Trencor, Inc v. NLRB ( 1997 )

REVISED
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________________
No. 96-60130
_______________________
TRENCOR, INC.
Petitioner-Cross-Respondent,
versus
NATIONAL LABOR RELATIONS BOARD,
Respondent-Cross-Petitioner.
___________________________________________________________________
Petition for Review and Cross-Application for Enforcement of
an Order of the National Labor Relations Board
___________________________________________________________________
April 8, 1997
Before REYNALDO G. GARZA, JONES, and DeMOSS, Circuit Judges.
EDITH H. JONES, Circuit Judge:
Trencor, Inc., a manufacturer of heavy construction
equipment petitions for review of the National Labor Relations
Board (the “Board”) order directing Trencor to bargain with the
United Steelworkers of America (the “Union”). Trencor contends
because the Union promised “the biggest party in Texas” if it won
the election and dared the company illegally to match union
“guarantees” to workers, the election was tainted. The Board
cross-petitions for enforcement of its order. Although the Board’s
treatment of the “guarantees” was not unreasonable, the Board
failed to analyze the promise of a post-election party consistently
with the Regional Director’s facts and this court’s precedent. We
must therefore deny enforcement of the bargaining order and remand
for further proceedings.
I. Background
On August 3, 1995, Trencor’s maintenance and production
employees voted on whether the Union would serve as their exclusive
collective-bargaining representative. Of 99 eligible voters, 70
voted for representation and 26 voted against.1 Trencor filed
objections to the election, but, after an administrative
investigation without a hearing, the NLRB Regional Director issued
a report recommending that Trencor’s objections be overruled and
that the Union be certified. The Board adopted the Regional
Director’s recommendations and certified the Union as the exclusive
collective bargaining agent for the employees.
After certification, Trencor refused to bargain with the
Union. In November 1995, the Union filed an unfair labor practice
charge and the Regional Director subsequently issued an unfair
labor practice complaint. Trencor’s answer admitted its refusal to
bargain, but alleged that Union misconduct tainted the election and
that the Union’s certification was invalid. In its February 26,
1996 Decision and Order, the Board granted the General Counsel’s
motion for summary judgment, concluding that Trencor’s objections
1
Nine ballots were challenged, but this number was
insufficient to affect the election outcome.
2
were or should have been litigated in the representation proceeding
and that no new evidence or special circumstances warranted
reexamination of the representation proceeding. The order
affirmatively requires Trencor to bargain with the Union, post
appropriate notices, and comply with the Union’s requests for
information.
On appeal, Trencor concedes that it has refused to
bargain, but challenges the Board decision to certify the Union.
Trencor’s challenge centers on three alleged improprieties
committed by the Union on the eve of the election.
II. Standard of Review
The Board’s decision will be upheld by this court if it
is reasonable and supported by substantial evidence in the record.
NLRB v. McCarty Farms, Inc., 24 F.3d 725, 728 (5th Cir. 1994). The
Board is given a “wide degree of discretion” in resolving election
disputes. NLRB v. A.J. Tower Co., 329 U.S. 324, 330, 67 S. Ct. 324,
328 (1946); NLRB v. New Orleans Bus Travel, Inc., 883 F.2d 382, 384
(5th Cir. 1989). An objecting party must demonstrate that any
improprieties “interfered with the employees’ exercise of free
choice to such an extent that they materially affected the results
of the election.” NLRB v. Golden Age Beverage Co., 415 F.2d 26, 30
(5th Cir. 1969). See also NLRB v. Rolligon Corp., 702 F.2d 589,
592 (5th Cir. 1983) (“the need for a ... new election is judged not
against a standard of perfection, but against the likelihood that
the outcome of the election might have been affected”). Since the
3
Board resolved this issue at summary judgment without conducting a
hearing, we must accept all allegations presented by Trencor’s
evidence and all reasonable inferences in a light most favorable to
Trencor. McCarty Farms, 24 F.3d at 729.
III. Alleged Union Improprieties
A. Promise of the “Biggest Party in Texas”
Trencor complains that the Union offered conditional
inducements to win employee support in the election. The day
before the election, Union agent Bill Fears told employees that if
the Union won the election, it would host “the biggest party in the
history of Texas,” and that the Union would buy “all the food and
beer.” Trencor primarily relies on NLRB v. Lou Taylor, Inc., 564
F.2d 1173 (5th Cir. 1977), and Crestwood Manor, 234 N.L.R.B. 1097
(1978) to argue that such conditional inducements render the
election invalid.
In Lou Taylor, this court enforced a Board order in which
the announcement of a company’s annual Christmas party in an
employer’s campaign speech the day before the election was found to
be illegal. 564 F.2d at 1175. The company president promised that
there would be a Christmas party and “that the employees would be
paid for the time spent at the party and for the holiday.” Id. An
administrative law judge and the Board found, and this court
affirmed, that the announcement improperly influenced the
employees’ choice despite the fact that the employer customarily
gave its employees a Christmas party. Id. The election was
4
invalidated notwithstanding the overwhelming rejection of the
union. Lou Taylor, Inc., 226 N.L.R.B. 1024, 1030 n.10 (union received
only 38 of 223 votes cast).
In Crestwood Manor, the Board invalidated an election
because of a union’s promise to hold a one hundred dollar raffle
for employees if the union won the election. 234 N.L.R.B. at 1097. The
Board stated that:
The Employer argues that since the
Petitioner’s raffle was conditioned upon
Petitioner’s prevailing in the election, the
Hearing Officer correctly concluded that it
was a promise of benefit which requires
setting aside the results of the election. We
find merit in the Employer’s contention. ...
If we were not to so find, we might well
envision future elections in which employers
and unions alike might be tempted to promise
employees all sorts of inducements -- raffles,
prizes, vacation trips, or whatever -- if
their side won the election. Such an
intrusion into the election process would be
highly undesirable.
***
Even if it could be said that the raffle was
worth only $1.18 [one in eighty-five chance of
winning one hundred dollars] to each employee,
we could hardly countenance an offer of $1 to
each employee for a union victory or loss.
Id.
The Board argues on appeal that a promise to hold a party
is qualitatively different from a promise to give a monetary
benefit. Relying on the Third Circuit’s decision in NLRB v. L& J
Equipment Co., 745 F.2d 224, 231 (3d Cir. 1984),2 the Board asserts
2
The Board also relies on several other cases which do not involve parties
conditioned on a Union victory, but rather involve pre-election parties. Because
pre-election parties induce employees to hear the message of the sponsor and
5
because they are not conditioned on the sponsor’s victory, the Board has tended
to allow them. See, e.g., Peachtree City Warehouse, Inc., 158 N.L.R.B. 1031, 1035-36,
1039-40 (1966) (employer-sponsored dinner with music, dancing, and liquor shortly
before election held proper); Lach-Simkins Dental Laboratories, 186 N.L.R.B. 671,
671-672 (1970)(union-sponsored free luncheon at the time and near the place of
polling held proper).
The only two cases, other than L&J Equipment, that involve promises
of post-election parties or meal and alcohol purchases are Movsovitz & Son, Inc.,
194 N.L.R.B. 444, 78 LRRM 1656 (1971) and R.H. Osbrink, 114 N.L.R.B. 940 (1955). In
citing Movsovitz, the Board quotes the part of the decision stating that the
“Board has long since held that the supplying of meals or alcoholic beverages at
a party is not necessarily coercive or destructive of an atmosphere in which a
free choice can be made.” 78 LRRM at 1656. However, the cases cited by
Movsovitz for the quoted proposition all involved pre-election purchases of meals
and beverages. See Lloyd A. Fry Roofing Co., 123 N.L.R.B. 86, 87 (1959) (union party
held the day prior to the election); Zeller Corp., 115 N.L.R.B. 762, 764 (1956)
(employer provided dinner for employees on company time without loss of pay three
days prior to election); Ohmite Manuf. Co., 111 N.L.R.B. 888, 888-89 (1955) (union
bought food and drink at tavern the night before the election).
Movsovitz itself did involve a promise that a union employee “would
buy beer and whiskey for the Movsovitz employees” after the “Union won the
election.” 78 LRRM at 1656. The Board acknowledged that “the fact that such
promise was conditioned on a union victory in the election is troublesome,” but
went on to conclude that the promise involved a “type of minimal gratuity” that
“is not such an emolument as can reasonably be expected to influence the
employees’ free choice in the election.” Id. However, once again, the precedent
cited in support of this proposition involved a pre-election gift. See Jacqueline
Cochran, Inc., 177 NLRB No. 39, 71 LRRM 1395(pre-election gift of a turkey to
employees allowed since the purpose of the gift was to encourage attendance at
pre-election meeting). Furthermore, even though the Board did say in Movsovitz
that it was assuming the promise was made, the Board tipped its hand in the prior
paragraph, opining that “the only evidence of the alleged promise to purchase
beer and whiskey is the uncorroborated testimony of one witness, who was
discredited in other aspects of her testimony. In such circumstances we
question whether such a promise was in fact made.” 78 LRRM at 1656.
The Movsovitz rationale is difficult to square with the Board’s
diligent fight against conditional $1.18 gifts in Crestwood Manor. In any event,
Movsovitz does not help the Board since neither it nor the Regional Director ever
found that the Union’s promise of the “biggest party in the history of Texas” was
a “minimal gratuity” that would not influence the employee’s free choice. In
fact, the Regional Director stated that the Union’s promise “may have served as
a possible inducement to get employees to vote for the Union... .”
In Osbrink, the union “distributed a leaflet in which it urged
employees to vote for it and then attend a victory party that evening.” 114 N.L.R.B.
at 942. The opinion’s sole analysis of the issue is a recitation that the
Regional Director disagreed with the employer’s interpretation of the leaflet as
a “form of bribe” and “considered it to be a legitimate form of campaign
propaganda.” Id. The Board adopted the Regional Director’s recommendations. Id.
at 943. There is no indication in the opinion as to what was involved in the
“victory party,” particularly as to what, if anything, the union was purchasing
for the employees’ benefit. Furthermore, the Regional Director’s determination
in Osbrink that the leaflet was “propaganda” and not a “form of bribe” is
ambiguous: it could mean that the Regional Director did not believe the union
was actually planning to provide any sort of benefit to employees. The Osbrink
decision is also in tension with the Board’s later decision in Crestwood Manor.
In any event, the Regional Director’s determination in this case that the party
may have affected employee decisions distinguishes Osbrink.
6
that offering a victory party is not necessarily “inimical to an
atmosphere in which free choice can be made.” Promising a party
which only lasts one night, the Board alleges, would not
“substantially influence employees in a decision having a major
effect on their working lives.” Id. The Board distinguishes Lou
Taylor on the ground that the employees were to be paid for
attending the Christmas party, while in this case the victory party
was not coupled with a monetary benefit. Similarly, the Board
distinguishes Crestwood Manor, noting that the raffle represented
a direct financial benefit contingent on the union victory, a
notion the Board finds more offensive than the promise of a party.
The Board’s reasoning on appeal might be persuasive if it
comported with the facts administratively found. But the Regional
Director’s recommendations, adopted in full by the Board, admitted
that the Union’s party invitation “may have served as a possible
inducement to get employees to vote for the Union.” The Regional
Director then concluded that “it does not amount to impermissible
coercion [in] the absence of a linkage between the party and either
a pre-election pledge of Union support or an actual vote for the
Union,” citing Nu Skin International, Inc., 307 N.L.R.B. 223
(overruling employer’s objection to union’s passing out t-shirts
before the election only to employees who signed a pro-union
7
petition). On appeal, the Board neither cites Nu Skin nor relies
on the Regional Director’s rationale.3
Furthermore, Trencor contends that the monetary/non-
monetary distinction drawn by the Board is not meaningful, since
the benefits promised by the Union have some monetary value.
Trencor also points to potential problems with this distinction,
noting that substantial non-monetary benefits could potentially be
more problematic than the $100 raffle in Crestwood Manor. The
Board itself warned of the temptation to offer “all sorts of
inducements” as a reason for finding the raffle to be illegal. 234
N.L.R.B. at 1097.
Ultimately, we are persuaded that the Board can not adopt
the recommendation of the Regional Director, which notes that
offering a party conditioned on the Union victory “may have served
as a possible inducement to get employees to vote for the Union
...” but rests on flawed legal analysis, and then argue on appeal
3
Indeed, the Board would be hard pressed to pursue the
argument relied on by the Regional Director. Although offering
benefits conditioned upon a pre-election demonstration of an
employee’s support has certainly been scrutinized by the Board,
Crestwood Manor and other decisions clearly demonstrate that
offering benefits conditioned upon a union victory is inappropriate
whether or not a pre-election show of support is required.
Furthermore, Nu Skin involved a pre-election distribution of t-
shirts known to be of nominal value. 307 N.L.R.B. at 223. The Board
relied on the fact that the employees knew the t-shirts had nominal
value and that the Union had a legitimate interest in only
distributing shirts with union insignia to employees who actually
supported the union. Id. at 223-24. In contrast, as far as the
record suggests, the party promised to Trencor employees involved
an unknown, but potentially large, benefit, and the union had no
stated interest in promising the party other than to influence
employees’ votes.
8
that offering a party could not reasonably have been seen as an
inducement.4 See Burlington Truck Lines, Inc. v. United States,
371 U.S. 156, 168-69, 83 S. Ct. 239, 246 (1962) (“The courts may not
accept appellate counsel’s post hoc rationalizations for agency
action; [Securities & Exchange Comm’n v.] Chenery [Corp., 332 U.S.
194, 196, 67 S. Ct. 1575, 1577 (1947)] requires that an agency’s
discretionary order be upheld, if at all, on the same basis
articulated in the order by the agency itself ...”).5 See also NLRB
v. Brookshire Grocery Co., 919 F.2d 359, 367 n.9 (5th Cir. 1990)
(“The Board’s order can be sustained only on the grounds
articulated therein.”)
4
Both the dissent and the Board argue that the promise was
minimal and could not be expected to influence the election.
Nothing in the Regional Director’s findings indicates that the
benefit offered by the Union was “minimal.” Instead, the findings
acknowledge the possible influence of the party could have on
employees’ votes. And, although the report concludes that the
offer “does not amount to impermissible coercion . . . ,” the legal
basis for that conclusion--that there was an “absence of linkage
between the party and either a pre-election pledge of Union support
or an actual vote for the Union ...” is completely abandoned by the
Board on appeal. On appeal, the Board argues that any victory
party, regardless of any “linkage” between the promised benefit and
a Union victory, is permissible. The Board’s appellate lawyers
have not simply added citations to support the legal theory relied
on below, they have clearly changed the theory why the Union
activity was permissible.
5
The Burlington Truck Lines court went on to quote Chenery at length:
A simple but fundamental rule of administrative law ***
is *** that a reviewing court, in dealing with a
determination or judgment which an administrative agency
alone is authorized to make, must judge the propriety of
such action solely by the grounds invoked by the agency.
If those grounds are inadequate or improper, the court
is powerless to affirm the administrative action ***.
[Chenery, 332 U.S. at 196, 67 S.Ct. at 1577]
371 U.S. at 168-69, 83 S.Ct. at 246 (ellipses in original).
9
The Third Circuit decision in L&J Equipment makes the
salient point that a one day or one night event might not sway an
employee’s decision on a matter as important as whether to support
Union representation. 745 F.2d at 231. However, L&J Equipment
could distinguish the Crestwood Manor raffle since the Third
Circuit was presented with a Regional Director and Board
determination, “after viewing all the evidence,” that “the victory
party was truly meant to celebrate any victory and lay the
groundwork for a productive union-employee relationship.” Id. at
231-32. In contrast, the only determination in this case is that
the offer of a party “may have served as a possible inducement to
get employees to vote for the Union ... .” There is no indication
in the record that the offered “biggest party in the history of
Texas” had anything to do with laying the “groundwork for a
productive employee-union relationship” or, indeed, was anything
more than an inducement to vote for the Union. Although on appeal
the Board attempts to justify its decision by arguing that offers
of post-election parties categorically do not influence employees,
the record does not contain such a finding at any stage of the
proceedings.6
6
As the Burlington Truck Lines court stated: “[t]he short answer to this
attempted justification is that the Commission did not so find.” 371 U.S. at 168,
83 S.Ct. at 246.
10
Absent such a finding, this case is not meaningfully
distinct from Lou Taylor or Crestwood Manor.7 The Board stated in
Crestwood Manor that “[t]he conditioning of the receipt of benefits
on favorable election results is impermissible conduct for parties
engaged in the election.” 234 N.L.R.B. at 1097. Even the potential
benefit of $1.18 per employee was considered impermissible by the
Board. Id. Our court has also agreed with the Board that the offer
of a Christmas party that employees would receive vacation time to
attend, even though the employer had traditionally given its
employees a Christmas party, was an impermissible inducement when
announced the day before the election. Lou Taylor, 564 F.2d at
1175. It is not unreasonable to infer that the Union’s offer in
this case, also made on the day before the election, represented as
much or more economic benefit per employee than the $1.18 in
Crestwood Manor or possibly even the unspecified amount in Lou
Taylor. The Regional Director drew this inference. The Board
cannot acknowledge the potential influence of a conditional
inducement by adopting the Regional Director’s decision and then
7
We are not, as Judge Garza suggests, indicating that
Crestwood Manor overruled prior Board decisions that have addressed
the circumstances in which parties are permissible. Crestwood
Manor holds that even minor inducements conditioned on a union or
company victory can be improper. The few prior Board decisions
that have addressed parties offered on the condition of a union
victory, as discussed in note 2, supra, rested on case-specific
Board findings that the party offered could not reasonably have
been perceived as an inducement to vote for the Union. There is no
such finding here.
11
expect this court to affirm because it is supposedly axiomatic that
this type of inducement does not influence employees.
Accordingly, we cannot uphold the Board’s decision to
overrule Trencor’s objection on this issue. Trencor has presented
prima facie evidence that the Union conditioned “the receipt of
benefits on favorable election results,” which “is impermissible
conduct for parties engaged in the election.” Crestwood Manor, 234
N.L.R.B. at 1097. See also Lou Taylor, 564 F.2d at 1175. We must set
aside the order of the Board and remand for an evidentiary hearing
and analysis consistent with this court’s precedents.
B. Union “Guarantees”
On August 2, 1995, the day before the election was to be
held, the Union distributed flyers that listed numerous
“guarantees” by the Union. The purported guarantees included
several matters related to Union membership, such as Union dues
payments, the right of employees to resign from the Union, the
right of employees to file unfair labor practice charges against
the Union, and a pledge to seek employee approval of any negotiated
collective bargaining agreement. The Union also “guaranteed” that
upon its victory, employees’ wages, benefits and working benefits
would not suffer, and that the Union had negotiated improved terms
for employees in every prior first contract negotiation. The Union
representative, Bill Fears, signed his name under each guarantee,
referring to the document as a signed contract between the Union
and employees.
12
Trencor alleges that by making the guarantees, the Union
offered employees “a financial benefit to which they would
otherwise not be entitled” in the critical period prior to the
election, thereby violating Board rules governing elections. See
Mailing Services, Inc., 293 N.L.R.B. 565 (1989). We disagree.
The Board decision to overrule this objection was
reasonable. Unions are permitted to promise the extension of
existing membership benefits to employees. Dart Container of
California, 277 N.L.R.B. 1369 (1985). Unlike Mailing Services, where
free health screening, an existing Union benefit, was actually
given to employees before the election, this is merely an
unremarkable promise to extend Union benefits to employees after
the Union’s election. 293 N.L.R.B. 565 (1989). Unions may also promise
to obtain better terms in the future. NLRB v. Golden Age Beverage,
415 F.2d 26, 30-31 (5th Cir. 1969) (union’s promised improvements
“fell within the category of customary and legally unobjectionable
preelection propaganda”). Trencor’s objection to the Union
“guarantees” is without merit.
C. Union’s “Catch 22" Tactics
Trencor’s better argument relates to the Union’s
challenge to Trencor executives to make guarantees similar to those
offered by the Union.8 Companies are not allowed to make such
8
The Union challenged Trencor officers to sign and date seven
statements:
1. I guarantee the company will never cut wages,
benefits, or other working conditions now in effect,
unless it is voted on and accepted by a majority of
13
promises in the period immediately preceding an election,9 and
workers here at our plant. (The same right union members
have).
***
2. I guarantee the company will not increase the
employees portion or co-pay for insurance costs, and will
not reduce the present benefits under this plan ever.
***
3. I guarantee the company will select all future job
openings by seniority and qualifications, rather than
using the favoritism system we now use. Also if there is
a difference of opinion in the selection process, the
affected party can file a grievance up to and including
arbitration to obtain justice.
***
4. I guarantee the company will end all favoritism in
the plant, and treat all workers fairly and equally and
stop the special treatment of a few favorites.
***
5. I guarantee in the future the company will notify
all workers by Thursday of any weekend overtime, or
workers will not be forced to work it, if they choose.
***
6. I guarantee any worker having a grievance on wages,
benefits, or other working conditions, including any
disciplinary actions, will have the right to present his
or her grievance to top management and if it is not
resolved to the workers satisfaction, the worker shall
have the right steelworker members have to present the
grievance to an impartial arbitrator accepted by both
sides, whose decision will be final and binding on the
company and the worker.
***
7. Finally, I guarantee the company will allow every
worker a full voice and vote on all matters pertaining to
wages, benefits, and all other working conditions. (The
same right steelworker union members have).
***
If company officials will not sign each and every
guarantee, how can you protect yourself without having
these basic rights? ...
9
See NLRB v. Exchange Parts Co., 375 U.S. 405, 409 (1964)
(“conduct immediately favorable to employees which is undertaken
with the express purpose of impinging upon their freedom of choice
for or against unionization” is illegal) and NLRB v. Varo, Inc.,
425 F.2d 293, 298-99 (5th Cir. 1970) (plant manager’s preelection
14
Trencor argues this challenge put the company in the untenable
position of either making illegal promises or appearing to back
down from the Union.
Trencor responded to the challenge by printing its own
leaflet disputing the Union’s guarantees and pointing out that it
was prohibited by law from making any type of similar promises.
Trencor alleged that Union agent Bill Fears wrote handwritten
responses on the face of Trencor’s leaflets. Trencor produced one
such altered leaflet on which someone had handwritten in the
margins10 that: “THE COMPANY CAN GIVE IT’S [sic] EMPLOYEES A
CONTRACT WITHOUT A UNION BEING INVOLVED. IF IT CARED ABOUT ITS
WORKERS & WANTED THEM TREATED FAIRLY.” (emphasis in original).
Trencor alleges that this alteration of its leaflet occurred on the
morning of the election, denying Trencor the opportunity to respond
to this misrepresentation and putting Trencor in a “false light”
because it followed the law. Thus, Trencor argues, the “laboratory
statement that “[i]f money is all you people are concerned with,
you don’t have to go through all of this trouble to get it” was an
illegal promise of benefits in violation of § 8(a)(1) of the Labor
Management Relations Act).
10
The handwritten text was connected by an arrow to the typeset
text of the company’s flier which read:
Please understand this; the company by law cannot
guarantee or promise you anything to get you to vote
against the Union. What the Union salesman is doing is
trying to get the company to violate the law by
guaranteeing or promising you something so that if it
loses the election it can possibly become your
representative even though you don’t want it. The
company will not violate the law and will not promise or
guarantee anything.
(Emphasis in original).
15
conditions” necessary for the employees’ free choice were
destroyed. See Home Town Foods, 416 at 396 (5th Cir. 1969)
(“‘laboratory conditions test’ represents an ideal atmosphere in
which a free choice may be made by employees, protected from
interference by employer, union, Board agent, or other parties”;
key is “whether the employees were permitted to register a free
choice”).
The Board counters that Trencor’s responsive leaflet
apprised the employees of its views on the Union guarantees and the
legal restrictions keeping the company from making similar
promises, thereby rebutting the notion that it was backing down
from the Union challenge. The Board also argues that there is no
evidence that the handwritten message on Trencor’s leaflet came
from a Union agent or was widely distributed. Ultimately, the
Board relies on Midland Nat’l Life Ins. Co., 263 N.L.R.B. 127, 131-33
(1982), in which the Board decided that it would “no longer probe
into the truth or falsity of the parties’ campaign statements and
[would not] set elections aside on the basis of misleading campaign
statements.” The Board contends that because the thrust of
Trencor’s complaint about the Union challenge is that it was
misleading, the Midland doctrine applies and the Board will not
invalidate the election on this basis.
16
Accepting Trencor’s allegation that the Union was
responsible for the election day message,11 we must decide if the
Midland doctrine bars a challenge to the election. This circuit
has yet to approve fully the Midland doctrine.12 Only one Fifth
Circuit case cites Midland. See NLRB v. Rolligon Corp., 702 F.2d
589, 597 (5th Cir. 1983). In Rolligon, this court overruled an
election challenge where the union misused Board subpoenas two
months before the election. Id. at 596-97. Although the court
condemned the union’s actions, the court agreed “with the Board
11
The Board argues on appeal that there is no evidence of Union
involvement with the handwritten notes on Trencor’s leaflets. This
borders on the ridiculous. At the top of the same defaced leaflet,
in the same handwriting, is written “TRENCOR, WHY DID YOU CUT OFF
THE TOP PART OF THIS HANDBILL WE PUT OUT? IS IT [sic] ‘GUARANTEE’
WAS IN BIG CAPITAL LETTERS?” (emphasis in original). Surely, the
reference to the “HANDBILL WE PUT OUT” supports the inference that
the Union, who put out the prior handbill, also was responsible for
the handwritten messages on Trencor’s leaflet. Even if this was
not patently obvious, the Board is required to take Trencor’s
allegations as true given that the Board entered summary judgment
for the Union without a hearing. McCarty Farms, 24 F.3d at 729.
The Regional Director’s report and recommendation, adopted by the
Board, accepted the company’s allegations as true, and the Board
must continue to do so on appeal.
12
Three other circuits have adopted the Midland doctrine. See
NLRB v. Semco Printing Ctr., Inc., 721 F.2d 886, 892 (2d Cir.
1983); NLRB v. Monark Boat Co., 713 F.2d 355, 360 (8th Cir. 1983);
NLRB v. Yellow Transp. Co., 709 F.2d 1342 (9th Cir. 1983).
However, two other circuits, while approving the Board’s decision
in a particular case, held that an election might be overturned
where “the misrepresentation is so pervasive and the deception so
artful that employees will be unable to separate truth from untruth
and where their right to a free and fair choice will be affected.”
Van Dorn Plastic Mach. Co. v. NLRB, 736 F.2d 343, 348 (6th Cir.
1984) (citing NLRB v. New Columbus Nursing Home, Inc., 720 F.2d
726, 728 (1st Cir. 1983); See also NLRB v. Hub Plastics, Inc., 52
F.3d 608 (6th Cir. 1995) (remanding to require NLRB to determine
whether union misrepresentation fell within Van Dorn exception to
Midland).
17
that setting aside an election in which sixty-three percent of the
workers have chosen the union as their representative is not the
proper remedy.” Id. at 597. The court voiced support for the
rationale of Midland, noting that employees are “‘mature
individuals who are capable of recognizing campaign propaganda for
what it is and discounting it.’” NLRB v. Rolligon Corp., 702 F.2d
589, 597 (5th Cir. 1983) (quoting Midland, 263 N.L.R.B. at 132 (quoting
Shopping Kart Food Market, 228 N.L.R.B. 1311 (1977))). However, this
court ultimately based its decision on the impact the
misrepresentation would have on the election,13 concluding that
there was “substantial evidence in the record to support the
Board’s conclusion that the union’s misconduct was not likely to
have created the impression that the Board favored one party over
another.” Id. Important to the court’s conclusion was the fact
that the company had two months to respond to the union misconduct
but failed to do so. Id. at 596.
Trencor urges that Midland is inapplicable because it is
not alleging a simple misrepresentation, but rather is objecting to
13
The court noted that “both the Board and the courts have
shown a reluctance to ‘censor or police campaign propaganda unless
the misrepresentations are so substantial that the uncoerced
desires of the employees cannot be determined.’” Rolligon, 702 F.2d
at 597 (quoting NLRB v. Muscogee Lumber Co., 473 F.2d 1364, 1367
(5th Cir. 1973)).
18
the Union’s challenging Trencor to make illegal promises on the eve
of the election. Trencor contends the illegal challenge falls
outside the category of misrepresentation and within the category
of “campaign conduct, such as threats, promises, or the like, which
interfere with employee free choice” and which the Board is still
pledged to protect against under Midland. 263 N.L.R.B. at 131-33. We
disagree.
The Board’s decision to uphold the election on this basis
is supported by substantial evidence in the record. Although it is
unnecessary to decide the full scope of this court’s support of the
Midland doctrine, we rely on the overarching principle, recognized
in Rolligon, that employees must generally be trusted to sort
through election propaganda and posturing in deciding how to vote.
Contrary to Trencor’s protestations, the gravamen of its complaint
is that the Union challenge was misleading, i.e., it put Trencor in
a “false light.” Trencor’s efforts to place the Union conduct
outside the “misrepresentation” framework fail because,
irrespective of the outer bound of the Midland doctrine, Trencor
has not demonstrated that the Union conduct was so deceptive that
it inhibited employee free choice. Accordingly, the Board’s
application of the Midland doctrine to this case was within the
wide discretion granted to the Board by Congress. The Union’s
attempt to challenge Trencor to do something that the Union surely
knew the company could not do, on the eve of the election, is not
19
an honest tactic and certainly not one that should be condoned.14
However, in this case, Trencor was able to respond to the Union’s
challenge with its own leaflets outlining the company’s position.
The fact that the Union placed handwritten messages on some or all
of the company’s leaflets did not prevent employees from reading
the claims of both sides and making their own determinations.15 We
cannot conclude that “the misrepresentation is so pervasive and the
deception so artful that employees will be unable to separate truth
from untruth and ... their right to a free and fair choice will be
affected.” See Van Dorn Plastic, 736 F.2d at 348.
14
Trencor also contends that it not so much the misleading
Union challenge as its last-minute timing that is objectionable.
The company relies on the Kalen Construction Company, Inc., 321
NLRB No. 94, 1996 WL 387382 (1996), in which the Board recently
prohibited companies from changing their paycheck policies as a
campaign tactic within 24 hours of a union election. While Kalen
imposes a restraint on this particular type of electioneering
“speech,” and could be vulnerable for that reason, the decision
specifically does not apply to “the circulation of campaign
literature at any time prior to an election.”
15
The handwritten response to Trencor’s statement that the law
barred the company from making promises in the period before an
election, when read critically, acknowledges by omission that
Trencor’s statement was accurate. The Union response only states
that Trencor could make the requested promises “without a union
being involved.” See supra, note 10. Although suggesting that
Trencor could make the disputed promises, the response does not
actually dispute the substance of Trencor’s statement. This is not
to say that the handwritten response is completely truthful, but we
assume that employees can recognize the slanted rhetoric.
20
CONCLUSION
For the foregoing reasons, DENY the Board’s cross-
petition for enforcement of its bargaining order, and REMAND for
further proceedings as described above.
ENFORCEMENT OF BOARD ORDER DENIED; CASE REMANDED.
21
REYNALDO G. GARZA, Circuit Judge, dissenting.
While I concur with the majority’s treatment of the union’s
guarantees and its alleged “Catch-22" campaign tactics, I cannot
concur with its treatment of the alleged promise of a party and
therefore respectfully dissent from its refusal to grant the
Board’s petition for enforcement. My disagreement extends to
several points, as I explain below.
In his report on Trencor’s objections to the election, the
Regional Director for Region 16 stated as follows with respect to
the issue of the party:
In support of this objection the Employer provided an
employee witness who testified that a Union representative
told an employee, a Union supporter, that when the Union won
the election they were going to have the biggest party in the
history of Texas and that he would buy all the food and beer
for them. The Union employee supporter then, on or about
August 2, 1995, told the Employer witness about the party.
Assuming the Union representative made the above
statements at some point prior to the election about a
prospective party and even assuming the employee who told of
this party was an agent of the Union, such would not be a
basis for setting the election aside.
While the party referred to may have served as a possible
inducement to get employees to vote for the Union, it does not
amount to an impermissible coercion of the absence [sic] of a
linkage between the party and either a pre-election pledge of
Union support or an actual vote for the Union. Accordingly,
the alleged prospective party cannot be a basis for setting
the election aside. See Nu Skin International, Inc., 307 NLRB
No. 46. Accordingly, it is recommended this objection be
overruled.
22
(emphasis added). The Board adopted the Regional Director’s
findings and recommendations and overruled Trencor’s objections to
the election.
The majority states that the Board’s legal analysis is flawed,
and estops the Board from supplementing its legal citation with
additional cases to demonstrate the consistency with which it has
treated this issue. The majority also relies upon language in the
Board’s decision that the party “may have served as a possible
inducement.” The majority states: “Ultimately, we are persuaded
that the Board cannot adopt the recommendation of the Regional
Director, which notes that offering a party conditioned on a Union
victory ‘may have served as a possible inducement’ but rests on a
flawed legal analysis, and then argue on appeal that offering a
party could not reasonably have been seen as an inducement.” Maj.
op. at 8-9. The majority goes on to reject the Board’s legal
argument by stating that “[t]he Board’s reasoning on appeal might
be more persuasive if it comported with the facts administratively
found.” Maj. op. at 7.
The majority errs in its treatment of the Board’s opinion.
First, the language the majority alludes to is not a finding of
fact on this issue. Even if it was, it is of no legal import
because the Board determined that even if true, Trencor’s objection
failed as a matter of policy because the alleged
inducement—offering a victory party—was not an improper inducement,
i.e. one that would serve as a ground for setting aside the
23
election. Second, the majority finds error in the Board’s adoption
of the report when legal authority cited within it is not exactly
on point. Essentially, the majority holds that the Board is
estopped from not relying specifically on the Nu Skin case and the
Board’s analysis therein. What the majority overlooks is that the
Board’s opinion in Nu Skin did nothing more than discuss the topic
of unlawful inducements in light of guidance provided by the
Supreme Court in NLRB v. Savair Mfg. Co., 414 U.S. 270 (1973), the
Court’s only decision in this area. Moreover, the Board’s task in
an election challenge is not a quest for on-point precedent, but to
make an ad hoc determination based on the facts presented or, as
here, alleged. See Lach Simkins Dental Labs., 186 N.L.R.B. 671, 672
(1972) (Board will approach the question of whether “laboratory
conditions” have been upset on a case-by-case basis).
The Board’s opinion states that the promise was minimal and
could not have been expected to influence the election. In this
court, the Board argues that the promise was minimal and could not
be expected to influence the election. The Board’s appellate brief
certainly expresses its position much better than does its opinion
in this case, but there is no requirement that the two documents be
identical. In its petition for review, the Board provides a number
of cases setting forth the Board’s long-held position that an
employer or union’s simple promise to have a party is not improper,
to bolster its argument here that it properly determined the
promise of the party was an inducement of de minimis proportions.
24
This is not a case where a new legal argument is being introduced
into the mix. Rather, the NLRB General Counsel has done additional
research for this court and supplied the on-point legal citations.
The majority is quite correct that agencies are not permitted
to justify their actions in a judicial review proceeding on
different grounds than those they relied upon at the time of that
action. For us to sanction this sort of post hoc rationalization
would allow agencies to engage in unprincipled decision making and
would make us their accomplice. But this is not the type of
situation the Court had in mind when it decided Chenery and
Burlington Truck Lines. The Court has stated that “[w]hile we may
not supply a reasoned basis for the agency’s action that the agency
itself has not given, we will uphold a decision of less than ideal
clarity if the agency’s path may reasonably be discerned.” Bowman
Transp. v. Arkansas-Best Freight Sys., 419 U.S. 281, 285-86 (1974);
see also State of Texas v. United States, 756 F.2d 419, 427 (5th
Cir.), cert. denied, 474 U.S. 843 (1985). Because I believe “the
agency’s path may be reasonably discerned,” I would reject
Trencor’s argument that the Board’s appellate argument does not
match the reasons guiding its opinion.
In addition to its Chenery argument, the majority goes further
and states that the Board’s decision is foreclosed by the decision
of our court in NLRB v. Lou Taylor, Inc., 564 F.2d 1173 (5th Cir.
1977). In that case, the Board sought enforcement of an order
finding that an employer violated section 8(a)(1) of the Act and
25
requiring a new election where an employer told its employees
before the election that it would pay them to attend its Christmas
party and would also pay them for the holiday. The Board ordered
the new election “despite the Company’s contention that Christmas
parties were not new benefits and there were valid reasons for the
absence of Christmas parties in the preceding years.” Id. at 1175.
If the employer’s argument that the party itself was not improper
was of no concern to the Board or to us in our review of its
decision, it is abundantly clear that our decision rested on the
fact that a monetary benefit was conferred to the employees. The
Board has consistently held that parties may not buy votes. See,
e.g., NLRB v. Exchange Parts Co., 375 U.S. 405 (1964) (employer’s
conferral of benefit violated section 8(a)(1)); Crestwood Manor,
234 N.L.R.B. 1097 (1978) (“laboratory conditions” case holding union’s
promise to hold $100 raffle to be an improper inducement). The
Board has also consistently held that it can be an unfair labor
practice for an employer to withhold an ordinarily granted benefit,
such as hosting a Christmas party, during the pendency of a
campaign. An employer’s assertion that the benefit conferred is
one it has always given operates as an affirmative defense to an
8(a)(1) charge. That the Board still found a violation makes it
plain that the objectionable activity in that case was the promise
of a paid holiday and paid attendance.16
16
The majority’s misinterpretation of this case carries over
to its refusal to force Trencor to meet its burden of demonstrating
that the alleged impropriety by the union influenced the outcome of
26
The majority does not find it sufficient, however, to rest on
the arguments discussed above, and proceeds to reject the Board’s
position on this issue. It essentially determines that the Board’s
Crestwood Manor decision overruled, by implication, all previous
Board decisions in which an inducement of $1.18 or more was found
to be unobjectionable. Maj op. at 4-11 & nn.2-3. As a consequence
of this, the majority must be arguing (although it does not state
that it is) that this has caused the Board to be acting
inconsistent with its own precedent, a basis for us to approach its
present position with skepticism. See I.N.S. v. Cardoza Fonseca,
480 U.S. 421, 446 n.30 (1987) (“An additional reason for rejecting
the INS’s request for heightened deference to its position is the
inconsistency of the positions the BIA has taken through the
years.”); Shaw Supermarkets v. NLRB, 884 F.2d 34 (1st Cir. 1989)
(Board must explain departure from precedent). Even were this
argument valid, the Board must have in turn overruled the Crestwood
the election, a requirement in “laboratory conditions” cases such
as this one. See, e.g., NLRB v. McCarty Farms, 24 F.3d 725, 728-30
(5th Cir. 1994); Vicksburg Hosp. v. NLRB, 653 F.2d 1070, 1075 (5th
Cir. Unit A 1981) (“[e]stablishing that the objectionable
activities ‘either tended to or did influence the outcome of
election’ is especially difficult where, as in the case of the
Vicksburg Hospital election, the union won by a wide [148-66]
margin.”) (citations omitted). As Lou Taylor is a section 8(a)(1)
case, the remedy ordered there cannot be transplanted to a
“laboratory conditions” case because a different standard applies.
The Board almost invariably overturns an election where it finds
unfair labor practices were committed during the pre-election
period. Dal-Tex Optical Co., 137 N.L.R.B. 1782 (1962). See Sinclair
Co., 164 N.L.R.B. 261 (1967), enforced, 397 F.2d 157 (1st Cir. 1968),
aff’d sub nom. NLRB v. Gissel Packing Co. 395 U.S. 575 (1969), for
a discussion by the Board which separates the two standards within
a particular case.
27
Manor decision and abandoned this “$1.18 rule” (again by
implication), because it held fourteen years later in Nu Skin that
the promise of t-shirts (costing from $4 to $5) was
unobjectionable.17
The Supreme Court has long emphasized that, because the Board
is the expert body in the field of labor relations, we are to give
“considerable deference” to the Board’s position on policy
determinations and are not to disturb it “as long as it is rational
and consistent with the Act.” NLRB v. Curtin Matheson Scientific,
494 U.S. 775, 786-87 (1990). Stated another way, as an
administrative agency, the NLRB is entitled to the deference
announced by the Court in Chevron U.S.A. v. Natural Resources
Defense Council, 467 U.S. 837, 844 (1984). See ABF Freight Sys. v.
NLRB, 114 S. Ct. 835 (1994) (“When Congress expressly delegates to
an administrative agency the authority to make specific policy
determinations, courts must give the agency’s decision controlling
weight unless it is ‘arbitrary, capricious, or manifestly contrary
to the statute.’); Stardyne, Inc. v. NLRB, 41 F.3d 141, 147-48 (3d
Cir. 1994) (Board’s case-by-case adjudications to fill gaps in Act
are analyzed under Chevron). We also look to the consistency with
which the Board has acted as a factor in deciding whether the
17
The majority’s attempt to distinguish Nu Skin by noting it
was a pre-election benefit is unpersuasive, as is the extended
footnote in which it attempts to cast doubt upon forty years of
Board precedent because of a difference between pre- and post-
election benefits that it believes renders suspect the Board’s
citation of one in the context of the other. Maj. op. at 6-7 nn.
2-3.
28
agency’s action should stand. Cardoza Fonseca, 480 U.S. at 446;
NLRB v. New Jersey Bell Tel., 936 F.2d 144, 147 (3d Cir. 1991).
Nowhere, perhaps, is this deference greater than when the
issue is whether the “laboratory conditions” of the election are
alleged to have been upset. Section 9 of the Act gives the Board
“the broad duty of providing election procedures and safeguards for
elections and a wide discretion in determining when conduct did or
did not jeopardize the untrammeled expression of employee free
choice.” NLRB v. Sanitary Laundry, 441 F.2d 1368, 1369 (10th Cir.
1971). The issue before us today, whether the promise of a party
is the type of benefit that could reasonably have tended to
influence the employees’ decision, represents “precisely the type
of minor, detailed, interstitial question of labor election policy
that Congress asked the Labor Board, not the courts, to decide.”
NLRB v. Labor Services, Inc., 721 F.2d 13, 18 (1st Cir. 1983)
(Breyer, J., dissenting).
In rejecting the Board’s determination here, the majority
places this court at odds with the positions taken by our sister
courts. The Third Circuit considered this precise issue in NLRB
v. L&J Equipment Co., 745 F.2d 224 (1984), and, despite the
majority’s attempt to distinguish it, found the policy to represent
a reasonable exercise of its powers. The majority states that the
crucial difference between that case and the one before us today is
that the Board there made a fact finding that the purpose of the
election was to celebrate victory and “lay the groundwork for a
29
productive employee-union relationship.” In so distinguishing it,
however, the majority by-passes precedent of our court that
specifically rejects the “intent to influence” test in favor of the
“tendency to influence” test that the Board argues before us today.
See NLRB v. McCarty Farms, 24 F.3d 725, 731 n.5 (5th Cir. 1994)
(discussing the standard). The Third Circuit, incidentally uses
the same standard we use, NLRB v. Clearfield Cheese Co., 322 F.2d
89, 93-94 (3d Cir. 1963), making it rather difficult to distinguish
its opinion there on the basis that it relied upon the “purpose” as
being a satisfactory one. Because the Third Circuit’s decision is,
therefore, indistinguishable from the situation here, the
majority’s opinion creates a split with our colleagues on that
court. The majority’s conclusion also conflicts with favorable
commentary on the Board’s position on this issue from the First
Circuit. Labor Services, 721 F.2d at 17 (Board “properly held” in
Movsovitz that promise to buy beer and wine after election “could
not reasonably be expected to have influenced the employees’ free
choice.”)
Reviewed under the proper standard, the Board’s policy must
stand. Its position has been uniform for decades, as the majority
opinion clearly demonstrates. Maj. op. at 6-7 n.2. Because
Congress did not mandate an outcome here but expressly left it to
the Board to decide, it cannot be said that its determination is
“manifestly contrary to the statute.” Its determination is neither
arbitrary nor capricious. We have previously recognized “that
30
clinical asepsis is an unattainable goal in the real world of union
organizational efforts,” and accordingly are “conscious of the
‘realities of industrial life’ in our application of the
controlling standard.’” McCarty Farms, 24 F.3d at 728 n.2
(citations omitted). The Board has distinguished money payments
from parties on the ground that the former closely resembles a
bribe, while it is highly unlikely employees will vote against
their better interests merely on the promise of a party. As the
majority recognizes in its discussion of the Board’s Midland
decision, employees must be viewed as mature individuals. Maj. op.
at 16-19. As such, the union organizer’s Texas-sized boasts about
the party aside, the Board’s determination that the promise of the
party was not one that destroyed the laboratory conditions of the
election is entirely reasonable and should be upheld.
In sum, I believe that the Board’s opinion reflects the same
argument it advances on judicial review, that its position is not
foreclosed by any precedent of our court, and that the Board’s
position is not “arbitrary, capricious, or manifestly contrary” to
the Act. The employees’ 70-26 vote in favor of union
representation should be upheld. Accordingly, I would deny
Trencor’s petition for review and would grant the Board’s cross-
petition for enforcement of its order.
31