The Black Hawk Corporation v. National Labor Relations Board , 431 F.2d 900 ( 1970 )

ALBERT V. BRYAN, Circuit Judge:

Here in question is the National Labor Relations Board’s finding that Black Hawk Corporation violated section 8(a) (3) and (a) (1) of the Labor Relations Act, 29 U.S.C. § 158(a) (3) and (a) (1), by the 1967 layoff of 17 employees. Specifically, the Board found they were thus penalized because of their union leanings and in order to affect the outcome of a pending representation election. The decision is attacked by the Company as lacking in substantial proof. We agree with this contention and decline to enforce that part of the Board’s order. This disposition renders moot the plaint of leniency in the remedy suggested by the intervening unions, the Industrial Union Department, AFL-CIO and the Textile Workers Union of America, AFL-CIO.

The Black Hawk Corporation, located in Greenville, South Carolina, is a wholly-owned subsidiary of J. P. Stevens & Co., Inc. It was established in 1960 as a warehouse for the storage and handling of baled cotton to be used exclusively by Stevens’ twenty-one consuming plants in North and South Carolina, Georgia, and Tennessee. While Stevens uses some independently owned warehouse facilities, it is uncontested that throughout the middle of 1967, Black Hawk, as Stevens’ only central cotton storage place, processed the bulk of Stevens’ cotton. The operation consists of weighing the raw material on arrival, and testing and classifying it before consolidation into large lots suitable for shipment to the consuming plants.

While the warehouse supply remains fairly constant, the inbound shipments vary during the cotton year. Beginning in late August, volume increases, with the acme in December and January. Ordinarily, there is a slack period from April or May until early August. This fluctuation has caused Black Hawk periodically and correspondingly to adjust the number of its employees. Since 1964, when the warehouse was enlarged, Black Hawk has had as many as 71 people working there during the heavy season. For the three years prior to 1967, the force was reduced for want of work at an average rate of 25 employees annually.

In 1967 there was a steep decrease from 51 to 31 workers in the warehouse, where employees were inclined to unionization, and an increase of four workers in the shop, where a converse sympathy prevailed. These variations occurred during the nine weeks beginning with the charging union’s petition for an election on August 22 and ending with the balloting on October 25. The precipi-tateness of the diminution and its timing occasioned the complaint. Noteworthy here, however, terminations were assigned in inverse seniority order, without reference to activity or disinterest in the organization drive.

Opposing the charge, Black Hawk pleaded economic justification. Cotton is purchased on the open market, and in anticipation of a “short crop” and in the face of new Government production controls, Stevens bought unusually high amounts in late 1966 and early 1967, long before it knew of the Black Hawk union movement which began in June 1967. As a result, in 1967 the usual April-May slow season did not arrive until September. By that time, Black Hawk argues, independent warehouses which Stevens rented in Gulfport and Clarksdale, Mississippi had accumulated cotton sufficient for consolidation into lots large enough for direct consignment to Stevens’ manufacturing plants. Hence, Black Hawk maintains, shipment to it would have been both unnecessary and uneconomical.

The Board rejected this contention, saying that while Stevens had previously used the Gulfport and Clarksdale facilities, nevertheless it had shipped cotton from them through Black Hawk until the fall of 1967. The Board found this rescheduling of an “established practice, whether it had been an uneconomical one or not,” to constitute a component of the motive requisite to an 8(a)(3) violation. Other ingredients included Stevens’ history of union hostility,¹ its discovery of the currency of the movement, and the hiring of shop employees, thought to be aligned with the Company, when the warehouse workers were discharged.

Decision of the controversy then comes to the ascertainment of whether the proof measures up to the substantiality required to enforce a Board finding and order. In assaying the evidence, we are mindful that the Board’s choice between two fairly conflicting views may not be displaced. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951). However, we are not mindless that our duty also is to gauge the evidence “in the light that the record in its entirety furnishes, including the body of evidence opposed to the Board’s view.” Id. In this, the test is whether

“the inferences on which the Board’s findings were based were so overborne by evidence calling for contrary inferences that the findings of the Board could not * * * be deemed to be supported by ‘substantial’ evidence.” NLRB v. Pittsburgh S. S. Co., 340 U.S. 498, 502, 71 S.Ct. 453, 455, 95 L.Ed. 479 (1951).

Thus, critical to decision here are the inferences which the Board drew respecting Black Hawk’s motive in the layoffs. Under 8(a)(3), “both discrimination and a resulting discouragement of union membership are necessary, but the a.dded element of unlawful intent is also required.” NLRB v. Brown, 380 U.S. 278, 286, 85 S.Ct. 980, 985, 13 L.Ed.2d 839 (1965).

The evidential features under-propping the Board’s conclusion, make out a prima facie transgression of the Act. Black Hawk countered, however, with proof establishing that it was “motivated by legitimate objectives.” NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S.Ct. 1792, 18 L.Ed.2d 1027 (1967).

We think the Company sustained its plea, to repeat: that the change of practice — using direct shipments from the outlying warehouses to Stevens’ manufacturing plants — was pursued because these warehouses by August, 1967, in the judgment of the company, had accumulated requisite quantities of cotton to render baling and grading operations feasible at the removed points; that in-currence of extra expense by shipping through Black Hawk was thereby obviated; and that the call for men at that warehouse declined.

The new shipping design certainly deserves an inference of fair dealing with labor as much as it does a sinister implication. Moreover, weight should be accorded the judgment of the Company, certainly ex facie presumed bona fide. Whether or not the rearrangement was warranted was a matter of the internal economy of the business, to be resolved by the Company. See J. A. Hackney & Sons, Inc. v. NLRB, 426 F.2d 943 (4 Cir. May 20, 1970). We do not think that inferences of unfairly motivated or invidious employee-discrimination are permissible because of the change in shipping practices.

Nor may such inferences be drawn in the instant situation from Stevens’ history of union bias and knowledge of a current union campaign. These factors have been declared by this court in a corresponding situation to be “diminished to the point that [they] cannot be reasonably deemed to be ‘substantial’ in the Universal Camera Corp. sense.” Maphis Chapman Corp. v. NLRB, 368 F.2d 298, 304 (4 Cir. 1966). There, the company was charged with an 8(a)(3) violation for releasing two employees, whom it knew were involved in the union campaign. The employer’s general animosity towards unionization was beyond question. Nevertheless, the company was absolved of wrongdoing for one of the discharges, because the evidence overbalanced the possibility that the layoff was with a discriminatory purpose —the worker was a seasonal, rather than permanent employee. A similar conclusion must be reached instantly.

The Board’s last ground for the finding of improper motive in the shipping changes was the hiring of the additional shop personnel. This, we think, is too slight to provide any sign of ill will. Nothing in the record negates the Company’s explanation for these hirings— that the amount of work in the shop necessitated the recruits.

In sum, the Board has failed to carry its obligation of proving that Black Hawk was prompted by a discriminatory purpose in discharging the 17 employees. Black Hawk’s justifiable explanation for its conduct stands unrefuted, minifying the effect of the inferences the Board drew from its evidence on motive. The charge of an 8(a)(3) and its attendant 8(a)(1) violation cannot stand.

Enforcement granted in part and denied in part.

1 . Stevens has been extensively involved in litigating unfair labor practice charges. Five orders of the Board have been enforced in whole or in part against it since 1967. J. P. Stevens & Co. v. NLRB, 380 F.2d 292 (2 Cir.), cert. denied 389 U.S. 1005, 88 S.Ct. 564, 19 L.Ed.2d 600 (1967); Textile Workers Union v. NL RB, 388 F.2d 896 (2 Cir.1967), cert. denied sub nom. J. P. Stevens & Co. v. NLRB, 393 U.S. 836, 89 S.Ct. 112, 21 L.Ed.2d 107 (1968); J. P. Stevens & Co. v. NLRB, 406 F.2d 1017 (4 Cir. 1968); J. P. Stevens & Co. v. NLRB, 417 F.2d 533 (5 Cir. 1969).