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

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OF V7 2 NV=7 W

No. rice. OF THE CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1997

WEBCOR PACKAGING, INC.,

Petitioner,

¥.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

Petition for a Writ of Cert ‘aritothe

United States Court of Appeals

for the Sixth Circuit

PETITION FOR A WRIT OF CERTIORARI

BRIAN M. SMITH *

LAWRENCE J. DEBRINCAT

BRIAN M. SMITH &

ASSOCIATES, P.C.

1133 E. Maple Road, Suite 202

Troy, Michigan 48083-2853

(248) 524-1404

Counsel for Petitioner

November 7, 1997 * Counsel of Record

WILSON - EPes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

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QUESTIONS PRESENTED

Whether an employee group must act in a representa-

tional capacity in order to be a “Labor Organization” as

defined under 29 U.S.C. § 152(5).

Whether an employee group is “dealing with” an em-

ployer as defined under 29 U.S.C. § 152(5) wherein the

group addresses wages, hours, working conditions and

other terms of employment and makes Suggestions or pro-

vides input to the employer and the employer acts upon

the suggestions or input.

Whether an employer violates 29 U.S.C. § 158(a) (2)

by establishing an employee group when the employer,

in establishing such group, does not have the motive of

discouraging employees from organizing for the purposes

of collective bargaining.

PARTIES TO THE PROCEEDING AND LIST OF

PARENT COMPANIES AND SUBSIDIARIES

The Petitioner is Webcor Packaging, Inc. The Re-

spondent is the National Labor Relations Board. There

is no parent company or non-wholly owned subsidiary of

Petitioner Webcor Packaging, Inc.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ..QWW o.oo : i

PARTIES TO THE PROCEEDING AND LIST OF

PARENT COMPANIES AND SUBSIDIARIBS........ ii

TABLE OF AUTHORITTRG 2..2...cccc..c.cc.ccccnccnccsccesssesss v

PEAR OE on aii asc ccccecenens sieisieetliieshealiwiis ales 1

as sis cece ngusasiilns 1

STATUTORY PROVISION INVOLVED ........................ 2

ERE AL Se a a a ae 2

A. Background and Facts ............................................ 2

Ee 6

REASONS FOR GRANTING THE PETITION 7

I. REVIEW BY THIS COURT IS NEEDED TO

RESOLVE AN IMPORTANT, RECURRING

QUESTION OF FEDERAL LABOR LAW

THAT THE NLRB AND THE FEDERAL CIR-

CUIT COURTS HAVE FAILED TO RESOLVE,

I.E.. WHETHER REPRESENTATION IS A

NECESSARY ELEMENT OF A “LABOR OR-

GANIZATION” UNDER 29 U.S.C. § 152(5)...... 8

Il. REVIEW BY THIS COURT IS NEEDED BE-

CAUSE THE NLRB’S INTERPRETATION OF

“DEALING WITH” FOR THE PURPOSES OF

DETERMINING WHAT CONSTITUTES A

“LABOR ORGANIZATION” IS NOT CONSIST-

ENT WITH THE PURPOSES OF THE NLRA.. 12

(iii)

UENO iis ee Fn cn

TABLE OF CONTENTS—Continued

Page

III. REVIEW BY THIS COURT IS NEEDED TO

RECTIFY THE NLRB’S POLICY OF FINDING

AN EMPLOYER, WHO DOES NOT HAVE

THE MOTIVE OF DISCOURAGING EM-

PLOYEES FROM ORGANIZING FOR THE

PURPOSES OF COLLECTIVE BARGAINING,

VIOLATES 29 U.S.C. § 158(a)(2) WHEN

IT ESTABLISHES AN EMPLOYEE GROUP

TO DISCUSS EMPLOYMENT RELATED

GRIT sinerensininctisniinietansirndomichateneniieaniina cclaibianaetaboadeltalices 15

a sein tstnahenacanisinisnnssevreumsiattnldconpecentatnanansspcihieieitas 17

BFF I crits ntssatisntnsivncnnntacncnictensttnsnsntitiigtiviamainnicshcamapadapasaian la

TABLE OF AUTHORITIES

CASES: Page

Airstream v. N.L.R.B., 877 F.2d 1291, 131

L.R.R.M. 2899 (6th Cir. 1989) ........................ 9,13

Camvac International Inc., 288 N.L.R.B. 816, 130

re eS S| RO eR ee Ome 9, 13

Electromation Inc., 309 N.L.R.B. 990, 140 L.R.R.M.

NREL EARS RT Oe ee 8, 9, 12, 13

Electromation v. N.L.R.B., 35 F.8d 1148, 147

L.R.R.M. 2257 (7th Cir. 1994) ........................... 9

F.M. Transport, Inc., 306 N.L.R.B. 757, 139

Bais Mbite BIPM BUILD incsianciccnnnsnsaee.ac onnstarsasiiesecncesc... 9,12

Garney Morris, Inc., 318 N.L.R.B. 101, 146

RAMEN, WHITE TOD vesceioverctrcecscesensessce. ol s. 9

Memphis Truck & Trailer, Inc., 284 N.L.R.B. 900,

126 L.R.R.M. 1826 (1987) ....................................... 10

N.L.R.B. v. Cabot Carbon Co., 360 U.S. 203, 79

S. Ct. 1015, 3 L.Ed.2d 1175 (1959) 12

N.L.R.B. v. Webcor Packaging, Inc., 118 F.3d 1115

og Be 5 SRO SE Ea ae ene 1,9

Research Federal Credit Union, 310 N.L.R.B. 56,

142 L.R.R.M. 1250 (1998) .....0.000...00..00..... 9,12

Ryder Distribution Resources, Inc., 311 N. :. R.B.

814, 143 L.R.R.M. 1225 (1998) ........0000 9,12

Schwab Foods, Inc., 284 N.L.R.B. 1055, 125

ee fe OS Re eee 9

UARCO, Inc., 286 N.L.R.B. 55, 180 L.R.R.M. 1447

RUIN Absa ca ck cece mce he ie eR eee ae Crk 9

Waste Management of Utah, 310 N.L.R.B. 883, 144

L.R.R.M. 1815 (1993) ..... SOEUR kat he ee ek 9,12

Webcor Packaging, Inc., 319 N.L.R.B. 1208, 151

me | ee ne 1,9

Yukon Manufacturing Co., 310 N.L.R.B. 324, 144

ee eS | am e eree e 9

STATUTES:

National Labor Relations Act, as amended, 29

U.S.C. Section 151 (et seq.) :

29 U.S.C. Section 152(5) ........... 1, 8, 11, 15

Soe irs MUNIN oc scsscices cessdsenecescernsasasccsssasé,. 12, 16

TABLE OF AUTHORITIES—Continued

Page

29 U.S.C. Section 158 (a) (2) ................-.--.2--eeeeeeee passim

, pee Com "| nr ne 6

OTHER AUTHORITIES:

Bureau of Labor Statistics, Bureau of Labor Sta-

tistics News Release, USDL 97-27 (Jan. 31,

BS P ticdnctincecdebertann PERE PRS Oe ES CS MF SN. 7

IN THE

Supreme Court of the United States

OCTOBER TERM, 1997

No.

WEBCOR PACKAGING, INC.,

4 Petitioner,

NATIONAL LABOR RELATIONS BOARD,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

PETITION FOR A WRIT OF CERTIORARI

Webcor Packaging, Inc. respectfully petitions for a

Writ of Certiorari to review the Judgment of the United

States Court of Appeals for the Sixth Circuit in this case.

OPINIONS BELOW

The opinion of the Court of Appeals, (App., infra, at

la), is reported at 118 F.3d 1115. The opinion of the

National Labor Relations Board, (App., infra, at 19a),

is reported at 319 NLRB 1203. The opinion of Admin-

istrative Law Judge Stephen J. Gross, (App., infra, at

34a), is unreported.

JURISDICTION

The Court of Appeals entered its Judgment on July 11,

1997. (App., infra, at 1a.) An order granting Petitioner

a 30 day extension to file this petition was entered by this

Court on October 6, 1997. The jurisdiction of this Court

is invoked under 28 U.S.C. § 1254(1).

STATUTORY PROVISION INVOLVED

Section 8(a)(2) of the National Labor Relations Act,

29 U.S.C. § 158(a)(2), provides that ‘[i]t shall be an

unfair labor practice for an employee . . . to dominate

or interfere with the formation or administration of any

labor organization or contribute financial or other support

to it: Provided, that subject to rules and regulations

made and published by the Board pursuant to Section 6,

an employer shall not be prohibited from permitting em-

ployees to confer with him during working hours without

loss of time or pay.”

Section 2(5) of the National Labor Relations Act, 29

U.S.C. § 152(5), provides that a “labor organization” is

“any organization of any kind, or any agency or employee

representation cominittee or plan, in which employees

participate and which exists for the purpose, in whole or

in part, of dealing with employers concerning- grievances,

labor disputes, wages, rates of pay, hours of employment,

or conditions of work.”

STATEMENT

A. Background and Facts

This case involves the extent to which employers, whose

employees are not represented by a union, can communi-

cate with their employees concerning matters directly re-

lated to their employment. In an ever increasingly com-

petitive global marketplace, employers in this country

have come to the realization that they must involve their

employees in the decision making process. As a result,

employee involvement programs have been used by em-

ployers to increase employee satisfaction and, thus, in-

crease efficiency, effectiveness, and productivity.

Webcor Packaging, Inc. is a manufacturer of corru-

gated boxes and is located in Burton, Michigan. (App.,

infra, at 35a.) The plant has approximately forty (40)

production and maintenance employees.

Compak is also in the business of manufacturing cor-

rugated boxes and is owned by the same individuals who

own Webcor. The Compak plant is located in Duren,

Michigan and has been organized by the Allied Industrial

Workers for approximately twénty-five (25) years.

The Allied Industrial Workers (AIW) attempted to

organize the employees at Webcor in 1989. An election

was held and the employees voted against AIW repre-

sentation. (/d. at 38a.)

Craft-Barresi, a labor consulting firm, was hired by the

Company to conduct a survey of employees’ concerns and

attitudes in the spring of 1990. The results of the survey

showed that the employees wanted to be more adequately

informed of any changes that management wished to

implement.

In September of 1990, Robert Sibilsky was hired as the

Vice-President of Operations at Compak-Webcor. (Jd.

at 2a.) As Vice-President of Operations, Mr. Sibilsky is

responsible for manufacturing and administration at both

the Compak and Webcor plants. At the time he began

with Webcor, Mr. Sibilsky did a thorough evaluation of

the Company which included discussions with managers,

employees, customers and employees of Craft-Barresi.

One of the conclusions of Mr. Sibilsky’s evaluation was

that an Employee Involvement Program needed to be

implemented at Webcor. (Id. at 36a-37a. )

In October of 1990, Mr. Sibilsky met with Frank

Barresi, a labor consultant with Craft-Barresi, to discuss

implementation of an Employee Involvement Program at

Webcor. (Jd. at 38a.) A decision was made to imple-

ment a two-pronged program. The first prong would be

the implementation of an Employee Involvement Steering

Committee. (Jd. at 2a.) The Steering Committee would

operate as the coordinating body of the program and

would address issues related to productivity, quality,

safety, housekeeping and waste. The second prong, the

Plant Council, would be the development of a standing

body which would discuss policy issues. The purpose of

the Plant Council was to be an information sharing, com-

munication device in these areas. (/d.)

A sign up sheet for the Steering Committee was posted

on the employees bulletin board on November 20, 1990.

The Steering Committee was ultimately made up of three

(3) hourly employees and two (2) management people.

(/d.) The three (3) hourly members of the Steering

Committee were determined by placing the names of the

volunteers in a box and randomly drawing three (3)

names, (/d. at 37a.) The majority of the Committee was

made up of hourly employees so that the employees knew

the program was to be balanced, Olin Rikard, Manufac-

turing Manager, and Ken Lieben, a supervisor, served as

the management personnel on the Steering Committee.

The Steering Committee was established on December

20, 1990. The first meeting of the Steering Committee

took place on January 3, 1991, (id.), the purpose of

which was to discuss the organizational structure of the

Employee Involvement Program and how the Committee

should operate.

The Committee began reviewing suggestions received

from individual employees at the third and fourth meet-

ings on January 10 and January 17, 1991. The issues

which came before the Committee included overtime dis-

tribution, tool policy and the lunch program. (/d. at 10a

n.6.) These were clearly policy issues which were not

intended to be addressed by the Steering Committee.

After reviewing the types of issues which were coming

before the Steering Committee, Mr. Sibilsky decided, in

late January, that the Plant Council should be imple-

mented. (/d. at 38a-39a.) Mr. Sibilsky determined that

this would allow the Steering Committee to focus on the

areas which it was created to focus on (i.e., safety, qual-

ity, productivity, housekeeping and waste).

A memo was sent from Mr. Sibilsky to Olin Rikard

instructing him to move forward with the Plant Council.

The Plant Council was to consist of five (5) hourly em-

ployees and three (3) management people. (/d. at 3a.)

This make up of the Plant Council was determined by

the Steering Committee. A notice was posted to the

employees informing them that a Plant Council was to

be formed and an election to determine the hourly mem-

bers would take place on February 22, 1991. (/d. at 2a.)

That same month, Mr. Sibilsky learned that the Team-

sters were attempting to organize the facility. The organ-

izing effort, however, did not motivate, and had no effect,

on the decision to implement the Plant Council. (/d. at

2a, 39a, )

An election to determine the hourly employees who

would sit on the Plant Council was held, as scheduled.

on February 22, 1991. However, several of the ballots

were turned in blank. Therefore, the Company decided

not to implement the Plant Council at this time due to

the employees lukewarm support and the Teamsters or-

ganizing drive. (Id. at 2a.)

The National Labor Relations Board conducted an

election on April 18, 1991 to determine if the Teamsters

had the support of a majority of employees. The Team-

sters lost the election by a vote of 21 to 14. (/d. at 3a.)

Subsequent to the NLRB election, the Company

solicited volunteers to serve on the Plant Council. Several

employees volunteered and an election was held to deter-

mine who would be the five (5) hourly members of the

Plant Council in May of 1991, (/d.) The first meeting of

the Plant Council also took place in May of 1991,

Issues come before the Plant Council by means of a

Suggestion box located in the plant. The suggestions

placed in the box must be signed by the individual or they

will not be addressed, (/d. at 42a.) The individual em-

ployee then attends the meeting to discuss his or her sug-

gestion or idea. (Jd. at 43a.) The Plant Council alter-

nates individuals who are used as facilitators for the

discussions.

The minutes of the meetings are taken from the notes

of Olin Rikard and one of the hourly employees. The

dates of the meetings are set at a time when all of the

members can attend. (/d. at 45a-46a.) The times of the

meetings alternate to accommodate the members who

work on different shifts.

Employees are paid for their time spent attending Plant

Council meetings as well as Steering Committee, Produc-

tivity and Safety meetings. (/d. at 46a.) Any necessary

materials are also provided to all of the committees. (/d.)

B. Proceedings Below

A hearing was held in this matter before Administrative

Law Judge Stephen J. Gross on October 29 and 30, 1992

pursuant to unfair labor practice charges and election ob-

jections filed by Local 332, International Brotherhood of

Teamsters, Chauffeurs, Warehousemen and Helpers of

America, AFL-CIO (hereinafter the “Union”). Judge

Gross issued his decision on October 28, 1993. Judge

Gross held that Petitioner had dominated or interfered

with the formation or administration of a labor organiza-

tion in violation of 29 U.S.C. Section 158(a)(2) and

further ordered that the results of the election conducted

on April 18, 1992 should be set aside based upon Peti-

tioner’s actions with respect to the Plant Council prior

to the election. (App., infra, at 5la-52a.)

The Petitioner filed Exceptions to Judge Gross’s Deci-

sion with the Board. On December 18, 1995, the Na-

tional Labor Relations Board (hereinafter “Board”) is-

sued its Decision upholding Judge Gross’s Decision. (/d.

at 28a.)

The Board, pursuant to 29 U.S.C, Section 160(e), filed

an application for enforcement of its Order issued on

December 18, 1995 against Webcor Packaging, Inc. with

the United States Sixth Circuit Court of Appeals. The

Sixth Circuit issued its Decision upholding the Board on

July 11, 1997. The Petitioner now brings this Petition

for a Writ of Certiorari. (Id. at 1a.)

REASONS FOR GRANTING THE PETITION

This case involves issues which will determine the abil-

ity of U.S. employers to compete with foreign companies

in an increasingly competitive global marketplace. Addi-

tionally, the resolution of the issues in this case will de-

termine whether non-union employees in this country,

approximately ninety percent of the U.S. private sector

workforce,* will be able to communicate with their em-

ployer concerning matters directly related to their employ-

ment,

In the last twenty (20) years, U.S. employers have

become increasingly aware of the need to involve em-

ployees in the decision making process. As a result, em-

ployers have developed employee involvement programs.

These programs are now being used on a world-wide basis

to increase employee satisfaction and, thus, productivity

and efficiency. The Board’s interpretation of the Na-

tional Labor Relations Act prohibits employers whose

employees have not opted in favor of union representa-

tion and collective bargaining from establishing employee

involvement programs that address issues directly related

to the employees’ employment (i.e. wages, hours, working

condition, etc.). The employees’ inability to be involved

in issues critical to their livelihood decreases their job

satisfaction and, ultimately, their effectiveness. This puts

domestic employers at a distinct disadvantage in compari-

son to their foreign counterparts.

The Petitioner, in this case, established an employee

involvement program to receive input from its employees

in order to make an informed decision concerning the

* Bureau of Labor Statistics, Bureau of Labor Statistics News

Release, USDL 97-27 at 1 (Jan. 31, 1997).

employees’ needs and desires. The Board, as has con-

sistently been its practice, found the employee involve-

ment program to be a violation of the National Labor

Relations Act.

I. REVIEW BY THIS COURT IS NEEDED TO RE-

SOLVE AN IMPORTANT, RECURRING QUESTION

OF FEDERAL LABOR LAW THAT THE NLRB AND

THE FEDERAL CIRCUIT COURTS HAVE FAILED

TO RESOLVE, LE.,. WHETHER REPRESENTATION

IS A NECESSARY ELEMENT OF A “LABOR

ORGANIZATION” UNDER 29 U.S.C. § 152(5).

A “Labor Organization” is defined under 29 U.S.C.

§ 152(5) as follows:

Any organization of any kind or agency or employee

representation committee or plan, in which em-

ployees participate and which exists for the purpose,

in whole or in part, of dealing with employers con-

cerning grievances, labor disputes, wages, rates of

pay, hours of employment, or conditions of work.

The Board, as well as the various federal circuit courts,

have failed to resolve the question of whether, under 29

U.S.C. § 152(5), an employee group must act as a repre-

sentative of the other employees to meet the definition of

a labor organization.

The Board noted in Electromation, 309 N.L.R.B. 990,

142 L.R.R.M. 1001 (1992), that the issue has not been

resolved:

Because we find, as explained below, that employee-

members of the Respondent’s action committees

acted in a representational capacity, it is unnecessary

to the disposition of this case to determine whether

an employee group could ever be found to consti-

tute a labor organization in the absence of a finding

that it acted as a representative of other employees.

As set forth in his separate concurrence, Member

Devaney would reach this issue, and he concludes

that such a finding is essential to a determination that

a group is a labor organization within the meaning

of Section 2(5).

Electromation, 309 N.L.R.B. at 994 n.20.

The unresolved nature of this issue has been confirmed

by subsequent decisions of the Board and Courts of Ap-

peal. Webcor Packaging, Inc., 319 N.L.R.B. 1203, 151

L.R.R.M. 1221 (1995), Electromation v. N.L.R.B., 35

F.3d 1148, 147 L.R.R.M. 2257 (7th Cir. 1994), N.L.R.B.

v. Webcor Packaging, Inc., 118 F.3d 1115 (6th Cir.

1997).

A labor organization must, by its very nature, be a

representative of its members. The Board has failed to

acknowledge the representational requirement for a labor

organization. This position by the Board has had the

effect of requiring compulsory membership in a union

for an employee to communicate with his or her employer

about issues closely related to his or her employment. In

fact, the Board, by failing to address this issue, has been

able to consistently conclude that employee groups dis-

cussing grievances, labor disputes, wages, rates of pay,

hours of employment, or conditions, of work with their

employer are per se labor organizations which have been

dominated by the employer in violation of 29 U.S.C.

§ 158(a)(2). Garney Morris, Inc., 313 N.L.R.B. 101,

146 L.R.R.M. 1153 (1993), Ryder Distribution Re-

sources, Inc., 311 N.L.R.B. 814, 143 L.R.R.M. 1225

(1993), Waste Management of Utah, 310 N.L.R.B. 883,

144 L.R.R.M. 1315 (1993), Yukon Manufacturing Co.,

310 N.L.R.B. 324, 144 L.R.R.M. 1070 (1993), Research

Federal Credit Union, 310 N.L.R.B. 56, 142 L.R.R.M.

1250 (1993), F.M. Transport, Inc., 306 N.L.R.B. 757,

139 L.R.R.M. 1389 (1992), Airstream, Inc., 288

N.L.R.B. 220, 130 L.R.R.M. 1281 (1988), Schwab

Foods, Inc., 284 N.L.R.B. 1055, 125 L.R.R.M. 1225

(1987), Camvac International Inc, 288 N.L.R.B. 816,

130 L.R.R.M. 1447 (1988), UARCO, Inc., 286 N.L.R.B.

55, 130 L.R.R.M. 1447 (1988), Memphis Truck &

Trailer, Inc., 284 N.L.R.B. 900, 126 L.R.R.M. 1326

(1987).

The Board’s failure to address this issue has a chilling

effect on the communication channels between non-union

employees and their employers. Employers who do not

wish to violate the law are forced to eliminate any mean-

ingful communication channels they have with their em-

ployees. This is especially problematic for employers

who have. large numbers of employees. For a large em-

ployer, communicating directly with every employee is

virtually impossible. Through employee involvement pro-

grams, employers are able to systematically determine

the perceptions, attitudes and opinions of their employees.

The Board’s position eliminates the possibility for an

employer to communicate directly with a small number

of employees, who voice their individual concerns, to de-

termine the desires of the employees. A large employer

is effectively stymied in its attempts to get meaningful

input from its employees prior to making a decision that

will have a long-lasting effect on the employees’ daily

lives.

The Plant Council, in the instant case, lacks the repre-

sentational status which should be a requirement for a

group to be considered a labor organization. The mem-

bers of the Council are not representing the other em-

ployees in the plant. The employees in the plant are

required to attend any meeting at which a suggestion of

theirs is to be addressed. Thus, every employee is not

only able, but required, to communicate their ideas or

suggestions to management without the need of a member

of the Plant Council to do so for him. The Administra-

tive Law Judge found, and the Board supported this find-

ing, that the members of the Plant Council acted in a

representational capacity simply because they were elected.

(App., infra, at 23a.) This fact alone is not sufficient to

support a finding that the employees acted in a repre-

sentational capacity. The Sixth Circuit’s notation that

the Plant Council members canvassed employees for their

opinion on one occasion is a self-serving conclusion and

not supported by the record evidence. As Administrative

Law Judge Stephen J. Gross reasoned:

Unlike Electromation (at fn. 7), the employee mem-

bers of Webcor’s Plant Council were not instructed

“tO go amongst the other employees and find out

what kind of ideas they had.” (Employees generally

were invited to suggest matters for consideration by

the Plant Council; however I do not consider that

to mean that the employee-members of the Council

acted in a representative capacity.) Rather, I got the

impression that the employee-members of the Plant

Council voiced their own thoughts about how to deal

with whatever issue was on the table, without cun-

cerning themselves about whether those thoughts nec-

essarily mirrored the points of view of the plant's

employees generally. And the testimony of employee

Plant Council member Mathew Newcomb indicates

that representation was not what the members of the

Plant Council—either employee-members or man-

agement-members—had in mind: According to New-

comb, “we [the Plant Council members] are hoping

to settle the problems and make the hourly employees

and management see the same thing at the same

level.”

(App., infra, at 47a-48a) (emphasis added).

It is clear that the members of the Plant Council do not

act in a representative capacity. Without the representa-

tional element, a labor organization cannot exist. How-

ever, despite the lack of this representational element,

the Board, and the Sixth Circuit, erroneously found the

Plant Council to be a labor organization under 29 U.S.C.

§ 152(5). Therefore, it is imperative for this Court to

review this unsettled area of the law.

II. REVIEW BY THIS COURT IS NEEDED BECAUSE

THE NLRB’S INTERPRETATION OF “DEALING

WITH” FOR THE PURPOSES OF DETERMINING

WHAT CONSTITUTES A “LABOR ORGANIZA-

TION” IS NOT CONSISTENT WITH THE PUR-

POSES OF THE NLRA.

The congressional intent in enacting 20 U.S.C. § 158

(a)(2) is clear. The provision was enacted in order to

eliminate the creation of “sham” unions by employers

which gave the employees the perception that they were ,

being represeated by a bargaining agent. Electromation,

309 N.L.R.B. at 999 (Member Devaney, concurring).

The perception created by the employer-initiated body

had the effect of eliminating the employees’ rights to rep-

resentation under 29 U.S.C. § 15° ,.a). Thus, Congress

enacted Section 8(a)(2) prohibiting an employer from

dominating or interfering with the formation or adminis-

tration of a labor organization or contributing financial

or other support to it.

This Court addressed what constitutes “dealing with”

for purposes of a “labor organization” in N.L.R.B. v.

Cabot Carbon, 360 U.S. 203, 79 S. Ct. 1015, 3 L. Ed. 2d

1175 (1959). In Cabot Carbon, this Court held that the

term “dealing with” is broader than “bargaining with.”

However, the Court provided no other guidance as to what

is, and what is not, encompassed within the term “deal-

ing with.”

The Board’s practice has been to summarily conclude

that any employer/employee group which discusses, even

slightly, an issue related to wages, grievances, hours of

employment, or conditions of work is “dealing with” the

employer as defined in Section 2(5). Ryder Distribution

Resources, Inc., 311 N.L.R.B. 814, 143 L.R.R.M. 1225

(1993), Waste Management of Utah, 310 N.L.R.B. 883,

144 L.R.R.M. 1315 (1993), Research Federal Credit

Union, 310 N.L.R.B. 56, 142 L.R.R.M. 1250 (1993),

F.M. Transport, Inc., 306 N.L.R.B. 56, 139 L.R.R.M.

1389 (1992), Airstream, Inc., 288 N.L.R.B. 220, 130

L.R.R.M. 1281 (1988), Camvac International, Inc., 288

N.L.R.B. 816, 130 L.R.R.M. 1447 (1988). In Electro-

mation, the Board stated the following:

. we review “dealing with” as a bilateral mech-

anism involving proposals from the employee com-

mittee concerning subjects listed in Section 2(5),

coupied with real or apparent consideration of those

proposals by management .. .

Electromation, 309 N.L.R.B. 995 n.21.

In practice, the Board has concluded that this Court’s

holding in Cabot Carbon was that “dealing with” is all

encompassing. The Board routinely finds that committees

which address the subjects listed in Section 2(5) are

“dealing with” the employer.

Under the Board’s application of the law, employee

involvement programs cannot exist in this country. The

Board’s position is that unilateral mechanisms are accept-

able while bilateral mechanisms are not. However, in

determining what constitutes a unilateral, as opposed to a

bilateral, mechanism, the Board reviews whether an em-

ployer acts upon the input received from its employees.

See (App., infra, at 21a.)

This is a ludicrous application of the law set out in

Cabot Carbon and is totally at odds with today’s work

environment. In other words, the Board would allow an

employer to solicit information from its employees. How-

ever, if the employer acts upon the information received.

it is “dealing with” the employees. This eliminates any

meaningful communication between the parties, frustrates

both the employer and employee, and has the effect of

requiring compulsory membership in a union for an

employee to discuss employment issues with his or her

employer.

As stated earlier, employee involvement has become an

integral part of the modern workplace. In order to be

| successful in today’s global marketplace, employers have

| become increasingly aware of the need to communicate

with their employees and to use that information to oper-

ate more effectively and efficiently. In fact, Administrative

Law Judge Stephen Gross acknowledged that this was

taking place at Petitioner’s operations:

. . . According to Sibilsky’s credible testimony, what

Sibilsky calls “employee involvement” at Consoli-

dated Packaging led to exceedingly high quality in

that plant’s outpat—levels of quality that were, in

fact, higher than at Webcor. Sibilsky accordingly was

an apostle of employee involvement when he began

his management at Webcor.

By “employee involvement” Sibilsky means a way

of operating a plant: (1) that calls on employees,

as well as management, to think up better ways of

operating, primarily in respect to matters that affect

productivity, quality, safety, plant cleanliness, and

reduction in waste; (2) in which management pro-

ceeds in a manner that evidences a respect for what

employees have to say about how things should be

done in the plant; and (3) under which small num-

bers of employees and supervisors meet as commit-

tees in order to thrash out the best ways to improve

operations and deal with problems as they crop up.

Sibilsky credibly testified that, as he sees things,

unless managers of manufacturing operations do

utilize employee involvement programs, competitive

levels of quality and low cost can not be achieved.

In Sibilsky’s words:

What surfaced in the mid-80’s was something

that we really knew a long time ago. . . but

we didn’t utilize it—the way we were going to

achieve . . . quality and low cost was by involv-

ing all the people in our operation in thinking.

Not checking their brains at the door, but think-

ing about and participating in how we are going

to get better at what we do. Because if we don’t

get better .. . we're not going to get any busi-

ness. We will not be there. It is that simple.

Sibilsky found no employee involvement in the

problem-solving process when he arrived at Webcor;

what was in place, as Sibilsky testified, was a “top-

down type of arrangement . . . The solutions were

always top down. [The employees] weren’t asked

for their input on solutions to . . . quality problems,

productivity problems, or the rest of it.” (Sibilsky

defined “top-down management” this way: where the

managers of a plant, rather than asking the em-

ployees how a problem can be solved, “take it upon

themselves to analyze the problem, and determine

what the issues are, and then force the solution down

the pipe.” )

(App., infra, at 35a-36a. )

In order for U.S. companies to remain competitive, the

employee involvement process discussed above is im-

perative. Employers unsuccessfully attempted to compete

with their global competition by using “top-down man-

agement” in the past. The Board’s policy has the effect

of forcing employers to go back to this unsuccessful man-

agement style. Therefore, the Petition should be granted

in the instant case in order to clarify, based on today’s

work environment, what constitutes “dealing with” for the

purposes of 29 U.S.C. § 152(5).

Ill. REVIEW BY THIS COURT IS NEEDED TO REC-

TIFY THE NLRB’S POLICY OF FINDING AN EM-

PLOYER, WHO DOES NOT HAVE THE MOTIVE OF

DISCOURAGING EMPLOYEES FROM ORGANIZ-

ING FOR THE PURPOSES OF COLLECTIVE BAR-

GAINING, VIOLATES 29 U.S.C. § 158(a)(2) WHEN

IT ESTABLISHES AN EMPLOYEE GROUP TO

DISCUSS EMPLOYMENT RELATED ISSUES.

The NLRB has consistently held that an Employer

establishing an employee group to discuss issues related

to their employment is in violation of 29 U.S.C. § 158

(a)(2). As stated earlier in this Petition, 29 U.S.C. § 158

(a)(2) was enacted in order to stop employers from

interfering with employee rights under 29 U.S.C. § 157.

Employers would create “sham” unions in an attempt to

discourage employees from organizing.

Since the enactment of 29 U.S.C. § 158(a)(2), the

employer/employee relationship has changed dramati-

cally. Employers from around the world have come to

accept the fact that a cooperative, as opposed to adver-

sarial, relationship is necessary to compete in a global

marketplace. Therefore, strong communication lines be-

tween employer and employee are now viewed as a neces-

sity to ensure quality, productivity, safety, and efficiency.

As a result of this philosophical change, employee

involvement has developed as a tool used by companies

to make full use of their greatest asset, their employees.

Employers have come to the realization that without the

direct information they receive from employees, their

opportunity for success in the global marketplace is greatly

diminished. Therefore, an employer’s motive in develop-

ing an employee involvement program is to succeed in the

marketplace.

However, despite this change in the attitudes of both

employers and employees, the NLRB still routinely finds

employee groups established by an employer to be in

violation of 29 U.S.C. § 158(a)(2). The NLRB has

failed to properly enforce the Act in a manner which is

consistent with the intent of Congress in enacting 29

U.S.C. § 158(a)(2). The intent was to prohibit em-

ployers, whose motive was to discourage employees from

organizing for the purposes of collective bargaining, from

establishing employee groups. The NLRB’s policy_of

enforcement improperly prohibits the employer from es-

tablishing employee groups to communicate with em-

ployees regardless of the employee’s motive. Therefore,

the Petition should be granted in order to rectify the

Board’s enforcement policy which is inconsistent with the

purposes of the Act.

CONCLUSION

The Petition for a Writ of Certiorari should be granted.

November 7, 1997

Respectfully submitted,

BRIAN M. SMITH *

LAWRENCE J. DEBRINCAT

BRIAN M. SMITH &

ASSOCIATES, P.C.

1133 E. Maple Road, Suite 202

Troy, Michigan 48083-2853

(248) 524-1404

Counsel for Petitioner

* Counsel of Record

APPENDICES

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APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 96-5423

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

WEBCOR PACKAGING, INC.,

Respondent.

On Application for Enforcement of an Order of the

National Labor Relations Board

Nos. 7-CA-31809, 7-CA-31896, 7-RC-19513

Argued: April 28, 1997

Decided and Filed: July 11, 1997

Before: GUY, MOORE, and COLE, Circuit Judges.

MOORE, J., delivered the opinion of the court, in

which COLE, J., joined. GUY, J. (p. 18), delivered a

separate opinion concurring in the result only.

OPINION

KAREN NELSON MOORE, Circuit Judge. The Na-

tional Labor Relations Board (NLRB) petitions this

court to enforce its order setting aside union election re-

SO EE GEIS POURGEE me

sults and disestablishing a labor organization which

Webcor created and dominated in violation of § 8(a) (2)

of the National Labor Relations Act (NLRA). For the

reasons discussed below, we enforce the order.

I. FACTS

Neither party challenges the following findings of the

Administrative Law Judge (ALJ): In 1990 Robert Sibil-

sky joined Respondent Webcor as vice-president for opera-

tions, bringing with him a new management strategy

involving increased worker-management cooperation. He

soon established an “Employee Involvement Steering Com-

mittee,” composed of three workers and two managers,

to investigate ways to improve safety, productivity, qual-

ity, and other areas that did not involve what he called

“policy issues,” i.e., employer-employee relations. The

Steering Committee did not discuss employer-employee re-

lations and is therefore not at issue in this case.

The Steering Committee was quite popular with the

workers, but not in the way Sibilsky had hoped. The

company had encouraged employees to submit suggestions

to the committee; many of these suggestions turned out to

concern employer-employee relations. Sibilsky’s response

was to propose the formation of another committee, a

“Plant Council,” to address these policy issues. At the

same time, the Allied Industrial Workers Union started an

organizing drive at Webcor (apparently as a result of

other, less popular, changes that Sibilsky had instituted).

The decision to create the Plant Council was apparently

unrelated to the union activity.

On February 22, 1991, Webcor held an election for

the employee members of the Plant Council; of the twenty-

eight ballots cast, eighteen were blank. Furthermore, four

of the five persons elected refused to serve. Sibilsky took

this as an indication of indifference at best and temporar-

ily scrapped the Plant Council idea. He nonetheless cir-

culated a “Dear Employee” letter asking workers to vote

against unionization; the letter included a statement that

the company had responded to employee concerns by

“implement[ing]” the Plant Council and an employee in-

volvement program in response to employee concerns.

See Joint Appendix (J.A.) at 63 (Letter).’

On April 18 the workers voted against unionization by

a twenty-one-to-fourteen margin. Two weeks later the

company held another election for the Plant Council. This

election was much more successful than the first and

elected to the Council five workers, all of whom had vol-

unteered to serve if elected.

The Plant Council included three management mem-

bers as well as the five workers. Although in theory the

Council was to make decisions by majority vote, in prac-

tice it worked by consensus. An employee who wanted to

raise an issue before the Council would usually place a

written suggestion in a box and then attend the meeting

at which the suggestion was discussed. The Council was

meant to, and did, address “work rules, wages, and bene-

fits”; it in fact addressed and made several proposals that

the company subsequently adopted. The Council met dur-

ing working hours and the company covered all expenses,

including wages for the time spent.

The Department of Labor brought this action claiming

that the Council was an employee representation commit-

tee under company domination and as such violated the

NLRA. Webcor replied that the Council was an exemplar

of worker-management cooperation and merited praise

rather than legal attack. The Department’s view prevailed

before the ALJ and the NLRB, both of which held that

the Plant Council was an illegal company-dominated labor

1 The letter also proclaimed that “[t]hese responses to employees

were made without a union! They occurred because of a cooperative

spirit. Employee Involvement, developed long before the union was

present, and Plant Council are designed to further develop that

relationship.” J.A. at 63.

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organization and ordered the company to disestablish the

Council and hold new union elections. The NLRB Gen-

eral Counsel now petitions to have the Board’s order en-

forced. We have jurisdiction over such petitions under 29

U.S.C. § 160(e).

II. DISCUSSION

The National Labor Relations Act provides that it con-

stitutes an “unfair labor practice for an employer . . . to

dominate or interfere with the formation or administration

of any labor organization or contribute financial or other

support to it.” NLRA § 8(a)(2), codified at 29 U.S.C.

§ 158(a)(2). The ALJ and the Board held that the

Council was a labor organization and that the company

dominated it; Webcor disputes both conclusions.

A. Whether the Plant Council is a Labor Organization

under the Act

Webcor first argues that the Board erred in concluding

that the Council was a labor organization. The NLRA

defines “labor organization” as

any organization of any kind, or any agency or em-

ployee representation committee or plan, in which

employees participate and which exists for the pur-

pose, in whole or in part, of dealing with employers

concerning grievances, labor disputes, wages, rates of

pay, hours of employment, or conditions of work.

29 U.S.C. §152(5) (emphasis added). The Supreme

Court has long held that this statutory definition is suscep-

tible to a broad interpretation and that the Board should

be accorded great latitude in delineating its contours. See

Marine Engineers Beneficial Ass’n v. Interlake, S.S. Co.,

370 U.S. 173, 181-82 (1962); NLRB v. Cabot Carbon

Co., 360 U.S. 203, 211 & n. 7 (1959). Webcor nonethe-

less contends that the Council is not a labor organization

because (1) it did not “deal with” the company concern-

ing work conditions, and (2) members of the Counci: did

not represent other employees. Respondent’s Br. at 12.

This Circuit has in recent years applied inconsistent

standards in reviewing the Board’s interpretation of the

NLRA.* Just last year, however, the Supreme Court

clearly stated its view that the courts must defer to the

NLRB’s interpretation of the Act under the two-step test

of Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 842-43 (1984). Holly Farms

Corp. v. NLRB, US. , 116 S. Ct. 1396, 1401,

1406 (1996) (applying Chevron to Board adjudication).

Accord International Longshoremen’s and Warehouse-

men’s Union, Local 14 v. NLRB, 85 F.3d 646, 652 (D.C.

Cir. 1996) (“[{P]ursuant to the precepts of Chevron . . .,

we must defer to the Board’s reasonable judgments regard-

ing applications of the NLRA.”). See generally KENNETH

CuLp Davis & RICHARD J. PIERCE, JR., 1 ADMINISTRA-

TIVE LAW TREATISE § 3.5 at p. 120 (3d ed. 1994)

(“Since Congress gave NLRB both the power to make

policy decisions and the power to adjudicate, it is fair to

infer that Congress delegated to NLRB the power to make

binding policy decisions through the process of adjudica-

tion,” and Chevron analysis is therefore appropriate. ).

“For the Board to prevail, it need not show that its con-

struction is the best way to read the statute; rather, courts

must respect the Board’s judgment so long as its reading

is a reasonable one.” Holly Farms, 116 S. Ct. at 1406

2 Compare Evergreen Healthcare, Inc. v. NLRB, 104 F.3d 867, 873

(6th Cir. 1997) (stating that “the Board’s conclusions of law...

are reviewed by this Court de novo,” but noting that court should

refuse enforcement if “order has no ‘reasonable basis in law.’”

(citing NLRB v. Pentre Elec., Inc., 998 F.2d 363, 368 (6th Cir.

1993)) ; Cleveland Real Estate Partners v. NLRB, 95 F.3d 457, 462,

465 (6th Cir. 1996) (applying de novo review but asserting that

court is “respectful of the Board’s interpretation” of the law), with

Opportunity Homes, Inc. v. NLRB, 101 F.3d 1515, 1518 (6th Cir.

1996) (stating that de novo review applies) (citing Pentre Elec.) ;

NLRB v. Fluor Daniel, Inc., 102 F.3d 818, 826 (6th Cir. 1996)

(reviewing Board’s legal conclusions de novo); Smiths Indus., Inc.

v. NLRB, 86 F.3d 76, 79 (6th Cir. 1996) (same) (citing Pentre

Elec.).

(citations omitted). Thus, Holly Farms establishes the

standard of review now binding on the courts of appeals

in reviewing the NLRB’s interpretation of the relevant

provisions of the NLRA.* Under this standard, our first

task is to determine “whether Congress has directly spoken

to the precise question at issue.” Chevron, 467 U.S. at

842. If Congress has done so, we must give effect to its

expression. Jd. at 842-43. If not, however, “the question

for the court is whether the agency’s answer is based on a

permissible construction of the statute.” Jd. at 843. Ac-

cord Holly Farms, 116 S. Ct. at 1406.*

The Board has held that a group constitutes a labor

organization if it involves “(1) employee participation,

(2) a purpose to deal with employers, (3) concerning

itself with conditions of employment or other statutory

subjects, and (4) if an “employee representation commit-

tee or plan’ is involved, evidence that the committee is in

some way representing the employees.” Electromation,

Inc., 309 N.L.R.B. 990, 996 (1992), enforced, 35 F.3d

1148 (7th Cir. 1994).° This construction of the term is

3 To the extent that our prior statements of the standard of re-

view conflict with Holly Farms, the Supreme Court decision has

effectively overruled them. We note that none of the prior opinions

from our circuit cite Holly Farms or Chevron for the applicable

standard of review.

*If the Board had applied the statute inconsistently or had

changed its construction of the statute without reasoned justifica-

tion, Chevron deference would not be appropriate. See Holly Farms,

116 S. Ct. at 1404. That is not an issue in this case, as discussed

below.

5 The decisions in Electromation and E.J. du Pont de Nemours &

Co., 311 N.L.R.B. 893 (1993), discussed infra, were intended as

“landmark” cases that would clarify the Board’s policy concerning

the distinction between permissible “quality circles” and illegal

company unions. See Robert B. Moberly, The Worker Participation

Conundrum: Does Prohibiting Employer-Assisted Labor Organiza-

tions Prevent Labor-Management Cooperation?, 69 WASH. L. REV.

331, 346-356 (1994) (discussing Electromation and duPont). Pro-

fessor Moberly concludes that the Board has struck the correct

an entirely reasonable refinement of the statutory defini-

tion quoted above, and we must therefore adopt it under

Chevron. There is no question that the Council involved

employees and addressed conditions of employment. See

Respondent’s Br. at 9; J.A. at 60, 118, 138. Webcor

asserts, however, that the Plant Council did not represent

other employees and that it did not “deal with” the

company.

1. Whether the Plant Council Represented Other

Employees

Webcor’s first argument is that the Plant Council was

not a labor organization because it did not represent other

employees. Instead, the company argues, the Council

merely provided a forum for employees to make sugges-

tions, which the Council then communicated to manage-

ment. As its opinion below notes, the Board has yet to

decide “whether an employee group could be found to

constitute a labor organization absent a finding that it

acted as a representative of other employees.” J.A. at 5

n.6 (citing Electromation, 309 N.L.R.B. at 994 n.20,

balance by allowing worker participation programs (which he en-

dorses) while prohibiting the establishment of employee groups that

companies will use to undermine workers’ rights. Id. at 359. In

the last few years Congress has attempted to amend the NLRA

so as to overrule Electromation; the bill narrowly passed through

both houses but was vetoed by the President. See Nancy K. Kuba-

sek et al., Putting Worker-Management Relations in Context: Why

Employee Representational Choice Needs Greater Protection in

Reform of Section 8(a)(2) of the NLRA, 34 Harv. J. ON LEGIs. 53,

53-55, 69 (1997) (discussing Teamwork for Managers and Em-

ployees Act (TEAM Act), which would have amended the NLRA

so that “it [would] not constitute or be evidence of an unfair labor

practice under this paragraph for an employer to establish, assist,

maintain, or participate in any organization ... in which employees

{deal with employers about] matters of mutual interest” unless the

organization purported to be the employees’ bargaining agent or

union) (quoting H.R. 743, 104th Cong. (1995)). A similar pro-

posal is currently pending in Congress. See S. REP. No. 105-12

(Teamwork for Employees and Managers Act of 1997).

re]

oh)

sty

which specifically reserved the issue). Because we affirm

the ALJ’s finding that the Council members did act as

representatives, we need not address the novel legal

question.

The ALJ’s determination that the Plant Council mem-

bers acted at least in part as representatives of other work-

ers is one of fact, which we may not disturb so long as it

is supported by substantial evidence. 29 U.S.C. § 160(e);

Taylor Warehouse Corp. v. NLRB, 98 F.3d 892, 898 (6th

Cir. 1996). Even if this finding rests solely on an infer-

ence that the ALJ has drawn, it must stand unless that

inference is unreasonable. Jd. at 899.

The ALJ specifically noted that the Council was not

meant to be a strictly representational body. J.A. at 18.

However, he believed that the fact that the employee

members were elected showed that they served at least in

part as representatives: people vote for particular dele-

gates because they hope that the person they elect will

represent their views, either because the delegate shares

them or because she will try to determine them. The

Board gives further reasons to support this finding. First,

that a proposed new attendance policy was circulated to

al! employees with instructions that they “respond back to

the Plant Council,” see J.A. at 16, 81, 90-92, supports

the inference that the Council was meant to represent

those employees who did respond. J.A. at 5 n.6. Further-

more, the minutes of some of the Council meetings sug-

gest that the worker-members served to represent the whole

class of employees. See J.A. at 69 (addressing “method

of getting some response back from Plant Council to the

employees”); J.A. at 75 (requesting management action

on employee suggestion). Also, it appears from the record

that, initially, suggestions to the Council were made in

writing and then discussed without inviting the person who

made the suggestion. J.A. at 79. Such a practice weakens

the company’s claim that the Council was only a forum for

individual employees to air their ideas: when a group of

workers and management sits down to discuss suggestions

made by absent workers it is reasonable to infer that the

worker-members are representing their coworkers. Finally,

if the Council was meant to get input from lots of indi-

vidual employee members, it is hard to see why members

were elected for such long (one-year) terms. Cf. NLRB

v. Streamway Div. of Scott & Fetzer Co., 691 F.2d 288,

290, 294-95 (6th Cir. 1982) (noting that “continuous

rotation of Committee members” for three-month terms

suggested that members acted as individuals rather than as

representatives). In short, there is ample evidence sup-

porting the ALJ’s finding that the Council operated at

least in part as a representative body, rather than a brain-

storming group. Cf. NLRB v. General Shoe Corp., 192

F.2d 504, 506, 507 (6th Cir. 1951) (holding similar

committee to be labor organization), cert. denied, 343

U.S. 904 (1952).

2. Whether the Plant Council was Engaged in

“Dealing with” Webcor

The Supreme Court has long held that Congress in-

tended the phrase “dealing with” to include a much

broader range of employer-worker interaction than would

fall within the traditional concept of collective bargaining.

Cabot Carbon, 360 U.S. at 213-214. More recently the

Board has developed a fairly precise definition of the term,

holding that “dealing with”

ordinarily entails a pattern or practice in which a

group of employees, over time, makes proposals to

management, management responds to these pro-

posals by acceptance or rejection by word or deed,

and compromise is not required. If the evidence es-

tablishes such a pattern or practice, or that the group

exists for a purpose of following such a pattern or

practice, the element of dealing is present. However,

if there are only isolated instances in which the group

makes ad hoc proposals to management followed by

10a

a management response of acceptance or rejection by

word or deed, the element of dealing is missing.

[I]f the committee exists for the purpose of sharing

information with the employer, the committee would

not ordinarily be a labor organization. That is, if the

committee makes no proposals to the employer, and

the employer simply gathers the information and does

what it wishes with such information, the element of

dealing is missing, and the committee would not be a

labor organization.

E.1. du Pont de Nemours & Co., 311 N.L.R.B. 893, 894

(1993). We do not believe—and Webcor does not claim

—that this is an unreasonable definition of the rather

vague term “dealing.” And, under this standard the ALJ’s

findings make it plain that the Council was created to, and

did, deal with the employer: the Council made several

specific suggestions to the company and the company re-

sponded by voluntarily adopting at least four of these.°

This is a paradigm case of dealing. In fact, the Council is

in this respect indistinguishable from the committees held

to violate the Act in NLRB v. Newport News Shipbuilding

& Dry Dock Co., 308 U.S. 241, 244-47, 251 (1939);

NLRB v. General Shoe Corp., 192 F.2d 504, 507 (6th

Cir. 1951); and NLRB v. Sharples Chemicals, Inc., 209

F.2d 645, 651-52 (6th Cir. 1954) (both cited with ap-

proval in Cabot Carbon, 360 U.S. at 212 n. 14). Webcor

nonetheless claims that our more recent case law indicates

that the Council did not deal with the company.

® See J.A. at 15-16 (ALJ findings). These changes included a new

policy whereby the company, rather than the individual workers,

would purchase tools, J.A. at 234-36; a new policy equalizing elig-

ibility for overtime, displacing the old seniority system, J.A. at

152, 163; a new policy whereby Webcor would annually purchase

an additional pair of safety boots for those who needed them, J.A.

at 151-52; and, a modification to a management-proposed change in

the attendance policy, J.A. at 158, 91-92. There was also testimony

that the Council’s action had led to a new policy regarding vacation

pay. J.A. at 150-51, 215-16.

lla

Webcor first argues that the Council cannot be a labor

organization under this court’s holding in Scott & Fetzer,

691 F.2d at 295. We disagree. The Scott & Fetzer court's

conclusion that the committee before it was not a labor

organization rested on the lack of a “continuous interac-

tion between employer and committee.” Id. at 294. See

id. (“Although Cabot Carbon cautions against a restric-

tive reading of the term ‘dealing,’ it involved a more active,

ongoing association, between management and employees,

which the term dealing connotes, than is present here.”).

The court noted that there was only one instance in which

the employer changed a policy at the committee’s request.

Id, at 295 n.11. “An isolated incident does not convert the

Committee into a labor organization.”). This holding is,

for the purposes of the matter at hand," consistent with the

Board’s current definition of dealing, which excludes such

“isolated instances in which the group makes ad hoc pro-

posals to management followed by a management re-

sponse.” DuPont, 311 N.L.R.B. at 894. In the case at

bar, the ALJ found that the company had made at least

four significant policy changes as a result of the Council’s

recommendations. See note 6, above. This constitutes an

active, ongoing course of dealings, and Scott & Fetzer is

in this respect inapposite.

Webcor next cites Scott & Fetzer and Airstream, Inc. v.

NLRB, 877 F.2d 1291 (6th Cir. 1989), for the proposi-

tion that because there is no evidence that the company

formed the Plant Council out of hostility towards the

union or in order to deceive employees or otherwise ob-

struct the unionization drive, the Council was not a labor

organization. While we acknowledge that some of the lan-

™ The Board’s definition does, however, indicate that, contrary to

Scott & Fetzer’s holding, a “recital of the committee’s purpose” to

deal could itself be sufficient evidence of dealings. Sce duPont, 311

N.L.R.B. at 894 (“If the evidence establishes . . . that the group

exists for a purpose of following such a pattern or practice, the

element of dealing is present.’’) .

ke Le

12a

guage in these two cases suggests that the existence of

employer bad faith is relevant in determining whether a

particular group constitutes a labor organization under the

Act, longstanding precedents from this circuit, the Su-

preme Court, and the NLRB, as well as the text of the

statute itself, make it clear that bad faith is not a pre-

requisite to a finding that a company-sponsored group is a

labor organization.

The statutory definition of “labor organization” makes

no reference to employer bad faith or anti-union animus.

Moreover, in Newport News the Court held that a finding

that the employer had not interfered with union elections

and that the employees were satisfied with a company-

sponsored Employees’ Representative Committee did not

preclude the Board from finding the committee to consti-

tute an illegal company-dominated labor organization.

308 U.S. at 248, 251. The Board continues to adhere to

this holding. See Electromation, 309 N.L.R.B. at 995

n.24 (no need to prove anti-union motive or intent to in-

terfere with right to unionize). This court, too, has

upheld Board determinations that similar employee com-

mittees were labor organizations, without any showing of

employer bad faith. See, e.g., General Shoe, 192 F.2d at

507; Sharples Chemicals, 209 F.2d at 651-62. We can,

in fact, find no meaningful distinction between Webcor’s

Plant Council and the employee groups found to be labor

organizations in each of these cases. See Cabot Carbon,

360 U.S. at 213-14; Newport News, 308 U.S. at 244-47;

Electromation, 35 F.3d at 1161; Sharples Chemicals, 209

F.2d at 648-49; General Shoe, 192 F.2d at 505-06. The

alleged labor organization in Airstream, on the other hand,

was no more than a continuation of an earlier program

involving employer-worker “rap sessions,” which the

Board had specifically found existed solely to facilitate

communication and therefore not to constitute a labor

organization. See 877 F.2d at 1295. The Airstream court

in fact distinguished this employee group from similar

13a

groups that we had found to constitute labor organizations

on just this basis. Jd. at 1297. Webcor’s Plant Council is

not merely a continuation of any legal employee-employer

rap session program. In light of the holdings in Cabot

Carbon, Newport News, General Shoe, and Sharples

Chemicals, and of the deference that we must give the

Board’s determination as to what factors define the term

labor organization as used in the NLRA, we conclude that

this distinguishes the group at issue in Airstream from the

Plant Council and the organizations in the cited cases, and

that the Plant Council, like those other groups, constitutes

a labor organization under section 29 U.S.C. § 152(5).°

8 Even if we found Airstream indistinguishable from the case at bar

we would be hesitant to reverse the Board’s holding that the Plant

Council is a labor organization as defined by the Act. As noted above,

the Supreme Court has recently repeated its holding that we must

accept the Board’s reasonable construction of ambiguous terms in the

NLRB under Chevron. Airstream and Scott & Fetzer, gave no defer-

ence to the Board’s reading of the Act: instead, they set out to provide

what they considered to be an “enlightened view of the Act.” Scott

& Fetzer, 691 F.2d at 291. See Airstream, 877 F.2d at 1296 (“An

overly broad construction of the statute would be as destructive

of the objects of the Act as ignoring the provisions entirely.’’)

(quoting Scott & Fetzer, 691 F.2d at 292). As discussed above,

such policy questions are for the Board, not for the courts. Air-

stream and Scott & Fetzer therefore addressed a question—the

best construction of the NLRA—which is not before us; the ques-

tion before us is only whether the Board’s reading of the Act is

reasonable. See Holly Farms, 116 S. Ct. at 1406 (“For the Board

to prevail, it need not show that its construction is the best way to

read the statute ....”). And, as discussed in the text, because

the Board’s reading is consistent with a long line of holdings out

of both the Supreme Court and this court, we believe it is quite

reasonable. Cf. Reich v. D.M. Sabia Co., 90 F.3d 854, 860 (3d Cir.

1996) (overruling prior panel’s holding in part based on Chevron) ;

Mesa Verde Constr. Co. v. Northern Cal. Dist. Council of Laborers,

861 F.2d 1124, 1136 (9th Cir. 1988) (en banc) (holding that “if a

panel finds that a NLRB interpretation of the labor laws is reason-

able and consistent with those laws, the panel may adopt that inter-

pretation even if circuit precedent is to the contrary” despite Cir-

cuit rule that one panel may not overrule another.). We note that

the Board’s opinion distinguished Airstream and Scott & Fetzer

14a

B. Whether Webcor Dominated the Plant Council

Webcor next argues that, even if the Plant Council was

a labor organization, Webcor did not dominate it. The

Board has defined domination for the purposes of the

Statute:

{A] labor organization that is the creation of man-

agement, whose structure and function are essen-

tially determined by management, . . . and whose

continued existence depends on the fiat of manage-

ment, is one whose formation or administration has

been dominated under Section 8(a)(2). In such an

instance, actual domination has been established by

virtue of the employer’s specific acts of creating the

organization itself and determining its structure and

function. However, when the formulation and struc-

ture of the organization is determined by employees,

domination is not established, even if the employer

has the potential ability to influence the structure or

| effectiveness of the organization. Thus, the Board’s

) cases following Cabot Carbon reflect the view that

when the impetus behind the formation of an or-

. ganization of employees emanates from an employer

| and the organization has no effective existence in-

dependent of the employer’s active involvement, a

finding of domination is appropriate if the purpose of

the organization is to deal with the employer con-

cerning conditions of employment.

from the case at bar, rather than taking a “nonacquiescence” ap-

proach and simply ignoring our precedent. This is also not an in-

stance in which the Board has departed from the Supreme Court’s

interpretation of the statute. Cf. Maislin Indus., U.S., Inc. v. Pri-

mary Steel, Inc., 497 U.S. 116, 130-31 (1990) (refusing to follow

agency’s new interpretation of statute which conflicts with century-

old Supreme Court precedent). If Congress disagrees with the

Supreme Court’s interpretation of a statute it can be expected to

amend the law. See id. at 131. Congress cannot, however, be ex-

pected continuously to revise statutes to address isolated lower

court dicta with which it disagrees.

15a

Electromation, 309 N.L.R.B. at 995-96 (footnote and

citations omitted). The term “dominate,” as used in the

Act, is not self-defining and the Board’s definition is not

unreasonable. See Newport News, 308 U.S. at 249

(upholding finding of domination where company deter-

mined structure of organization and could choose whether

to adopt recommendations); Electromation, 35 F.3d at

1163 (“The Board’s interpretation of Section 8(a)(2)

simply does not contravene the statutory language.”);

Scott & Fetzer, 691 F.2d at 291 (assuming domination

where committee “was expressly mandated by the Com-

pany, and the Company controlled its composition and its

meetings”); Sharples Chemicals, 209 F.2d at 652 (domi-

nation finding supported by evidence of employer finan-

cial support, management participation in committee and

power to remove representatives by transferring them to

different department). As the ALJ noted, the Plant Coun-.

cil here was created by management and could have

been disbanded by management. See J.A. at 19. Further-

more, that it lacked independent means of support, met

on company property during working hours, never met

independent of management, and had its elections run by

the company all support the finding of domination. J.A. at

19. See NLRB v. H & H Plastics Mfg. Co., 389 F.2d 678,

680 (6th Cir. 1968). See also Electromation, 35 F.3d at

1170 (upholding finding of domination in similar situa-

tion); NLRB v. Chardon Tel. Co., 323 F.2d 563, 564

(6th Cir. 1963) (per curiam) (“Employees are free to

form their own independent organization, but the [NLRA]

requires that any such organization shall be completely in-

dependent of the employer.”) (citation omitted).

Modern Plastics Corp. v. NLRB, 379 F.2d 201 (6th

Cir. 1967), is not to the contrary. In Modern Plastics we

istingui between employer cooperation with, and

domination of, a labor organization and concluded that

the relationship in that case was one of cooperation. /d. at

204. Importantly, the evidence in that case was “limited

RRO nae a ns

16a

to actions which occurred after the formation of the Com-

mittee,” id. at 203, whereas much of the evidence of

domination in the case at bar relates to the company’s

role in creating the Council. Where, as in Modern Plas-

tics, there is no evidence that the employer played an

inappropriate role in the actual formation of the labor

organization, a showing that the employer is actually

exerting influence over the organization is needed to find

domination. Electromation, 309 N.L.R.B. at 995-96

(quoted above). If the company itself creates the labor

organization, however, such a showing of actual control is

unnecessary.” Id. See General Shoe, 192 F.2d at 505,

507. The Board’s determination that Webcor dominated

the Plant Council is supported by substantial evidence.

® William Gould, the current Chairman of the NLRB, has called

for Congress to amend the NLRA to clarify the definition of

“dominate”. so as to make clear that employers may promote the

formation of and cooperate with employee groups so long as the

employees retain control over the organizations. See, e.g., William

B. Gould IV, Employee Participation and Labor Policy: Why the

TEAM Act Should be Defeated and the National Labor Relations

Act Amended, 30 CREIGHTON L. REV. 8, 11 (1996) (“Employers

ought to be able to promote the creation of and to subsidize em-

ployee groups. ... [T]he final and most important aspect of any

change should be an assurance that such employee organizations

will be autonomous, that is to say, that they can select their own

representatives or leadership and determine what it is that they

want to discuss with management and how their organization should

be structured. ... [T]he employer that promotes such an em-

ployee group must be prepared to allow for genuine employee par-

ticipation in leadership as well as involvement on empolyment

issues.” Chairman Gould concurred in the Board’s judgment below

on the grounds that “the control exercised by the Respondent over

the Plant Council is such that the freedom of choice and independ-

ence of action open to employees is too strictly confined within

parameters of the Respondent’s making for the Plant Council to be

a genuine expression of democracy in the workplace.” J.A. at 6-7

n.13 (citing Keeler Brass Co., 217 N.L.R.B. 1110 (1995) (Gould,

Chairman, concurring) ).

17a

C. The Scope of the Board’s Remedy

Webcor’s final argument is that, even if the Council

violated the Act and the Board was correct in ordering

its disestablishment, the Board erred in ordering that the

union election results be set aside and new elections held.

An order setting aside elections is not ripe for our review

until subsequent elections are held, even when that order

is consolidated with other questions that are immediately

appealable. United States Elec. Motors v. NLRB, 722

F.2d 315, 320 (6th Cir. 1983) (per curiam), cert. de-

nicd, 467 U.S. 1216 (1984). Accord NLRB v. Pizza

Crust Co. of Penn., Inc., 862 F.2d 49, 50 (3d Cir. 1989)

(collecting cases); American Bread Co. v. NLRB, 411

F.2d 147, 156 (6th Cir. 1969). The proper route for

review is for the employer to refuse to recognize a subse-

quent, Board-ordered election on the grounds that the

election was improper. Electrical Motors, 722 F.2d at

320. Accordingly, we have no jurisdiction over this part

of the appeal and cannot address the merits of the

issue. Id.

Ill. CONCLUSION

For the reasons discussed above, we ENFORCE the

Board’s order disestablishing the Plant Council and hoid

that we are without jurisdiction over that portion of the

Order that requires new elections to be held.

CONCURRENCE IN RESULT ONLY

GUY, Circuit Judge, concurring in the result only. Be-

cause I believe that the result reached in this case no

longer reflects congressional intent, it is with the greatest

of reluctance that I concur. But for a presidential veto of

amendatory legislation passed by Congress, what Webcor

attempted to do here would be viewed against the back-

drop of legislation more hospitable to concepts like plant

councils.

18a

In a similar vein, gratuitous on my part though it may

be, I believe that the Board exceeded its authority when it

ordered a new election. There is nothing in the record to

indicate that the rejection of the union in the first election

represented other than the clear will of a majority of the

employees. The Plant Council at issue here was not even

formed until after the election.

I realize, of course, that this issue is not now before us,

and so I agree that we must enforce the Board’s order.

19a

APPENDIX B

UNITED STATES OF AMERICA

BEFORE THE

NATIONAL LABOR RELATIONS BOARD

Cases 7-CA-31809, C-CA-31896, and 7-RC-19513

WEBCOR PACKAGING, INC.

and

LOcAL 332, INTERNATIONAL BROTHERHOOD

OF TEAMSTERS, AFL-CIO

December 18, 1995

DECISION, ORDER, AND DIRECTION OF

SECOND ELECTION

By CHAIRMAN GOULD AND MEMBERS BROWNING

AND TRUESDALE

On October 28, 1993, Administrative Law Judge

Stephen J. Gross issued the attached decision. The Re-

spondent filed exceptions and a supporting brief, the

General Counsel filed an answering brief, and the Re-

spondent filed a reply brief to the General Counsel’s

answering brief. The General Counsel filed exceptions and

a supporting brief, and the Respondent filed an answer-

ing brief.

The National Labor Relations Board has delegated its

authority in this proceeding to a three-member panel.

20a

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 as

further discussed below and to adopt the recommended

Order.

Background

The judge found that the Plant Council established at

the Respondent’s facility was a labor organization within

the meaning of Section 2(5) of the Act, and that the

Respondent violated Section 8(a)(2) of the Act by domi-

nating and interfering with the formation and administra-

tion of the Plant Council and by contributing financial and

other support to the Plant Council. We agree with the

judge’s findings, for the reasons set forth by him, and

for the reasons set forth below.

Discussion

1. We agree with the judge’s finding that the Plant

Council satisfies the criterion set forth in Section 2(5)

of the Act that a statutory labor organization is one that

1 The Respondent has requested oral argument. The request is de-

nied as the record, exceptions, and briefs adequately present the

issues and the positions of the parties.

* The General Counsel has excepted to some of the judge’s credi-

bility 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. 183 F.2d 363 (3d Cir. 1951). We have carefully

examined the record and find no basis for reversing the findings.

We agree with the General Counsel that it would have been pre-

ferable for the judge to explicitly discredit the employee testimony

regarding the statements allegedly made by Plant Manager Rikard,

or to explicitly credit Rikard’s denial. Nevertheless, the judge did

not err in holding that, because either version was just as believ-

able, the General Counsel failed to carry his burden of proving the

allegation that the statements violated Sec. 8(a)(1). See Bethel

Home, Inc., 275 NLRB 154, 157 (1985).

OT eri ep

PSOE TR ENN AIO MSL IO OT

aie

2la

exists, in whole or in part, for the purpose of dealing with

employers concerning grievances, labor disputes, wages,

rates of pay, hours of employment, or conditions of work.

The Board has explained that “dealing with” contemplates

“a bilateral mechanism involving proposals from the em-

ployee committee concerning the subjects listed in Sec.

2(5), coupled with real or apparent consideration of those

proposals by management.” Electromation, Inc., 309

NLRB 990, 995 fn. 21 (1992), enfd. 35 F.3d 1148 (7th

Cir. 1994). The bilateral mechanism thus ordinarily en-

tails a pattern or practice in which a group of employees,

over time, makes proposais to management, and manage-

ment responds to these proposals by acceptance or rejec-

tion by word or deed. E. J. du Pont & Co., 311 NLRB

893, 894 (1993). The record evidence establishes that

this is precisely how the Respondent designed the Plant

Council to operate.

Robert Sibilsky, the Respondent’s vice president for

operations who ordered the establishment of the Plant

Council, testified that the Plant Council was designed to

offer recommendations to management about proposed

changes in working conditions and that management would

consider whether to accept or reject those recommenda-

tions. Sibilsky testified:

What you're looking for out of those bodies and

specifically out of the Plant Council, is a consensus

building type of recommendation that would come—

that would be a recommendation from that entire

committee to Management about a proposed change

... and if there was a recommendations to be made,

it was to be considered by Management.

Sibilsky testified, for example, that by written memoran-

dum dated November 15, 1991, the Plant Council re-

quested reconsideration of the Respondent’s policy for

issuing employee vacation paychecks. Sibilsky stated that

Respondent’s management considered the proposal, but

eae ae EEE»

22a

rejected it and decided to retain its procedures.’ In addi-

tion, Matthew Newcomb, an employee member of the

Plant Council, testified that the Plant Council proposed

to management a policy that the Respondent would pay

for employee safety shoes, and that the Respondent’s man-

agement considered and approved the proposal.‘

Indeed, Sibilsky was specifically asked by counsel for

the General Counsel whether the Plant Council had the

authority to make a final determination, without manage-

ment approval, as to whether any policy recommendation

was to be effectuated. Sibilsky replied:

[O}f substantive nature, no . . . the area that they...

cannot make decisions on are those that deal with—

8’ The following exchange took place between Sibilsky and coun-

sel for the Respondent:

Q: There was previous testimony that I think the Plant

council or the steering committee . . . got involved with an

issue cutting checks . . . for employees when they go on vaca-

tion. Do you have any direct information on that subject.

A: The vacation pay issue was addressed at the plant

council.

Q: Okay.

A: And it came to me as a question.

There were a couple of issues that were raised. One, employees

were asking why we had to deduct federal taxes, state taxes,

from their vacation check, They didn’t want that to take

place. Could we change what we did? And not do that?

The second question was, the employees normally received their

vacation pay check on their anniversary date. They wanted to

change that to when they took their vacation, could they get

their vacation check, I responded in writing to the plant coun-

cil... that we could not change the methodology of how we

distributed the vacation checks. And so we stayed with the

program. It was not changed. [Emphasis added. ]}

* Newcomb testified :

Q: And tell us, as much as you remember, about what’s

been discussed in the Plant Council meetings.

A: ... And safety shoes, we [the Plant Council] come up

with a policy for safety shoes. The company agreed to give

forty five dollars for everybody buying a pair of OSHA, ap-

proved safety shoes. ... [Emphasis added. ]

PEO eT IT eR INS TOF PAST

PRELIM SBE RR Un ST oy Cots

23a

with the handbook—those issues related to wages,

hours, that sort of thing. They don’t have the author-

ity to make that decision.

Sibilsky emphasized that management would treat recom-

mendations on such issues from the Plant Council “very

seriously,” and that management would “have to take it

under advisement.” °

We accordingly conclude that the record evidence estab-

lishes that the Plant Council existed for the purpose, at

least in part, of following a pattern or practice of making

proposals to management which would be considered and

accepted or rejected, and that such a pattern in fact

occurred. We therefore agree with the judge that the

element of “dealing with” is present in this case."

5 We note that on advice of counsel the Respondent temporarily

restricted during the pendency of the instant proceeding the Plant

Council procedure of recommending proposals to management.

®The judge additionally found, and we agree, that the Plant

Council acted in a representational capacity because its employee-

members were elected by the Respondent’s work force. Compare

NLRB v. Scott & Fetzer Co., 691 F.2d 288, 294-295 (6th Cir. 1982)

(continuous rotation of employee committee members rather than

an electoral process militates against finding labor organization

status). We note further that the Plant Council canvassed em-

ployees for their opinion regarding policy changes the Plant Coun-

cil was considering. For example, the Plant Council! circulated to

all employees a copy of its proposed attendances program, asking

employees to read the proposal and respond back to the Plant Coun-

cil, and attaching a comment form. The Plant Council minutes addi-

tionally reflect its efforts in “trying to get the feeling of what the

employees actually wanted on vacation checks.”

In light of our finding that the Plant Council acted in a repre-

sentational capacity, it is unnecessary to the disposition of this

case to determine whether an employee group could be found to

constitute a labor organization absent a finding that it acted as a

representative of other employees. See Electromation, supra, 309

NLRB at 994 fn. 20.

7 We thus find that the record evidence contradicts the Respond-

ent’s contention in its exceptions that the Plant Council was merely

a unilateral employee communication device and brainstorming

24a

2. We further agree with the judge that the Respondent

unlawfully dominated the formation and administration of

the Plant Council. A labor organization that is the crea-

tion of management, whose structure and function are

essentially determined by management, and whose contin-

ued existence depends on the fiat of management, is one

whose formation or administration has been dominated

under Section 8(a)(2) of the Act. Electromation, supra,

309 NLRB at 995. Each of these elements is present

in this case.

The record evidence establishes that the Plant Council

was the creation of management. By memorandum dated

February 11, 1991, Vice President Sibilsky directed Olin

Rikard, Respondent’s director of manufacturing, to estab-

lish the Plant Council and to have it in place by March 15,

1991. Two days later, a memorandum from Mark Black-

burn, Respondent’s plant superintendent, was posted to

all employees directing the establishment of the Plant

Council, describing the goals for the Plant Council, and

detailing the election process.

The record evidence further establishes that the struc-

ture and function of the Plant Council were essentially

determined by the Respondent. Sibilsky directed in his

memorandum of February 11, 1991, that “[t]he Plant

Council will consist of five hourly employees who will be

elected by the hourly work force,” and that “the Plant

Council will function as a policy development body .. .

involved with the development of plant policies, the em-

ployee handbooks, the creation of a grievance procedure

that will involve council member representation, and with

the process of hourly compensation and benefits.” The

Respondent further determined the number of manage-

group. Compare £. I. du Pont & Co., supra at 894 (committee that

. exists for the purpose of sharing information with the employer,

or engaging in brainstorming without making specific proposals,

is not a statutory labor organization).

ilmenite

Sy PRO |

25a

ment officials who would serve on the Plant Council, and

selected those individuals. Thus, the Respondent deter-

mined the function of the Plant Council, defined the sub-

ject matter to be addressed by the Plant Council, and

announced the number of employee and management rep-

resentatives that would serve on the Plant Council.®

The record evidence further unequivocally establishes

that the existence of the Plant Council depended entirely

on the authorization and approval of the Respondent. Al-

though the Respondent contends in its exceptions that the

Respondent’s employees had expressed an interest in a

plant council in 1989, it is undisputed that the Plant

Council was not in fact initiated by the employees but by

Sibilsky’s management directive. Sibilsky testified that he

decided in late January 1991 to implement the Plant

Council because of problems he perceived in the opera-

tion of the Employee Involvement Steering Committee,

which had been established to focus on issues of quality,

waste reduction, housekeeping, safety, and productivity

but was then being asked by employees to involve itself

with “policy” issues.’ It was Sibilsky, moreover, who

ordered the establishment of the Plant Council to be

halted following the February 22, 1991, election based on

his judgment that there was insufficient support for the

Plant Council. And it was the Respondent that reestab-

lished the Plant Council by directing in late April or early

May 1991 that a second election for Plant Council be con-

8 We have carefully considered the Respondent’s exceptions stat-

ing that the Plant Council created its own bylaws, and that the

Employee involvement Steering Committee had some involvement in

the election process for Plant Council representatives, These facts

are insufficient to outweigh the record evidence that the functions,

structure, and composition of the Plant Council was determined by

the Respondent.

® As the judge noted, the General Counsel has not alleged that

the Respondent’s establishment of the Employees involvement

Steering Committee was unlawful.

26a

ducted. Based on these facts, there can be no dispute that

the Respondent has the authority to establish and disband

the Plant Council entirely at its own discretion.

We accordingly agree with the judge’s conclusion that

the impetus behind the formation of the Plant Council

emanated from the Respondent, and that the Plant Coun-

cil has no effective existence independent of the Respond-

ent’s active involvement and approval. A finding of un-

lawful domination is accordingly warranted. Electroma-

tion, supra, 309 NLRB at 996.

We recognize that this case arises in the Sixth Circuit.

As the Respondent notes, the Sixth Circuit has, on occa-

sion, declined to enforce decisions of the Board finding

that employer-sponsored committees violated Section 8

(a)(2). See NLRB v. Scott & Fetzer Co., supra; Air-

stream, Inc. v. NLRB, 877 F.2d 1291 (6th Cir. 1989).

We believe, however, that the Sixth Circuit precedent upon

which the Respondent relies is distinguishable.

In Airstream, the Sixth Circuit found that the employ-

er’s “President’s Advisory Council” (PAC) was not a stat-

utory labor organization because it did not deal with

wages or rates of pay, did not involve itself in or purport

to accomplish the settling of grievances and did not at-

tempt to resolve labor disputes with individual employees.”

In contrast, the Plant Council here was specifically as-

signed by the Respondent to develop policies concerning

wages and benefits, work rules and hours of operation,

and to create a grievance procedure involving Plant Coun-

cil member representation. There can thus be no dispute

that the Plant Council was charged with responsibility for

those topics listed in Section 2(5) of the Act.

Further, in Airstream, the Sixth Circuit found that the

PAC meetings were no different from prior “rap sessions”

10 877 F.2d at 1285.

27a

at which employees were invited to ask questions and

make suggestions.” ** The Plant Council, in contrast, was

not a forum for suggestions but was a formalized proce-

dure designed to make specific recommendations to man-

agement about changes in wages, hours, and other condi-

tions of work, and the Respondent pledged itself to con-

sider whether to accept or reject each recommendation.

The Plant Council was thus not merely a means of com-

munication between management and employees in which

ad hoc proposals were made and in which management

might glean some ideas and even adopt them, as the Sixth

Circuit viewed the employee committee in Airstream.

Rather, the Plant Council was directed to engage in a

pattern and practice of making recommendations for man-

agement consideration.”

Nor is this a case in which the employee committee dis-

cussed with management issues of production problems

and plant efficiency. See NLRB v. Associated Machines,

219 F.2d 433, 435 (6th Cir. 1955). The record evidence

clearly establishes that the Plant Council was not designed

to address such issues. Rather, the Respondent had cre-

ated its Employee Involvement Steering Committee, which

is not alleged to be unlawful, to address issues of produc-

tivity, quality, and safety. Sibilsky testified, however, that

employees nevertheless were addressing issues of wages,

benefits, and work rules to the latter committee. Sibilsky

decided to create the Plant Council specifically to deal

with issues of wages and other topics listed in Section 2(5)

of the Act.

11 Td,

12 Compare NLRB v. Scott & Fatzer Co., supra, 691 F.2d at 294

(Sixth Circuit held that employee committee that was part of a

company plan to determine employee attitudes regarding working

conditions and other problems for the company’s self-enlightenment,

rather than a method by which to pursue a course of dealings, was

not a “labor organization”; and emphasized the distinction between

communication of ideas and a course of dealings).

28a

Conclusion

Accordingly, for all these reasons, we agree with the

judge that the Plant Council was a labor organization

dominated by the Respondent in violation of Section

8(a)(2) and (1) of the Act.”

REMEDY

The Unfair Labor Practice Proceeding

We agree with the judge’s recommended remedy requir-

ing the Respondent to disestablish the Plant Council. Dis-

establishment is the usual Board remedy whenever unlaw-

ful domination of a labor organization is found. E.g.,

Keeler Brass Co., 317 NLRB 1110, 1114 (1995); Elec-

tromation, supra, 309 NLRB at 995 fn. 24 and 998.

In two decisions issued more than 50 years ago, the

Supreme Court upheld the Board’s authority to order dis-

establishment of “a company union so organized that it

is incapable of functioning as a bargaining representative

of employees.” NLRB v. Pennsylvania Greyhound Lines,

303 U.S. 261, 270 (1938). See also NLRB v. Newport

News Shipbuilding Co., 308 U.S. 241 (1939). In Penn-

sylvania Greyhound, the Court emphasized that the Act

“secure[s] to employees the benefits of self-organization

and collective bargaining through representatives of the

employees’ own choosing.” Pennsylvania Greyhound,

18 Chairman Gould agrees with his colleagues that the Plant

Council was a labor organization dominated by the Respondent in

violation of Sec. 8(a)(2) and (1) of the Act. He notes that the

control exercised by the Respondent over the Plant Council is such

that the freedom of choice and independence of action open to em-

ployees is not strictly confined within parameters of the Respond-

ent’s making for the Plant Council to be a genuine expression of

democracy in the workplace. Keeler Brass Co., 317 NLRB 1110

(1995) (Chairman Gould’s concurrence). Further, the Plant Coun-

cil was created for the purpose of engaging in a pattern or practice

of dealing with the Respondent on employment conditions.

29a

supra at 267. Likewise in Newport News, the Court rea-

soned that once a labor organization has been unlawfully

dominated by an employer, “disestablishment . . . may be

the only effective way of wiping the slate clean and afford-

ing the employees an opportunity to start afresh in organ-

izing for the adjustment of their relations with the em-

ployer.” Newport News, supra at 250.

The Representation Proceeding

We further agree with the judge’s recommended remedy

setting aside the results of the representation election held

on April 18, 1991, and directing that a second election be

conducted.

It is undisputed that the Respondent emphasized the

role of the Plant Council throughout the Union’s organiza-

tional campaign in urging its employees to vote against

the Union. Indeed, the Respondent guaranteed its em-

ployees during the organizational campaign that if the

Union lost the election no changes in the policies set forth

in its employee handbook would be made except through

the Plant Council process.‘ The Respondent’s campaign

14 The Respondent declared in its campaign literature:

If the Union WINS the election:

—All wages are subject to change.

—All benefits are subject to change.

—Policies, rules, etc. are subject to change.

There is NO guarantee that those items will be as good as

they are now.

If the Union LOSES the election :

—As we stated prior to this Union organizing drive,

We, the owners of Webvor:

GUARANTEE:

—The employee handbook will not be changed unless it is

changed through the Employee Involvement Plans Council

process. (Emphasis added.)

30a

literature additionally pronounced that Webcor had in fact

“implemented [the] Plant Council.” The Respondent fur-

ther portrayed the election as a stark choice between re-

taining the Plant Council and employee involvement proc-

esses or selecting the Union as its representative.” Sibil-

sky further underscored the prominent role of the Plant

Council during meetings the Respondent conducted with

its employees during the organizational campaign in which

he explained to employees “what was in place, where it

was going, what it could do for them, what it couldn’t do

for them.” The record evidence accordingly demonstrates

that the Respondent emphasized the Plant Council process

in the context of urging employees to vote against the

Union throughout the critical period between the filing of

the representation petition on February 19, 1991 and the

election itself on April 18, 1991.

The Respondent nevertheless asserts that the Plant

Council was not in fact implemented during the critical

period and did not effect any changes in working condi-

tions during the critical period. The Respondent accord-

ingly contends that the Plant Council had only a de mini-

mis impact on the representation election and does not

warrant the conduct of a second election.

The Respondent’s argument disregards the record evi-

dence. As noted above, the Respondent specifically ad-

vised employees during the critical period that the Plant

Council was in place. The Respondent does not dispute

or even address the conspicuous role it ascribed to the

15 The Respondent’s campaign literature stated:

The choice you will make on [election] day is a simple one.

EITHER...

You will choose to hire Teamsters 8332 as the sole and exclu-

sive agent.

ORS.

- You will choose to continue a relationship with Webcor based

on Employee Involvement.

* OP. SREP EE OAL RIM

3la

Plant Council during the critical period in its campaign

against the Union. And the Respondent concedes, as it

must, that it conducted an election for the Plant Council

during the critical period on February 22, 1991.

The Respondent further guaranteed its employees dur-

ing the critical period that the policies in the employee

handbook would not be changed except through the Plant

Council process if the Union lost the election. The Re-

spondent’s campaign literature concomitantly reminded

employees that the handbook included policies of signifi-

cance such as double time for Sunday work and utilizing

holiday and vacation hours to compute overtime. The

Employer’s announcement of the Plant Council as a

guarantor against change in policies of great import to

employees contradicts the Respondent’s contention that its

actions, even if considered to be misconduct, were de mini-

mis with respect to affecting the results of the election.

The record evidence compels the conclusion that the role

of the Plant Council was stressed by the Respondent

throughout the critical period as a reason to vote against

the Union. This case thus falls squarely within the Board’s

general policy of setting aside an election when an unfair

labor practice occurs during the critical period. See, e.g.,

Leather Center, 312 NLRB 521, 530 (1993).

ORDER

The National Labor Relations Board adopts the recom-

mended Order of the administrative law judge and orders

that the Respondent, Webcor Packaging, Inc., Burton,

Michigan, its officers, agents, successors, and assigns, shall

take the action set forth in the Order.

DIRECTION OF SECOND ELECTION

A second election by secret ballot shall be held among

the employees of the unit found appropriate, whenever. the

Regional Director deems appropriate. The Regional Di-

eee Ry os

32a

rector shall direct and supervise the election, subject to the

Board’s Rules and Regulations. Eligible to vote are those

employed during the payroll period ending 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 temporarily 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 strike began and who have

not been 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 Local 332, International Brotherhood of Team-

sters, AFL-CIO.

To ensure that all eligible voters have the opportunity

to be informed of the issues in the exercise of their statu-

tory right to vote, all parties to the election shall have

access to a list of voters and their addresses that may be

used to communicate with them. Excelsior Underwear,

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

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

eligibility list containing the full names and addresses of

all eligible voters must be filed by the Employer with the

Regional Director within 7 days from the date of the No-

tice of Second Election. North Macon Health Care

Facility, 315 NLRB 359 (1994). 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 circum-

stances. Failure to comply with this requirement shall be

TSANG TERT ET?

LP ARS AE Ae RT

SOV EMME OE mm we

EAE RCE LES RAS TORE BE ARI

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;

33a

grounds for setting aside the election if proper objections

are filed.

Dated, Washington, D.C. December 18, 1995

WILLIAM B. GouLD IV, Chairman

MARGARET A. BROWNING, Member

JOHN C. TRUESDALE, Member

(SEAL) NATIONAL LABOR RELATIONS BOARD

34a

APPENDIX C

JD—221—93

Flint, MI

UNITED STATES OF AMERICA

BEFORE THE

NATIONAL LABOR RELATIONS BOARD

DIVISION OF JUDGES

7—CA—31809

7—CA—31896

7—RC—19513

WEBCOR PACKAGING, INC.

and

LocaL 332, INTERNATIONAL BROTHERHOOD OF TEAM-

STERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS

OF AMERICA, AFL-CIO

DECISION

STEPHEN J. GROSS, Administrative Law Judge. The

General Counsel alleges that a Webcor supervisor threat-

ened one employee because of the union activities of Web-

cor’s workforce, coercively interrogated another employee,

and gave the impression that Webcor was spying on the

employees’ union activities, all in violation of Section

8(a)(1) of the National Labor Relations Act (the Act).

But the General Counsel’s major allegation is that Webcor

dominated and interfered with the formation and adminis-

tration of a labor organization, and contributed financial

a Ra CPP Te SIN eH Dears Mpa te

IGT PPLE HA APES Dict: FA

35a

and other support to it, thereby violating Section 8(a) (2)

of the Act.*

I turn first to the alleged violation of Section 8(a)(2).

Webcor’s “Plant Council”

Webcor manufactures corrugated boxes. It operates

only one facility, a plant in Burton, Michigan. Webcor’s

employees are not represented by a union.

Robert Sibilsky arrived at Webcor, as vice-president for

operations, in September 1990. (Sibilsky is an owner of

Webcor, apparently acquiring his ownership interest about

the same time he became vice-president of the company.)

Sibilsky had been the manager of another corrugated box

manufacturing company, Consolidated Packaging, prior

to coming to Webcor. According to Sibilsky’s credible

testimony, what Sibilsky calls “employee involvement” at

Consolidated Packaging led to exceedingly high quality

in that plant’s output—levels of quality that were, in fact,

higher than at Webcor. Sibilsky accordingly was an

apostle of employee involvement when he began his man-

agement of Webcor.

1The Charging Party, Local 332, International Brotherhood of

Teamsters, Chauffeurs, Warehousemen and Helpers of America,

AFL-CIO (hereafter Local 332 or the Union), filed its charge in

Case 7—CA—31809 on April 25, 1991, and its charge in Case 7—

CA—31896 on May 17, 1991. On June 7, 1991, the Regional Direc-

tor for Region 7 issued an Order Consolidating Cases and a Notice

of Consolidated Hearing. The Regional Director simultaneously

ordered that the Union’s Objections to the election held in Case

No. 7—RC—19513, which to a considerable extent parallel the

alleged unfair labor practices, be consolidated for hearing with the

unfair labor practice allegations. I held the hearing herein in

Flint, Michigan, on October 29 and 30, 1992. Thereafter the Gen-

eral Counsel and Webcor filed briefs. Webcor admits that it is an

employer engaged in commerce within the meaning of Section 2(2)

and (6) of the Act and further admits that Local 332 is a labor

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

36a

By “employee involvement” Sibilsky means a way of

operating a plant: (1) that calls on employees, as well

as management, to think up better ways of operating,

primarily in respect to matters that affect productivity,

quality, safety, plant cleanliness, and reduction in waste;

(2) in which management proceeds in a manner that evi-

dences a respect for what employees have to say about

how things should be done in the plant; and (3) under

which small numbers of employees and supervisors meet

as committees in order to thrash out the best ways to im-

prove operations and deal with problems as they crop up.

Sibilsky credibly testified that, as he sees things, unless

managers of manufacturing operations do utilize employee

involvement programs, competitive levels of quality and

low cost cannot be achieved. In Sibilsky’s words—

What surfaced in the mid-80’s was something that we

really knew a long time ago . . . but we didn’t utilize

it—the way we were going to achieve . . . quality and

low cost was by involving all the people in our opera-

tion in thinking. Not checking their brains at the

door, but thinking about and participating in how we

are going to get better at what we do. Because if

we don’t get better . . . we’re not going to get any

business. We will not be there. It is that simple.

Sibilsky found no employee involvement in the problem-

solving process when he arrived at Webcor; what was in

place, as Sibilsky testified, was a “top-down type of ar-

rangement . . . . The solutions were always top down.

[The employees] weren’t asked for their input on solutions

to . . . quality problems, productivity problems, or the

rest of it.” (Sibilsky defined “top-down management” this

way: where the managers of a plant, rather than asking

the employees how a problem can be solved, “take it upon

themselves to analyze the problem, and determine what

the issues are, and then force the solution down the pipe.”)

RS Gee A

eon te UGE Gare + ink

37a

Sibilsky, as vice-president of operations and an owner

of Webcor, is senior to all other members of Webcor’s

management. The next most senior official at Webcor is

director of manufacturing Olin Rikard. In Rikard’s words,

Sibilsky quickly “made it very clear that we [Webcor] were

going to have employee involvement.”

On November 1, 1990, Sibilsky became specific about

what he wanted in the way of an employee involvement

structure: he ordered Rikard to establish an “Employee

Involvement Steering Committee.” That Committee would

have five members—three employees and two members of

management. (The employee members would be chosen

by lot from among those who volunteered to serve on the

Committee.) The Committee was expected to focus on

issues of quality, waste-reduction, housekeeping, safety and

productivity. Those were the areas, thought Sibilsky,

about which the employees could be expected to have

expertise and where, as Sibilsky testified, “the bang for

the buck” is. The Employee Involvement Steering Com-

mittee was not to involve itself in what Sibilsky calls

“policy” issues; that is, matters such as wages, work rules,

hours of employment, and the like.

The Employee Involvement Steering Committee was

established in mid-December 1990, held its first meeting

on January 3, 1991, and held meetings weekly thereafter.

(Hereafter all dates to which this decision refers occurred

in 1991 unless otherwise noted.) Webcor’s employees

promptly began to submit matters for consideration by the

Committee. (The General Counsel does not allege that

Webcor violated the Act in any respect by establishing the

Employee Involvement Steering Committee.) But by mid-

January it became clear that things were not going as

Sibilsky had hoped. The problem was that many of the

matters employees were asking the Employee Involvement

Steering Committee to handle did not directly deal with

productivity or quality or the like. Rather, they concerned

policy issues. For example, suggestions coming into the

38a

Employee Involvement Steering Committee had to do with

changes in the way overtime was distributed among em-

ployees, whether employees should be on or off the clock

during lunch breaks, when employees should receive their

vacation pay, and whether and to what extent the com-

pany should reimburse employees for the cost of tools and

safety boots.

Sibilsky, and a labor consultant from whom Sibilsky

sought advice, had recognized that the Employee Involve-

ment Steering Committee would inevitably receive some

suggestions having to do with policy issues. But Sibilsky

and the labor consultant agreed that the Employee Involve-

ment Steering Committee should not deal with such mat-

ters. A separate entity would be set up to handle them.

Sibilsky’s expectation had been that the establishment of

this other entity would be delayed until the Employee In-

volvement Steering Committee had been in operation for

a while.

But when suggestions dealing with policy issues began

arriving on the doorsteps of the Employee Involvement

Steering Committee, some arrangement had to be made to

deal with them by an entity other than the Employee In-

volvement Steering Committee. The problem was that that

committee “was getting gridlocked on what [it] could and

couldn’t do” (in Sibilsky’s words).

A complicating factor is that it was at this point—

mid-January—that several employees asked Local 332 to

run an organizing effort at Webcor. Until then, there had

been no union activity at Webcor since an unsuccessful

unionization campaign late 1989 by the Allied Industrial

Workers. (Ironically, the employees’ interest in union rep-

resentation appears to have been aroused by changes in

procedures at Webcor that Sibilsky had, without seeking

employee input, forced “down the pipe”—to use Sibilsky’s

phrase. )

The result of all this was that in late January and early

February Local 332 got ready to begin an organizing cam-

—

39a

paign at Webcor; and, simultaneously, Sibilsky, after pon-

dering what to do about providing for employee involve-

ment in policy matters, moved toward the creation of a

“Plant Council” that would deal only with such matters.

On February 11 Sibilsky ordered Rikard to establish

a Plant Council in a memorandum that specified that the

Plant Council would have “five hourly employee” mem-

bers “who will be elected by the hourly work force” and

enumerated the matters with which the Plant Council

would “be involved.”

By February 11 Sibilsky had begun hearing rumors

about union activity in the plant. Thus the first question

to consider is whether Sibilsky decided to establish the

Plant Council, or decided to establish it so soon, because

of the union activities of the employees.

My conclusion is that the employees’ union activities

affected neither the decision to establish a Plant Council

nor the date on which the idea of a Plant Council was

put before the employees. Considerable evidence adduced

by Webcor shows that management’s action regarding a

Plant Council was driven by Sibilsky’s views about the

importance of employee involvement, by advice from a

labor consultant concerning employee involvement (which

advice was not based on information about union activ-

ity), and by the nature of the matters that the employees

were asking the Employee Involvement Steering Commit-

tee to consider.

I note that the General Counsel contends that Local

332 handbilled at the plant on February 7—four days be-

fore Sibilsky’s order to Rikard to establish a Plant Council.

But I find that the evidence fails to show that there was

any handbilling that early. (A business agent of the

Union testified that he distributed handbills on February 7

and then again on February 16. But he had earlier testi-

fied that the Union did not do any handbilling until after

the filing of the election petition, and that occurred on

40a

February 19. Further, no one but the business agent testi-

fied that there was any overt union activity prior to the

filing of the election petition.) In any event, my finding

about the reasons for the establishment of the Plant Coun-

cil would not change even if there had been handbilling on

February 7.

On February 13, two days after Sibilsky ordered Rikard

to establish a Plant Council, management announced to

employees that there would be a meeting on February 15

to discuss the “Webcor Plant Council” and also announced

that the five employee members of the Plant Council would

be chosen by an election among the employees to be held

a week later.

The Employee Involvement Steering Committee had

been asked to design the procedures for choosing the em-

ployee membership on the Plant Council. The Commit-

tee decided that the employee members of the Plant Coun-

cil should be chosen by election from among all the

production and maintenance employees. Sach employee

was to vote for five of the listed names.

The election was held as scheduled, on February 22.

Twenty-eight employees cast ballots. But 18 of the 28

ballots were blank. Of the five employees receiving the

most votes (on the 10 ballots that were not blank) four

refused to serve on the Plant Council. An employee called

as a witness by the General Counsel testified that, as far

as he was concerned, the proposed establishment of a

Plant Council was merely management’s way of respond-

ing to Local 332’s organizing effort. The employees’ re-

sponse to the election for membership on the Plant

Council suggests, or course, that that feeling was wide-

spread.

Sibilsky recognized that the election for Plant Council

membership showed “that there wasn’t any support” for

the Plant Council. He accordingly ordered that everything

concerning a Plant Council temporarily come to a halt.

4la

Nonetheless, in a “Dear Employee” letter distributed on

March 20, management contended that one reason Web-

cor’s employees ought to vote against representation by the

Union was management’s commitment to “employee in-

volvement”; and in listing management’s accomplishments,

the letter referred to “implemented Plant Council.”

The representation election was held on April 18.

Fourteen employees voted in favor of representation by

Local 332; 21 employees voted against representation by

the Union.’

About two weeks later—in late April or early May—

management again conducted an election to choose the

employee members of the Plant Council. As was the case

in the earlier, abortive, election, management provided the

ballots and the polling place, and the election was con-

ducted during working hours, with the employees on the

clock. On this occasion employees were asked to volun-

teer to serve on the Plant Council. The ballots named

only the volunteers. The election was a success in that the

employees cast complete ballots, five employee members

were chosen from among those who volunteered, and those

five employees agreed to serve.

The plant council began meeting in May and has con-

tinued to meet regularly since then.

Here are the details of what the Plant Council is and

how it operates.

The Membership Of The Plant Council; The Decisional

Process

The Plant Council has eight members: five employees

(as already discussed) and three members of management.

2 The bargaining unit: All full-time and regular part-time pro-

duction and maintenance employees and truck drivers employed by

Webcor at its facility at 1220 Center Road, Burton, Michigan; but

a a ie

42a

The management members are the two most senior offi-

cials at the plant (the director of manufacturing and the

plant manager), and a lower ranking Webcor official. If

an employee member of the Plant Council is promoted

into management, that individual leaves the Council and

the employee who received the next highest vote at the

previous election for Plant Council members replaces the

Employees choose only the employee members of the

Plant Council; they do not select the management mem-

bers. It is not altogether clear whether there has been any

decision concerning the term of an employee member on

the Plant Council. But Sibilsky apparently planned that

each employee member of the Plant Council would remain

on the Council for a maximum of about a year.

An employee member of the Plant Council called as a

witness by the General Counsel agreed that each member

has an “equal say . . . in terms of the ability to bring

topics up and discuss topics.’ "The chairmanship of the

Plant Council rotates, so that a different member chairs

each meeting. As a result, sometimes an employee mem-

ber of the Plant Council chairs the meeting, sometimes a

management member does.

In theory the members of the Plant Council can vote

on an issue, with a simple majority determining the out-

come. In practice the members strive to reach a con-

sensus and, as of the hearing, have always succeeded.

(The employee members of the Plant Council appear to

be quite satisfied with the decisional process within the

Plant Council. That holds true for an employee member

of the Plant Council who had actively supported Local

332 during the 1991 election campaign.)

Employees who are not members of the Plant Council

bring matters to the Plant Council’s attention by placing

a written suggestion in a box designated for that purpose.

Management puts matters before the Plant Council by

43a

having one of the management members raise it at a Plant

Council meeting. The Plant Council routinely invites to

Plant Council meetings those employees who have made

suggestions so that the employees can orally present their

proposals.

The Kinds Of Matters The Plant Council Is Authorized

To Deal With

I mentioned earlier that action on a Plant Council was

set in motion by a February 11 memorandum from Sibil-

sky to Rikard. In that memorandum Sibilsky spelled out

the matters that he wanted the Plant Council to concern

itself with:

The Plant Council will be involved with the develop-

ment of plant policies, the employee handbooks, the

creation of a grievance procedure that will involve

Council member representation, and with the process

of hourly compensation and benefits.

The Plant Council will function as a policy develop-

ment body... .

All matters of plant policy, procedure, and compen-

sation will be jointly reviewed prior to implementa-

tion by the Plant Council and Management.

By way of example, Sibilsky testified, the Plant Council

could consider work rules, wages and benefits, what the

plant’s hours should be, and what kinds of discipline

should be meted out for specified infractions.

The Effect Of A Plant Council Decision

As touched on earlier, four individuals own Webcor

and are considered Webcor’s senior management. Deci-

sions of the Plant Council ordinarily are not implemented

unless approved by the owners. As Sibilsky put it, no

Plant Council decision of a “substantive nature” is put

into effect without such approval. The only decisions of

44a

the Plant Council that are implemented without the own-

ers’ approval, testified Sibilsky, are decisions on “lesser

issues”—decisions “that are logical to make at the level

of the plant.”

The Activities Of The Plant Council

Matters that have come before the Plant Council

include:

Tools. The issue the Plant Council dealt with was when

Webcor should purchase tools for an employee (for use

in the employee’s work in the plant) and when should the

employee be responsible for the purchase of tools. Rikard

and one of the employee members of the Plant Council

drafted a policy statement on the subject, the Plant Coun-

cil adopted it, and the policy was implemented.

Overtime equalization. Webcor’s employees had been

complaining about favoritism in the way overtime work

was handed out. The members of the Plant Council de-

cided that when there was overtime work to do, manage-

ment would be required to first turn to the employee (in

the relevant job classification) with the lowest number of

overtime hours; the employee with the highest number of

overtime hours would be asked last. Seniority was to be

ignored for that purpose. This overtime equalization pol-

icy has been implemented.

Safety boots. Webcor had been paying for one pair of

safety boots per year for some of its employees. The em-

ployee members of the Plant Council proposed that, due

to the nature of the work involved, some of those employ-

ees needed two pair of safety boots per year and that

Webcor should pay for both pair. The management mem-

bers of the Plant Council agreed, and Webcor now does

pay for two pair of safety boots per year for such em-

ployees.

Attendance policy. In April 1992 management pro-

posed a revision to the plant’s attendance rules. All of the

45a

plant’s employees were asked to consider the revision

and to “respond back to the Plant Council.” Within the

Plant Council, the employee members opposed implemen-

tation of the new attendance rules. The new rules were

not implemented. But the members of the Plant Council

did reach agreement about some changes in attendance

policy, and Webcor did implement those changes.

The implication of the record as a whole is that none

of these actions would have been implemented unless Web-

cor’s owners approved of the Plant Council’s decision.

But the record is not entirely clear in that respect.

Temporary Restrictions On Plant Council Activities

Webcor’s labor counsel advised the company that the

Plant Council should not act on matters directly affecting

employee pay and benefits until the conclusion of this pro-

ceeding. The result of this advice has been that the Plant

Council has considered, but not acted upon, the following

matters: (1) changes in incentives for perfect attendance;

(2) whether each employee ought to get a paid day off

when a grandparent dies; and (3) the timing of the issu-

ance of checks covering paid vacation time.

Sibilsky testified that, as a result of counsel’s advice

concerning the need to await the outcome of this proceed-

ing, matters that might affect expenditures have been con-

sidered by the Plant Council, but they have not come out

in the form of recommendations. That, however, over-

states the restrictions on the Plant Council, given the new

policies governing tools and safety shoes that have been

implemented as a result of Plant Council action.

When Does The Plant Council Meet; Management Support

The Plant Council meets in the plant during working

hours. The members of the Plant Council decided they

would meet twice a month. The plant manager schedules

46a

the meeting dates, subject to change at the request of any

member of the Council.

Management supplies any needed materials and equip-

ment. All members of the Plant Council are paid for the

time they spend on Plant Council matters.

Does Webcor’s Plant Council Violate Section 8(a)(2)

The question for consideration in this proceeding is not

whether Webcor’s Plant Council benefits Webcor’s em-

ployees or harms them; or whether the Plant Council, and

entities like it at other companies, would be good for

America or bad. Rather, this case is about whether, in

the words of Sections 2(5) and 8(a)(2) and in light of

Electromation, Inc., 309 NLRB No. 163 (Dec. 16, 1992),

and its progeny, the Plant Council is a “labor organiza-

tion,” and whether, if it is, Webcor “dominate[{d] or inter-

fere[d] with the formation or administration” of the Plant

Council “or contribute[d] financial or other support to it.”

Is the Plant Council a “labor organization.” Section

2(5) defines “labor organization” as follows:

The term “labor organization” means any organ-

ization of any kind, or any agency or employee rep-

resentation committee or plan, in which employees

participate and which exists for the purpose, in whole

or in part, of dealing with employers concerning

grievances, labor disputes, wages, rates of pay, hours

of employment, or conditions of work.”

It is clear, of course, that Webcor’s Plant Council is

an “organization” within the meaning of Section 2(5),

and is one in which “employees participate.” See gener-

ally, Electromation, slip op. at 5. It is also clear that the

Plant Council’s purpose is to consider, and to take posi-

tions on, “grievances, . . . wages, rates of pay, hours of

employment, or conditions of work.” Further, it is in-

escapable that the Plant Council “deals with” an employer

47a

concerning such matters. That is because, in respect to

most matters the Plant Council follows a “pattern or prac-

tice” in which it, “over time, makes proposals to manage-

ment” (with “management” in this case being Webcor’s

owners) and “management responds to these proposals by

acceptance or rejection by word or deed.” E./. Du Pont &

Co., 311 NLRB No. 88, slip op. at 2 (May 28, 1993).*

What remains to determine is whether the employee

members of the Plant Council “acted in a representational

capacity within the meaning of Section 2(5).” Electroma-

tion, slip op. at 7;* see General Foods Corp., 231 NLRB

1232, 1234 (1977).

Unlike Electromation (at fn. 7), the employee mem-

bers of Webcor’s Plant Council were not instructed to “to

go amongst the other employees and find out what kind

of ideas they had . . . .”*° (Employees generally were in-

vited to suggest matters for consideration by the Plant

Council; however, I do not consider that to mean that the

employee members of the Council acted in a representa-

8 As discussed earlier, in respect to a limited number of “lesser”

matters the Plant Council’s decisions result directly in changes in

conditions of work. As to these matters it is unclear whether there

is any “dealing” with employers. The criterion would appear to be

whether the management members of the Council have the power

to reject proposals put forward by the employee members. Du Pont,

slip op. at 3. On theh one hand, it is the Plant Council’s practice to

operate by consensus—which suggests that the management mem-

bers do have such veto power. Id. On the other hand, the Plant

Council’s rules provide for voting, in which case a simple majority

determines the outcome. Since the management members are out-

numbered by the employee members, in the case of a vote manage-

ment could not reject a proposal supported by the employee members.

4 But see id. at fn. 20.

5 See also Ryder Distribution Resources, 311 NLRB No. 81, slip

op. at 5 (May 28, 1993), in which the employee-members of the

committee at issue were directed to poll the other employees con-

cerning the various proposals discussed in committee meetings.

48a

tive capacity.)® Rather, I got the impression that the em-

ployee members of the Plant Council voiced their own

thoughts about how to deal with whatever issue was on the

table, without concerning themselves about whether those

thoughts necessarily mirrored the points of view of the

plant’s employees generally. And the testimony of em-

ployee Plant Council member Mathew Newcomb indicates

that representation was not what the members of the Plant

Council—either employee members or management mem-

bers—had in mind: According to Newcomb, “we [the

Plant Council members] are hoping to settle the problems

and make the hourly employees and management see the

same thing at the same level.”

But for all that, the employee members of the Plant

Council surely “represent” Webcor’s employees generally.

The point is that the employee members of the Plant

Council are selected by election in which the voters are

the plant’s employees. Virtually by definition, the em-

ployee members of the Plant Council are thereby the rep-

resentatives of the employees. That is, given their election

to the Plant Council by the employees, the employee mem-

bers of the Plant Council are “representatives” of the em-

ployees in that they “stand for . . . a class” (in the words

of Webster's Third International Dictionary)—the class

being Webcor’s production and maintenance employees.’

I conclude, therefore, that Webcor’s Plant Council is a

labor organization within the meaning of Section 2(5) of

the Act.

Domination and inte, ference by Webcor. All this brings

us to the question of whether Webcor “dominate[d] or

*For other considerations regarding employee suggestion box

procedures, see Du Pont at fn. 11 and accompanying text.

™Compare, for example, the “Communications Committee” in

Sears, Roebuck & Co., 274 NLRB 230, 244 (1985), in which “the

employees on the committee were not selected by their fellow em-

ployees” but instead participated ‘‘on a rotion basis.”

49a

interfere[d] with the formation or administration” of the

Plant Council and whether Webcor “contribute[d] finan-

cial or other support to it.

Webcor did all of that. The Plant Council was “the

creation of management,” its “structure and function”

were “determined by management,” and its “continued

existence depends on the fiat of management.” Electro-

mation, slip op. at 6. Additionally the Plant Council’s

meetings are conducted on Webcor’s premises,° Webcor

pays the employees for the time they spend on Plant Coun-

cil matters, and Webcor contributes whatever additional

slight financial support the Plant Council needs.

Webcor’s motivation in establishing the Plant Council.

The Plant Council was created because of Sibilsky’s be-

lief that Webcor would benefit by involving employees in

the decisional processes. Concomitantly, Webcor’s Plant

Council was not created because of any antiunion animus

on the part of Webcor’s management. But “Sec. 8(a)(2)

does not require a finding of antiunion animus or a specific

motive to interfere with Sec. 7 rights.” Electromation at

fn. 24.

Webcor points out, on brief, that the Webcor “em-

ployees had expressed an interest in the formation of a

Plant Council in 1989”—during the Allied Industrial

Workers’ organizational campaign. But that is beside the

point if only because such expression of interest did not

play a role in Sibilsky’s decision to establish the Plant

Council.

As for the indications in the record that Webcor’s em-

ployees are pleased to have a Plant Council, that too is

irrelevant to the question of Whether Webcor violated

Section 8(a)(2). Electromation at fn. 24.

8 See, e.g., Peninsula General Hospital Medical Center, 312 NLRB

No. 97, JD slip op. at 12 (Sept. 30, 1993) .~

9 Id.

50a

Webcor's Plant Council—Conclusion

Based on the foregoing findings and conclusions, I fur-

ther conclude that Webcor violated Section 8(a)(2) of

the Act.

The Alleged Violations of Section 8(a)(1)

Employee Mathew Newcomb testified that, soon after

the Union had filed its election petition, plant manager

Rikard told Newcomb that he (Rikard) had heard that

Newcomb was one of the leaders of the unionization

effort and asked Newcomb why he supported the Union.

At the time Newcomb had not made public his position

regarding the Union. The General Counsel claims that

Webcor, by coercively interrogating an employee and giv-

ing an impression of surveillance of the employees’ union

activities, thereby violated Section 8(a)(1). Rikard, how-

ever, denied questioning Newcomb about Newcomb’s role

in or support for the Union, and Rikard’s testimony was

equally as credible as Newcomb’s, The General Counsel,

that is to say, failed to carry his burden of proof, I accord-

ingly shall recommend that this allegation be dismissed,

Maintenance employee Ricky Middleton testified that,

on the day preceding the representation election, Rikard

said to Middleton, “I don’t know what we're going to do

with you if the Union is voted in.” There had been wide-

spread rumors in the plant that Webcor was going to re-

duce the number of employees in its maintenance depart-

ment. If Rikard did utter such a statement, then, it con-

stituted a threat that unionization might cost Middleton

his job. But Rikard denied saying anything to Middleton

about the Teamsters and denied threatening Middleton

with job loss. Again, Rikard’s testimony was equally as

credible as Middleton’s, and I shall therefore recommend

that the allegation be dismissed.

Sla

Remedy

As requested by the General Counsel, the following

recommended Order requires Webcor to disestablish the

Plant Council. The General Counsel does not ask that I

order Webcor to undo actions taken as a result of Plant

Council recommendations. (As indicated earlier, Plant

Council recommendations implemented by Webcor include,

for example, rules covering payment by Webcor, in certain

circumstances, of the costs of safety boots and tools.) And

since it seems to me that more would be lost than gained

by ordering such an undoing, the recommended Order

imposes no such requirement.

There remains the question of whether the April 18,

1991, representation election should be set aside.

In that regard, one of the Union’s objections states that:

Since on or about February 19, 1991, the Em-

ployer has been trying to bargain with the employees

to avoid having to go to an election with Teamsters

Local 332.

While I have found that not to be the case, the objection

does not put into issue the question of whether Webcor's

actions regarding the Plant Council warrant setting aside

the representation election. And since “the Board's gen-

eral policy is to set aside an election whenever an unfair

labor practice occurs during the critical period” (Video

Tape Co., 288 NLRB 636, fn. 2 (1989)), the only re-

maining question is whether any Webcor actions between

February 19 (the day on which the petition was filed)

and April 18 regarding the Plant Council violated the Act.

That question arises because the Plant Council did not

begin acting until May 1991 and its employee-members

at that time had been selected by a vote that occurred

after the representation election.

I have found that on February 22 (i.e., subsequent to

the filing of the election petition), an election was held in

52a

the Webcor plant to select the employee members of the

Plant Council. It is true that, because of employee resist-

ance, Webcor set aside the results of that election. But

the act of holding the February 22 election would itself

appear to constitute interference with the formation of a

labor organization and thus be a violation of Section

8(a)(2). Moreover Webcor’s management contended

during the Union’s campaign—as an argument against

unionization—that the Plant Council had been “imple-

mented”; that is, that the Plant Council existed. (Pre-

sumably Webcor’s theory at the time was that the Plant

Council, while for the moment inactive, would begin

operating as soon as its membership was selected.)

The recommended Order accordingly sets aside the rep-

resentation election held on April 18, 1991, and remands

Case 7—RC—19513 to the Regional Director for Region

7 for the purpose of conducting a new election.

ORDER ”

The Respondent, Webcor Packaging, Inc.,, its officers,

agents, successors and assigns, shall

1, Cease and desist from

(a) dominating, assisting, or otherwise supporting the

Plant Council.

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

restraining or coercing employees in the exercise of the

rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to

effectuate the policies of the Act.

10Tf no exceptions are filed as provided by Section 102.46 of the

Board’s Rules and Regulations, the findings, conclusions, and recom-

mended Order shall, as provided in Section 102.48 of the Rules, be

adopted by the Board and all objections to them shall be deemed

waived for all purposes.

53a

(a) Immediately disestablish the Plant Council,

(b) Post at its facility in Burton, Michigan, copies of

the attached notice marked “Appendix.” Copies of the

notice, on forms provided by the Regional Director for

Region 7, after being signed by the Respondent's repre-

sentative, shall be posted by the Respondent immediately

upon receipt and maintained for 60 consecutive days in

conspicuous places, including all places where notices to

employees are customarily posted. Reasonable steps shall

be taken by the Respondent to ensure that the notices are

not altered, defaced, or covered by any other material.”

days from the date of this Order what steps the Respond-

ent has taken to comply.

IT IS FURTHER ORDERED that the complaint is

dismissed insofar as it alleges violations of the Act not

specifically found.

IT IS FURTHER ORDERED that the election held in

Case 7——RC—19513 on April 18, 1993, be set aside and

the case remanded to the Regional Director for Region 7

for the purpose of conducting a new election,

Dated, Washington, D.C, October 28, 1993

/s/ Stephen J. Gross

STEPHEN J. Gross

Administrative Law Judge

11 [f this Order is enforced by a judgment of the United States

Court of Appeals, the words in the notice reading “POSTED BY

ORDER OF THE NATIONAL LABOR RELATIONS BOARD”

shall read “POSTED PURSUANT TO A JUDGMENT OF THE

UNITED STATES COURT OF APPEALS ENFORCING AN

ORDER OF THE NATIONAL LABOR RELATIONS BOARD.”

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.