United Oil Manufacturing Co., Inc. v. National Labor Relations Board , 672 F.2d 1208 ( 1982 )

OPINION OF THE COURT

SLOVITER, Circuit Judge.

This case is before us on the petition of United Oil Manufacturing Co. (United Oil) for review of an order of the National Labor Relations Board (Board) directing it to cease and desist from the commission of certain unfair labor practices, restore past pay and benefits to certain employees, and recognize and bargain with the Union, and on the cross-application of the Board for enforcement of its order. United Oil challenges that portion of the order establishing a bargaining order remedy. For the reasons discussed below, we will deny the petition for review and grant the Board’s cross-application for enforcement of its order.

I.

United Oil operates a vehicle service complex on Interstate 80 in Kylertown, Pennsylvania, known as “Stop 21”, consisting of a gasoline and diesel fuel station, a store, and a motel. In the same complex, but operated by independent lessees of United Oil’s parent corporation, are a restaurant, barber shop, and truck repair facility.

In late October 1979, one of United Oil’s employees, Julio Leid, contacted Amalgamated Food Employees Union Local 590, United Food and Commercial Workers International Union, AFL-CIO (Union), and arranged for an organizational meeting to be held at her home on the afternoon of October 28. Five employees attended the meeting with a union organizer and signed union authorization cards. By some time in early November, the Union had obtained signed authorization cards from 17 of the 29 employees in the unit. On November 3, November 5, and again on November 11, the Union sought recognition by the company. In response to the last of these requests, General Manager Cecil Felix declined to confer recognition and responded that he wanted a fair election. In the interval between the arrangements for the organizational meeting and the request for recognition, the company.had engaged in conduct which formed the basis for some of the underlying unfair labor practice charges, including unlawful interrogation and the grant of wage increases and promotions for the purpose of discouraging union activity. The union representative told Felix that the company’s conduct had made a fair election impossible, and convened a meeting of employees at which a decision to strike was adopted on account of the company’s refusal to bargain and its alleged unfair labor practices in connection with the organizational campaign. The strike, which appears to have been completely effective, lasted from November 12, 1979 until March 10, 1980, when the employees were reinstated following their unconditional offer to return to work.

The Administrative Law Judge found that United Oil had committed three separate unfair labor practices. First, he found that the company, through General Manager Felix, had interrogated employee Eugene Zahuranec concerning the initial organizational meeting at Julio Leid’s home on October 28 and had improperly instructed him to report on what transpired at the meeting. Before the meeting, Zahuranec had requested Felix for time off to attend the meeting. Felix asked who else would be in attendance and “opined that the Union was no good.” Felix “told Zahuranec to go to the meeting and to call him at the conclusion thereof to report what had happened.” The next morning Felix phoned Zahuranec and asked who had been at the meeting, what had transpired, and the identity of the instigator of the union activity. Zahuranec identified the participants and indicated that he believed that Julio Leid had initially contacted the Union. Based on Zahuranec’s testimony, which the ALJ credited, the ALJ found that United Oil violated section 8(a)(1) of the National Labor Relations Act by “Felix questioning [Zahuranec] concerning union activity of co-workers, by instructing Zahuranec to report on the union activity of co-workers, and by his broad questioning of Zahuranec as to what transpired at the union meeting of October 28.”

The second unfair labor practice found by the ALJ was based on evidence that following its knowledge of the Union’s organizational effort, the company granted promotions and small wage increases to five employees, including Julio Leid and one other employee who had attended the October 28 meeting. Leid was first contacted by Felix about the promotion on October 29; the official notification of all five promotions and wage increases came on November 3 in the form of an announcement signed by Felix which was included with employee paychecks. The ALJ noted that United Oil’s “evidence includes no explanation for this sudden upgrading of the . . . employees and the grant of an increase, shortly after acquisition of knowledge that a union campaign was in progress.” The ALJ found that United Oil violated section 8(a)(1) “by promising wage increases and promotions, and by granting same, for the purposes of discouraging union activity.”

The third unfair labor practice related to the company’s post-strike conduct. The ALJ credited the testimony of three reinstated strikers, including Leid and Zahuranec, that they were not accorded the same opportunity to earn overtime pay which they had enjoyed prior to the strike. The ALJ found that the failure to restore to the strikers the overtime benefits previously enjoyed was not justified by supervening economic considerations and, accordingly, violated sections 8(a)(3) and (1) of the Act.

Two additional unfair labor practice charges, involving alleged surveillance by Felix of the October 28 meeting and the discharge of an employee, were dismissed by the ALJ.

The ALJ ordered United Oil to cease and desist from the commission of the unfair labor practices found to have occurred, restore the overtime benefits enjoyed by the three employees prior to the strike, and post appropriate notices. The AU characterized the granting of the promotions and wage increases as “serious unfair labor practices.” He acknowledged that whether a bargaining order was warranted was not “free from doubt,” but rejected the request for a bargaining order on the ground that conventional remedies were adequate in this case to facilitate a fair election. Among the considerations referred to by the AU were that, with the exception of the denial of overtime benefits to the reinstated strikers, the company’s unlawful conduct occurred prior to the first demand for recognition by the Union on November 3, and that the unlawful interrogation of Zahuranec occurred only after Zahuranec had initially volunteered information about the union activity of his fellow employees.

The Board adopted the ALJ’s findings as to the commission of the unfair labor practices,¹ but modified the ALJ’s order insofar as it concerned the necessity of a bargaining order. The Board found that the company had violated section 8(a)(5) of the Act and that the unfair labor practices committed were sufficiently serious to warrant a bargaining order.

United Oil challenges only that portion of the Board’s decision which found a section 8(a)(5) violation and issued a bargaining order remedy.

II.

As in all cases where a bargaining order is at issue, we start with the Supreme Court’s decision in NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969). In our recent en banc opinion in Hedstrom Co. v. NLRB, 629 F.2d 305 (3d Cir. 1980), cert. denied, 450 U.S. 996, 101 S.Ct. 1699, 68 L.Ed.2d 196 (1981), we summarized the teaching of Gissel as follows:

In Gissel, the Court declared that a bargaining order may appropriately be imposed in place of a new election not only in cases involving outrageous conduct [so-called Gissel I cases], but also in other than extraordinary cases that are “marked by less pervasive practices which nonetheless still have the tendency to undermine majority strength and impede the election processes” [so-called Gissel II cases]. The Board’s authority to issue a bargaining order on a lesser showing of employer misconduct is appropriate when there is also a showing that at one point the union had the support of a majority of employees. In such a case, a bargaining order serves both to effectuate ascertained employee free choice and to deter employer misconduct.

Id. at 308 (citations omitted).

Critics of bargaining orders stress the truism that free elections are the preferred method of selecting bargaining representatives, but the Supreme Court has approved the power of the Board to issue bargaining orders, in appropriate cases and we are obliged to defer to that judgment. In some situations, Board-ordered bargaining may be the only way in which employee choice can be effectuated. Although it may appear to us that the Board is sometimes too readily inclined to impose a bargaining order, which undesirably “insulates a union from the hazards of an election, and arguably tilts the scale too far in the union’s favor,” NLRB v. K & K Gourmet Meats, Inc., 640 F.2d 460, 473 (3d Cir. 1981) (Gibbons, J., dissenting), the propriety of the choice of a bargaining order in a given case has been left to the Board. As the Court stated in Gissel:

It is for the Board and not the courts ... to make that determination, based on its expert estimate as to the effects on the election process of unfair labor practices of varying intensity. In fashioning its remedies under the broad provisions of § 10(c) of the Act . .. the Board draws on a fund of knowledge and expertise all its own, and its choice of remedy must therefore be given special respect by reviewing courts. “[I]t is usually better to minimize the opportunity for reviewing courts to substitute their discretion for that of the agency.”

395 U.S. at 612 n.32, 89 S.Ct. at 1939 n.32 (citations omitted). With the limited scope of our review thus in mind, we turn to an examination of the Board’s choice of remedy in this case.

It does not seem to be disputed that this is a Gissel II-type case, or that the threshold requirement of a showing of union majority status has been satisfied. Nor does United Oil contest that it committed the 8(a)(1) and 8(a)(3) violations found by the Board. The crucial question before us is therefore whether the unfair labor practices which concededly occurred in this case were sufficient, in their extent and effect, to support the Board’s choice of a bargaining order remedy.

The Board gave the following statement of the basis for its order:

The commission of such serious unfair labor practices enumerated above, in a unit as small as the unit involved herein, makes a fair election doubtful, if not impossible. By its actions, Respondent clearly demonstrated to. the employees that it alone controlled their economic destiny. After ascertaining the identity of the principal union supporters, Respondent sought to “buy them off” with rewards and promotions. When that failed, Respondent took the reverse tack and punished them by denying overtime hours and pay. The message to the employees was that Respondent had the economic means at its disposal to achieve the result it desired. Such a powerful message cannot be erased or forgotten. Therefore, under these circumstances, the use of traditional remedies will not suffice. Accordingly, we conclude that a bargaining order would best protect employee sentiment already expressed through authorization cards.

United Oil’s primary argument is that its unlawful conduct was minor and that there was no evidence that it tended to undermine the Union’s majority. It emphasizes that the interrogation of Zahuranec and the grant of promotions and wage increases occurred prior to the Union’s attainment of majority status, and that the targets of the unlawful conduct continued to support the Union even after its occurrence. This argument fails to respond to the significant finding that even after the strike, its unlawful post-strike conduct continued to send “a powerful message.” The denial of overtime benefits occurred after both the attainment of union majority status and the manifestation of union support through the strike. The post-strike violations are important not only on their own account but also because of the reinforcing effect which they may have had on the pre-strike violations. In NLRB v. Permanent Label Corp., 657 F.2d 512, 519 (3d Cir. 1981) (en banc), we rejected the contention that unfair labor practices which occur before the achieveinent of union majority could not be relied upon by the Board in issuing a bargaining order, since “[fjorbidding the Board from considering such conduct sets an artificial time barrier and ignores the possible cumulative effect of antiunion activity.”

In Electrical Products Division of Midland-Ross Corp. v. NLRB, 617 F.2d 977 (3d Cir.), cert. denied, 449 U.S. 871, 101 S.Ct. 210, 66 L.Ed.2d 91 (1980), we identified the elements which we have often considered in determining whether a given bargaining order is proper. One was whether the objectionable conduct “was communicated to a ‘significant percentage of employees in the bargaining unit.’ ” Id. at 987. In this case, seven out of the 29 employees in the unit were directly affected by the illegal conduct, either as the targets of interrogation, the recipients of promotions and wage increases, or the victims of denied overtime benefits. The wage increases and promotions were communicated in writing by the employer to other employees. A change in the union vote of only three employees would have destroyed the union’s majority.

The second element referred to in Midland-Ross was whether “the unfair labor practices involved senior company officials.” Id. Here, the central figure in the unlawful conduct charged to Union Oil was General Manager Felix, the most senior company official at Stop 21.

The final Midland-Ross factor was whether the unfair labor practices created “a psychological impact on all the employees that is unlikely to dissipate.” Id. The unfair labor practices in this case may not have the same psychological impact as the threats of plant closure involved in Midland-Ross, but we cannot say that the Board overstepped the limits of the discretion vested in it by Gissel when it concluded that United Oil’s conduct conveyed “a powerful message [which] cannot be erased or forgotten.”²

United Oil contends that our review in this case should be governed by the decision in NLRB v. K & K Gourmet Meats, Inc., 640 F.2d 460 (3d Cir. 1981), where we refused to enforce a bargaining order. On the surface, there is some resemblance between the two cases. K & K Gourmet Meats involved the same union and union organizer, similar charges of unlawful interrogation and promises of benefits, and a strike during the organizational campaign. Moreover, in K & K Gourmet Meats, as in this case, the Board overruled the ALJ in imposing a bargaining order.

A careful examination shows significant differences between K & K Gourmet Meats and this case.³ In K & K Gourmet Meats, the ALJ had characterized the violations of the Act as “minimal”, 640 F.2d at 468; in this case the ALJ described the promotions and wage increases as “serious unfair labor practices.” In K & K Gourmet Meats, we determined that only two of the five unfair labor practices upon which the Board had based its bargaining order were supported by the record; in this case the violations are conceded. The company relies on the statement in K & K Gourmet Meats where the court pointed to the strike which followed the commission of the unfair labor practices as providing an indication that the unlawful conduct had had little impact on union support. However, in that case there were no post-strike violations. Here, the company engaged in unfair labor practices after the strike and that conduct was directed at one of the leading union supporters, among others. The Board found that post-strike conduct contributed to the effect of “clearly demonstratpng] to the employees that [United Oil] alone controlled their economic destiny.” Finally, if the holding in K & K Gourmet Meats suggested some hostility on the part of this court to bargaining orders, then any such impression should have been dispelled by our subsequent en banc decision in NLRB v. Permanent Label Corp., 657 F.2d 512 (3d Cir. 1981), where a bargaining order was enforced.

The Supreme Court has recently reaffirmed that the judiciary should not substitute its judgment for that of the Board “with respect to the issues that Congress intended the Board should resolve.” Charles D. Bonanno Linen Service, Inc. v. NLRB, — U.S. —, —, 102 S.Ct. 720, 727, 70 L.Ed.2d 656 (1982). The binding precedent of Gissel teaches that the choice of remedy for unfair labor practices is an issue vested in the discretion of the Board. We do not suggest that the courts do not have an important review function to perform, but that we must be mindful of its proper scope. It is not relevant whether we would have reached the same conclusion as the Board; it is “not our function to substitute our judgment for the Board’s on the propriety of a bargaining order.” NLRB v. Armcor Industries, Inc., 535 F.2d 239, 245 (3d Cir. 1976). In this case, we cannot conclude that the Board overstepped the authority of Gissel in reaching its conclusion that the cumulative effect of the unfair labor practices made “the possibility of erasing the effects of past practices and of ensuring a fair election ... by the use of traditional remedies, though present, .. . slight.” Gissel, 395 U.S. at 614, 89 S.Ct. at 1940.⁴

III.

United Oil raises two additional arguments for denying enforcement. On December 7,1979, the Union had filed a representation petition with the Board, seeking a unit which included all of United Oil’s full-time and regular part-time employees at Stop 21, as well as the employees of the leased restaurant; or in the alternative, a unit which excluded all of the employees of the leased operations and in addition excluded the employees of the motel operated by United Oil. In a decision dated January 29, 1980, the Regional Director rejected both units proposed by the Union, and directed an election in a unit comprising all of United Oil’s full-time and regular part-time employees at Stop 21, including the motel employees, and excluding the employees of the leased restaurant. United Oil contends that because the unit sought by the Union in its representation petition was found by the Regional Director to be inappropriate the Board erred in finding a section 8(a)(5) violation. However, the ALJ found that at the time United Oil rejected the Union’s demand for recognition, it had no knowledge of the inappropriateness of the unit sought. The ALJ found that the Union’s demand for recognition had described an appropriate unit consisting of “[a]ll full-time and part-time employees employed by United Oil Corporation at your Kylertown Truck Stop 21, Clearfield County[,] [ejxcluding: all other employees and guards, professional employees and supervisors as defined in the Act.” It is therefore immaterial that the subsequent representation petition described the unit differently.

The company’s other argument is that the General Counsel’s complaint alleged only that the Union enjoyed majority status from October 28, 1979 until November 3, 1979 (when the Union first demanded recognition), and that no allegation was made that the majority status continued until November 11, the date of the Union’s final demand for recognition and its rejection by United Oil. However, the company does not contend that the Union did not maintain its majority through at least November 11; indeed it is the maintenance of that majority on which the company relied in challenging the need for a bargaining order. We find that the record in this case supports the Board’s conclusion that the Union had majority status at the relevant times.

For the foregoing reasons, we will deny United Oil’s petition for review, and enforce the order of the Board.

1 . The Board found that the unlawful promotions and wage increases had been extended to a sixth employee.

2 . In Hedstrom Co. v. NLRB, 629 F.2d at 312, we listed a fourth factor, which does not seem to be present in this case: whether “the employer has demonstrated a history of opposition to unionization.”

3 . Similarly, the other cases cited by United Oil fail to support its position that the bargaining order here was improper. NLRB v. Armcor Industries, Inc., 535 F.2d 239 (3d Cir. 1976) and Hedstrom Co. v. NLRB, 558 F.2d 1137 (3d Cir. 1977), both turned not on the merits of the bargaining order but on the Board’s failure to articulate the basis for its decision. Indeed, when the Board on remand in Hedstrom stated its reasons and again imposed a bargaining order, this court enforced the order. Hedstrom v. NLRB, 629 F.2d 305 (3d Cir. 1980) (en banc), cert. denied, 450 U.S. 996, 101 S.Ct. 1699, 68 L.Ed.2d 196 (1981). In Struthers-Dunn, Inc. v. NLRB, 574 F.2d 796 (3d Cir. 1978), the record showed that the union had lost its majority before the commencement of any unfair labor practice. Finally, in Rapid Manufacturing Co. v. NLRB, 612 F.2d 144 (3d Cir. 1979), the evidence demonstrated that the unlawful conduct had neither involved senior company officials nor affected a significant percentage of the employees.

4 . The Board adopted all of the ALJ’s relevant factual findings, and differed only as to the need for a bargaining order. Therefore, the case to which the dissent refers, Eastern Engineering and Elevator Co. v. NLRB, 637 F.2d 191 (3d Cir. 1980), in which the Board had overruled the ALJ’s credibility determination, is in-apposite.