Alpo Petfoods, Inc. v. National Labor Relations Board , 126 F.3d 246 ( 1997 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
ALPO PETFOODS, INCORPORATED;
FRISKIES PETCARE, a Division of the
Nestle Food Company,
Petitioners,
v. No. 96-1572
NATIONAL LABOR RELATIONS BOARD;
OIL, CHEMICAL & ATOMIC WORKERS
INTERNATIONAL UNION,
Respondents.
NATIONAL LABOR RELATIONS BOARD,
Petitioners,
v.
No. 96-1604
ALPO PETFOODS, INCORPORATED;
FRISKIES PETCARE, a Division of the
Nestle Food Company,
Respondents.
On Petition for Review and Cross-Application
for Enforcement of an Order
of the National Labor Relations Board.
(6-CA-26669)
Argued: March 5, 1997
Decided: September 11, 1997
Before HALL and ERVIN, Circuit Judges, and MICHAEL,
Senior United States District Judge for the
Western District of Virginia, sitting by designation.
_________________________________________________________________
Petition denied and enforcement granted by published opinion. Judge
Ervin wrote the opinion, in which Judge Hall and Senior Judge
Michael joined.
_________________________________________________________________
COUNSEL
ARGUED: Steven Robert Wall, MORGAN, LEWIS & BOCKIUS,
L.L.P., Philadelphia, Pennsylvania, for Petitioners. Jill Ann Griffin,
NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Respondent. ON BRIEF: Barry E. Gosin, MORGAN, LEWIS &
BOCKIUS, L.L.P., Philadelphia, Pennsylvania, for Petitioners. Fred-
erick L. Feinstein, General Counsel, Linda Sher, Associate General
Counsel, Aileen A. Armstrong, Deputy Associate General Counsel,
Paul J. Spielberg, Deputy Assistant General Counsel, NATIONAL
LABOR RELATIONS BOARD, Washington, D.C., for Respondent.
_________________________________________________________________
OPINION
ERVIN, Circuit Judge:
Petitioner/Cross-Respondent Alpo Pet Foods, Inc. (Alpo) petitions
for review of a decision and order of the National Labor Relations
Board (Board), Respondent/Cross-Petitioner here, finding that Alpo
had violated the National Labor Relations Act when it laid off three
employees following a unionization campaign. The Board seeks
enforcement of its order requiring, inter alia , reinstatement with back
pay and restoration of seniority rights for these three employees. We
deny Alpo's petition for review and grant the Board's cross-
application for enforcement of its order.
I.
Alpo operates a pet food can parts facility in Weirton, West Vir-
ginia. This facility, which opened in 1985 with four initial employees,
has been managed by Vincent Kirpsak since its inception. Following
its 1987 decision to expand into the cat food market, Alpo decided in
1989 to expand the capacity at the facility to manufacture containers
2
in-house. As part of this effort, the maintenance department's staffing
was increased from four to eight employees in 1990, and, by design,
as much of the plant expansion as possible was to be undertaken by
these employees. By 1993, the expansion program was essentially
complete, with only minor work to be done through 1994. Mainte-
nance outsourcing decreased each year from 1991 onwards.
In November 1993, Kirpsak's supervisor advised him that the
Weirton facility was facing a forecasted shortfall of $382,000 for the
fiscal year ending September 30, 1994. Kirpsak responded with an
action plan to cut costs by $373,000, including shutting down the
plant for three five-day periods, saving energy, selling production
time to outside companies, and tweaking the volume/mix in the pro-
duction process.
Later that same month, David Gamble, an employee in the mainte-
nance department, began attempts at organizing the 75 employees at
the facility. To varying degrees he was joined in his efforts by his fel-
low maintenance department employees Charles Artman, Mark
Hager, and Earl Franklin Speerhas. Ultimately the campaign proved
unsuccessful, and the Oil, Chemical and Atomic Workers Interna-
tional Union (Union) lost the February 18, 1994 election by a vote of
50 to 25. The Union filed neither unfair labor practice charges nor
objections at that time for any conduct during the campaign, and the
Board certified the results on February 28. Alpo had conducted its
own anti-unionization campaign at an estimated cost to the plant of
$50,000.
By April 1994, it became clear to Kirpsak that his cost-savings plan
could not be implemented and by June he thought it was necessary
to act on the situation. Kirpsak therefore proposed to his supervisor
on June 28 that three maintenance department positions be eliminated,
justifying the reorganization in large part on the fact that the capital
expansion project was nearly complete and that it made sense to
return the maintenance department staffing to its pre-expansion proj-
ect level. Kirpsak determined that proper operation of the facility
required the retention of a plant electrician, two tool and die workers,
and one machinist, with the consequence that the positions of machin-
ist/electrician and two machinists would be eliminated. As a result of
these permanent layoffs, Kirpsak recognized that additional outsourc-
3
ing would be necessary and that certain retained employees would
have to take on greater responsibilities, thus warranting a $0.20/hour
wage increase. Nevertheless, the net effect of the layoffs would be a
savings of more than $84,000.
Kirpsak claimed that he subsequently turned to the employee hand-
book to implement the seniority procedures to determine which
employees would be laid off. On July 11, 1994, Gamble, Hager, and
Speerhas were notified that they were being permanently laid off from
the maintenance department. Hager, however, with the most plant-
wide seniority of these three employees, was offered an entry level
job as a packer, which he accepted.
On September 6, 1994, the Union filed a charge alleging that Alpo
had violated Section 8(a)(1) and (3) of the National Labor Relations
Act (NLRA or Act), 29 U.S.C. § 158(a)(1), (3), by laying off Gamble,
Hager, and Speerhas in retaliation for their union activities. Following
a two-day hearing before an administrative law judge (ALJ), the ALJ
issued a decision finding the company had violated the Act. The
Board, in a March 20, 1996 decision and order, affirmed the ALJ's
findings and conclusions in toto and adopted his recommended order
with only a minor modification. See Alpo Pet Foods, Inc., 320
N.L.R.B. 956, 320 N.L.R.B. No. 101 (Mar. 20, 1996).
The ALJ credited Kirpsak's reasons as to why certain positions
were retained but found "patently untrue" Kirpsak's testimony that he
considered only the positions, and not the individuals, to be elimi-
nated, especially in Gamble's case. See id., slip op. at 17. Indeed,
because the ALJ saw this testimony as an attempt to mislead him and
the Board, he drew the adverse inference that the true motivation
behind Gamble's layoff was unlawful. See id., slip op. at 18. The ALJ
also found that Gamble had been threatened by the human resources
manager, a § 8(a)(1) violation, and intimidated by Kirpsak during the
election campaign. See id. More generally, Alpo's turn to certain out-
sourcing, a decrease in machine efficiency after the layoffs, and the
$0.20/hour raise evidenced to the ALJ that Alpo's failure to admit its
economic mistake was unlawfully motivated and that it was not in
such dire financial condition as to have made the layoffs economi-
cally necessary. See id., slip op. at 19. The ALJ concluded that the
layoffs of Gamble, Hager, and Speerhas and the subsequent subcon-
4
tracting of the work previously performed by them, to avoid recalling
them, was a violation of § 8(a)(1) and (3) of the Act. See id. In addi-
tion, because Alpo had failed to demonstrate to the ALJ's satisfaction
that the layoffs would have occurred in the absence of the protected
union activities, Alpo failed to meet its burden under Wright Line,
Inc., 251 N.L.R.B. 1083 (1980), enforced on other grounds, 662 F.2d
899 (1st Cir. 1981), cert. denied, 455 U.S. 989 (1982). See id., slip
op. at 20. As a result of this decision, the Board ordered Alpo to, inter
alia, reinstate Gamble, Hager, and Speerhas to their former positions
with back pay and restored seniority rights.
Alpo petitions for review of the Board's decision and order. The
Board cross-petitions for enforcement of its order.
II.
The Board possessed subject matter jurisdiction below pursuant to
29 U.S.C. § 160(a). The Board's Decision and Order of March 20,
1996, constitutes a final order under the NLRA, and thus we possess
appellate jurisdiction pursuant to 29 U.S.C. § 160(e), (f).
The Board's decision is to be upheld if its factual findings are sup-
ported by substantial evidence on the record. 29 U.S.C. § 160(e). This
is so "even though we might have reached a different result had we
heard the evidence in the first instance." NLRB v. General Wood Pre-
serving Co., 905 F.2d 803, 810 (4th Cir.) (internal quotation marks
and citations omitted), cert. denied, 498 U.S. 1016 (1990). "Substan-
tial evidence has been held to mean ``such relevant evidence as a rea-
sonable mind might accept as adequate to support a conclusion.'" Id.(quoting NLRB v. Aquabrom, Div. of Great Lakes Chem. Corp., 855
F.2d 1174, 1178 (6th Cir. 1988)).
III.
A.
Discriminatory discharge is an unfair labor practice under § 8(a)(3)
of the Act, 29 U.S.C. § 158(a)(3).1 An employer's actions violate this
_________________________________________________________________
1 Section 8(a)(3) of the Act provides in pertinent part:
It shall be an unfair labor practice for an employer. . . by dis-
5
section, however, only if they are motivated by anti-union animus.
Goldtex, Inc. v. NLRB, 14 F.3d 1008, 1011 (4th Cir. 1994). We have
recently laid out the standards with which to deal with such cases:
The Board has established a formula for determining
when an allegedly discriminatory discharge violates the
[Act]. First, the General Counsel must make out a prima
facie case that the employer's decision to lay off an
employee was motivated by anti-union animus. The burden
then shifts to the employer to prove affirmatively that the
same action would have been taken even in the absence of
the employee's union activity. To make out a prima facie
case, the General Counsel must show (1) that the employee
was engaged in protected activity, (2) that the employer was
aware of the activity, and (3) that the activity was a substan-
tial or motivating reason for the employer's action. Motive
may be demonstrated by circumstantial as well as direct evi-
dence and is a factual issue which the expertise of the Board
is peculiarly suited to determine.
FPC Holdings, Inc., v. NLRB, 64 F.3d 935, 942 (4th Cir. 1995) (cita-
tions and internal quotations marks omitted).
The issue in this case, then, is whether substantial evidence on the
whole record can sustain the Board's conclusion that the layoffs of
Gamble, Hager, and Speerhas were partly or wholly motivated by the
purpose of discouraging union activities at Alpo. See NLRB v. Instru-
ment Corp. of America, 714 F.2d 324, 328 (4th Cir. 1983). Although
the Board's determination of motive will not be overturned if it is rea-
sonable, "mere speculation as to the [employer's] real motives regis-
ters no weight on the substantial evidence scale." Id. (internal
quotation marks and citations omitted). Alpo, of course, can attempt
to rebut the prima facie case, once established, by presenting a valid
_________________________________________________________________
crimination in regard to hire or tenure of employment or any
term or condition of employment to encourage or discourage
membership in any labor organization. . . .
29 U.S.C. § 158(a)(3).
6
business justification. Goldtex, 14 F.3d at 1013; NLRB v. Nueva
Eng'g, Inc., 761 F.2d 961, 967 (4th Cir. 1985).
In this case, there is no question that Gamble, Hager, and Speerhas
were engaged in protected activities and that Alpo was aware of these
activities, at least by the time of layoff in each instance, if not before.
The case turns, then, on Alpo's motivation for the layoffs. Although
there is direct evidence of Alpo's motive with respect to Gamble, the
Board's evidence as it pertains specifically to Hager and Speerhas is
entirely circumstantial. Moreover, that specific circumstantial evi-
dence is very closely tied with Alpo's business justification. Thus,
although normally the burden does not shift to the employer to show
its business justification until after the prima facie case of motive has
been made, Goldtex, 14 F.3d at 1011, in this case it is necessary to
consider the factual evidence for both in tandem.
B.
We deal first with the circumstantial evidence relating to Alpo's
motives and justification in laying off Hager and Speerhas, considered
separately from Gamble. In particular, the Board, adopting the ALJ's
conclusions, determined that Alpo failed to sustain its rebuttal burden
because the "decrease in machine efficiency suffered as a direct result
of the discriminatory layoffs demonstrably precludes the availability
. . . of a Wright Line defense." Alpo Pet Foods, slip op. at 20. Sub-
stantial evidence does not support the conclusion that machine effi-
ciency decreased materially after the layoffs, and the analysis relied
upon is critically flawed. First, the Board treated July 1994 as a month
following the layoffs when the layoffs occurred in mid-July; July
1994 should properly have been excluded altogether. Second, the
Board ignores the fact that, since the hearing was held before the ALJ
in March 1995, efficiency data existed only through February 1995;
therefore, it was impossible to consider a full year of both pre- and
post-layoff data. This is important because, third, the Board also
ignored the cyclical nature of the facility's production during the
course of a year; moreover, the Board did not control for differences
in production requirements from year to year which could greatly
affect efficiency. Fourth, the Board, either on its own or through the
General Counsel, failed to perform a proper statistical analysis,
engaging in no more than simple facial comparisons and raw averag-
7
ing. Frankly, the Board's analysis, see id., slip op. at 15-17, in which
it invests so much weight in its conclusion, is meaningless. Even a
cursory examination of the efficiency data, see J.A. at 487-95, shows
that overall efficiency appeared to remain about the same and that any
decrease was not statistically material.2 The Board's conclusion that
Alpo's "own charts prove that the layoffs were injurious," but that
Alpo refuses to admit they were an economic mistake for fear of
showing its unlawful motivation, Alpo Pet Foods , slip op. at 19, is
pure speculation, due zero weight on the substantial evidence scale.
See Instrument Corp., 714 F.2d at 328. Instead, the lack of material
change in machine efficiency shows that Alpo is doing pretty well
without these three employees and that their layoffs may, indeed,
have been a wise economic move.
An examination of the other principal circumstantial evidence of
the economic effects of the layoffs shows it to be on similarly weak
ground. For instance, the Board noted that one of the retained mainte-
nance department employees testified that work has not backed up
_________________________________________________________________
2 It is not our province to perform the statistical analysis that the Board
should have undertaken. Nevertheless, a simple comparison of the seven-
month period following the layoffs, August 1994-February 1995 (all the
data available), with the same seven month period in the comparable ear-
lier period reveals the following:
Machine Group Aug. 93-Feb. 94 Aug. 94-Feb. 95
(before layoffs) (after layoffs)
300 DIA END 84.0% 83.7%
307 DIA END 82.4 78.1
307 EZO END 56.4 58.6
Shearing 76.9 79.7
Decorating 75.1 72.6
In other words, there was a decrease in two groups (307 DIA END and
Decorating), an increase in two groups (307 EZO END and Shearing),
and one group with no material change (300 DIA END). Although prob-
ably meaningless statistically, the average efficiency over all the groups
was 74.96% before the layoffs and 74.54% after the layoffs, representing
no material change. At least this simple comparison compares apples
with apples, unlike the Board's which fails to consider relevantly compa-
rable periods.
8
sufficiently to necessitate Hager's transfer back to maintenance. See
Alpo Pet Foods, slip op. at 14. However, because that same employee
also testified that on one occasion in the seven months since the lay-
offs he came in to work and found one production line down and that
he had to repair it so that the operators could run it, the Board con-
cluded that the layoffs left Alpo "with a shortage of personnel but that
it has chosen to suffer the shortage rather than recall them." Id., slip
op. at 14-15. This is nonsense. No reasonable mind would accept one
instance of the breakdown of complicated machinery over a seven
month period as adequate to support the conclusion that Alpo would
rather suffer a personnel shortage than recall these laid-off employees.
See NLRB v. General Wood Preserving Co., 905 F.2d 803, 810 (4th
Cir.) (stating that "[s]ubstantial evidence has been held to mean ``such
relevant evidence as a reasonable mind might accept as adequate to
support a conclusion'" (quoting NLRB v. Aquabrom, Div. of Great
Lakes Chem. Corp., 855 F.2d 1174, 1178 (6th Cir. 1988)), cert.
denied, 498 U.S. 1016 (1990). This conclusion is bolstered by the
Board's own conclusion that the amount of overtime assigned to the
retained employees to do the work ordinarily performed by the laid-
off employees was "minimal." Alpo Pet Foods, slip op. at 14.
Finally, in this same vein, the Board concluded that there was an
increase in the amount of subcontracting of work that previously
would have been done by the laid-off employees and that this subcon-
tracting was specifically part of the violation of the Act. See id., slip
op. at 19. While it is probably true that the general decrease in sub-
contracting was due to the winding down of the expansion project and
thus does not vitiate this specific increase in subcontracting, the
increase amounted to only $4900 over seven months (about $7500
annualized) that could be directly attributed to the absence of the laid-
off employees. Kirpsak had originally estimated that the facility
would have to outsource about $15,000 worth of work as part of the
cost of the reorganization and layoffs. Thus the layoffs resulted in
even less of an economic cost than originally thought, and conse-
quently the net benefit of the reorganization was even greater. The
cost savings, estimated at about $84,000, now appear to be more than
$90,000. It is hard to believe, looking only at this evidence, that a
company was illegally motivated not to retain three employees, and
thus incur outsourcing costs of $4900, when their layoff would pro-
vide a net benefit of $90,000. Substantial evidence does not support
9
the Board's implicit conclusion that Alpo was motivated to be rid of
these employees, outsourcing costs be damned.
In sum, we conclude that the Board's circumstantial evidence,
standing alone, is not substantial enough to support its conclusion that
Hager and Speerhas's layoffs were unlawfully motivated. Were this
circumstantial evidence the only evidence the Board presented to sup-
port its ruling that Hager and Speerhas's layoffs were violations of the
Act, then we would conclude that the Board would have failed to
carry its burden of establishing a prima facie case. However, because
we determine in the next subsection, part III.C., infra, that Alpo was
motivated by anti-union animus in its layoff of Gamble, we examine
the import of that animus with respect to Hager and Speerhas in part
IV, infra.
C.
The Board presents additional and much stronger direct evidence
of unlawful motivation in the case of Gamble.3
As an initial matter, two pieces of such evidence that the Board
relies on must be discounted. At a captive audience meeting just
before the election, Kirpsak came near to Gamble and, looking down
over his glasses, said "We don't need a union here." Alpo Pet Foods,
slip op. at 12. However, an employer's speech that does not threaten
reprisal or force, or promise a benefit, in relation to union activities
is unqualifiedly privileged under the Act. See NLRB v. Threads, Inc.,
308 F.2d 1, 9 (4th Cir. 1962); see also 29 U.S.C. § 158(c). An
employer's lawful anti-union speech may not be chilled by the return
threat that the Board may use it as evidence of unlawful motivation.
See Holo-Krome Co. v. NLRB, 907 F.2d 1343, 1346-47 (2d Cir.
1990). This episode may therefore play no part in the Board's prima
facie case on Alpo's motivation. For the same reasons, Alpo's pro-
_________________________________________________________________
3 All of the circumstantial evidence discussed above, see supra part
III.B., in the context of Hager and Speerhas's layoffs, was also adduced
as evidence in Gamble's layoff. We reject that circumstantial evidence
in Gamble's case for the same reasons. We have merely bifurcated our
approach to all of the evidence in the record to demonstrate where the
Board's decision is sustainable and where it is not.
10
duction manager's statement, at the initial captive audience meeting,
that the organizing effort was like a knife in his back must be dis-
counted.
Nevertheless, four other episodes do convincingly support the con-
clusion that substantial evidence underlies the finding that Alpo was
unlawfully motivated in its layoff of Gamble. First, at one point
Alpo's human resources manager told Gamble, "We know that you
are a union leader because we have six people that have seen you
hand out union petitions." He then added, "You know, this could be
a very big financial burden on your family." Alpo Pet Foods, slip op.
at 11. The Board properly concluded that this was a threat of termina-
tion that would have been a separate § 8(a)(1) violation had it been
alleged in a timely fashion and thus very probative evidence. See id.,
slip op. at 18.
Second, there is substantial, indeed compelling, evidence that
Alpo's human resources manager repeatedly surveilled Gamble's, and
other employees', union activities. See id., slip op. at 10-12. We have
previously held that "[i]t is an unfair labor practice for an employer
to create in the minds of employees an impression that he is closely
observing union organizational activity." J.P. Stevens & Co. v. NLRB,
638 F.2d 676, 683 (4th Cir. 1980); see also Nueva Eng'g, 761 F.2d
at 967. Again, although the surveillance was not timely alleged as a
violation, it remains forceful evidence of unlawful motive. See Alpo
Pet Foods, slip op. at 18.
Third, in May 1994, just before Kirpsak's decision to formulate a
reorganization plan, Gamble had placed a newspaper ad supporting
the unionization efforts of the employees at the company that shared
the same complex with Alpo. Although there is no direct evidence
that Alpo knew that Gamble had placed the ad, substantial evidence
supports the conclusion that "it had to have been clear to [Alpo's]
management that Gamble must have been involved and that he was
going to remain an active unionist for as long as he was around." Id.,slip op. at 19. Gamble was the leader of unionization efforts at Alpo
and made it no secret to his fellow employees that he intended to
place the ad in support of his compatriots. See id., slip op. at 13. The
close temporal connection between this incident and the plan resulting
11
in Gamble's layoff strongly supports the inference that Alpo was
unlawfully motivated.
Finally, Kirpsak testified that his reorganization plan was formu-
lated on the basis of positions and not individuals:
[W]hen we got approval to proceed with this, we went to the
policy manual and read it, and read it. And thought about it
until we came up with exactly how we were going to pro-
ceed with what particular individual.
Prior to that, it was just jobs. There were no individuals.
At this point, when the memo was written, it was jobs. It
was not individuals.
Id., slip op. at 18. The Board found this testimony to be "patently
untrue," "pure nonsense," and a deliberate attempt to mislead it. Id.,slip op. at 17-18. Substantial evidence plainly supports this finding.
Kirpsak was the general manager of a facility with 75 employees and
had been such since its inception. It is unimaginable that, when Kirp-
sak proposed to eliminate the plant's sole position of machin-
ist/electrician, he didn't know that Gamble was that sole
machinist/electrician.4 The Board properly concluded that Kirpsak's
denial that Gamble was scheduled for layoff all along warrants the
adverse inference that Alpo's true motivation behind the layoff was
unlawful. See id., slip op. at 18.
We note that any one of these episodes alone is probably sufficient
for the Board to establish its prima facie case of unlawful motivation.
Considered together there can be no question but that the Board sus-
tained its burden in the case of Gamble. The issue becomes, then,
whether Alpo's proffer of a business justification sustains its shifted
burden under Wright Line. See, e.g., Goldtex, 14 F.3d at 1013.
A number of facts weigh in Alpo's favor. First, the staffing of the
maintenance department was initially increased for the expansion
_________________________________________________________________
4 At oral argument, Alpo's counsel essentially conceded that Kirpsak
was lying and that he knew who would be laid off.
12
project. Because that project was winding down, it makes logical and
economic sense to return to a pre-expansion project staffing level.
Second, the return to that previous level has evidently not had a mate-
rially adverse affect on plant performance. Indeed, to the extent that
the facility's machine groups are performing at materially the same
level as before the layoffs with three fewer employees indicates that
overall efficiency has actually increased. In fact, this increase is mea-
surable: it is the $90,000 net benefit of laying off these three employ-
ees. Finally, Kirpsak was advised of the forecasted shortfall in the
1994 fiscal year, and directed to address it, before Gamble began the
organizing activities. Thus, at least initially, Alpo's economic motives
for developing an action plan were not pretextual. Although not part
of Alpo's business justification, an equity further weighing in its
favor is the fact that Gamble had been significantly involved in a prior
organization campaign in 1990, and there is absolutely no evidence
that he was retaliated against as a result.
A number of facts also significantly militate against Alpo's justifi-
cation. First, there is the close temporal connection between Gamble's
May 1994 newspaper ad and the imminent promulgation of a plan
that would eliminate him as a further threat for unionizing the facility.
This connection takes on further significance since Kirpsak was not
prompted by his supervisor either to reformulate the action plan of
November 1993 or to suggest reorganizing the plant.
Second, there is a substantial and significant debate between Alpo
and the Board about the true economic necessity for layoffs by that
time. This debate clearly distinguishes this case from Goldtex, in
which it was undisputed that some layoffs were economically necessi-
tated. See Goldtex, 14 F.3d at 1011. Kirpsak waffled in his testimony
as to whether, by April 1994, the entire forecasted shortfall was
$115,000 or whether just the labor component totaled that amount.
Compare J.A. at 221 (stating on direct that at the beginning of June
1994 there was a $115,000 shortfall in labor costs) with J.A. at 265-
67 (stating repeatedly on cross that the entire budget deficit had
declined from $382,000 to $110,000-$115,000 by April) and with
J.A. at 289 (restating on redirect that the $115,000 figure represented
just labor costs). If Kirpsak's testimony that the $115,000 figure rep-
resented only labor costs be accepted, then there is absolutely no
explanation as to how an estimated annualized $98,000 labor cost
13
shortfall near the beginning of the fiscal year had grown, six months
later and with less than half the fiscal year to go, to $115,000. Further,
if the economic condition of the facility had, in fact, worsened so
much over those months, then a projected $84,000 salve would only
have partially ameliorated that condition. Yet there is no evidence that
Kirpsak even considered, let alone implemented, any other actions to
bring the facility back in budget. Unlike the November 1993 action
plan that considered cost savings over the whole plant, this isolated
action, if severe deficits remained elsewhere, could have caused more
harm than good and is not characteristic of a thoughtful manager. All
of this is to say that Kirpsak's credibility on the issue of economic
necessity for the layoffs is sorely lacking. Like the fabrication of his
story concerning the June 1994 proposal for downsizing, Kirpsak's
reasons for all of his actions appear pretextual.
Third, Kirpsak admitted that Alpo's anti-unionization campaign
cost his plant alone $50,000. Substantial evidence supports the
Board's finding that "Kirpsak was fully aware that Gamble was the
person responsible for the organizational campaign, the ringleader,
the individual who cost the Company $50,000. He was special, not
just one of several moderately prounion people . . .." Alpo Pet Foods,
slip op. at 18. Finally, Alpo had bragged in its campaign literature,
including in letters sent to each employee, that it had never laid off
anyone permanently in the entire time the facility had been open. This
record stands in marked contrast to the subsequent laying off of three
employees within five months of the election, including Gamble, the
"ringleader."
Given the weaknesses in Alpo's justification for the discharges, we
conclude that Alpo has not sufficiently shown that its proffered rea-
sons are not pretextual, see Nueva Eng'g, 761 F.2d at 968-69, and that
therefore it has not rebutted the strong evidence of unlawful motiva-
tion that the Board established with respect to Gamble. Substantial
evidence supports the Board's finding that Alpo, determined to rid
itself of the ringleader, was willing to sacrifice Hager and Speerhas
under the seniority rules to reach Gamble. We admit we are somewhat
troubled by this conclusion since, in fact, both Gamble and Speerhas
have been recalled to production positions, although not to their for-
mer maintenance positions, and Hager was "recalled" as a packer the
day he was laid off. Still, the "substantial evidence" standard is defer-
14
ential to the Board's findings, and while we would be much less sure
that the Board would or should prevail under a preponderance of the
evidence standard, that is not the test. We can only conclude, then,
that the Board's decision with respect to Gamble should be upheld
even though we might have reached a different result had we heard
the evidence in the first place. See General Wood Preserving, 905
F.2d at 810.
IV.
Having concluded that Alpo violated the Act with respect to Gam-
ble, we must now determine whether the anti-union animus exhibited
can serve to bootstrap Hager and Speerhas's layoffs into violations
warranting remedial action as well. Alpo argues that our decision in
Goldtex precludes this result. In Goldtex, we refused to assume that
because the employer had acted with improper motivation as to one
employee that it had also done so with respect to three other dis-
charged employees. Instead, we required the Board"to show what the
statute mandates: that the employees were discharged for the purpose
of discouraging union activities." Goldtex , 14 F.3d at 1012. Alpo
would have us read Goldtex as requiring (1) the Board to establish
that each employee was laid off for the purpose of discouraging union
activities and (2) us to conclude that Hager and Speerhas's layoffs do
not constitute violations of the Act because the Board failed to carry
its burden of showing that each was individually laid off as a result
of anti-union animus directed towards him.
As noted above, see supra part III.C., the instant case is plainly dis-
tinguishable from Goldtex, for in Goldtex it was undisputed that eco-
nomic circumstances necessitated layoffs by the employer. See
Goldtex, 14 F.3d at 1011. We were careful there to emphasize
repeatedly in our two paragraph discussion that it was the posture of
economic necessity that led us to conclude that the impermissible dis-
charge of one employee does not "automatically infect" all simulta-
neous discharges. See id. at 1012 ("Where, as here, layoffs were
necessitated by economic circumstances, the impermissible discharge
of one pro-union employee does not automatically infect all dis-
charges made during that same month."); id. at 1012-13 (distinguish-
ing NLRB v. Frigid Storage, Inc., 934 F.2d 506 (4th Cir. 1991), Hyatt
Corp. v. NLRB, 939 F.2d 361 (6th Cir. 1991), and Ballou Brick Co.
15
v. NLRB, 798 F.2d 339 (8th Cir. 1986), on the ground that the layoffs
in those cases were not economically necessary); id. at 1013 ("It is not
disputed that the layoffs in this case were required because of a down-
turn in Goldtex's business fortunes . . . ."); id. ("Where layoffs are
economically justified, the invalidation of a single impermissible dis-
charge will not serve to similarly invalidate all contemporaneous ter-
minations.").
Instead, here we are faced with the posture where substantial evi-
dence supports the Board's conclusion that Alpo was willing to sacri-
fice Hager and Speerhas under the seniority rules in order to get rid
of Gamble. Although there are few cases directly on point, it is well-
settled that, in the context of mass layoffs,5 § 8(a)(3) violations may
be sustained where an employer orders the layoffs"for the purpose
of discouraging union activity or in retaliation against its employees
because of the union activities of some." Birch Run Welding & Fabri-
cating, Inc. v. NLRB, 761 F.2d 1175, 1180 (6th Cir. 1985). See also
Hyatt Corp., 939 F.2d at 375-76 (upholding § 8(a)(3) violations,
under Birch Run's general layoff theory, where three union supporters
and nine other employees were discharged over a seven month
period); Merchants Truck Line, Inc. v. NLRB, 577 F.2d 1011, 1016
(5th Cir. 1978) ("Where the central aim of a mass lay-off is to dis-
courage union activity, the discharge is unlawful, even though neutral
or anti-union employees suffer in the process."); Majestic Molded
Prods., Inc. v. NLRB, 330 F.2d 603, 606 (2d Cir. 1964) ("A power
display in the form of a mass lay-off, where it is demonstrated that
a significant motive and a desired effect were to``discourage member-
ship in any labor organization,' satisfies the requirements of § 8(a)(3)
to the letter even if some white sheep suffer along with the black.").6
In Frigid Storage, we refused to allow an employer to wield an "un-
discerning axe." Frigid Storage, 934 F.2d at 510. In that case, we
upheld a § 8(a)(3) violation for the discharge of an employee, whose
union sentiments were unknown, when he was fired on the Monday
_________________________________________________________________
5 We note that, although small in absolute number, the three layoffs
here constituted 43% of the maintenance department.
6 The Board itself routinely relies on this mass layoff theory. See, e.g.,
Rainbow News 12, 316 N.L.R.B. 52, 1995 WL 25663 at *32 (Jan. 20,
1995); ACTIV Indus., Inc., 277 N.L.R.B. 356, 1985 WL 46074 at *1 n.3
(Nov. 12, 1985).
16
following the Friday discharge of two union adherents and the manag-
er's anti-union tirade in which he had threatened to discharge an
employee on Monday. See id. (citing Birch Run, Merchants, and
Majestic).
Even when the axe is wielded in accordance with seniority rules,
courts enforce the Board's order as to all discharged employees, not
just those whom the employer was explicitly targeting. In Tesoro
Petroleum, for example, the Ninth Circuit upheld a § 8(a)(3) violation
for the discharge of four employees. Three of the employees were
union members, but the fourth and most junior had not revealed his
union leanings. The fourth was fired to reach the three more senior.
The court rejected the employer's economic justification and
expressly noted that the fourth would be entitled to reinstatement and
back pay along with the others. NLRB v. Tesoro Petroleum Corp., 431
F.2d 95, 96-97 (9th Cir. 1970). Similarly, in Majestic Molded
Products, the Second Circuit enforced the Board's order where the
layoffs were in order of seniority, without regard to whether the
employer was aware of any individual's pro-union sentiment, and a
significant motive of the layoffs was to discourage union member-
ship. Majestic Molded Prods., 330 F.2d at 605-06.
In the instant case, Alpo sought to rid itself of ringleader Gamble
in order to discourage future union activities. Bound by its own
seniority rules, however, Alpo also had to lay off Hager and Speerhas.
Unlike these other cases, Alpo knew before the layoffs that both
Hager and Speerhas were union supporters. Alpo could thus kill three
birds with one stone. On the whole record, then, Alpo's attack on
Gamble evinced enough anti-union animus to suffice for all three. We
therefore conclude that all three layoffs were unlawfully motivated
and the Board's order should be enforced as to all three.
PETITION DENIED AND ENFORCEMENT GRANTED
17