Petition for Writ of Certiorari — AutoZone, Inc. v. National Labor Relations Board

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Supreme Court, U.S.

= eS me.

96 116 JUL 22 1996,

No. OFFICE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1995

AUTOZONE, INC.,

Petitioner,

versus

NATIONAL LABOR RELATIONS BOARD,

Respondent.

Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Sixth Circuit

PETITION FOR WRIT OF CERTIORARI

Cornewius R. Heuser

Tracy K. Hipatco

KULLMAN, INMAN, Bee, DOWNING

& BANTA

A Professional Corporation

P. O. Box 60118 (70160)

1600 Energy Centre

1100 Poydras Street

New Orleans, Louisiana 70163

Telephone: (504) 524-4162

Counsel for Petitioner

AutoZone, Inc.

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

Q~ .

QUESTIONS PRESENTED

1. Did the Court of Appeals err when it ruled that the

failure, during a union election campaign, to grant a

wage adjustment which was undetermined at the incep-

tion of union organizing activities constituted an unfair

labor practice under the National Labor Relations Act,

particularly where employees were never guaranteed a

specific adjustment and the employer acted in good faith,

upon advice of counsel, and in an effort to avoid influ-

encing the outcome of the election?

2. Did the Court of Appeals err when it ruled that an

employer violates the Act when it merely informs

employees of its previous experiences with strikes, parti-

cularly where the employer informs employees of striker

reinstatement rights?

LIST OF PARTIES TO THE PROCEEDINGS

IN THE COURT BELOW

The parties and attorneys involved in the proceed-

ings in the court below, the Court of Appeals for the Sixth

Circuit, are AutoZone, Inc., the Petitioner, and the

National Labor Relations Board, the Respondent.

lil

TABLE OF CONTENTS

Page

RUPE MPEG NW MUOCIW EEO secs cee esscnccastvcaucads i

LIST OF PARTIES TO THE PROCEEDINGS IN THE

SEY SEEMING CCUM Ww iv aS GeV beRS EA Gh isos cen ee ii

EIEN RED xo oie 0 ose Ma waceew a s00ct woni's iii

RETR GD PUN EMME 6 sv okey cence evs vvacss eben. Vv

RAE TE POAP TRUDE L TS oobi cveniecnsvepericees vi

TE EPO ono dev wh ent no's 8 ¥K6s vos ved evarses 1

STATEMENT OF JURISDICTION................... 1

STATUTORY PROVISIONS INVOLVED............. 2

EE MEMO paket ices ecekbbievepsecnsneeneese 2

EINES GOW’ REGE MOINGIS oon van ctccveessiseveacs 3

A. Reasons for Granting Petitioner’s Writ....... 3

S. Procedural Background ...............0.00005 +

errr ere 5

i EES EAT ETE Ore re ire ee 6

A. Petitioner Lawfully Refrained From Making a

Decision as to the Timing and Amount of a

Wage Adjustment to Avoid Influencing the

Outcome of the Election, While Explaining to

Employees the Legal Basis for Its Decision... 6

(1) Summary of the Argument.............. 6

(2) History of General Adjustments at Peti-

tioner’s Distribution Centers............ 7

(3) The Court Below Erred in Concluding That

Petitioner Violated the Act Where Petitioner

Merely Informed Employees of the Legal

Restrictions Guiding Its Decision With

Regard to Wage Adjustments............. 11

TABLE OF CONTENTS - Continued

Page

(4) The Court’s Imposition of 8(a)(3) Liability

Was Clearly Unwarranted Because Peti-

tioner Had No Established Past Practice

of Granting Wage Adjustments.......... 15

B. The Court Below Improperly Disregarded the

Written Text of a Campaign Speech to Find

That Petitioner’s Noncoercive Expressions of

Opinion on Union Matters Violated the Act.. 25

C. Employees Were Informed of Striker Reinstate-

ment Rights; Therefore, the Court Below Was

Clearly Wrong in Concluding That Petitioner’s

References to Strikes Constituted a Violation of

NG DUN isan dF dans chvt ee cs he kane Meeensanes 28

ee MRL os | errr rere re. ee ret 30

INDEX TO APPENDICES

Opinion of the Court of Appeals for the Sixth

Circuit

SAV dS Noe ew RRS gh iN dae Kena cw Ohun Eas App. 1

Decision, Order and Direction of Second Election

by National Labor Relations Board........... App. 25

TABLE OF AUTHORITIES

Page

CASES

Atlantic Forest Prod., Inc., 282 N.L.R.B. 855 (1987) 11, 13

Bowling Green-Warren County Community Hosp.

Corp. v. NLRB, 756 F.2d 41 (6th Cir. 1981)..14, 22, 23

Cutter Lab., tnc.,.221 NASB. 160 CES7OR sie ceecssnee 11

Emory Convalescent Home, 260 N.L.R.B. 540 (1992) .... 27

Florida Steel Corp. v. NLRB, 587 F.2d 735 (5th Cir.

IST) kas sce hbepedechbcenese eens ee 26, 29

Free-Flow Packaging Corp. v. NLRB, 566 F.2d 1124

(Ol Cle. BOP Ge ew ihn cakes ccc viasvieaasves 18, 19, 20

Gossen Co., 254 N.L.R.B. 339 (1981), modified on

other grounds, 719 F.2d 1354 (7th Cir. 1983)........ 29

Great Atl. & Pac. Tea Co., 192 N.L.R.B. 645 (1971) 12, 13

Honey Elec., Inc., 138 LRRM 1014 (1991), aff'd in

part, rev'd in part, 964 F.2d 543 (6th Cir. 1992). .13, 14

].J. Newberry Co. v. NLRB, 645 F.2d 148 (2d Cir. .

SOR R i c v ask koiad da 5aa cee whey bik banat 15, 17

NLRB v. Big Three Indus. Gas & Equip. Co., 441 F.2d

re Ye Ag | prererrrear yee Pre rey Pee yee 14

NLRB v. Cleveland Trust Co., 214 F.2d 95 (6th Cir.

SO ois. tank dae hs ohn da bbb eee eee 22

NLRB v. Planter’s Peanuts, 574 F.2d 400 (8th Cir.

SDFG so ininscdévsinestiacistati eee eee 24, 25

Vii

TABLE OF AUTHORITIES - Continued

Page

NLRB v. Service Garage, Inc., 668 F.2d 247 (6th Cir.

oe SE Ey ee ee OO ET re ene 14, 17, 23, 24

Otis Hosp., 222 N.L.R.B. 402 (1976), aff'd, 545 F.2d

Rt a Re eee e pep eye penn ee 15, 16

Peabody Coal Co. v. NLRB, 725 F.2d 357 (6th Cir.

a EPUET EEE TEES TT EERE eos Pree Pe eT eee 21

Plasticraft, Inc. v. NLRB, 586 F.2d 185 (10th Cir.

SPS AERGA Wee RELIG phew wad wie choad ¥ankaae Hib adc aa: 18

PPG Indus., 247 N.L.R.B. 941 (1980) ................. 29

Rosaeurs Supermarkets, Inc., 300 N.L.R.B. 709 (1990) .... 13

Stokely-Van Camp, Inc. v. NLRB, 722 F.2d 1324 (7th

RAE SUE nih cha Nar de Wea tee we ere tis ee 20

STATUTES

ee Se EEE ok chk ba 5a as eve 1

NLRA § 10(f), as amended, 29 U.S.C. hs Bee 1

NLRA § 8(a)(1), as amended, 29 U.S.C. § 158(a)(1) passim

NLRA § 8(a)(3), as amended, 29 U.S.C. § 158(a)(3)

1S EEE SCR Rie HR EEE Rae eee 2, 15, 18, 21, 24

NLRA § 8&(c), as amended, 29 U.S.C. Bf. See a, a

OPINION BELOW

The opinion of the Court of Appeals for the Sixth

Circuit, which is unpublished, appears in the Appendix

at App. 1.

STATEMENT OF JURISDICTION

The Court of Appeals for the Sixth Circuit entered its

opinion and judgment on April 24, 1996. On June 14,

1996, the Court of Appeals for the Sixth Circuit entered

an Order to stay the mandate pending this Court's dispo-

sition of this Petition for Writ of Certiorari. Petitioner

filed its Petition for Writ of Certiorari within ninety days

of the Notice of Entry of Judgment. This Court's jurisdic-

tion is invoked under 28 U.S.C. § 1254(1).

The Court of Appeals for the Sixth Circuit had juris-

diction to hear Petitioner’s Petition for Review of the

decision of the National Labor Relations Board, which is

a final agency action that disposes of all claims to all

parties, pursuant to Section 10(f) of the National Labor

Relations Act as amended, 29 U.S.C. § 160(f). That section

provides in pertinent part:

Any person aggrieved by a final order of the

Board granting or denying in whole or in part

the relief sought may obtain a review of such

order in any United States Court of Appeals in

the circuit wherein . . . such person resides or

transacts business .. .

Petitioner’s corporate headquarters is located in

Memphis, Tennessee, and it transacts business in Ohio.

Therefore, this matter was within the jurisdiction of the

Court of Appeals for the Sixth Circuit.

STATUTORY PROVISIONS INVOLVED

The text of the following pertinent statutory provi-

sions is set forth below:

29 U.S.C. § 158

Unfair labor practices

(a) Unfair labor practices by employer

It shall be an unfair labor practice for an employer —

(1) to interfere with, restrain, or coerce

employees in the exercise of the rights guaran-

teed in section 157 of this title;

(3) by discrimination in regard to hire or

tenure of employment or any term or condition

of employment to encourage or discourage

membership in any labor organization: Provided,

That nothing in this subchapter, or in any other

statute of the United States, shall preclude an

employer from making an agreement with a

labor organization (not established, maintained,

or assisted by any action defined in this subsec-

tion as an unfair labor practice) to require as a

condition of employment membership therein

on or after the thirtieth day following the begin-

ning of such employment or the effective date of

such agreement, whichever is the later, (i) if

such labor organization is the representative of

the employees as provided in section 159(a) of

this title, in the appropriate collective-bargain-

ing unit covered by such agreement when made,

and (ii) unless following an election held as

provided in section 159(e) of this title within one

year preceding the effective date of such agree-

ment, the Board shall have certified that at least

a majority of the employees eligible to vote in

such election have voted to rescind the authority

of such labor organization to make such an

iia aii

agreement: Provided further, That no employer

shall justify any discrimination against an

employee for non-membership in a labor organi-

zation (A) if he has reasonable grounds for

believing that such membership was not avail-

able to the employee on the same terms and

conditions generally applicable to other mem-

bers, or (B) if he has reasonable grounds for

believing that membership was denied or termi-

nated for reasons other than the failure of the

employee to tender the periodic dues and the

initiation fees uniformly required as a condition

of acquiring or retaining membership;

force or promise of benefit

The expressing of any views, argument, or opinion,

or the dissemination thereof, whether in written, printed,

graphic, or visual form, shall not constitute or be evi-

dence of an unfair labor practice under any of the provi-

sions of this subchapter, if such expression contains no

threat of reprisal or force or promise of benefit.

STATEMENT OF THE CASE

A. Reasons for Granting Petitioner’s Writ.

The decision of the Sixth Circuit Court of Appeals,

which found that Petitioner violated the Act by withhold-

ing in good faith, and upon advice of counsel, a wage

adjustment which was undetermined at the inception of

union organizing activities, is contrary to Board law and

circuit law. Employers are regularly placed in the precar-

ious position Petitioner faced during the course of the

union organizing campaign conducted here. Due to the

frequency of such dilemmas occurring and the often con-

flicting guidelines developed in Labor Board and circuit

court decisions, elucidation by this Honorable Court on

the issue of wage adjustments in the context of a union

campaign is appropriate and warranted.

B. Procedural Background.

This appeal is the culmination of events arising out of

an unsuccessful organizational attempt conducted by the

General Drivers, Warehousemen and Helpers, Local No.

28, International Brotherhood of Teamsters, AFL-CIO

(hereinafter the “union”) among employees of Peti-

tioner’s Greenville, South Carolina Distribution Center.

Pursuant to a Stipulated Election Agreement, an election

was held on March 5, 1993. In a unit of more than 200

voters, 135 votes were cast against union representation

and only 57 votes were cast in favor of representation.

Two challenged ballots were cast.

The union filed objections which were consolidated

with certain complaints issued by the Regional Director

regarding various unfair labor practice charges filed by

the union. A hearing took place on December 6 and 13-16,

1993, and the Administrative Law Judge (hereinafter

“ALJ”) rendered his decision on March 28, 1994.

The ALJ dismissed numerous objections, finding

them to be without merit. However, the ALJ found that

AutoZone unlawfully withheld a wage increase during

the union campaign. Petitioner then filed exceptions to

the ALJ’s decision with the Nationa! Labor Relations

Board (hereinafter “Board”) on May 12, 1994. The Board,

without explanation, affirmed the ALJ’s decision and

order. 315 N.L.R.B. No. 21 (1994). Based on serious errors

contained in the ALJ’s decision and order, Petitioner filed

a petition for review to the Court of Appeals for the Sixth

Circuit (hereinafter “court below”) on October 12, 1994.

The court below rendered its decision on April 24,

1996, denying AutoZone’s petition to set aside the deci-

sion of the Board and granting in full the Board’s cross-

application for enforcement of its order. Based on serious

errors contained in the decision of the court below and

the need for guidance in this important area of national

labor relations policy, Petitioner filed the instant Petition

for Writ of Certiorari to this Court.

C. Factual Background.

Petitioner is engaged in the distribution and sale of

automotive parts. During 1993, Petitioner operated five

distribution centers located one each in Arizona, Texas,

Louisiana, Tennessee, and South Carolina. The union

waged its campaign in the Greenville, South Carolina,

Distribution Center by distributing literature and para-

phernalia to Petitioner’s. employees, holding meetings,

and soliciting support. A representation petition was

filed on January 7, 1993.

During the period preceding the election, which was

held on March 5, 1993, Petitioner instructed its super-

visors not to threaten, intimidate, make promises, or sur-

veil employees. In addition, Petitioner presented written

campaign speeches to enable employees to make an

informed decision regarding union representation. Fer-

guson, the Greenville Distribution Center Manager, and

Roberts, the Vice President of Distribution, sought legal

advice during the course of the campaign to ensure com-

pliance with the Act.

In January 1993, Petitioner became concerned with

the legality of moving forward with any wage adjust-

ments during the course of the campaign. Petitioner's

concerns were magnified by the fact that the amount of

any wage adjustment, which had been sporadic in nature,

was not finalized prior to the filing of the union’s peti-

tion, and thus communicated same to legal counsel.

Under the circumstances, Petitioner was in a dilemma: If

Petitioner proceeded with a wage adjustment during the

height of the union campaign, it would most certainly

have been accused of “vote buying.” In an effort to avoid

the filing of unfair labor practice charges and “vote buy-

ing” allegations by the union, a decision was made not to

proceed with a decision regarding any wage adjustments

at the Greenville Distribution Center.

ARGUMENT

A. Petitioner Lawfully Refrained From Making a

Decision as to the Timing and Amount of a

Wage Adjustment to Avoid Influencing the

Outcome of the Election, While Explaining to

Employees the Legal Basis for Its Decision.

(1) Summary of the Argument.

In its decision, the court below found that: (1) Peti-

tioner’s past practice of granting wage adjustments in its

Greenville facility has historically been erratic both in

timing and in amount (App. 3-4, 101); (2) there is no

guarantee that employees at any of Petitioner’s facilities

will receive a wage adjustment (App. 3-4, 101); (3) wage

adjustments are not dependent upon inflation rates, but

instead upon a market analysis of the areas in which the

individual distribution centers are located (App. 3-4,

101-02); (4) wage adjustments among the individual facil-

ities, as well as among the individual classifications of

employees, vary across the board (App. 3-4, 105-06); (5)

employees in Greenville were never guaranteed a specific

wage adjustment for 1993 (App. 3-4, 101-02); and (6)

Petitioner had not finalized a decision regarding a wage

adjustment for Greenville employees when the union

filed its petition. (App. 4-5, 103.)

Despite the erratic nature of wage adjustments at

Petitioner’s facilities, the court below nevertheless con-

cluded that Petitioner unlawfully withheld a wage adjust-

ment. Petitioner shows it did not violate the Act when it

merely informed employees of the legal restrictions guid-

ing its decision during the representation proceedings

with regard to wage adjustments. As a result, the appel-

late court’s decision must be reversed.

(2) History of General Adjustments at Peti-

tioner’s Distribution Centers.

Petitioner’s past practice with regard to wage adjust-

ments is undisputed. Petitioner maintains two types of

wage adjustment programs for its employees: (1) normal

progression raises where employees receive established

“step” raises during the first two years of their employ-

ment;! and (2) general adjustments, given sporadically

not in predetermined amounts, which vary across the

board among the different job classifications to

employees with more than two years of service. (App.

60.) The second category of wage adjustments is the

category in dispute.

Unlike the normal progression raises, general adjust-

ments are given sporadically and are directly tied to a

market analysis of the area in which each distribution

center is located.2 (App. 3-4, 60.) There is no guarantee

that an adjustment will be given on a yearly basis. (App.

3, 61.) The history of general adjustments at the Green-

ville Distribution Center illustrates the sporadic nature of

wage increases. That facility opened in October 1986. It

was not until 1990 that employees received a general

adjustment; they did not receive one in 1987, in 1988 or

until late in 1989. (App. 20, 101.)

1 For example, at the Greenville Distribution Center, new

employees are reviewed at intervals of six months, one year,

one-and-a-half years, and two years, receiving a set increase

after each review. Before, during, and after the union campaign,

employees with less than two years of service were given their

normal progression raises in accordance with the pay scale in

place at the Greenville Distribution Center.

2 As the Board correctly observed, general adjustments are

not “cost of living adjustments” because (1) not everybody gets

the same increase, if any; and (2) the general adjustment is

based on the results of a market analysis, or area wage survey,

rather than some COL index. (App. 60.)

In November 1989, a general adjustment was

announced at the Greenville Distribution Center for the

year 1990. (App. 20, 101.) This general adjustment consis-

ted of a 3'/2% change to the pay scale; the individual pay

categories each received a different percentage increase.

(App. 20, 101.) In 1991, some, but not all, Greenville

employees with over two years of service received a 0.9%

adjustment to the pay scale. (App. 101.) For example, one

category of employees received a 50¢ per hour adjust-

ment, while another category received a 15¢ per hour

adjustment. The “net” increase for 1992 for all pay ranges

across the scale constituted a 4.3% change to the pay

scale.

Moreover, general adjustments given to employees at

each of Petitioner’s five facilities vary both in amount

and distribution among the individual pay grades of

employees. In fact, there is no instance of any across-the-

board percent increase being given to all employees at a

distribution center. Thus, the mere fact that one pay

grade receives an adjustment does not mean that all other

pay grades will receive the same cents-per-hour increase

or the same percent increase. Petitioner now turns to

events from November of 1992 through January of 1993.

In November 1992, Roberts was on a routine visit in

the Greenville Distribution Center when he was

approached by several employees who asked whether

there would be an adjustment for the year 1993, and if so,

what that increase would be. (App. 4, 101.) At that time

no recommendations had been made regarding a general

adjustment for 1993. However, based on the 4.3%

weighted average adjustment made in 1992, Roberts

responded that, “to the best of our knowledge, we

expected there to be an annual increase in the range of 4%

to 5%, but that was not confirmed.” (App. 4, 101.)

(Emphasis added.)

Around the first part of December 1992, Roberts trav-

eled to the Greenville facility to inform all of the

employees of the same information. (App. 4, 101.) Speci-

fically, Roberts told employees “at that time our assump-

tion was that there might be an annual increase in the

range of four to five percent”; however, because the com-

pany was awaiting some market analysis data, no deci-

sion had been made regarding the giving of an

adjustment, if any.? Thus, the employees were given no

guarantees that a general adjustment would be given in the

year 1993. In fact, there was no further mention to

employees of any adjustment until January 22, 1993.

Roberts subsequently received the Hay Report in

mid-December 1992, which revealed that Phoenix’s pay

scale was not competitive. (App. 4, 102.) As such, each of

the distribution center managers, including Ferguson,

undertook wage surveys in their respective areas. (App.

4-5, 101-02.) As late as January 6, 1993, the day before the

union’s petition was filed, Ferguson was gathering wage

data from loca! competitors. id. This information would

be forwarded to Roberts so that he could formulate a

recommendation to present to Petitioner’s president for

review, modification, and, ultimately, decision. Id.

As of January 8, 1993, no decision had been made

regarding amounts for general adjustments in any of

Petitioner’s five facilities. However, by this time,

3 In the summer of 1992, Petitioner engaged the services of

the Hay Group to conduct a market analysis for its Phoenix

Distribution Center. (App. 4.) The Hay Group’s findings would

impact the pay scales in all of Petitioner’s facilities because the

pay progression in the five facilities was generally in “the same

ball park.” Thus, if the Hay Group found Phoenix’s pay scale

competitive, Petitioner could assume that Greenville’s pay scale

was also competitive. Conversely, if the Hay Group showed

Phoenix’s pay scale was not competitive, a market analysis

would have to be conducted for each of the distribution centers

to determine the appropriate adjustments for the individual

facilities. (App. 4, 101-02.)

AutoZone became aware that the union had filed its

petition for an election.* (App. 103.) Based on Roberts’

cursory review of wage information sent to him by Fer-

guson on the afternoon of January 6, 1993, Roberts

expected the adjustment would be greater than the 4% to

5% previously forecasted for Greenville. (App. 5, 19.)

In light of the union’s demand for recognition, cou-

pled with the fact that a decision regarding Greenville’s

general adjustment had not been finalized nor disclosed to

employees, Roberts contacted and apprised legal counsel

of the above considerations, including the fact that the

adjustment might be larger than normal. (App. 102-03.)

Based on this information, counsel advised that it would

be unlawful to implement an as-of-yet undecided-upon

raise. (App. 103.) Therefore, a recommendation for a gen-

eral adjustment to Greenville’s pay scale for 1993 was

never prepared. (App. 103.)

On January 11, 1993, Petitioner’s president reviewed

the recommendations presented to him for the other facil-

ities. (App. 5.) After making some modifications to

Roberts’ recommendations, Petitioner’s president gave

final approval for adjustments in the other distribution

centers on the evening of January 11, 1993. (App. 5.)

Significantly, the general adjustments varied greatly

among the facilities, ranging from 3.3% to 10.24%. Again,

not every employee received the same raise. To the con-

trary, each “class” of employees received a different

amount. To this day, a decision regarding a general

adjustment to Greenville’s pay scale has not been final-

ized. (App. 103.)

4 The Petition was filed on January 7, 1993. However, at

5:29 p.m. on January 6, 1993, the union sent a telegram to

Ferguson demanding recognition, a practice commonly

heralding the arrival of a formal NLRB petition. (App. 103.)

Upon receipt of the telegram, Ferguson immediately contacted

Roberts. (App. 103.)

(3) The Court Below Erred in Concluding That

Petitioner Violated the Act Where Peti-

tioner Merely Informed Employees of the

Legal Restrictions Guiding Its Decision

With Regard to Wage Adjustments.

In its decision, the court below affirmed without

discussion the Board’s mechanical application of factors

set forth in Atlantic Forest Prod., Inc., 282 N.L.R.B. 855, 858

(1987), to find that Petitioner violated the Act during a

presentation given to employees on January 22, 1993.

(App. 65.) However, this mechanical approach was previ-

ously rejected in Cutter Lab., Inc., 221 N.L.R.B. 161 (1975),

wherein the Board stated: “No aspect of [Petitioner’s]

conduct can be viewed in isolation. The totality of the

circumstances must be considered to avoid a mechanistic

and unrealistic application of the Act.” Cutter, 221

N.L.R.B. at 168. This decision, Atlantic Forest Products,

which is contrary to previous Board law and the law of

the Sixth Circuit, must not be permitted to control the

outcome of this case.

On January 22, 1993, Roberts addressed the

employees of Greenville to explain the legal status of a

general adjustment. All parties stipulated to the prepared

text read to employees on that day:

The other issues I want to discuss have to do

with the status of pay increases at this DC. A

number of you have asked when or if the 4% to

5% increase we mentioned back in December

would be going through. You need to understand

that the numbers we mentioned in December were a

tentative forecast only. After that time we decided

5 In Cutter Lab., Inc., supra, the Board reversed a finding of

8(a)(i) liability under similar circumstances, concluding the

respondent did not violate the Act by informing employees of

its decision to withhold wage increases during a union

campaign.

to reevaluate the pay situation in this market.

Before we were able to gather all the data we

needed and reach a final decision, however, the

Teamsters’ Petition came in. Our understanding of

the law is that we cannot make changes in the pay

scale or benefits once the Petition comes in unless the

decision has been finalized beforehand. We very

much regret that the union’s poor timing has now

tied our hands, but we do not intend to violate the

law. The thing to keep in mind, though, is that

once the union is beaten in the election —- and we

feel confident that that is exactly what is going

to happen here, then we will be able to move

forward, free of the restrictions that we now live

under. We are sorry we cannot be more specific

than that now, but we wanted you to under-

stand the legal status of your pay increase at the

time.

(Emphasis added.)

The text of the speech shows that Roberts was merely

informing employees of Petitioner’s obligation under the

Act, which is lawful. In Great Atl. & Pac. Tea Co., 192

N.L.R.B. 645 (1971), the Board reversed the ALJ’s finding

that 8(a)(1) liability existed because the company with-

held employee raises during the union campaign. In that

case, like here, at the time the petition was filed, the

company had not completed its wage survey. Therefore,

no decision had been reached concerning a wage

increase. Once the petition was filed, the company con-

sulted its attorney, who advised the withholding of any

raise. At trial the company argued that, because it could

not designate any particular date or amount for a wage

increase which could be definitely shown as that which

would have occurred absent the campaign, it decided not

to give any increase.

The Board dismissed the charge, finding significant

the fact that employees were not promised any type of

wage increase, notwithstanding the fact that employees were

aware increases had been given in the past around this time.®

The company, when asked about a raise during the

campaign, told employees that it “would be an unfair

labor practice charge to give a raise while the union is

organizing. .. . We intend to obey the law.” 192 N.L.R.B. at

650. Because the company did not seek to capitalize on

the absence of the wage increase, no violation was found.

Petitioner, in its speech on January 22, 1993, repeat-

edly referred to its legal obligations, and its intent to

“obey the law.” In Honey Elec., Inc., 138 LRRM 1014

(1991), aff'd in part, rev'd in part, 964 F.2d 543 (6th Cir.

1992), the Board reversed the ALJ’s finding of 8(a)(1)

liability for those very reasons:

Contrary to the Judge, we find that Respon-

dent’s stated reason for not announcing the

[wage] plan did not shift the onus to the union.

Rather, Respondent simply informed its

6 Herein, the Board erroneously likened the situation in

Atlantic Forest Prod., supra, to the instant case. However, in

Atlantic Forest Prod., the employer withheld regularly scheduled

pay raises given to employees every year in January and July.

Petitioner does not maintain such an established practice, nor

did Petitioner ever guarantee a wage increase to its employees.

To the contrary, employees were specifically informed that a

wage adjustment would be dependent upon the outcome of a

market analysis not yet completed. (App. 4.) In Rosaeurs

Supermarkets, Inc., 300 N.L.R.B. 709 (1990), the ALJ dismissed

the 8(a)(1) violation, stating: ”. . . . I find that [the company]

outlined the proposed new wage program and the employees

interpreted this to mean, mistakenly or not, that the program

would have resulted in immediate wage increases. Whether the

new program would have resulted in immediate wage increases

cannot be determined on this record. It is clear from all

testimony, however, that no specific amount of increases were

announced. Rather, only that the new wage program would be

implemented January 1.” 300 N.L.R.B. at 712.

employees it would not do anything that could

be interpreted as a violation of the Board’s rules.

Such a statement merely indicated to employees

that the Respondent wanted to be sure that it

acted in a lawful manner and did not attribute

the decision to the union or the union campaign.

138 LRRM at 1016. (Emphasis added.)

Herein, instead of viewing the speech in its entirety,

and according weight to the written words, the Board

selectively focused on disjointed phrases contained in the

speech to sustain the violation. (App. 19-20, 65.) Inter-

preting these statements out of context, the Board con-

cluded, “The subliminal message is that a ‘yes’ vote will

doom any pay adjustment.” (App. 65.)

Petitioner excepts to the Board’s selective and dis-

jointed interpretation oi the campaign text and the lower

court’s deference to the Board on this issue. “In assaying

the legality of words spoken or written in connection

with a union campaign, the language should neither be

isolated nor analyzed in a vacuum, but must be consid-

ered in light of the surrounding circumstances in which it

was written.” NLRB v. Big Three Indus. Gas & Equip. Co.,

441 F.2d 774, 777 (5th Cir. 1971). Herein, while Petitioner

expressed its hopes of winning the election, it did not tell

employees that adjustments would not be given if the

union were selected as their collective bargaining repre-

sentative. Rather, the speech fairly and correctly inter-

preted the law applicable to the situation. The speech,

when viewed in its entirety, does not constitute a viola-

tion of Section 8(a)(1) of the Actu

7 See also NLRB v. Service Garage, Inc., discussed infra, and

Bowling Green-Warren County Community Hosp. Corp. v. NLRB,

infra.

(4) The Court’s Imposition of 8(a)(3) Liability

Was Clearly Unwarranted Because Peti-

tioner Had No Established Past Practice of

Granting Wage Adjustments.

In its decision, the court below focused on what it

perceived as Roberts’ unlawful motives (App. 19-20,

108-09), rather than on objective evidence regarding Peti-

tioner’s past practice, or lack thereof, in granting wage

adjustments, to conclude that Petitioner violated Section

8(a)(3). (App. 19-20, 159.) In so doing, the court below

completely disregarded the perils faced by employers

such as Petitioner in granting or withholding benefits

during a union campaign.® Because the decision below is

based solely upon the subjective belief that Petitioner did

not finalize an amount of any adjustment due to anti-

union animus, it must be reversed. Consideration of

objective factors guiding Petitioner’s decision to withhold

wage increases shows that liability was wrongly imposed.

Relying on Otis Hosp., 222 N.L.R.B. 402 (1976), aff'd,

545 F.2d 252 (1st Cir. 1976), the Board erroneously con-

cluded that: “AutoZone artificially interrupted its pro-

cessing of the wage adjustment process for its Greenville,

South Carolina Distribution Center, while continuing

with it for its other distribution centers because on Janu-

ary 7, 1993, the Union filed a representation petition in

Case 11-RC-5844.” (App. 159.) The Board’s reliance on

Otis Hosp. is misplaced. In that case, the Board found that

the employer violated Sections 8(a)(1) and 8(a)(3) of the

Act by withholding a regularly scheduled wage increase. The

& This dilemma was best summarized by the court in J.J.

Newberry Co. v. NLRB, 645 F.2d 148 (2d Cir. 1981): “Having

previously decided to increase wages, the employer in August

1977 was in a position of being forced to tread on eggshells,

being caught in a potential ‘damned if you do, damned if you

don’t’ situation.” 645 F.2d at 151.

Board’s decision was premised upon several aggravating

factors not present in the instant case.

Unlike Petitioner, the employer in Otis Hosp. main-

tained an established practice of granting wage increases.

The wage increase was nevertheless withheld in the face of

a union campaign, despite encouragement from the union

to implement the raise. The employer further instructed an

employee to tell all other unit employees that no raise

would be given because of the union. Finally, there was no

testimony that the employer withheld raises because of its

concern over the filing of unfair labor practice charges. As

such, the violations were sustained.

Also unlike the employer in Ofis Hosp., Petitioner did

not have the benefit of union approval regarding imple-

mentation of an increase.? Additionally, Petitioner did

not, as the employer did in Ofis Hosp., instruct an

9 In its decision, the Board noted: “By letter dated January

19, the union encouraged AutoZone to give employees pay

raises ‘currently due’ to some employees, and warned that

charges would be filed for numerous violations of the Act.

AutoZone did not formally respond to the Union’s letter.” (App.

43.) The letter referred to by the Board lacks significance for two

reasons: (1) the raises referred to therein concern the normal

progression raises which were given to employees during the

campaign; and (2) the union’s “promise” would not prevent the

filing of unfair labor practice charges by someone other than the

union. Moreover, Dave Barry, an international organizer for the

Teamsters, testified that he allegedly spoke to Ferguson

subsequent to sending this letter. During this conversation,

Ferguson did not state that a final decision had been made

regarding a general adjustment for Greenville employees.

Additionally, Petitioner did “respond” to this letter in the sense

that employees were given their normal progression raises

thereafter. Finally, the letter confirmed Petitioner's concern over

the filing of unfair labor practice charges because the union

expressly stated that it intended to file charges for “numerous

violations of the Act.” (App. 43.)

‘

employee to “spread the word” that a raise was being

withheld “because of the union.” Finally, the unrebutted

testimony of Roberts established that Petitioner pro-

ceeded cautiously, after consultation with legal counsel,

and in an effort to avoid unlawfully interfering with the

outcome of the election. (App. 102-03.) Under these cir-

cumstances, Petitioner’s actions did not violate the Act.

According to the law of the Sixth Circuit, because the

Board places on employers the burden of proving that

wage increases granted during an organizing campaign

are not motivated by a desire to influence the campaign, a

reviewing court must examine the evidence closely where

the charge is that failure to grant a wage increase during

a campaign is an unfair labor practice. NLRB v. Service

Garage, Inc., 668 F.2d 247, 249 (6th Cir. 1982).

The undisputed evidence presented at trial clearly

demonstrates that the company was in the process of

determining general adjustments when the petition was

filed. (App. 102-04.) In fact, Ferguson was gathering com-

petitive wage data on January 6, 1993, the day before the

petition was filed. (App. 102-03.) Absent a final deter-

mination on the amount of a general adjustment prior to

the union’s petition, Petitioner could not lawfully pro-

ceed with an increase.

Nevertheless, the Board found and the court below

agreed that “AutoZone has failed to show that it would

have postponed its analysis notwithstanding the fact of

union activities and solely over the concern that to pro-

ceed in the face of an election petition, when no pay raise

decision had been finalized, would have been unlawful.”

(App. 107.) This per se approach was rejected in J.J. New-

berry Co. v. NLRB, 645 F.2d 148 (2d Cir. 1981), where the

court noted:

20-20 hindsight supports the view that because

the employer’s decision to increase wages was

made prior to and independently of any union

activity, it could have gone ahead and imple-

mented the increase in the face of the union

drive. But if the employer did so, it faced the

serious risk, as its attorneys recognized, that an

increase in wages so soon after the union peti-

tioned for an election would lead to an unfair

labor practice charge.

645 F.2d at 152.

In reversing the Board’s finding of 8(a)(1) and 8(a)(3)

liability, the court took into consideration the

“employer’s inability to predict with any degree of cer-

tainty whether an implementation in August of its previ-

ously adopted raise would be viewed by the Board as

lawful. ...” Id. This very “inability to predict” how the

Board would view Petitioner’s actions if it moved for-

ward with an increase in the absence of an established

practice regarding adjustments, coupled with the facts

that an amount was not finalized before the petition was

filed and counsel advised against implementation,

guided Petitioner’s decision to refrain from completing

the work necessary to make a wage adjustment. The

hindsight approach utilized by the Board and the court

below unfairly penalizes employers like Petitioner who

attempt to comply with the Act, by leaving them in an

indefensible or “damned if you do, damned if you don’t”

position. !°

In Free-Flow Packaging Corp. v. NLRB, 566 F.2d 1124

(9th Cir. 1978), the employer withheld wage increases

during a union campaign based on its perception that it

lacked a discernible program for granting adjustments. In

10 In Plasticraft, Inc. v. NLRB, 586 F.2d 185, 188 (10th Cir.

1978), the court stated: “That an ALJ with the benefit of

hindsight and complete data might later ‘find’ that there was a

status quo would be irrelevant. The focus is whether the status

quo would have been clearly apparent to an objectively

reasonable employer at the time.” (Emphasis added.)

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the past, the employer, like here, had granted increases,

but these increases were sporadic in nature and were

never given across the board, but instead varied among

individual classifications of employees. When the union

petition was filed, the company contacted legal counsel

who advised against giving the raise. The company relied

on counsel’s advice and in turn informed employees that

no raise would be given because it would constitute an

unfair labor practice.

The ALJ sustained the violation based upon the

employees’ “reasonable expectation of an increase.” 566

F.2d at 1130. In reversing the ALJ’s decision, the court

initially noted that “it is not always clear to an employer

whether a wage increase would conform to the status quo

or depart from it.” 566 F.2d at 1129. The court went on to

state:

The employer’s dilemma, then, persists, save

when the status quo - the state of existing con-

ditions of employment with respect to wage

increases — is clearly apparent and it can with

assurance be said that grant or denial of a wage

increase would constitute a change from those

conditions. In a case where status quo is not

clearly apparent, and accordingly the

employer’s dilemma persists, no inference of

antiunion motive can be said to flow from an

after-the-fact determination of what the status

quo in fact was. There is no rational basis for

such an inference unless the status quo is clearly

apparent and it can be reasoned that the

employer willfully chose to depart from it.

566 F.2d at 1129.

Based upon the employer’s past practice with regard

tu wage adjustments, the court held that “the status quo

was not so clearly apparent as to dissipate the employer’s

dilemma. . . . and give rise to an inference of antiunion

motive.” Id. at 1130. In the instant case, Petitioner’s past

practice with regard to wage adjustments falls squarely

within the dilemma described in Free-Flow Packaging. The

court’s subjective belief that Petitioner’s actions were

unlawfully motivated is unsupportable.

The courts have consistently recognized an

employer’s predicament in situations where wage adjust-

ments are not automatic but rather contain elements of

discretion and uncertainty. Thus, the inference of unlaw-

ful motive is not to be lightly drawn, and it must be

based upon substantial evidence in the record and not on

conjecture. Stokely-Van Camp, Inc. v. NLRB, 722 F.2d 1324,

1329 (7th Cir. 1983). Herein, inferences drawn by the

court below and the Board are not supported by substan-

tial evidence. Instead of according weight to evidence

presented with regard to the sporadic nature of wage

adjustments, Petitioner’s reliance on advice of counsel

(App. 103), and its stated concern to comply with the Act

(Id.), the Board focused on what it perceived to be

Roberts’ lack of credibility as a witness and the court

below adopted the Board’s perceptions. (App. 105-06.)

According to the Board, “to the extent it is necessary,

[we] do not credit Vice President Roberts.” (Id.) The

Board erroneously formed this “opinion” by pointing to

alleged “inconsistencies” between the testimony of

Roberts and a lower-level supervisor. (Id.) Specifically,

Roberts testified that he was involved in TIPS!! training

in Greenville after the Petition was filed in January 1993.

(Tr. 861-862.) The Board then compared this testimony to

that of supervisor Schlicting, who stated that Ferguson

began the TIPS instructions in late December 1992. From

this, the Board concluded that Roberts must have known

that the TIPS training was occurring in December 1992.

(App. 104.) Certainly, the Board’s conclusion is strained

11 During the campaign, supervisors were instructed not to

threaten, interrogate, promise, or surveil employees. (App. 104.)

at best. Just as plausible a conclusion is that there were

two sessions, one during the pre-petition period and the

second, more comprehensive session after the petition

was filed when conduct was now within the “critical”

period, post-petition and pre-election.

Additionally, the Board relied on a one-line answer

given by Roberts during a lengthy question-and-answer

session held on January 22, 1993, where Roberts was

bombarded with questions by employees pertaining to

the union campaign. Specifically, in response to a ques-

tion regarding wage adjustments given in the different

facilities, Roberts stated that the pay increases averaged

anywhere from 12% to 15%. While the Board conceded

that this answer was correct with respect to pay increases

given at the Phoenix Distribution Center (App. 104), it

took exception to Roberts’ “failure” to explain the

“weighted” increases given in each of the other four

facilities.12 The court below agreed with the Board.

In hindsight, perhaps Roberts could have more fully

explained the different percentages assigned to each class

of employees at each of the distribution centers; however,

to discredit this testimony, while conceding that it was

correct, is unsupportable. Moreover, during the question-

and-answer session, Roberts reiterated that Petitioner

intended to obey the law, and further, that it would not

imply promises because that would “violate the law.”

In Peabody Coal Co. v. NLRB, 725 F.2d 357 (6th Cir.

1984), the Court of Appeals stated that 8(a)(3) discrimina-

tion in the context of wages violates the law only if it

stems from improper motives. 725 F.2d at 367. That court

12 Formulation of a “weighted increase” involves

multiplying the number of employees in each classification by

the percentage adjustment given in that class. This number is

then divided by the total number of employees at the facility to

yield a weighted increase. (App. 106.)

went on to explain, “When an employer can demonstrate

some other lawful rationale for such disparate treatment,

such as a substantial and legitimate business purpose, or

even a desire to avoid the risk of an additional 8(a)(3) charge, it

has not engaged in forbidden conduct.” Id. (Emphasis

added.)!> The unrebutted testimony and documentary

evidence show that Petitioner acted lawfully, by refrain-

ing from making a decision as to the amount of a wage

adjustment, after consultation with counsel and in an

effort to comply with the Act.

In Bowling Green-Warren County Community Hosp.

Corp. v. NLRB, 756 F.2d 41 (6th Cir. 1981), the employer

commissioned a wage survey in early 1981 to ascertain

whether a wage adjustment was necessary. The union

filed a petition for representation in March of that year.

Immediately thereafter, the employer contacted legal

counsel to determine whether the proposed wage review

could be implemented. Because employees had been

informed of the wage study, but no firm date or dollar

amount of the adjustment had been finalized, legal coun-

sel advised against giving the raise to unit employees.

Relying on counsel’s advice, the employer withheld

unit employee increases while granting increases to non-

unit employees. Following the election, which the union

won, the company offered to implement a wage increase

if the union did not object. The union agreed, but

demanded that the employer grant the raise retroactively

to the date non-unit employees received raises. The

employer refused, so the union filed charges contending

that the company unlawfully withheld wage adjustments

during the campaign.

13 See also NLRB v. Cleveland Trust Co., 214 F.2d 95 (6th Cir.

1954) (holding the Board is not authorized to ignore material,

uncontradicted facts).

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The Board concluded that the wage increase had not

been made definite in time or in amount. Thus, because

the raise did not constitute a “scheduled increase,” its

withholding was not violative of the Act. However, the

Board found that the employer’s action in granting

increases to non-unit employees, while withholding

increases from unit employees, violated the Act, “evi-

dencing a discriminatory motive on the part of the

employer.” 756 F.2d at 43.14

The Sixth Circuit reversed the Board's finding that the

employer unlawfully withheld wage adjustments to unit

employees while granting increases to non-unit

employees, noting that the employer was in a precarious

position when it announced the wage study which was

subsequently followed by the union’s petition:

Thus, Medical Center was truly confronted with

a dilemma; it was likely to be damned whether

or not it granted an increase to the [unit] as of

April 1. . . . Similarly, it is not so clear that had

Medical Center attempted to explain the reason

for the less than uniform increase it would have

escaped Board action. . . . We therefore are not

persuaded by the Board’s hindsight in this case.

The choice made by Medical Center appears to

have been a logical one. . . .

756 F.2d at 43-44.

A similar conclusion was reached by the same circuit

in NLRB v. Service Garage, Inc., 668 F.2d 247 (6th Cir. 1982),

where the employer withheld a wage adjustment during

a union campaign. There, the ALJ found the employer

maintained no discernible practice of granting wage

adjustments, despite employee rumors that a 7% COL

‘4 The Board speculated that the petitioner could have

complied with the Act by either (1) withholding the increase in

its entirety; or (2) explaining to unit employees the reason an

increase was being withheld. 756 F.2d at 44.

adjustment was expected in January. When asked about a

raise, however, the company stated that it was being

withheld because of the union. Citing the ALJ, who con-

cluded that the employer did not violate Section 8(a)(1) or

(3), the court wrote:

Under Board policy, there is a presumption that

the purpose of a wage increase granted during a

union campaign is to interfere with the cam-

paign and the employer bears the burden of

rebutting this presumption, perhaps by showing

the increase was consistent with past practice.

668 F.2d at 248.

Consideration of the employer’s past practice with

regard to wage adjustments led to the ALJ’s conclusion

that, had the employer granted the 7% adjustment, it

could not have rebutted this presumption. The Board

reversed the ALJ based solely upon the supervisor’s

statement, which placed the onus on the union for the

withheld wage adjustment. According to the Board, the

supervisor’s statement made the company’s past practice

with respect to wage increases “immaterial.” 668 F.2d at

249. Reversing the Board’s decision, the Court of Appeals

noted: “It [the Board] concluded somewhat simplistically

that the company did not face the dilemma outlined by

the ALJ because it was only required to act as if there was

no union.” Id. at 249. The Court of Appeals denied

enforcement of the Board’s make-whole remedy, stating:

Since the Board has placed on employers the

burden of proving that wage increases granted

during an organizing campaign are not moti-

vated by a desire to influence the campaign, we

must review the evidence closely where the

charge is that failure to grant a wage increase

during a campaign is an unfair labor practice.

Id. at 249.

Another analogous case is NLRB v. Planter’s Peanuts,

574 F.2d 400 (8th Cir. 1978), where the court denied

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enforcement of the Board’s order. In Planter’s, the

employer computed wage increases by conducting yearly

local wage surveys. Id. at 402. The wage survey for the

following year’s increase was complete and increases

were being considered when the union filed its petition.

Id. at 403. However, no final decision to implement an

increase had been made. Id. at 404. The court, recognizing

the employer’s precarious position, held that the

employer did not violate the Act by not moving forward

with a wage increase. Id. at 406.

Considering the foregoing, the court below was

clearly wrong in finding that Petitioner violated the Act.

Had Petitioner moved forward with a wage adjustment,

which was historically sporadic in nature and undeter-

mined at the inception of the union campaign drive,

Petitioner would, in all likelihood, be defending against

unfair labor practice charges, including a bargaining

order, for granting an increase. Board precedent has

repeatedly failed to recognize the precarious position

faced by employers like Petitioner. Under the circum-

stances, Petitioner cannot be unfairly penalized for its

good-faith efforts to comply with the Act.

B. The Court Below Improperly Disregarded the

Written Text of a Campaign Speech to Find

That Petitioner’s Noncoercive Expressions of

Opinion on Union Matters Violated the Act.

The court below determined that Petitioner

unlawfully threatened employees with closure of the

Greenville facility based not upon the words contained in

a written text delivered verbatim to employees, but upon

unfounded assumptions and mere speculation. The pre-

pared speech was stipulated into evidence by all parties and

states in pertinent part:

1 know, as sure as I am standing here, that if I let

anyone — here or anywhere else in this company

— think the Teamsters’ union is in charge, I

might as well close the doors, put a lock on the

gate and throw away the key. I will not let the

Teamsters, with their record and their own

agenda, destroy what you and I have built.

Significantly, the Board correctly pointed out in its

decision that the speaker did not state he would close the

doors if the union was voted in. Inexplicably, however,

the Board sustained the violation based upon its subjective

belief that the words contained in the speech “implied”

closure of the facility and the court below agreed with

this subjective belief. (App. 17.) According to the Board:

His message is that if the union gets in, and

secures such favorable contract terms (to which,

of course AutoZone would have to agree), so

that someone at AutoZone could ‘think’ that if

the union was in charge, then [the speaker]

‘might as well’ close the Greenville plant. And he

would do so because ‘I will not let the Team-

sters, with their record and their own agenda,

destroy what you and I have built.’ That, I find

is the message.

(App. 86.) (Emphasis added.) The court below agreed

with this conclusion. (App. 17.)

Petitioner submits that the court’s disregard of the

written text constitutes reversible error. The interpreta-

tion of a written instrument is a question of law to be

decided by the courts. Florida Steel Corp. v. NLRB, 587 F.2d

735, 751 (5th Cir. 1979). Accordingly, “the interpretation

and construction of such an instrument by an administra-

tive agency, such as the Board in this case, is not binding

on the court.” Id.

The Court of Appeals for the Sixth Circuit previously

rejected the Board’s interpretation of a campaign speech

in NLRB v. Pentre Elec., Inc., 998 F.2d 363 (6th Cir. 1993). In

that case, the company’s vice president told employees,

“we would not have the jobs we have now if we had been

union, and it would have been very difficult to get work

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if we were union.” 998 F.2d at 367. The Board found this

language violated the Act, reasoning that the “effect of

those statements was to convey to employees that union-

ization would result in the company’s closing its doors.”

Id. at 368.

On appeal, the Sixth Circuit rejected the Board’s

approach, noting that “the right to free speech in a union

organizational campaign is not to be narrowly restricted.”

Id. at 368. Thus, the Board’s decision was vacated because

its conclusions were not supported by substantial evi-

dence.

Herein, the speech falls squarely within the purview

of Section 8(c) of the Act.!° When the allegedly unlawful

statement is viewed in the context of the entire speech, it

is evident that it was only intimating the fact that Peti-

tioner had no intentions of allowing the union to control

its policies by forcing unreasonable demands upon the

company.

In Emory Convalescent Home, 260 N.L.R.B. 540 (1992),

the Board correctly held that the mere reference to closure

of a nursing home in a company speech discouraging

unionization did not constitute unlawful employer con-

duct. In that case, the employer’s representative stated,

“We do not want to see this convalescent home forced to

close.” Id. at 554. The Board held that this was not a direct

threat of closure and therefore protected campaign

speech under Section 8(c) of the Act. Id.

15 29 U.S.C. § 158(c) states “The expressing of any views,

argument or opinion, or the dissemination thereof, whether in

written, printed, graphic, or visual form, shall not constitute or

be evidence of an unfair labor practice under any of the

provisions of this subchapter, if such expression contains no

threat of reprisal or force or promise of benefit.”

A fortiori, the speech, which in no way threatened or

coerced employees by linking the unionization of Peti-

tioner’s employees with the closure of the Greenville

Distribution Center, is also lawful under the Act.

C. Employees Were Informed of Striker Reinstate-

ment Rights; Therefore, the Court Below Was

Clearly Wrong in Concluding That Petitioner’s

References to Strikes Constituted a Violation of

the Act.

The court below improperly focused on another part

of the referenced speech to find that Petitioner unlawfully

threatened employees with loss of their jobs. Specifically,

it was stated:

Nobody wins a strike. In each of the cases I

mentioned, both the company and the Teamsters

survived the strike and are still around.

Nashville is still operating full bore. So is

Sikeston and so is Memphis. The only part of

the equation not still there are the employees

who allowed the Teamsters to call them out on

strike. As Rick and Dennis told you, the 185

strikers at our Nashville warehouse who walked

out on an illegal wildcat strike were all fired.

Those 185 employees did not get to vote. Not

one of them has ever gotten his job back. The

strikers in Memphis and Sikeston were all

replaced, and none of them have gotten their

jobs back to this day. In fact, there is no union

today in the Nashville DC, the Sikeston DC, or

the Memphis DC.

Significantly, in sustaining the violation, the court

below and the Board relied not on statements made in the

speech, but rather on Petitioner’s alleged “omissions.”

Specifically, the Board correctly noted that “the statement

about fired illegal strikers never getting their jobs back is

lawful.” (App. 84.) (Emphasis added.) According to the

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court below and the Board, however, because Petitioner

allegedly failed to explain “that the names of the replaced

employees could be placed on a preferential hiring list

and that they would be recalled if a permanent replace-

ment left the employ of the Respondent,” the references

to strikes were unlawful. (App. 16, 83.) Petitioner did

inform employees of striker reinstatement rights; thus the

Board’s erroneous conclusion must be reversed.

During the preelection period, meetings were held

with groups of employees for the presentation of

speeches by members of management as a means to com-

municate facts and opinions about the union. In the

group talks given the week of January 25, 1993, all ware-

house employees were informed of striker reinstatement

rights:

Our only obligation, if the strikers give up the

strike and offer to come back to work, is to place

them on a preferential hiring list and to bring

them back to work when positions become

available, which may be never.

Therefore, the Board’s reliance on Petitioner’s alleged

“omission” was wrong, and its finding of a violation

must be reversed.

Moreover, it is well established that an employer may

tell its employees about the union’s history of strikes and

discontent. PPG Indus., 247 N.L.R.B. 941 (1980). Similarly,

truthful disparagement of a union’s “track record” in

reference to possible “delays, dues and strikes” are pro-

tected statements. Gossen Co., 254 N.L.R.B. 339 (1981),

modified on other grounds, 719 F.2d 1354 (7th Cir. 1983).

Herein, the company merely communicated the Team-

sters’ “track record” of strikes with which the speaker

was involved, which is lawful. Florida Steel Corp. v. NLRB,

587 F.2d 735, 751 (5th Cir. 1979). Additionally, no threat of

job loss occurred because employees were previously

informed of striker reinstatement rights.

CONCLUSION

To the extent the decision of the Court of Appeals for

the Sixth Circuit found that Petitioner engaged in unfair

labor practices or objectionable conduct, Petitioner

respectfully requests it be reversed. Not only are the

court’s findings unsupported by substantial evidence,

they are contrary to Board precedent, the law of the Sixth

Circuit and other circuits.

Respectfully submitted this 19th day of July, 1996,

Cornetius R. Heuser

Tracy K. Hipatco

KULLMAN, INMAN, BEE,

Downinc & BANTA

A Professional Corporation

Suite 1600, Energy Centre

1100 Poydras Street

New Orleans, Louisiana 70160

Telephone: (504) 524-4162

Counsel for Petitioner

Autozone, Inc.

Sapspit Des b= inte:

App. 1

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

Nos. 94-6280, 94-6408

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

AUTOZONE, INC.,

ON PETITION FOR

REVIEW AND CROSS-

APPLICATION FOR

ENFORCEMENT OF AN

)

Petitioner

)

NATIONAL LABOR ORDER OF THE

)

Cross-Respondent,

RELATIONS BOARD, NATIONAL LABOR

RELATIONS BOARD

Respondent

Cross-Petitioner. (Filed

April 24, 1996)

BEFORE: NELSON and SILER, Circuit Judges; and

WISEMAN, District Judge.*

PER CURIAM. This case comes before this Court on

petition of AutoZone, Inc. (“AutoZone”) for review of a

decision and an order rendered on September 30, 1994 by

the National Labor Relations Board (the “Board”). On

cross-application, the Board seeks enforcement of the

order. We DENY AutoZone’s petition to set aside the

decision of the Board. Furthermore, we GRANT in full

the Board’s cross-application for enforcement of its order.

* The Honorable Thomas A. Wiseman, Jr., District Judge

for the Middle District of Tennessee, sitting by designation.

App. 2

I. Facts and Procedural History

A. General Background

AutoZone is engaged in the distribution and sale of

automotive parts throughout the continental United

States. Among its nationwide distribution centers is a

facility located in Greenville, South Carolina. The events

of this case arose during an effort by the General Drivers,

Warehousemen and Helpers, Local No. 28, International

Brotherhood of Teamsters, AFL-CIO (the “Union”) to seek

representation of employees at this facility in Greenville.

In October or November of 1992, the Union began an

organizing campaign among the employees at the Green-

ville distribution center. By January 6, 1993, the campaign

culminated to the point of recognition demand, and on

the following day, January 7, the Union filed a represen-

tation petition with the Board. By a letter dated January 8,

Greenville Distribution Center Manager Rick Ferguson

declined the Union’s demand for recognition. On January

11, Ferguson posted a notice to all personnel, advising

them of the Union’s petition and of AutoZone’s opposi-

tion. On January 27, the Board’s Regional Director

approved a stipulation by both AutoZone and the Union

that a representation election be 1:eld on March 5, 1993

among employees in an agreed-upon bargaining unit.

The Union lost the election. Of approximately 203

eligible voters, 57 voted in favor of union representation

and 135 voted against, with two challenged ballots.

Thereafter, the Union filed objections to AutoZone’s con-

duct, allegedly affecting the election results. Certain of

App. 3

these objections were subsequently consolidated for hear-

ing with a complaint issued by the Board’s Regional

Director alleging unfair labor practices against AutoZone.

: B. AutoZone’s removal of Union Flyers

AutoZone’s unlawful conduct first surfaced on Janu-

ary 20, when Supervisor Timothy Schlichting, in the pres-

ence of Supervisor Eddie Massey and Personnel Manager

Jim Wartinger, removed three or four letter-sized union

flyers from a bulletin board, used by employees for sales

notices and other personal notes, in the Company can-

teen. Schlichting, however, did not remove the antiunion

materials also posted on the board. Having observed

Schlichting’s removal of the flyers, employee Reuben Rice

complaint to Vice President Dennis Roberts about the

removal shortly after Schlichting’s actions; the flyers

were reposted later that day.

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C. AutoZone’s Pay Adjustment Process and Sur-

rounding Conduct

AutoZone uses a pay increase procedure that

includes an annual pay “adjustment” for the employees

at its various distribution centers, each having its own

wage scale. The annual increase is determined separately

for each distribution center by its local management and

is not guaranteed. In fact, the increase is granted only if a

wage survey shows a given distribution center’s payscale

is not competitive within its geographic area. Once the

information is collected, Vice President Roberts reviews it

App. 4

and then makes a recommendation to AutoZone’s presi-

dent. In 1991, AutoZone began conducting its wage sur-

veys and analysis in December, with wage adjustments

being made in January 1993.

On a routine visit in November 1992 to the Greenville

Distribution Center, Roberts was approached by several

employees, asking about a wage increase and if so how

much. Roberts replied to the best of his knowledge that

he expected a wage increase between 4 to 5 percent, but

this figure was not yet confirmed. About two weeks later,

Roberts returned to Greenville, where both he and man-

agement met with small groups of employees to convey

the same information about the wage increase. In addi-

tion, they added that AutoZone was awaiting the results

of a labor market analysis being done in its Phoenix,

Arizona distribution center by the Hay Group. If the

Phoenix survey showed AutoZone’s wages not to be com-

petitive there, AutoZone would then assume its other

distribution centers were also not competitive and initiate

wage surveys in those areas.

In mid-December 1992, Vice President Roberts

received a copy of the Hay Group survey, which indi-

cated that AutoZone’s pay was no longer competitive in

the Phoenix area. In response, Roberts issued instructions

to begin wage surveys for all distribution center areas,

including Greenville. Having received all the data for

AutoZone’s distribution centers, Roberts reviewed the

material and passed on his wage increase recommenda-

tions for all the distribution centers, except for Green-

ville. Roberts placed the Greenville wage data aside; he

Sage. See NOR ETS

App. 5

did not perform his analysis or finalize a recommenda-

tion regarding a pay adjustment for the Greenville Distri-

bution Center. On January 11, 1992, AutoZone’s president

approved Roberts’ recommendations with some mod-

ification.

According to the data from the wage surveys at the

other distribution centers, the wage adjustment at Green-

ville, had it been made, would have been greater than 5

percent. Furthermore, if the adjustment had been imple-

mented at Greenville, it would have been effective for the

pay period beginning January 3, 1993.

On January 22, 1993, Vice President Dennis Roberts

and Manager Rick Ferguson made a joint speech to the

Greenville employees. After a few introductory com-

ments, Ferguson emphasized that “We do not want the

teamsters or any other union in our operation!!”. He

added, “We are completely and entirely against this

union getting in here and we will take every legal step

available to keep it out !!”. Roberts, delivering the second

half of the speech, stated:

The other issue I want to discuss has to do

with the status of pay increases at this [distribu-

tion center]. A number of you have asked when

or if the 4 to 5 percent increase we had men-

tioned back in December would be going

through. You need to understand that the

numbers we mentioned in December were a

tentative forecast only. After that time, we

decided to re-evaluate the pay situation in this

market. Before we were able to gather all the

data we needed and reach a final decision, how-

ever, the Teamsters’ petition came in. Our

understanding of the law is that we cannot

App. 6

make changes in the pay or benefits once a

petition comes in, unless the decision had been

finalized beforehand. We very much regret that

the union’s poor timing has now tied our hands,

but we do not intend to violate the law. The

thing to keep in mind, though, is that once the

union is beaten in the election — and we feel

confident that is exactly what is going to happen

here — then we will be able to move forward,

free of the restrictions that we now live under.

We’re sorry we cannot be more specific than that

now, but we wanted you to understand the legal

status of your pay increase at this time.

AutoZone then conducted a question-and-answer session

following this speech. In response to a question concern-

ing pay increases at the other distribution centers, Fer-

guson responded that the average increase was between

12 and 15 percent.

D. AutoZone’s Gag Order

On February 11, 1993, several members of the

Union’s organizing committee approached Ferguson and

Roberts to discuss a problem concerning, in essence, dis-

criminatory practice by AutoZone. Reuben Rice, an Auto-

Zone employee, read to them a short handwritten note

protesting a company practice of allowing antiunion

employees to walk around the facility during work time

making antiunion statements to other employees, while

prohibiting union supporters from campaigning for the

Union during work time. Two days before this meeting,

Supervisor Schlichting told employee Stanley Wilson that

he would be discharged if he were caught discussing the

Union on the job.

App. 7

Later that day, AutoZone assembled all employees,

and Ferguson told them there would be no talking what-

soever either for or against the Union during work time.

He further stated that such discussion was hampering

production and that violators would be subject to disci-

pline, including discharge. This restriction was not in

effect during their personal time at breaks, lunch, and

before or after work; employees could discuss any topic

during these times. Despite these warnings, AutoZone’s

policy concerning employee conversation remained in

effect. That is, employees were permitted to carry on

conversations during work as long as it did not interfere

with their work.

In mid-February, Supervisor Barbara Cunningham

told employees during a meeting that any discussion

regarding the Union would lead to their being termi-

nated.

Around the same time, Supervisor Marshall Hurley

told employees, including employee Robin Delk, who

were talking in the rest room line that they should not be

talking about the Union.

On another occasion in mid-February, housekeeping

employee James Andrews, while cleaning lavatories in

the women’s rest room, stopped two female employees

coming in to use the facility. Andrews spoke with the two

about Union health benefits, which was an issue in the

campaign. As a result of the discussion, the women were

delayed from returning to their jobs. Later that day,

Supervisor Timothy Schlichting told Andrews that he was

not to discuss union issues on company time. Schlichting

never spoke with the two female employees involved,

App. 8

and he did not issue Andrews a written warning or make

a written note of the incident.

E. AutoZone Chairman and C.E.O. J.R. Hyde’s

Speech

On February 19, 1993, about two weeks before the

election, AutoZone Chairman and C.E.O. J.R. Hyde made

a speech to the Greenville Distribution Center employees.

In his speech, he emphasized that the election was

“serious business” and that AutoZone was “totally

opposed to the Teamsters getting in here.” Hyde further

stated that although AutoZone was completely non-

union, he had a long history of dealing with the Teams-

ters. In fact, he stated “in every instance where the Team-

sters have made us lock horns with them, it has been the

employees who have suffered most.” He stated that the

employees had “good sense” if the Teamsters strike

record scared them. He described strikes he allegedly

experienced at three other AutoZone distribution centers,

stating with emphasis that the Union strikes “100 percent

of the time.” Hyde added that “[clonsidering the record,

[he] would be awfully concerned about what’s going to

happen [at Greenville] after March 5th [, the election

date,] if the [Union were to] win.” In a reference to

alleged strikes at the three other facilities, he stated, “I do

not want any of you or any of us to run the risk of [the

Union] making this [distribution center] number 4 on

their strike list against us.”

Hyde continued:

Nobody wins a strike. At each of the cases I

mentioned, both the company and [the Union]

App. 9

survived the strike and are still around. [The

Distribution Center at] Nashville is still operat-

ing today full bore. So is Sikeston and so is

Memphis. The only part of the equation not still

there are the employees who allowed the Teams-

ters to call them out on strike. As Rick and

Dennis told you, the 185 strikers at our

Nashville warehouse who walked out on an ille-

gal wildcat strike were all fired. Those 185

employees did not get to vote. Not one of them

has ever gotten his job back. The strikers in

Memphis and Sikeston were all replaced, and

none of them have gotten their jobs back to this

day. In fact, there is no union today in the

Nashville [distribution center], the Sikeston

[distribution center], or the Memphis [distribu-

tion center].”

In addition, describing his attitude toward the Union,

collective bargaining, and strikes, Hyde stated:

[The Union’s] record with me and your

management team is just about as bad as you

can get. Maybe it’s because I take a no-nonsense

; business approach to dealing with them, and I

never suck up to them or try to become pals

} with [the Union] bosses. I’ve always dealt fairly

4 and legally with them, but neither do I quake

and shake when the word “union” is mentioned.

I don’t make many bets but I will bet you

. this - [union representatives] Mr. Barry, Mr.

: Wood and Local 28 have never dealt with any-

‘ one like us. If [the Union] want[s] to play hard-

ball, we can do the same.

Don’t misunderstand: AutoZone and I don’t

want a strike; we don’t want trouble. But, if [the

Union] make[s] demands on us which I am

App. 10

unwilling to accept, I will say, “NO.” I guaran-

tee you and Mr. Barry that if I say, “NO,” I will

mean it and I am ready. If you or he believe for

one second that a picket line or a strike at this

{distribution center] will make me give one inch

— you’re dead wrong. And if the organizers

think a strike or picket, anywhere else — includ-

ing the stores — will make me give one inch —

then they are dead wrong.

I know, as sure as I’m standing here, that if I

let anyone — here or anywhere else in this com-

pany — think [the Union] is in charge, I might as

well close the doors, put a lock on the gate, and

throw away the key. I will not let [the Union],

with [its] record and [its] own agenda, destroy

what you and I have built.

F. The Act and the Board’s Conclusions and Order

Under section 7 of the National Labor Relations Act

(the “Act”), 29 U.S.C. § 157, employees “have the right to

self-organization, to form, join, or assist labor organiza-

tions . . . and to engage in other concerted activities for

the purpose of collective bargaining or other mutual aid

or protection... .” According to section 8(a)(1) of the

Act, 29 U.S.C. § 158(a)(1), it is an unfair labor practice for

an employer “to interfere with, restrain, or coerce

employees in the exercise of the rights guaranteed in

section 7.” In addition, section 8(a)(3) of the Act, 29

U.S.C. § 158(a)(3), provides that discrimination in regard

to... any term or condition of employment to encourage

or discourage membership in any labor organization” is

an unfair labor practice for an employer.

App. 11

Based upon the foregoing, the Board, in agreement with

the administrative law judge (“ALJ”), found that Auto-

Zone violated section 8(a)(1) of the Act by removing

prounion literature from a plant bulletin board while

leaving antiunion literature posted; telling employees

that a pay raise was being withheld because the Union

had filed a representation petition; imposing a gag order

on all working-time talk about unions; and threatening

employees with loss of jobs and closure of its facility if

they chose union representation. In addition, the Board

found in agreement with the ALJ, that AutoZone violated

sections 8(a)(1) and (3) of the Act by suspending its pay

increase determination process and withholding a sched-

uled pay increase because of its employee’s support for

the Union.

In order to remedy these unfair labor practices, the

Board ordered AutoZone to cease and desist from the

violations and from any similar actions interfering with

employees exercising their rights under section 7 of the

Act. In addition, the Board’s order requires AutoZone to

complete the Greenville Distribution Center’s wage

adjustment process, which was unlawfully suspended in

January 1993, to implement the resulting pay increase

with interest, effective January 3, 1993; and to post copies

of remedial notice.

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II. Discussion

This Court’s standard of review over Board findings

is well established. The Board’s findings must be sus-

tained as long as they are supported by substantial evi-

dence, even if the reviewing court might have justifiably

App. 12

reached a different conclusion had the matter been before

it de novo. 29 U.S.C. § 160(e); Universal Camera Corp. v.

NLRB, 340 U.S. 474, 493, (1951); Indiana Cal-Pro, Inc. v.

NLRB, 863 F.2d 1292, 1297 (6th Cir. 1988). In addition, the

Board’s application of the law to particular facts arises

under the substantial evidence standard. Turnbull Cone

Baking Co. v. NLRB, 778 F.2d 292, 295 (6th Cir. 1985), cert.

denied, 476 U.S. 1159 (1986). We review the Board’s con-

clusions of law de novo. Wilson v. NLRB, 920 F.2d 1282,

1285 (6th Cir. 1990), cert. denied, __ U.S. __, 112 S.Ct.

3025 (1992). Having reviewed the record, we believe that

all of the Board’s findings of fact are supported by sub-

stantial evidence and that there are no errors of law in its

decision.

A. Removal of Union Material

Although the Act does not create a right of access to

employer bulletin boards, Container Corp. of America, 244

NLRB 318 n.2 (1979), enf’d in part, 649 F.2d 1213 (6th Cir.

1981), once an employer “by policy or prac-

tice, .. . permits employee access to its bulletin boards for

any purpose, section 7 of the Act . . . secures the

employees’ right to post union” or other organizational

materials. Union Carbide Corp. v. NLRB, 714 F.2d 657,

660-61 (6th Cir. 1983). Accord NLRB v. Challenge-Cook Bros.

of Ohio, Inc., 374 F.2d 147, 153 (6th Cir. 1967). Accordingly,

an employer’s discriminatory removal of union notices

from the bulletin board violates section 8(a)(1) of the Act.

Union Carbide Corp. v. NLRB, 714 F.2d at 661; Challenge-

Cook Bros. of Ohio, Inc., 374 F.2d at 153.

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App. 13

In the instant case, it is undisputed that Supervisor

Schlichting removed several union fliers from a company

bulletin board while leaving antiunion material undis-

turbed. Despite this fact, AutoZone asserts that by repost-

ing the material with an apology within three hours

effectively cured any unlawful infringement of

employees’ section 7 rights.

The Board’s standard for effective repudiation is set

forth in Passavant Memorial Hospital, 237 NLRB 138 (1978).

For a repudiation to be effective, it must be timely, unam-

biguous, specific in nature to the coercive conduct, and

free from other proscribed illegal conduct. In addition,

adequate publication of the repudiation to the employees

is required, and there must be no proscribed conduct by

the employer after the publication. Id. at 138-39.

In the instant case, AutoZone’s conduct failed to

meet the Passavant standards. The record lacks any evi-

dence of AutoZone’s giving the employees any assur-

ances that it would not engage in any future interference

with their statutory rights. Moreover, AutoZone did not

refrain from such proscribed conduct. Instead, AutoZone

engaged in further unlawful conduct, including a gag

rule prohibiting discussion of unions along with a series

of coercive threats of retaliation in the event of unioniza-

tion.

AutoZone argues that the Board should have applied

the test as set forth in Atlantic Forest Products, 282 NLRB

855 (1987). In Atlantic Forrest Products the Board found

that even if the Passavant test was not satisfied, an action

that would otherwise have been a breach could be cured.

Id. In the Atlantic case, the court relied on six factors: (1)

App. 14

only three employees were told of the restriction, (2)

remedial action was taken within one half to three hours,

(3) employees were told that it was a mistake to impose

the regulation, (4) there was no evidence of further viola-

tions, (5) a supervisor testified that he understood that

lawful solicitation could occur, and (6) the event occurred

on the first day the notice was posted. Id. at 872.

AutoZone’s timely replacement and apology of the

union material, however, still does not satisfy the condi-

tions in Atlantic Forest. Unlike the employer in Atlantic

Forest, AutoZone did not convey to employees that it

recognized that its behavior was improper. Further, an

undetermined number of employees were affected.

Finally, AutoZone’s behavior did not change after the

remedial action. Therefore, the violation was not cured

because AutoZone’s behavior can be distinguished from

the employer in both Atlantic Forest and Passavant.

B. Employee Conversation: “The Gag Order”

Employee conversation generally cannot be restricted

during work hours so as to prevent discussion about the

union while allowing other topics to be discussed. NLRB

v. O.ympic Medical Corp., 608 F.2d 762, 763-764 (9th Cir.

1979); Visador Co., 303 NLRB 1039, 1041-1042 (1991). How-

ever, an employer may restrict campaigning in order to

maintain productivity. Ohmite Mfg. Co., 290 NLRB 1036,

1045 (1988); Adco Elec. Inc., 307 NLRB 1113, 1118 (1992).

In the case at bar, the record substantially supports

the Board’s findings that AutoZone promulgated an

unlawfully restrictive “gag rule” on February 11, 1993

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App. 15

and that it implemented the rule through subsequent

warnings and admonitions to employees. In early Febru-

ary, Supervisor Schlichting threatened employee Wilson

with discharge if he were caught discussing the Union on

the job. On February 11, some union supporters protested

AutoZone’s practice of permitting employee worktime

anti-union statements while prohibiting pro-union state-

ments. AutoZone responded with a blanket gag rule pro-

hibiting any worktime talk about the Union, but

continued to permit employees to engage in worktime

conversations about other topics.

AutoZone continued to implement its policy in mid-

February. Supervisor Cunningham told employees that

anyone talking for or against the Union would be termi-

nated, and Supervisor Hurley told employees that they

did not need to be talking about the Union. In addition,

Supervisor Schlichting told employee Andrews that he

was not to discuss union issues on company time.

Moreover, as the ALJ noted, the promulgation of this

gag rule was unnecessarily restrictive and therefore

unlawful. There is no evidence that Union discussion

affected production. As the ALJ noted and as reflected by

the record, any alleged productivity problem resulted

from the employees leaving their work stations and inter-

fering with the work of others, not the topic of conversa-

tion.

C. Hyde’s Speech

Threats of job loss or plant closure by an employer as

a consequence of unionization is a violation of section

8(a)(1) of the Act. NLRB v. Hovey Elec., Inc., 964 F.2d 543,

App. 16

546 (6th Cir. 1992), citing NLRB v. Garon, 738 F.2d 140 (6th

Cir. 1984). The test is not actual intimidation or coercion,

but whether the conduct tends to be coercive or interfere

with employees’ exercise of their rights. NLRB v. Elec.

Steam Radiator Corp., 321 F.2d 733, 736 (6th Cir. 1963);

NLRB v. Okun Bros. Shoe Store, Inc., 825 F.2d 102, 105 (6th

Cir. 1987), cert. denied, 485 U.S. 935 (1988).

In the case at bar, the Board found that AutoZone

Chairman and CEO Hyde’s February 19 speech to Green-

ville employees contained threats of job loss and plant

closure in the event of unionization. Those findings are

substantially supported by the record. An employer vio-

lates section 8(a)(1) of the Act by campaigning against the

union on the basis that strikes are an inevitable result of

unionization. NLRB v. Thomas Products Co., 432 F.2d 1217,

1218 (6th Cir. 1970). Similarly, it is unlawful for an

employer to tell employees, without more, that they

could lose their jobs to permanent replacements in the

event of a strike. Employees must be told of their rights if

they return unconditionally from a strike. Laidlaw Corp.,

171 NLRB 1366, 1368-1367 (1968), enforced, 414 F.2d 99

(7th Cir.), cert. denied, 397 U.S. 920 (1969). One of these

rights is that employers must place permanently replaced

strikers on a preferential hiring list if they return uncon-

ditionally. Larson Tool & Stamping Co., 296 NLRB 895

(1989). When threat of permanent replacement is com-

bined with job loss, it is not reasonable to infer that an

employee will interpret this to mean that a Laidlaw right

exists. Baddour, Inc., 303 NLRB 275 (1991).

The Board found and the record substantially sup-

ports that Chairman Hyde’s speech contained both a

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App. 17

threat of plant closure and permanent loss of employ-

ment. Hyde told the employees his concerns about a

union election victory given his personal experience that

the Teamsters strike “100% of the time.” Words such as

these, as noted by the ALJ, convey the message that a

successful vote for the Union will lead to a strike. See U.S.

Electrical Motors v. NLRB, 722 F.2d 315, 321 (6th Cir. 1983),

cert. denied, 467 U.S. 1216 (1984). In addition, Hyde

emphasized that AutoZone’s striking employees at its

Memphis and Sikeston distribution centers “were all

replaced” and that “none of them have gotten their jobs

back to this day.” This statement, which equates lawful

strikes with permanent replacement and job loss, fails to

mention the striker’s Laidlaw rights, and is therefore

unlawful. Finally, although Hyde did not expressly state

he would close the facility, his statement conveyed that

message. Hyde stated “[I]f I let anyone . . . think [the

Union] is in charge, I might as well close the doors, put a

lock on the gate, and throw away the key. I will not let

[the Union], with [its] record and [its] own agenda,

destroy what you and I have built.” As the ALJ noted,

these words convey the message that Hyde would close

the plant rather than see the nonunion status of the

facility changed.

' AutoZone contends that Hyde’s statements concerning

plant closure are noncoercive under NLRB v. Pentre Elec., Inc.,

998 F.2d 363 (6th Cir. 1993). This contention is without merit

given the differences between the two speeches. In Pentre, this

Court, in finding the statements to be lawful, noted the

statements in question were objective, contained nothing

indicating plant closure or similar consequences to result from

action by company officials acting on their own volition, and

were not interspersed with antiunion statements. In the case at

App. 18

D. AutoZone’s Withholding of Employee Pay

Increase

An employer violates section 8(a)(1) of the Act by

withholding a previously planned, promised, or sched-

uled employee benefit during an attempt at union organi-

zation. Southern Moldings, Inc. v. NLRB, 715 F.2d 1069,

1074 (6th Cir. 1983). Similarly, withholding of a promised

benefit can violate section 8(a)(3) of the Act, particularly

where the employer’s action was motivated by a discrim-

inatory intent to discourage employees from engaging in

organizational activities. See Turnbull Cone Baking Co. v.

NLRB, 778 F.2d 292 (6th Cir. 1985), cert. denied, 476 U.S.

1159 (1986); NLRB v. Shelby Memorial Hosp. Assn, 1 F.3d

550, 557-58 (7th Cir. 1993); Gupta Permold Corp., 289 NLRB

1234, 1234-1235 (1988). Although an employer commits

an unfair labor practice by engaging in protected activ-

ities and gives pretextual reasons for the discharge, the

employer’s anti-union animus must contribute to the dis-

charge for the actions to be unlawful. Turnbull, 778 F.2d at

296.

In the instant case, the record fully supports the

Board’s finding that AutoZone withheld a planned and

expected pay adjustment it would have otherwise

granted based upon the relevant factors indicating that

employees were due for a raise. Moreover, the Board

found and record substantially supports that AutoZone

discontinued its pay adjustment process and postponed a

bar, Hyde’s statements reflected a subjective and personal

hostility toward the Union, a defiant attitude toward the

prospect of dealing with the Union, «nd plant closure

statements both threatening and gratuitous.

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App. 19

pay increase at Greenville because of the Union’s petition

and the Union activities of its employees.

The record reflects that a wage adjustment at the

Greenville Distribution Center was anticipated as a part

of AutoZone’s wage adjustment process for January 1993

and that AutoZone communicated to its employees its

intention to grant a wage adjustment. AutoZone had

followed a practice of granting an annual adjustment in

January to employees at each of its distribution centers

where local wage surveys indicated that an adjustment

was needed in order to remain competitive in the local

labor market. In addition, Vice President Roberts received

a preliminary report in November that showed an

increase in salary would be required to keep the center

competitive and told employees in December that he

expected the raise to be between 4 and 5%. On January

11, 1993, all reports and wage survey data were available,

and adjustments were implemented in the centers exclud-

ing the Greenville facility. Under its established Policy,

the data would have warranted an increase of 4 to 5

percent. After halting its pay adjustment process for the

Greenville Distribution Center, Vice President Roberts

announced in his January 22 speech that his earlier fore-

casts had been tentative, that the expected wage adjust-

ment was being withheld, and that the filing of the

Union’s representation was responsible.

In his speech, Roberts stated the pay increase was

withheld because it would have been illegal. The ALJ

discredited this testimony. The function of the ALJ is to

resolve credibility problems, and this Court will “not

normally disturb the credibility assessments of the Board

or the .. . [ALJ] who has observed the demeanor of the

App. 20

witnesses.” NLRB v. Norbar, Inc., 752 F.2d 235, 239 (6th

Cir. 1985). Accordingly, credibility determinations

affirmed by the Board must be upheld on review unless

they are shown to be unreasonable. NLRB v. Baja’s Place,

733 F.2d 416, 421 (6th Cir. 1984). Here, AutoZone has

failed to show any basis for disturbing the credibility

determinations by the ALJ, all of which were affirmed by

the Board.

As the Board noted and as supported by the record,

Roberts ‘exploited his decision and the resulting wage

adjustment denial, using it as a weapon during his Janu-

ary 22 speech. He blamed the Union for tying [sic] Auto-

Zone’s hands and strongly implied that a vote against the

Union would restore AutoZone’s freedom to grant the

pay increase. Intensifying this exploitation, Roberts

falsely told employees after the speech that the pay

increases taking effect at the other distribution centers

averaged from 12 to 15 percent. As the ALJ reasonably

inferred, this exaggeration of the average increases at the

other distribution centers was calculated to maximize the

anger of the Greenville employees toward the Union.

AutoZone argues that the employees had no right to

expect an increase because its history had been erratic in

both timing and amount. This contention is without merit

and was properly rejected by the Board. First, the record

shows that there had been an annual average adjustment

at Greenville in 1989, 1990, and 1991 and that there was a

company wide practice of granting adjustments at all of

its distribution centers in January. In addition, the ALJ

noted and the record supports that AutoZone led its

employees to believe that some kind of wage increase

would be forthcoming in 1993.

SSS ee

‘

{

App. 21

In sum, the record Supports the Board’s finding that

AutoZone Suspended its anticipated wage adjustment

procedure because the employees had assisted the Union

and because AutoZone wanted to postpone the pay

increases in order to help defeat the Union at the election.

E. Make Whole Remedy

AutoZone contends that a make whole remedy is

inappropriate because the wage program lacks definition.

This contention lacks me

rit. AutoZone asserts that an

absence of objective disce

rnible criteria prevented a make

whole remedy. See Travis Meat & Seafood Co.,Inc., 237

NLRB 213 (1978), enf'd denied, NLRB v. Travis Meat &

Seafood Co., Inc., 653 F.2d 233 (6th Cir, 1980). However, as

discussed above, the timing and the process are easily

determined. Applying the formula used in the past and at

other distribution centers, an amount could be deter-

mined. Further, a hearing establishing the amount can be

held following enforcement of the order. Hyatt Corp. v

NLRB, 939 F.2d 361, 372 (6th Cir. 1991). Therefore, the

Program has sufficient definition, and a make whole

edy is appropriate.

rem-

Ill. Conclusion

For the reasons stated above, we DENY AutoZone’s

petition to set aside the decision of the Board, an

GRANT in full the Board’s cross-applicati

ment of its order.

d we

on for enforce-

App. 22

UNITED STATES COURT OF APPEAL

FOR THE SIXTH CIRCUIT

AUTOZONE, INC.,

)

Petitioner ‘

7 ) Case No.

NATIONAL LABOR RELATIONS ? 94-6280

BOARD, |

Respondent. )

PETITION FOR REVIEW AND TO SET ASIDE AN

ORDER OF THE NATIONAL LABOR

RELATIONS BOARD

(Filed Oct. 11, 1994)

AutoZone, Inc. hereby petitions the Court for review

and to set aside the Decision and Order of the National

Labor Relations Board in Case Nos. 11-CA-15357, 11-

CA-15559, 11-CA-15665, and 11-RC-5894, entitled Auto-

Zone, Inc. and General Drivers, Warehousemen and

Helpers, Local Union No. 28, International Brotherhood

of Teamsters, AFL-CIO, 315 NLRB No. 21, issued on

September 30, 1994, to the extent that this Decision and

Order finds that AutoZone, Inc. violated the National

Labor Relations Act, and to the extent this Decision and

Order sets aside the election held on March 5, 1993, due

to conduct found objectionable by the Board.

;

Ee eps ew

Respectfully submitted this 10th day of October

1994.

App. 23

/s/ Tracy K. Hidalgo

CORNELIUS R. HEUSEL

TRACY K. HIDALGO

Kullman, Inman, Bee, Downing

& Banta

A Professional Corporation

1600 Energy Centre

P. O. Box 60118

New Orleans, LA 70118

COUNSEL FOR RESPONDENT

AUTOZONE, INC.

CERTIFICATE

I hereby certify that on this 10th day of October, 1994,

I served a copy of Petition for Review and to Set Aside an

Order of a National Labor Relations Board by United

States Airborne Express, postage prepaid, upon the fol-

lowing:

Michael W. Jeannette, Esq.

Counsel for General Counsel

The National Labor Relations Board

U.S. Courthouse & Federal Building

Room 447

251 North Main Street

Winston-Salem, NC 27101

James Wallington, Esq.

Baptiste & Wilder, PC.

1150 Connecticut Avenue, N.W.

Suite 500

Washington, DC 20036

App. 24

Mr. Willie Lee Clark, Jr.

Regional Director, Region 11

The National Labor Relations Board

U.S. Courthouse & Federal Building

Room 447

251 North Main Street

Winston-Salem, N.C. 27101

/s/ Tracy Kern Hidalgo

TRACY KERN HIDALGO

App. 25

AutoZone, Inc. and General Drivers, Warehouse-

men and Helpers, Local Union No. 28, Inter-

national Brotherhood of Teamsters, AFL-CIO,

Cases 11-CA-15357, 11-CA-15559, 11-CA-

15665, and 11-RC-5894

September 30, 1994

DECISION, ORDER, AND DIRECTION OF

SECOND ELECTION

By CHaIRMAN GouLp AND Memsers STEPHENS

AND BROWNING

On March 28, 1994, Administrative Law Judge Rich-

ard J. Linton issued the attached decision. The Respon-

dent filed exceptions and a supporting brief, and the

Charging Party filed an answering brief.

The National Labor Relations Board has delegated its

authority in this proceeding to a three-member panel.

The Board has considered the decision and the record

in light of the exceptions and briefs and has decided to

affirm the judge’s rulings, findings,’ and conclusions?

and to adopt the recommended Order.

' The Respondent has excepted to some of the judge’s

credibility findings. The Board’s established policy is not to

overrule an administrative law judge’s credibility resolutions

unless the clear preponderance of all the relevant evidence

convinces us that they are incorrect. Standard Dry Wall Products,

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

carefully examined the record and find no basis for reversing

the findings.

* We note that no exceptions have been filed to the decision

of the judge dismissing certain 8(a)(1) complaint allegations nor

to his decision overruling Objections 2, 3, 6, 8, and 14.

App. 26

ORDER

The National Labor Relations Board adopts the rec-

ommended Order of the administrative law judge and

orders that the Respondent, AutoZone, Inc., Greenville,

South Carolina, its officers, agents, successors, and

assigns, shall take the action set-forth in the Order.

It IS FURTHER ORDERED that the election held in Case 11-

RC-5894 is set aside and that Case 11-RC-5894 is

remanded to the Regional Director for Region 11 to con-

duct a new election when he deems the circumstances

permit the free choice of a bargaining representative.

DIRECTION OF SECOND ELECTION

A second election by secret ballot shall be held

among the employees in the unit found appropriate

whenever the Regional Director deems appropriate. The

Regional Director shall direct and supervise the election,

subject to the Board’s Rules and Regulations. Eligible to

vote are those employed during the payroll period end-

ing immediately before the date of the Notice of Second

Election, including employees who did not work during

that period because they were ill, on vacation, or tempo-

rarily laid off. Also eligible are employees engaged in an

economic strike that began less than 12 months before the

election date and who retained their employee status

during the eligibility period and their replacements.

Those in the military services may vote if they appear in

person at the polls. Ineligible to vote are employees who

have quit or been discharged for cause since the payroll

period, striking employees who have been discharged for

cause since the strike began and who have not been

SRI abel otadyt 2a eae heaton MO Deka ge ab ok

An BA ACh atte tA rome Sag ty

A a te wall be EAE on Hh

PDN OPS AREAL, Set RG alin hen se Agee

*«

App. 27

rehired or reinstated before the election date, and

employees engaged in an economic Strike that began

more than 12 months before the election date and who

have been permanently replaced. Those eligible shall vote

whether they desire to be represented for collective bar-

gaining by General Drivers, Warehousemen and Helpers,

Local Union No. 28, International Brotherhood of Teams-

ters, AFL-CIO.

To ensure that all eligible voters have the opportunity

to be informed of the issues in the exercise of their

statutory right to vote, all parties to the election should

have access to a list of voters and their addresses that

may be used to communicate with them. Excelsior Under-

wear, 156 NLRB 1236 (1966); NLRB v. Wyman-Gordon Co.,

394 U.S 759 (1969). Accordingly, it is directed that an

eligibility list containing the names and addresses of all

the eligible voters must be filed by the Employer with the

Regional Director within 7 days from the date of the

Notice of Second Election. The Regional Director shall

make the list available to all parties to the election. No

extension of time to file the list shall be granted by the

Regional Director except in extraordinary circumstances.

Failure to comply with this requirement shall be grounds

for setting aside the election whenever proper objections

are filed.

App. 28

Dated, Washington, D.C. September 30, 1994

William B. Gould IV, Chairman

James M. Stephens, Member

Margaret A. Browning, Member

(SEAL) Nationat LAsor RELATIONS BOARD

App. 29

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR

RELATIONS BOARD

DIVISION OF JUDGES

ATLANTA BRANCH OFFICE

AUTOZONE, INC.

Cases 11-CA-15357

11-CA-15559

and 11-CA-15665

11-RC-5894

GENERAL DRIVERS, WAREHOUSEMEN

AND HELPERS, LOCAL UNION NO. 28,

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, AFL-CIO

DECISION

ADMINISTRATIVE LAW JUDGE

Dated: March 28, 1994 Richard J. Linton

Washington, D.C. Administrative Law Judge

App. 30

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR

RELATIONS BOARD

DIVISION OF JUDGES

ATLANTA BRANCH OFFICE

AUTOZONE, INC.

Cases 11-CA-15357

a ena ta 11-CA-15559

and 11-CA-15665

11-RC-5894

GENERAL DRIVERS, WAREHOUSEMEN

AND HELPERS, LOCAL UNION NO. 28,

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, AFL-CIO

TABLE OF CONTENTS

SN ce caccuu cs Ed he OKC Ss OER VRE 1

Sietnenent GF Ge Cees. . sos ks vo wee ces bea ce eee 1

fo . aeereee rrr Pre rr rs ft kyr. 3

I. JURISDICTION 3

Il. LABOR ORGANIZATION INVOLVED 3

Ill. THE ALLEGED UNFAIR LABOR PRACTICES 5

A, AMROCOON'E DUNG «6 oe ks5hkasn cee 5

B. Overview of the Organizing Campaign........... 6

C. Overview of the Allegations and Objections...... 8

D. AutoZone Waives Motion to Dismiss............ 8

BE. Section Giayll) AMGeatons. . ou. sssaeciceceuerees 9

1. Eloise Ruth — November 18, 1992........... )

BPs cee ev oiknssieharseeisteaeeee 9

>. SAAN, 5 5s ccc Geaces tosenetue eee 10

2. Barbara Cunningham - January 13, 1993.... 10

ee Cre

10.

11.

12.

App. 31

Eddie Massey, Timothy Schlichting, and

Jim Wartinger - January 20, 1993...........

SS OS

tee

Barbara Cunningham - January 21, 1993....

EY, ep

Dennis Roberts - January 22, 1993..........

ee.

8 ree

Martin Nelson — February 2, 1993...........

AS re

Rick Ferguson — February 11, 1993..........

Ce ES

Timothy Schlichting - February 15, 18, 1993...

IN A OS ear

Timothy Schlichting - Mid-February 1993...

J.R. Hyde III - February a

= ae

Barbara Cunningham; Marshall Hurley -

si tie ntnes Ay A

ER ee

Timothy Schlichting — mid-February 1993... .

2 SSC tt eee

"SP PSP GGG E 4 S& &G

App. 32

13. Jerome Flowers — February 24, 1993......... 32

i: PR cna aate se ea ak caked te bbe eee 32

Se eae os oc he babe ce eee deark. 34

14. Barbara Cunningham - March 5, 1993....... 34

i: es ca bk cok cheeks ee eee 34

i SE os ios baieale vin canes eae 35

15. Rick Ferguson — March 16, 1993............ 35

A) IS Ao ca ROLE haa he eee xkaeens 35

i: eR, Coc cos Panwtdaeabaeaeas cinewaes 37

F. Section Glas} AIMGAIOOE,. 6 oso cc cece cee deecucnees 38

1. Withholding pay increase — January 22, 1993... .38

ic PERS, che nc oan wk wu dle we wee 38

Ms Te Sh eon ead ea ae oe 40

2. Jackie McGinnis denied cutter position

ee a ee wi o es Cus ah uel ca wre dhs ewan 43

Cs vee oe Ck oe ee ede bie tot ee 43

RS ge ee Seba ry be aan Sibel 45

3. James Andrews warned July 9, 1993......... 47

OS Sree i cidd ns doen dders onenan seen aneres 47

i Ee oa ga Be ale bin baal ha Mes Ware 52

4. Stanley Phillip Wilson fired September 13,

RRS POS Te a ee Tey Ca Pepe sy 53

i, : TI ons Gao xeekndavaceveteeses cre 53

ee. SPR eere try eer ee ee ee ee 54

S. SI, on isc np deskuanavceeereesdetees 63 |

IV. THE UNION’S OBJECTIONS 64

A. Sem 5 a Fis hoa bine Aa eke toeenas 64 |

B. The ORSCHONS. .. 2... ek cee cc cersnesee neces 65

at. Sf rr er Prereroy rrr Ter rest 65

2, CRMC CONE Zo oie oc seas wees ivensncsuesves 65

9. CROTON Bu. cc cincccccenaeesetconseesss 65

A. Chbectiend 6. on csi cece ncneccvescetwesnvenss 68

ni: SD Bi FS Ado ccis cs. 68

WN Mir in 8d rk obips LAS RRA Pose ee ek: 69

iB pear hag RN OE CO TE 69

Pk: SM Sin ioe Wor ua ava Suey ed uy oh Reh 69

Re MRIS SsicheSdy shes oui e cide ah 69

nN 25. fro te 8 ee 70

NN OU BN oc iesies ootue Gade, 5 Coes 70

PRNIMED bireais kenhl reins sixdian cub diel oicuia bain, 71

EH a ne8 eh uaa ous die hee ue He 71

Appendix — Notice To Employees

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS

BOARD DIVISION OF JUDGES

ATLANTA BRANCH OFFICE

AUTOZONE, INC.

and Cases 11-CA-15357

GENERAL DRIVERS, 11-CA-15559

WAREHOUSEMEN AND 11-CA-15665

HELPERS, LOCAL UNION NO. 11-RC-5894

28, INTERNATIONAL

BROTHERHOOD OF

TEAMSTERS, AFL-CIO

Michael W. Jeannette, Esq. (NLRB Region 11),

Winston-Salem, NC, for the General Counsel.

James F. Wallington, Esq. (Baptiste & Wilder),

Washington, D.C., for Teamsters Local 28.

Cornelius G. Heusel, Esg. and Tracy K. Hildago, Esq.

and, only on brief, Robert F. Spencer Jr., Esq.

(Kuilman, Inman, Bee, Downing & Banta),

New Orleans, LA, for AutoZone.

App. 34

DECISION

RICHARD J. LINTON, Administrative Law Judge

Statement of the Case

Although discrimination allegations here are impor-

tant, especially to the individuals, the principal issue

probably is whether AutoZone unlawfully announced to

employees that, under the law, it could not reach a final

decision on a pay raise at Greenville, South Carolina

because the Union had filed an election petition to repre-

sent the Greenville employees. Finding that announce-

ment unlawful, and AutoZone’s freezing of its decision

process likewise illegal, | order AutoZone to make that

decision and to implement the wage increase retroactive

to January 3, 1993, with interest. Based on these and

related findings, I recommend that the Board sustain

several of the Union’s objections, set aside the March 5,

1993 election (which the Union lost by a substantial mar-

gin), and direct that a second election be conducted. I

dismiss several allegations, including those of discrimina-

tion against named individuals.

I presided at this 5-day trial in Greenville, South

Carolina, opening December 6, 1993 and closing Decem-

ber 16, 1993, pursuant to the November 9, 1993 Third

Order Consolidating Cases, Consolidated Complaint And

Notice Of Hearing (complaint) issued by the General

Counsel of the National Labor Relations Board through

the Regional Director of Region 11 of the Board.! The

complaint is based on a charge filed and served, in the

1 All dates are for 1993 unless otherwise indicated.

pia ae Deel lla

St aH Ahh LU A ees een ah SA i ie bad Be it A nc si EC

App. 35

first case, on March 15, 1993 by General Drivers, Ware-

housemen and Helpers, Local Union No. 28, International

Brotherhood of Teamsters, AFL-CIO (Union or Teamsters

Local 28), International Brotherhood of Teamsters, AFL-

CIO (Union or Teamsters Local 28). That charge was

amended later, and charges were filed later in the other

cases. The charges were filed against AutoZone, Inc.

(AutoZone, Company or Respondent).

Issues from the representation case are embodied in

the Regional Director’s April 29, 1993 Report On Objec-

tions, Order Directing Hearing, And Order Consolidating

Cases (report on objections, or report). On March 5, 1993

a secret ballot election was held in Case 11-RC-5894

under the supervision of the Regional Director. The

Union lost by a vote of 135 to 57. Although the two

challenged ballots were insufficient in number to affect

the outcome, Teamsters Local 28 filed 13 specific objec-

tions with objection 14 protesting “other conduct” by

AutoZone. As the Regional Director’s April 29 reflects,

the Union withdrew objections 4, 9, 10, 12, and 13, and

the Regional Director consolidated the remaining objec-

tions (1, 2, 3, 5, 6, 7, 8, 11, and 14) with the complaint for

hearing. Most of the objections to be heard parallel alle-

gations of the complaint.

In the Government's complaint the General Counsel

alleges that AutoZone violated Section 8(a)(1) of the Act,

29 USC 158(a)(1), by various economic threats, promises,

interrogation, and other conduct between about Novem-

ber 18, 1992 and about March 16, and that AutoZone

violated Section 8(a)(3) of the Act, 29 USC 158(a)(3), by

withholding a scheduled wage increase since about Janu-

ary 22, by failing about March 18 to offer a cutter position

App. 36

to Jacqueline McGinnis, by issuing a (written) warning to

James Andrews about July 9, and by firing Stanley Phillip

Wilson about September 13, 1993.

By its answer AutoZone admits certain facts but

denies violating the Act.

On the entire record, including my observation of the

demeanor of the witnesses, and after considering the

briefs filed by the General Counsel (who attached a pro-

posed order and notice to the Government's brief), Team-

sters Local 28 (the Union adopts the Government's brief

respecting the unfair labor practice portion of the case),

and AutoZone, I make the following:

Findings of Fact

I. JURISDICTION

A Nevada corporation, AutoZone has an automotive

parts warehouse at Greenville, South Carolina. During

the past 12 months, AutoZone purchased and received at

its Greenville facility goods and materials, valued at

$50,000 or more, direct from points outside South Caro-

lina. At all material times, I find, AutoZone has been an

employer engaged in commerce within the meaning of

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

Il. LABOR ORGANIZATION INVOLVED

Complaint paragraph 6 alleges that Teamsters Local

28 is a labor organization within the meaning of Section

2(5) of the Act. In its answer to complaint paragraph 6,

AutoZone asserts that the allegation “is a legal conclusion

ERM eet Bio nk BOK was.

App. 37

which the Respondent is not required to admit or deny.”

The General Counsel did not move to deem this response

as an admission. At trial neither the General Counsel nor

the Union adduced direct evidence on this allegation.

Thus, when the Union called the organizer, David M.

Barry, the examination (although adducing evidence

about employees Participating in the organizing) was not

expressly directed toward establishing labor organization

Status. (2:265).2 On brief the parties advance opposing

arguments, with AutoZone going beyond the position in

its answer to argue that the parties were on notice by that

answer that the Union’s status as a labor organization

was in dispute.

Under Section 2(5) of the Act, only three simple

requirements have to be met to establish labor organiza-

tion status. First, an organization or group of any kind.

Second, that employees Participate in the organization.

And third, that the organization exists, at least in part, for

dealing with employers concerning such matters as

wages, hours, or working conditions. These requirements

are interpreted liberally. NLRB v. Cabot Carbon Co., 360

U.S. 203, 79 S. Ct. 1015 (1959); South Nassau Commu-

nities Hospital, 247 NLRB 527, 529-530 (1980). The three

prerequisites are purely factual matters, and the conclu-

sion of labor organization status which flows from these

three basic facts is likewise a factual conclusion — even

* References to the five-volume transcript of testimony are

by volume and page. Apparently because the transcript for

December 15, 1993 (the fourth day of the hearing) is a bit large at

309 pages, the court reporting service divided the day into two

volumes. I have restrung the day as a single volume, volume 4

of the transcript.

App. 38

though the factual conclusion also coincides with the

definition set forth in Section 2(5) of the Act and may be

expressed as a legal conclusion. Thus, AutoZone was

required by 29 CFR 102.20 to admit, deny, explain, or

state that it lacked knowledge.

Ample evidence in the record shows that the Union

meets the first and third requirements. Only as to the

second condition is there any question, and even then

only if participation “in the organization” means mem-

bership rather than such activities as signing union

authorization cards or serving on an organizing commit-

tee. As the Board has found that the mere act of signing

authorization cards constitutes the required participation,

it is clear that membership is not required.

Electrical Construction & Maintenance, 307 NLRB 1247

fn. 1 (1992). Serving, as employees did here, on the

Union’s organizing committee, also constitutes, I find, the

participation required by the statute. Thus, I find that the

Union satisfies the three prerequisites. Moreover, Auto-

Zone was well aware of the three basic facts as of the time

it filed its answer. Common sense dictated that it form the

factual conclusion and admit complaint paragraph 6 — in

the same manner that it admitted to the Section 2(11)

status of the supervisors alleged in complaint paragraph

In this case we do not have some employee commit-

tee whose status as a labor organization might, in good

faith, be questioned. We have here the Teamsters. In

addition to its own status, the Teamsters is affiliated with

the AFL-CIO. C.D. Gifford, Directory of U.S. Labor

Organizations 3, 53, 57-59 (1992-1993 ed., BNA). No

ee ee

Saye eee

ee ee nd

Se ny thee Gis ie sepia erties

Ae se eno lay t:

POPS ASA AB AIT Re ede

iS tis ees

App. 39

doubt there are thousands of Board cases in which Teams-

ters locals, and the International, have been found to be

statutory labor organizations. These include cases where |

have presided, such as Browning-Ferris Industries, 306

NLRB 682, 683 (1992). Finally, the board has held that a

local of the International Teamsters is a statutory labor

organization by virtue of its status as a local. Story Olds-

mobile, 244 NLRB 835, 836 fn. 1 (1979) (with representa-

tion documents there similar to those here). I find that

Teamsters Local Union No. 29 is a labor organization

within the meaning of Section 2(5) of the Act.

In light of the foregoing, and AutoZone’s refusal to

answer the allegation of labor organization status, Auto-

Zone’s continued litigation of the matter appears akin to

requiring NLRB Region 11 to prove that it is part of the

Agency. AutoZone’s continued resistance to admitting

what it obviously knows amounts to nothing more than

an effort to be argumentative — at the expense of the

taxpayers who are funding this proceeding. (A stipula-

tion in the briefs would have served nicely.) In a similar

context, respecting resistance to a subpena [sic] duces

tecum, the Supreme Court wrote, “A subpoena has never

been treated as an invitation to a game of hare and

hounds, in which the witness must testify only if cor-

nered at the end of of the chase.” U.S. v. Bryan, 339 U.S.

323, 331, 70 S.Ct. 724, 730, 94 L.Ed. 884 (1950). That, plus

additional language, the Sixth Circuit described as “this

guiding philosophy of the Supreme Court.” NLRB vy,

Strickland, 321 F.2d 811, 813, 53 LRRM 2994 (6th Cir.

1963). Lawyers appearing in Board Proceedings should

follow that “guiding Philosophy of the Supreme Court.”

App. 40

The General Counsel now requests (Brief at 4 fn.3)

that I assess the facts here under Graham-Windham Ser-

vices, 312 NLRB No. 199 fn. 2 (1993) (sanctions of strong

disapproval and warning under 29 CFR 102.21). Lawyers

must pay attention to the topic of possible sanctions in

Board proceedings, for it is clear that the Board is serious

about sanctioning lawyers who act in bad faith in Board

proceedings, such as filing frivolous pleadings which

consume Agency time and the taxpayers’ money without

legitimate cause. Thus, in addition to Graham-Windham

Services, see National Football League, 309 NLRB 78, 86

(1992) (104.44 sanctions hearing directed over possible

trial misconduct); Worldwide Detective Bureau, 296

NLRB 148 fn. 2 (1989) (102.21 sanctions of strong disap-

proval and warning); and M.J. Santulli Mail Service, 281

NLRB 1288 fn. 1, 1289-1290 (1986) (102.21 sanctions of

strong disapproval and warning).

The General Counsel does not affirmatively move for

any specific sanctions. AutoZone does not address the

matter, perhaps because it may not have read the General

Counsel’s brief. That is one reason a request for sanctions

should be by separate document, a motion, served on the

opponent, requesting a specific order. I also consider the

fact that neither the General Counsel nor the Union

expressly covered the matter at trial. Although I therefore

decline to address the issue of possible sanctions, I

express confidence that AutoZone’s attorneys will give

due attention to this area in future cases before the Board.

Ns na A aie BORE aS

App. 41

Ill. THE ALLEGED UNFAIR LABOR PRACTICES

A. AutoZone’s Business

AutoZone sells automotive parts in its retail stores

across the country. To supply these stores, AutoZone (as

of early 1993) operates a distribution center in each of

five cities: Phoenix Arizona, San Antonio Texas, Lafayette

Louisiana, Memphis Tennessee, and Greenville South

Carolina. The Greenville DC (distribution center), the

facility involved here, serves AutoZone’s retail stores in

Georgia, North Carolina, and South Carolina. (4:683,

812-813). There is some reference in the record to ware-

houses at other locations. (4:603; GCX 3 at 6; CPX 8).3 It is

unclear whether a warehouse may be something different

from a DC.

For some years AutoZone was a division of Malone &

Hyde, but since 1989 AutoZone has been an independent

company. AutoZone’s corporate headquarters is located

at Memphis. J.R. Hyde (apparently J.R. Hyde III) is Auto-

Zone’s chairman and CEO, Peter Formanek president and

COO, and Tom Hanemann executive vice president of

stores and distribution. [A news item in the March 17,

1994 Wall Street Journal, at B8, reports that Formanek is

resigning effective April 30, with Hanemann succeeding

to his post.] Each has his office at the Memphis corporate

office. Within the corporation the retail stores are a sepa-

rate division from the distribution centers until they

reach Hanemann’s level. Thus, Dennis Edward Roberts is

* Exhibits are designated GCX for the General Counsel’s,

CPX for the Charging Party Union’s, and RX for those of the

Respondent, AutoZone.

App. 42

vice president of distribution, and he reports to Hane-

mann. Reporting to Roberts are regional operation man-

agers (ROMs), who are not named in the record. The

individual DC managers report to the ROMs who, as

noted, report to Roberts. (4:810-812, 883).

Rick Ferguson has been manager of the Greenville

DC since October 1991, (2:96; 3:520), and during the rele-

vant time Ferguson had a number of supervisors report-

ing to him. Although Ferguson normally reports to a

ROM rather than to Roberts, it is clear the during the

Union’s organizing campaign here that Ferguson fre-

quently worked directly with Dennis Roberts. (3:506,

516-517; 4:813, 854; 5:938). As we shall see, for example,

they made joint speeches to the Greenville employees.

(GCX 2; RX 17; CPXs 7,10).

B. Overview of the Organizing Campaign

The Union’s organizing campaign at AutoZone’s

Greenville DC began around October-November 1992,

and some employees openly began wearing Union pins

by November and early December 1991. (1:31, 35; 3:350,

453-454, 467). DC Manager Rick Ferguson acknowledges

learning of the activity about early December. (2:98). By

mid-December or so Ferguson began a training program

for his supervisors as to what they were not to do in a

campaign. (4:660). Ferguson instructed Supervisors

(“advisors” at AutoZone) that, respecting employees’

union activities, they were not to threaten, interrogate,

promise, or spy. The first letters of the four forbidden

activities give rise to the acronym by which the instruc-

tions are called: TIPS. The TIPS training occurred almost

App. 43

daily. (4:610-611, 665-666, 689, 775, 862, 888; 5:908; CPX 11

at 4).

By January 6 the Union’s campaign reached the point

where the Union sent a telegram (RX 13) demanding

recognition and offering to demonstrate its majority sta-

tus. [Although no party objected to the offer of RX 13

(4:850), I failed to receive it in evidence. I do so now.] The

following day, January 7, the Union filed its petition (CPX

4) for a representation election in a unit of warehouse

employees. By letter dated January 8 (RX 14) Ferguson

declined the Union’s demand for recognition. On January

11 Ferguson posted a notice (TX 15) to all personnel

advising them of the petition and AutoZone’s opposition.

By letter of January 19 the Union encouraged AutoZone

to give employees pay raises “currently due” to “some”

employees, and warned that charges would be filed for

numerous violations of the Act. (GCX 5). AutoZone did

not respond to the Union’s letter. (4:858-859).

During the campaign AutoZone’s management deliv-

ered prepared-text speeches to groups of employees as

one means of communicating AutoZone’s position on the

issues. Vice President Dennis Roberts describes the pur-

pose of the meetings as “educational,” to present the facts

concerning union representation. (4:863, 881). DC Man-

ager Ferguson testified that six speeches were given, with

each speech delivered, on average, to 15 small groups of

employees in order to cover all employees. (5:924-925,

979-980). Each meeting lasted about an hour. (5:926).

On January 22 AutoZone gave the first (so far as the

record shows) of its speeches by management to groups

App. 44

of employees. Ferguson and Roberts divided this rela-

tively short speech (GCX 2) of eight double-spaced pages.

This was followed by a lengthy question and answer

session. As with the other speeches in evidence,

employees tape recorded the question and answer ses-

sion, a transcript of which (pages 6-33) is in evidence as

CPX 1. (2:336-340). Ferguson and Roberts delivered a

second speech on January 25 (RX 17;4:873).

On January 27, in Case 11-RC-5894, the Regional

Director for NLRB Region 11 approved a stipulation (CPX

5) by the parties to conduct an election on March 5 in the

following bargaining unit: ;

All full-time and regular part-time warehouse,

maintenance, and housekeeping employees, and

all full-time and regular part-time truckdrivers

employed by the Employer at its Greenville,

South Carolina location; excluding all office

clerical employees, line leaders, guards, and

supervisors as defined in the Act.

On February 1 Ferguson and Roberts delivered the

third speech (CPX 7). By letter (GCX 4) of the same date,

the Union sent AutoZone a list of 32-named employees

serving as the Union’s organizing committee. The letter

warns AutoZone not to violate federal law respecting the

statutory rights of employees to organize. Beginning with

the February 1 speech, AutoZone excluded employees

wearing union insignia on the basis their minds were

closed to AutoZone’s educational training. (2:112-113;

4:881; 5:925, 974, 979). Ferguson and Roberts delivered

their fourth speech (CPX 10) on February 8.

By two-page letter (CPX 8) dated February 16 Roberts

wrote employees describing past strikes by the Teamsters

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App. 45

at other warehouse locations and urging employees to

vote NO on March 5. (3:534). On February 19 J.R. Hyde

Ill, AutoZone’s chair and CEO, delivered a speech (GCX

3) to employees in which, on the last of 12 double-spaced

pages, he urges them to vote No on March 5. (2:292, 325).

The Hyde speech is the fifth one so far as the record

shows. If a speech was given the Preceding week (the

week of February 11), it is not identified and no text is in

evidence. Moreover, if a speech was given the week of

February 22 or the following week on March 1, 2, or 3, its

text is not in evidence. The text of a sixth speech (CGX

14), a short address by Ferguson on March 16, is in

evidence. That speech came after the election, but during

the objections period.

The March 5 election was held in two sessions, 8:30:

a.m. to 11 a.m. and 1 p.m. to 2:30 p-m. (CPX 5; 3:400). Of

approximately 203 eligible voters, 125 employees voted

No, 57 voted Yes, and only 2 ballots were challenged. The

Union had lost. Thereafter the Union filed objections, and

on April 29 the Regional Director for NLRB Region 11

issued his Report On Objections (GCX 1i) approving the

Union’s withdrawal of several objections and directing a

hearing on Objections 1, 2, 3, 5, 6, 7, 8, 11, and 14. (GCX 13

at 8). For the most part these nine objections parallel

allegations in the complaint.

C. Overview of the Allegations and Objections

Complaint paragraph 8 contains the allegations of

independent violations of Section 8(a)(1) of the Act (the

other 8(a)(1) alleged derives from alleged violations of

App. 46

Section 8(a)(3) of the Act). The alleged independent viola-

tions begin with an alleged threat by Eloise Ruth about

November 19, 1992 and continue with other economic

threats, interrogations, promises, and other conduct

through about March 16 when DC Manager Ferguson

allegedly threatened to withhold pay raises due

employees because of their support of the Union. The

8(a)(3) paragraphs allege that since January 22 AutoZone

has withheld scheduled pay increases due unit employees

because the Union filed a representation petition, that

since about March 18 AutoZone has failed to offer a

cutter position to Jacqueline McGinnis, that about July 9

AutoZone issued a written warning to James Andrews,

and that about September 13 AutoZone fired Stanley

Phillip Wilson. AutoZone denies all the 8(a)(1) allegations

and the first of the 8(a)(3) allegations (withholding a

scheduled pay increase), but admits that it did not offer

McGinnis a cutter’s job, that it warned James Andrews on

July 9, and that it fired Stanley Phillip Wilson on Septem-

ber 13. AutoZone denies any unlawful motivation. As

noted, most of the Unions’ objections parallel allegations

of the complaint and, in some instances, expand on them.

At trial the General Counsel withdrew one of the

independent allegations, paragraph 8(p), as unsupported

by any evidence. I granted the motion. (3:550-552). On

brief (at 6 fn.5) the General counsel also moves to with-

draw a related allegation, paragraph 8(q), apparently for

the same reason as AutoZone observes in its brief (at 9 fn.

5). I grant that motion also.

App. 47

D. AutoZone Waives Motion to Dismiss

After the General Counsel (3:500) and the Union

(3:536) had rested their cases in chief, AutoZone made a

lengthy motion to dismiss the complaint. (3:536-553).

When I denied its motion to dismiss, AutoZone pro-

ceeded with its defense. (3:553). A respondent tests the

sufficiency of a prima facie case by resting on its motion

to dismiss the complaint. It must elect whether to rest or

to proceed, for if it proceeds it waives the motion. By

proceeding with its own case in chief rather than resting

on its motion to dismiss, AutoZone waived the motion to

dismiss. Peter Vitalie Company, 313 NLRB No. 162, JD

slip op. at 3-4 (Mar. 2, 1994). I therefore shall consider all

the evidence in the entire record in reaching my decision.

Peter Vitalie, id.

E. Section 8(a)(1) Allegations

1. Eloise Ruth - November 18, 1992

a. Facts

Complaint paragraph 8(a) alleges that on November

18, 1992 Eloise Ruth threatened employees with more

onerous working conditions if they selected the Union as

their collective bargaining representative. Reuben Rice

testified in support of the allegation, with Ruth support-

ing AutoZone’s denial.

Rice, who left AutoZone in June 1993, worked as an

order selector pulling parts such as starters and alterna-

tors. (3:452, 475). About October 1992 Rice had his first

contact with union representatives or supporters, and in

November he began wearing, occasionaily, a union pin.

App. 48

Eventually Rice served as an observer for the Union at

the March 5 election. (3:453-454, 467-468).

Rice apparently worked in the section where Eloise

Ruth is the line leader. Although line leaders later were

excluded from the stipulated bargaining unit (CPX 5),

line leaders are hourly paid and, as Rice concedes, serve

as the lowest level supervisors. (3:454, 470; 4:690). The

complaint lists Ruth among the statutory supervisors,

and in its answer AutoZone admits that allegation of

supervisor status.

Rice testified that, apparently in November 1992, he

would tell Ruth why he was supporting the Union.

(3:469). At that time he considered Ruth a friend and he

confided in her on occasion. They voluntarily discussed

union matters. (3:471). In mid-November, Rice testified,

Ruth, in the same sentence, told Rice that if he continued

his support of the Union and his dating of a specific

(unnamed in the record) white woman that Ruth would

make Rice’s job harder on him. (3:454, 471-472). Both Rice

and Ruth are black. (3:471, 474). Rice initially admitted

that he, in one or more conversations, had told Ruth that

she should support the Union rather than siding with

whites (3:472), but, reversing position and denying that

statement, testified he told Ruth that if the employees

voted in the Union it would produce an equal oppor-

tunity for everyone. (3:473-474).

Line Leader Ruth asserts that Rice would initiate

conversations with her about the Union, promising that

the Union couid get better benefits for her on insurance,

uniforms, and the like. Ruth denies telling Rice that she

would make his job harder if he “voted” for the Union,

App. 49

and she denies threatening Rice in any way. (4:693-694).

Ruth does not expressly address the matter of a conversa-

tion with Rice about his dating of a white woman.

b. Discussion

Crediting Ruth rather than Rice, I find that Rice

seized the occasion of this case to retaliate against Ruth

because she disapproved of his interracial dating. To

accomplish this, Rice simply modified Ruth’s threat about

dating to include a reference to the Union. I shall dismiss

complaint paragraph 8(a).

2. Barbara Cunningham - January 13, 1993

a. Facts

Complaint paragraph 8(b) alleges that on January 13

Supervisor Barbara Cunningham threatened to withhold

pay increases due employees because of their support for

the Union. Robin Delk is the Principal supporting wit-

ness, with Cunningham Supporting AutoZone’s denial.

Robin Delk worked for AutoZone from July 1991 to

April 1993. (3:349). Delk worked as an order selector

under Barbara Cunningham and was an early and open

supporter of the Union. (3:349-350). Supervisor Cun-

ningham held a sectional meeting in the warehouse after

lunch on January 13, Delk testified, with some 100

employees attending. (3:350-351, 364). Delk was standing

in a group to one side which included Janette Hanson,

Paul Henry, Jackie McGinnis, Reuben Rice, and others.

(3:351, 370). At one point during the meeting Delk, as she

App. 50

testified, asked Cunningham when she would receive her

(regular progression) pay increase which then was about

due. Cunningham said that Delk would not receive a

raise because of the support of the Teamsters by the

warehouse employees. Delk responded that her raise

should depend on her evaluation, and her job perfor-

mance, not on the level of union support in the ware-

house. Cunningham replied that Delk needed to talk to

her fellow employees about the union support. (3:351,

369). Cunningham had turned to face Delk and Delk does

not know whether employees on the other side of the

area could hear the exchange, particularly since some of

the employees were talking among themselves. (3:365,

369-372). Following the exchange, and while she was still

standing at the meeting, Delk made some notes about the

exchange, but she did not bring those notes to the hear-

ing. (3:363, 376-377). Within 10 days Delk was evaluated

by Cunningham and received her progression increase.

(3:351-352, 364, 367-368, 372). Cunningham recalls the

evaluation review as being about January 21, her birth-

day. (4:777-778).

Jackie McGinnis recalls Delk’s question coming as the

meeting (in late January) ended and as employees were

leaving the area, with Cunningham telling Delk to ask the

Union where her raise was. Delk just turned and laughed.

McGinnis asserts that the only ones then present were

Delk, McGinnis, Hanson, and Cunningham. The three

employees, open supporter of the Union, were wearing

their Union insignia. (2:233-235, 256-259). Disagreeing

with McGinnis, Delk firmly states that the meeting had

not ended. (3:364). Janette M. Hanson describes a refer-

ence to a question, by someone, of when employees were

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App. 51

going to receive their raise, with Cunningham replying

that the raise was frozen until after “all this was over.”

(1:16-17). Hanson does not describe any specific exchange

between Delk and Cunningham, nor does Reuben Rice.

Paul Henry, also named by Delk, did not testify.

McGinnis asserts that it was employee Joe Smith who,

during the meeting, asked Cunningham whether she had

heard anything on their raises, with Cunningham

answering “No.” (2:257).

Hired as the first employee when the facility opened

in October 1986, Barbara Cunningham began as the cen-

ter’s receptionist. She progressed through a series of posi-

tions, including personnel manager (1988-1989), then to

order selector advisor, and finally, about March 1, 1993, to

Assistant DC Manager. (4:771, 796-797). Cunningham

recalls no question at a group meeting by Delk about a

pay raise, denies telling her at a meeting that Delk should

ask the Union about her pay raise, asserts that she would

not have said. “Go ask the Union,” and denies discussing,

immediately following a group meeting, a pay raise with

Delk, Hanson, and McGinnis. (4:773-776, 779).

b. Discussion

Differences by corroborating witnesses on details are

not unusual, but the differences here are substantial. The

General Counsel does not suggest how the differences are

to be reconciled. In vizw of the TIPS training Cun-

ningham had received, the fact that some 100 employees

were present, with several, perhaps many, wearing insig-

nia of the Union, the Hanson version certainly seems to

App. 52

support Cunningham. Unable to credit Delk or McGinnis,

I shall dismiss complaint paragraph 8(b).

3. Eddie Massey, Timothy Schlichting, and

Jim Wartinger - January 20, 1993

a. Facts

Complaint paragraph 8(d) alleges that on January 20

Eddie Massey, Timothy Schlichting, and Jim Wartinger

removed prounion literature from canteen bulletin boards

while leaving antiunion literature posted. Reuben Rice

testified in support of the allegation, with Massey and

Schlichting supporting AutoZone’s denial. Massey is

AutoZone’s transportation advisor (4:695) and Schlicht-

ing was then an advisor [supervisor] over three depart-

ment, Returns, Maintenance, and Housekeeping

Schlichting left AutoZone for another cOmpany about

August 1, 1993. (4:608-610).

According to the distance estimate by Reuben Rice,

the beginning of his first floor work area is some 30 feet

from the canteen, or employee breakroom, which is situ-

ated at the second floor level. A large clear glass window

forms the top portion of the canteen wall and faces out

onto the warehouse floor. The bottom portion of the

canteen wall is concrete and reaches up to a point above

waist level. (3:456-457, 475-482, 638). There are several

company bulletin boards inside the canteen, and on one

of them employees may post classified sales and other

personal notes. (4:636, 696, 866, 892). From the glass wall

to the employee bulletin board is about 20 feet. (3:481).

App. 53

As he was standing at the front of his work area on

January 20, Rice testified (3:456, 475), and looking up

through the second floor glass portion of the canteen wall

and across the canteen to the bulletin board, he observed

Massey, Schlichting, and Wartinger standing at the

employee bulletin board. As Rice watched, he saw

Schlichting remove three or four letter-size union flyers

which, previously posted by Rice, addressed such matters

as management salaries. Although antiunion matter also

was posted on the board, Schlichting left the antiunion

matter posted. (3:455-457, 484-486). When Vice President

Dennis Roberts came by about 30 minutes later, Rice

complained to him about the removal. Roberts said he

would take care of it. By the end of the shift, about 3

hours later, Rice observed that the flyers had been

reposted. Roberts apologized to Rice for the removal.

(3:486-487).

Schlichting denies removing any union flyers, or see-

ing anyone do such. (4:637). Massey denies that any of

the three removed any union items. (4:697). Schlichting

(4:637) and Massey (4:697) claim they saw a cardboard

poster fall to the floor (blown down by wind from a fan)

while they stood there. In his testimony Roberts does not

address the report by Rice that Roberts said he would

take care of the matter, that the flyers were reposted

within 3 hours, and that Roberts apologized.

Ferguson testified that following Rice’s testimony he

measured the distance required to view the canteen bulle-

tin board from the warehouse floor. At 6 feet 2 inches,

Ferguson had to stand 132 feet from the bulletin board in

App. 54

order to see the posted items. As Ferguson’s measure-

ment apparently was made on the floors of the ware-

house and the canteen, rather than measuring the line of

sight, the measurement does not include whatever extra

distance would be added to the warehouse floor distance

in order to raise it up and link it to a line-of-sight straight

line. (5:909-910). No witness was called in rebuttal to

contradict Ferguson’s measurements. Ferguson concedes

that he and Roberts did not question Rice’s line of vision,

or that he observed what he protested, on the day in

question. (5:972). I estimate that Rice stands about 5 feet

11 inches, or slightly under 6 feet, in work shoes.

No expert in mathematics testified concerning

whether, calculating the math of distance and angles, a

person in Rice’s position could have looked over the

second floor concrete wainscot [apparently anywhere

from 42 to 48 inches high], through the glass portion of

the wall, across the 20 to 24 foot canteen, and have seen

the level at which items were posted on the bulletin

board. Moreover, there is no estimate for the height of the

first floor wall. Whether the wall measures 9 feet, 10 feet,

or something different, is not shown in the record.

b. Discussion

I need not resolve this question of geometry (there

are not enough measurements in any event), for Vice

President Roberts, in effect, admits Rice’s version.

Indeed, after Roberts reassured Rice the matter would be

taken care of, the items were reposted that afternoon.

Moreover, Ferguson admits that Roberts told him about

Rice’s protest, and they did not question Rice’s version

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App. 55

on the day of the event. Accordingly, whether Rice actu-

ally saw the removal, or someone in the canteen reported

it to him, is immaterial. Crediting Rice’s account, as

admitted by AutoZone, I find that AutoZone violated

Section 8(a)(1) of the Act as alleged. I further find that the

reposting did not effectively disavow the effects of the

discriminatory removal under Passavant Memorial Area

Hospital, 237 NLRB 138 (1978).

4. Barbara Cunningham - January 21, 1993

a. Facts

Complaint paragraph 8(e) alleges that on January 21

Barbara Cunningham interrogated employees regarding

their union sympathies and desires. Robin Delk testified

in support of the allegation, with Cunningham support-

ing AutoZone’s denial.

As earlier noted, Robin Delk testified that a week to a

week and a half after Cunningham's January 13 sectional

meeting, during which Delk asked about her progression

wage increase, Cunningham conducted her evaluation inter-

view. (3:351-352, 367-368, 372). Cunningham recalls that it

occurred about her birthday, January 21. (4:778, 782). Delk

considered the evaluation good, and she was told that she

was getting a pay raise and the amount of her pay increase.

(3:352, 372-373; 4:777). There is no dispute that before the

January 21 evaluation interview Cunningham knew of

Delk’s open and outspoken (wearing union pin, union jacket,

and handbilling) support of the Union, and Delk was wear-

ing her union pin during the January 21 interview. (3:368,

372). Cunningham suggests that Delk had expressed her

EE ee

App. 56

union support to Cunningham in earlier conversations

(4:776, 778), and (on a leading question) that the positicn was

unsolicited by Cunningham (4:779). Denying any prior con-

versations with Cunningham about the Union (3:375), Delk

observes that her father, a 25-year member of the Union,

makes regular stops at the Greenville warehouse, she visits

with him on some of those occasions, and that his union

membership in the Teamsters is common knowledge. (3:375).

Delk testified that after the evaluation portion of the

interview, Cunningham, changing the subject, asked Delk

how she felt about the Union and why she supported the

Union. (3:352-353, 374). (Although Delk later testified,

3:373, that she did not recall at what point the union topic

arose, her initial description, 3:352, puts it after at least

some, perhaps all, of the evaluation portion.) Although

Delk was wearing a union pin, Cunningham did not

explain why she was asking how Delk felt about the

Union. (3:374-375).

To Cunningham's questions, Delk replied that she

was raised with the Union, that it was strong in her

family, and that she believed in the Union. Her father has

been a member of the Union for over 25 years, and Delk

values the union benefits her father has received. Cun-

ningham responded that she grew up in the North, that

she remembered the Teamsters and Jimmy Hoffa, and

that she remembered the Teamsters as being violent peo-

ple who would overturn cars and set fire to property.

(3:352, 374, 393-394).

Cunningham’s initial description of the interview

was in terms of what the customary sequence was rather

than what actually occurred. (4:778). Cunningham denies

BO AS

Oth ee .

App. 57

there was any discussion between them about their opin-

ions on the Union. In answer to a leading question (“Did

she [Delk] volunteer .. . “), Cunningham testified Delk

volunteered how she felt about the Union, that her father

was part of the Union, that she had grown up with it, and

that is why she felt that way. To another leading question

of whether this was in response to Cunningham’s asking

a question, Cunningham testified “No.” (4:782-783).

b. Discussion

Without hesitation I credit Delk rather than Cun-

ningham. Indeed, Cunningham’s answers to the leading

questions tend to corroborate Delk’s version. Although

asking an open supporter of the Union how she feels

about the Union seems silly and strange, and therefore

not credible, oral statements in conversation generally are

not prepared in advance and not as Precise and logical as

are expressions reduced to writing. In any event it is not

the first time such a question has been asked of an open

union supporter. See Pilliod of Mississippi, 275 NLRB

799 fn. 2 (1985).

AutoZone relies on Pilliod to argue that even if Delk

is credited the allegation must be dismissed. I agree. Had

Cunningham asked the questions before the evaluation, I

would find a violation. Even an open union supporter

might well be coerced by such questions occurring at the

beginning of a performance evaluation. And whether

Delk in fact was, or would be, is immaterial, for actual

impact is not the test. Here, however, the questions came

after Delk was informed of her good evaluation and of

the amount of her pay increase. The questions which

App. 58 \

followed merely launched brief position statements by

two persons with opposing views.

The General Counsel also argues that Cunningham’s

reference to violence by the Teamsters under Jimmy

Hoffa “is naturally coercive and would cause a reason-

able person to reconsider supporting the Union. Thus,

Cunningham’s remarks to Delk amounted to unlawful

interrogation and are violative of the Act.” The General

Counsel does not assert that Cunningham’s description of

her experience with the violent acts in the North, such as

the overturning of cars and setting fire to property, is

untrue. It therefore is no surprise that such violence

“would cause a reasonable person to reconsider support-

ing the Union.” But such fact does not make Cun-

ningham’s description of her experience in the North

unlawfully coercive. By contrast, Delk’s experience with

the Union, its representatives, as well as her father, has

been just the opposite — everything she has seen has been

good. And she expressed her view very well to Cun-

ningham, supporting it with the specific benefits she has

observed. Robin Delk’s father can be justly proud of his

daughter’s articulate defense of the Union. For the rea-

sons stated, I shall dismiss complaint paragraph 8(e).

5. Dennis Roberts - January 22, 1993

a. Introduction

Complaint paragraph 8(f) alleges that on January 22

Vice President Dennis Roberts told employees “that a pay

raise was being withheld because the Union had filed a

representation petition.”

App. 59

The question here is whether the final paragraph of

the text of the January 22 joint speech (GCX 2) by Roberts

and DC Manager Rick Ferguson (they alternated in deliv-

ering portions) rises to the violation alleged in paragraph

8(f). (2:325). The final text paragraph of the speech, deliv-

ered by Roberts, reads (GCX 2 at 7-8):

The other issue I want to discuss has to do with

the status of pay increases at this D.C. A number

of you have asked when or if the 4% to 5%

increase we had mentioned back in December

would be going through. You need to under-

stand that the numbers we mentioned in Decem-

ber were a tentative forecast only. After that

time, we decided to re-evaluate the pay situa-

tion in this market. Before we were able to

gather all the data we needed and reach a final

decision, however, the Teamsters’ petition came

in. Our understanding of the law is that we

cannot make changes in the pay or benefits once

a petition comes in, unless the decision had been

finalized beforehand. We very much regret that

the union’s poor timing has now tied our hands,

but we do not intend to violate the law. The

thing to keep in mind, though, is that once the

union is beaten in the election - and we feel

confident that that is exactly what is going to

happen here - then we will be able to move

forward, free of the restrictions that we now live

under. We’re sorry we cannot be more specific

than that now, but we wanted you to under-

stand the legal status of your pay increase at

this time.

In this speech, and others, AutoZone vigorously

opposes the unionization of its Greenville facility. Clearly

and expressly AutoZone (Ferguson speaking), as is its

App. 60

right, told the employees that AutoZone does not want

“the Teamsters or any other union in our operation. We

are completely and entirely against this union getting in

here and we will take every legal step available to us to

keep it out!!” (GCX 2 at 2-3).

Complaint paragraph 9 alleges that AutoZone has

violated Section 8(a)(3) of the Act since January 22 by

withholding “scheduled pay increases due to its unit

employees because the Union filed a representation peti-

tion.” AutoZone denies the allegation.

The pay increase allegations constitute a principal

part of the case. I do not treat the paragraph 9 allegation

until later. Paragraph 9 is relevant here, however, because

it provides context for the paragraph 8(f) allegation about

Roberts’ remarks of January 22.

b. Facts

Vice President Dennis Roberts testimonially

described AutoZone’s pay increase procedure and its

background. First, AutoZone has two types of pay

increases for its DCs (distribution centers). One is a wage

progression advance for an employee's initial 2 years:

evaluations and increases at (90 days at Greenville), 6

months, 12 months, 18 months, and 24 months. (4:815,

826). The second is an annual adjustment, inaccurately

called a cost of living (COL) increase. (4:815). It is not a

true COL because (1) not everyone gets the same

increase, and (2) the annual adjustment is based on the

results of a market analysis, or area wage survey rather

than some COL index. The wage survey is conducted by

App. 61

the local management. The data collected is passed to the

ROM (Regional Operations Manager), and thence to

Roberts who, with accounting support, assembles the

analysis, forms, and recommendation for AutoZone’s

president who typically makes a decision based on the

data and recommendation submitted. (4:815-816, 839).

Because the wage surveys are based on the DCs’ geo-

graphic areas, the DCs have different pay scales. (4:824).

An annual adjustment is a bit of a misnomer, for the

adjustments are not guaranteed if the wage survey shows

that a DC’s payscale is competitive for its area. (4:831).

For several years AutoZone performed its wage sur-

veys, or market analyses, in November with any adjust-

ments implemented in December. AutoZone changed its

procedure in late 1991, shifting the survey to December

with adjustments made in the following January, the first

being January 1992. (4:820-821; GCX 6).

On a routine visit to the Greenville DC in late

November 1992, Roberts testified, several employees

approached him and asked whether there would be an

annual increase and if so how much. Roberts answered

that to the best of his knowledge he expected that there

would be an increase in the range of 4 percent to 5

percent. He told them that this was not yet confirmed.

(4:835-836, 885). To be fair to other employees, Roberts

testified, he returned some 2 weeks later, around Decem-

ber 8, 1992, and management held meetings with smal]

groups of employees sharing that same information

(there “might” be an annual increase in range of 4 percent

to 5 percent) with all employees. The employees also

were told that AutoZone was awaiting the results of a

market analysis being done in the Phoenix area by the

App. 62

Hay Group. (4:836-837, 885-886). The day he left Green-

ville, Roberts received, by overnight mail, an advance

copy of the Hay Group’s survey, dated December 15, for

his review on his return flight to, presumably, Memphis.

(4:837-838).

The Hay Group’s report indicated to Roberts that

AutoZone was no longer competitive in the Phoenix area.

That led him to instruct Ferguson, the Greenville man-

ager, to begin a wage survey for the Greenville area. This

was done by Ferguson and Personnel Mariager Jim War-

tinger. They contacted such firms as Wal-Mart which has

a warehouse some 20 miles from AutoZone’s Greenville

DC. (4:839-841). By Friday, January 8, or Saturday, Janu-

ary 9, 1993, Roberts testified, Roberts had received all of

the wage survey data. He did not have it before Ferguson

met with Wal-Mart on January 6. He made his analysis,

with accounting staff support, and gave his recommenda-

tion on all DCs, except Greenville on Monday, January 11,

to AutoZone’s president, who approved it that afternoon

with some modification. (4:844-845, 847-848). Although

Roberts had all the wage survey data for Greenville, he

did not perform his analysis nor finalize a recommenda-

tion respecting a pay adjustment at Greenville. (4:845,

848, 862, 884-885, 387, 898).

According to Roberts, he did not learn of the Union’s

organizing activities at Greenville until Ferguson called

him on receiving the Union’s telegram (RX 13) after 5

p-m. on Wednesday, January 6, in which the Union

demanded recognition. (4:842, 854). After consulting its

attorneys, AutoZone concluded that it would be unlawful

to implement a pay increase at Greenville. He therefore

_ssse

App. 63

put the Greenville data aside, did not complete the anal-

ysis for Greenville, and has not done so. (4:846, 848, 862,

885). The analysis was stopped because of concern over

legality, and not for the lack of any data. (4:846). Extrapo-

lating from the wage surveys for the other DCs, Roberts

testified that the adjustment for Greenville, had it been

made, would have been greater than 5 percent. (4:841,

| 885). Had the analysis been made and an adjustment

implemented at Greenville, as it was elsewhere, it would

have been effective for the pay period beginning Sunday,

! January 3, 1993, with the increase reflected in the pay-

checks issued January 22. (4:842-843).

c. Discussion

The law is settled on this issue. “It is well established

that an employer is required to proceed with an expected

wage or benefit adjustment as if the union were not on

the scene.” Atlantic Forest Products, 282 NLRB 855, 858

(1987). In Atlantic Forest the Board, continuing, observes

that an exception to the rule allows the employer to

postpone the wage or benefit adjustment so long as it

makes clear to employees that the adjustment would

occur whether or not they select a union, and that the

“sole purpose” of the postponement is to avoid the

appearance of influencing the election’s outcome. In mak-

ing such announcements, however, the employer must

avoid attributing to the union the onus for postponement

of adjustments in wages or benefits, or disparaginz and

undermining the union by creating the impression that it

stood in the way of their getting planned wage increases

and benefits. Atlantic Forest, id.

App. 64

In Atlantic the Board found that the employer’s

announcement unlawfully attributed to the union the

withholding of a regularly scheduled semi-annual wage

increase. The statement in issue here is very similar to the

employer’s announcement in Atlantic. Thus, although

Roberts tells employees that the 4 percent to 5 percent

was a tentative forecast, it is based on employees’ knowl-

edge of an annual adjustment decision. The December

forecast by Roberts, as he asserts, was 4 percent to 5

percent. Thus, an adjustment of some kind, forecast to be

in the range of 4 percent to 5 percent, would be made.

After the December “tentative forecast,” Roberts states,

AutoZone decided to reevaluate wage rates in the Green-

ville market. Before that could be completed and a final

decision reached, the Union filed its petition.

Now as we know from Atlantic Forest Products, the

Union’s petition is irrelevant — but for one exception.

Other than the one exception, an employer, election peti-

tion or no, is to proceed as if there is no union on the

scene. That is, AutoZone was required to complete its

wage survey, to make a final decision, and to implement

that final decision — all as if the Union were not there. By

one permitted exception, the employer may announce a

postponement provided it makes clear to employees, (1)

the adjustment eventually will occur regardless of the

election results; (2) the sole purpose of the postponement

is to avoid the appearance of influencing the election’s

outcome; and (3) in making the announcement, the

employer must avoid attributing to the union the onus

for the postponement, or disparaging or undermining the

union by creating the impression that the union stands in

the way of the employees getting the planned adjustment.

App. 65

So stated, Atlantic Forest establishes (reiterates, actually)

the three tests to be applied.

How does AutoZone fare on the three tests? The

answer is easy. AutoZone, after a fashion, passes test one,

but it fails tests two and three. First, the understanding it

expressed about the law is wrong, for, as I have noted,

filing of the petition is an irrelevant event, save for one

exception. Second, there is no requirement that a decision

have [sic] been finalized. (Not misstating the law perhaps

is an implied fourth test of Atlantic.)

Consideration of tests two and three show very

clearly that the sole purpose of Roberts’ announcement

was just the opposite of the Atlantic test two, for the

purpose was to encourage a vote NO. A negative vote

would be encouraged because Roberts blamed the

Union’s “poor timing” for the postponement. Incited

anger needs an outlet, and voting against the Union in

the election would provide that outlet. Not only would

Roberts’ words incite anger against the Union, and

remind employees how to take revenge (beat the Union in

the election), but they promise the thrill of victory, after

the Union is beaten, in the form of AutoZone’s being able

“to move forward, free of the restrictions that we now

live under.” That is, AutoZone would be able to proceed

with its pay adjustment process when the Union loses the

election. (The subliminal message is that a YES vote will

doom any pay adjustment.) His overt message is the same

as that found unlawful in Atlantic Forest Products. It is

the “carrot or the stick” approach condemned in DTR

Industries, 311 NLRB 833, 836 (1993). I find that Auto-

Zone, by Vice President Roberts’ speech, violated Section

8(a)(1) as alleged by complaint paragraph 8(f).

App. 66

6. Martin Nelson — February 2, 1993

a. Facts

Complaint paragraph 8(h)

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