginning “In your New York union contracts” mis- ’

led the employees, The majority’s opinion -is specula-

tion, and if I were going to speculate I would assume

that after a long and bitter campaign, the employees

would all know whether the ‘company had in fact °

signed advantageous contracts with the union at other

plants. Finally, the reversal of thé Board with respect:

to the mechanics of ‘the election is utterly without

justification. There was nota scintilla of evidence that

the persons excluded from voting were company ad-

herents. If mistakes there were, the Board was justi-

fied in’assuming they cut hoth ways. In NLRB v.

Jesse Fones Sausage Co., 309 PF. 2d 664, 667 (4 Cir.

1962), this court said “* * * itis not for this court

to exercise discretion as to ‘whether or not the elec-

tion should be set aside for irregularities in ‘pro-

cedure.’ ”’ : : |

_. United States Court of Appeals for the Fourth —

= Circuit

No. 10552 |

. ‘Nationa Lapor RELATIONS BOARD, PETITIONER

Bata Suoz Company, Inc., RESPONDENT; UNITED SHOR

Workers or America, AFL-CIO, InTERVENOR :

On Petition’ for Enforcement of an Order. of the

' . National Labor Relations Board

This cause came on to be heard upon the petition

of the National Labor Relations Board for enforce-

ment of a certain order issued by it against Respon-

dent, Bata Shoe Company, Inc., its officers, agents,

‘ " a ‘

_—" -e

oe

successors, and assigns, on the 18th day of February,.

1966, in a proceeding before said, Board known upon

its. records as Case No. 5-CA-3293; upon the answer

of the Respondent, and upon the certified list in lieu. °

of a transcript of the reoond and the said cause was.

argued by counsel.

On consideration id it is ordered; adjudged

and decreed by the United ‘States Court of Appeals -

_ for the Fourth Circuit, that the said petition of the-

National Labor Relations Board be, and it is perey.

denied.

J. Braxton CRAVEN, Je R.,

United States Circuit Judge.

Filed ae 6, 1967, Mavnice S. Dean, Clerk.

APPENDIX C

United States Court of Appeals -

Sor the Fourth Cireuit

No. 10159

| Graraic ARTS FINIsHING Oo. Inc, PETITIONER .

: Vv. , ]

N ATIONAL LABOR RELATIONS Boar, RESPONDENT

On Petition for Review of an-Order of the N ational

Labor Relations Board. _

anteit February 9, 1966—Decided June 19, 1967

. Before BoreMan, Bryan annd J. SPENCER DMA, »

| Circuit J udges

BoreMan, Ciréuit Judge: This is a petition by

Graphic Arts Finishing Co., Inc. (hereafter the com- .

pany), for review of a decision of the National Labor

Relations Board (hereafter the Board) which held

_ that the company had. violated section 8(a). (5) of

_ the National Labor Relations Act as amended. The

Board’s Decision and Order is reported at 153 NLRB ems

No. 115.

The company, a Maryland corporation, is ‘ihaikinéaa

in finishing printed material, and has its principal

, place of business in Baltimore. In September of 1964

the United Papermakers and Paperworkers, AFL-—

CIO (hereafter the union), engaged in an organiz-

*Judge Bell, 2 member of the panel, voted in conference

for enforcement of the Board’s order but died before the

; opinion was prepared. 7

(61)

52

‘on campaign e the company plant. On September

| 22, 1964, the Board eonducted a representation elec-

tion at ‘the ‘company: plant. There were ninety-one

' votes cast for the union and eighty-three against,

' with five challenged votes. The eommpany filed. objec-

- tions with the Regional Director urging that the elec-

tion “was rendered invalid by reason of unfair con- |

duct on the part of the union and should be set aside.

-The Regional Director, after an investigation but

without a hearing, recommended that the company’s

_ objections he overruled and that the union be certi-

fied. The company filed objections with the Board

and again requested a hearing. The Board, without a

hearing, adopted—the- Regional Director’s recommen- .

dations and eertified the union as the bargaining rep-

- résentative of company employees. However, the com: .

‘pany refused to bargain with the union, asserting that

it would not do so wntil a federal court had reviewed

the Board’s ‘certification. The union then filed an un-

fair labor practice charge based upon the company’s

refusal to bargain. The parties stipulated to waive a

hearing before a Trial Examiner and the matter pro-

ceeded directly to the Board. The Board held that the ~

company had violated section 8(a)(5) of the Act

by refusing to bargain colleetively with the union

and ordered the company to cease and desist from

such practice. |

The company argues ‘that the iesiihoalham conduct

and tactics of the union rendered the election unfair

- and interfered with the free choice of the employees.

We consider and discuss here only one aspect of the

_ thallenged conduct which, in our opinion, requires that .

enforeement of the order under review be denied.’ .

2 Among other company objections to the election were the

following: coercion of employees and threafs of violence on the

_ ‘part of union representatives and sympathizers; union violation -

Poe , pe ee i Ye

_ It is undisputed that twenty-four hourg prior to the

actian the junion issued two circulars which under-

took to point out to the employees the many benefits.

which would follow unionization. One circular related -

to “wage rates and fringe benefits that are being paid. |

under’ Union Contracts, ” and proceeded to list wage =

rates for various classifications, but the companies

allegedly paying such rates were not identified. It.

was subsequently established that the rates and bene-

- fits were a composite of those paid under various ~

contracts.in a wide area extending from Philadelphia, ~

Pennsylvania, to Washington, D.C., excluding the

Baltimore area. A witness familiar with the wage

rates and benefits existing in unionized binderies in

the Baltimore area submitted a statement that none ~

- of the companies in that area was paying the rates

and benefits listed in the circular.

The apprentice rate set forth in the leaflet was 10%

> or $33 per hour higher than that actually paid even

in the Washington area where a high apprentice rate.

did exist.

_ A seeond cixeular distributed at the same time dis-

-eussed strike procedure and. strike benefits. With re-

_ spect to strike relief benefits the leaflet stated “‘$100,-—

— 000 Dollars was paid out in strike relief to members

and their families in the Chesapeake strike. NOT

ONE PERSON LOST A THING.” The strike re-

ferred to in the circular was a strike sanctioned and -

conducted by the same union at Chesapeake Paper-

board Company, a, Baltimore firm, from August 1962

to February 1963. The president of that company sub-

mitted a statement to the Regional Director in which

' of agreement not to challenge the votes of certain employes

which agreement was a condition precedent to the company’s

consent. to the election; the late start of the election which

> deterred employees from voting. ;

ie

‘it was shown that his employees lost _ppudontiinately

$600,000” in wages as a‘ result ‘of that strike. This

strike was of great, importance in the election which

is challenged here: because the same union’ was ins .

volved.

The Regional Director found that the circular con-

tained such misstatements but that they were “not. suffi-

cient to render the election invalid because their.

_ impact on the election was insubstantial. The misrepre-

sentation as to apprentice rates was ‘dismissed ‘as in-

significant because the company did not have an“ap-

prentice program and that trainees did not consider

_ themselyes apprentices. The Regional Director found

no obligation on the part of the union to disclose ~

that its information referred to a wholly different

area. It concluded that the union was merely stating

what. it could do and “the. fact that the prevailing

unionized industry rates and benefits in Baltimore

are less, does not mean it misrepresented or deceived

the voters.”

‘The Regional Director also dismissed the misstate-

"ment concerning the-strike relief benefits paid at the

| Chesapeake Paperboard Plant because ‘“‘this is the

sort of ‘language that employees can readily evaluate.

It is unreasonable to suppose that employees would be ~ .

misled by such statements into thinking that whether

they strike or work, they will suffer no loss whatso-

ever. The facts of. industrial life are too widespread.

One can readily. see through such exaggeration.”

These findings were adopted by the Board in its deci-

sion that the company had violated section 8(a) (5)

of the Act; the Board merely referred to its earlier

decision. ‘With this decision: we cannot agree. .

‘The Board, in Hollywood Ceramics Company, Inc., up

140 NLRB 221, formluated and announced the test

to be applied in determining: whether campaign liter-

oat r OG) ae RM gO NO ee A

\

es

- ature containing misrepresentations could serve as a

_ basis for invalidating an election, ‘There the Board

- held that, in order to set aside an election, there must "9

be (1) a misrepresentation of a material fact which -

is a substantial departure from the truth, (2) which

is ‘so timed as to prevent the other side from making

an effective rebuttal, and (3) may reasonably be ex-

_ pected to have a signifi¢ant impact on the election. Id. °

at 224, . “fs } ; | cam y ES,

_ In NLRB. v. Bonnie Enterprise, Inc., 341 F. 2d

712 (4 Cir. 1965), this court set aside an election

. because of union misrepresentatiori of facts contained —

in campaign literature. There the literature cofttained

misrepresentations as to group life insurance, sick °

pay, vacations and coffee breaks. It was distributed

on the day prior to the election and on election day.

We held: PE oes a9, ANG Borg bas

It is clear that the promises contained in the

, circular went far beyond .the beunds of per-

____missible hyperbole sometimes indulged in dur-

ing pre-election ca: paigns for public office.

They were substantial misrepresentations of

material facts of vital concern to employees _ -

Voting in the election. In fact, it is difficult to

_ conceive of more important -Inisrepresenta-

mine their untruthfulness. Id. at 714. at

_. In Celanese Corporation of America v. N.L.R.B.2

it was held that’ misrepresentations'as t6 fringe bene- -

fits were material’ to voting employees: and would —

operate to set aside the election. The union had stated

°o

#121 NLRB. 303 (1958), enforcement denied, 279 F.2d 204

(7 Cir. 1960), vacated per curiam, 365 US. 297 (1961), ene

forcement denied, 291 F. 2d 224° (7 Cir.), cert. denied, 368

U.S. 925 (1961), +, rire

56

that fringe a at other: company sala had ra we

- won through collective bargaining. While the court —

found that a number of benefits at-the company’s:

other plant were effected through collective bargain-

ing, the company ‘had. instituted some bénefits on its .

own initiative. The union argument that it did not

intend to create the impression that all the benefits. —

‘were won through collective bargaining was - rejected

by the eourt which stated: “If the author had in-

- tended to speak of some -or several benefits, he would

necessarily: have had to employ a limiting adjective.’’

279 F. 2d 206. The court, in a subsequent decision,

pointed out that because of the union’s special knowl-

‘ edge as to the facts and because the company was.

effectively prevented from replying to these misstate-

ments the election would be set aside. 291 F. 2d 226-~

, Avcord, N.L.R.B. v. Houston Chronicle Publishing

. . Company, 300 F. 2d 273 (5 Cir. 1962).

: In the instant case there was no. épportanity. to

reply ‘to the union’s misstatements and the. election

was close ; - -€ switch of only five votes would have

-resulfed in a union defeat. The misrepresentations

‘ - oncerned subjects even more vital than those in

Bonnie Enterprises because here they dealt, in part,.

- with wages. ‘A misrepresentation of $.33 an hour with

respect to apprentices’ wages represents $13.00 per

week and more than $600.00 per year. It appears be-

yond question that such a figure is material and would

significantly affect the free choice of the employees.

See Bok, Regulating NLRB Election Tactics, 78

-. Harv: L. Re . 38, 90 (1964). The Regional Director’s:

attempt to in that the company had no appren-

tice system ignores the fact that the company had

twelve trainees. It is also clear that no union em-

ployees in the area were receiving all the rates and

benefits listed in the literature. The union, in discuss-

~

—_

aie ot eam ae

ing such significant subjects was obligated to be mueh fe

more precise. Wages are of paramount importanee to -

employees as “they are the stuff of life for Unions

-. and members, the selfsame subjects concerning which

men organize and elect their representatives to bar-

gain.” N.L.R.B. v. Houston Chronicle Publishing

Company, supra, 300 F.2d at 280. | .

' - We conclude that the gross misrepresentation as to

strike benefits paid to the union’s members at another

plant. in the area and that not one person lost a thing —

during a recent strike was material and had a signifi-

cant impact on the election. There was no equivocation :

here: the union statement concerning what it had paid |

other members and the effect of such payments was -

unqualifiedly false. The’ Regional Director’s explana- ~

‘tion’ that’ the workers could easily see through sueh.

a misstatement disregards the fact that this was a

statement made by the union. which paid the strike |

- benefits, a fact which would seem to clothe the state-

ment with unmistakable authenticity. If the employ-

ees believed this statement, made ‘by the party in the

best position to know the truth, any doubts they en-

tertained about joining the union for fear of being |

involved in a costly strike would be substantially re-

duced, if not totally removed. It i$-ecommon knowledge

that strikes play a-major role in labor relations and

that they constitute the most potent weapon in the -

. employees’ arsenal. We reach the conclusion that such

ay deliberate misrepresentations as to material facts, .

. particularly the false statement that the payment by °

the union of strike relief funds save the strikers from

‘all loss, made to employees who were faced with a diffi- -

cult choice in an election decided by sucha narrow

margin, were timed so as to prevent the company from

‘making an effective rebuttal, were reasonably ex- °

pected to have a significant impact on the election and

Sle HAT Cie te Oe EEE NAB UD &@

“ .

58

.. prevented the anita from naiitdealais their tune

+ and untrammeled choice as to a bargaining: represen-

tive. .N.L.R.B. v. Prinity Steel Co., 214 F. 2d 120, 123.

(5 Cir. 1954).

We hold that the Board’s onde ‘should be set aside

and the company’s petition for denial of enforce- |

ment should be i viniiaenia

ot”

ee

| Enforcement denied.

.

eke.

,