Jet Star, Inc. v. NLRB ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 99-2488 & 99-2778
Jet Star, Inc.,
Petitioner/Cross-Respondent,
v.
National Labor Relations Board,
Respondent/Cross-Petitioner.
Petition for Review and Cross-Application for Enforcement
of an Order of the National Labor Relations Board.
No. 13-CA-35087--Robert A. Giannasi, Administrative Law
Judge.
Argued January 10, 2000--Decided April 4, 2000
Before Flaum, Manion, and Evans, Circuit Judges.
Flaum, Circuit Judge. Jet Star, Inc. petitions
for review of the National Labor Relations
Board’s ("NLRB" or "Board") decision affirming an
administrative law judge’s ("ALJ") finding that
the Company violated Sections 8(a)(1) and 8(a)(3)
of the National Labor Relations Act ("NLRA" or
"Act"), 29 U.S.C. sec. 151 et seq., by
discharging employee John Krueger in retaliation
for his union activities. The Board ordered Jet
Star to make Krueger whole for the discrimination
he suffered, including reinstatement, back pay,
the removal of any reference to the unlawful
discharge from his employment file, and the
posting of an appropriate notice. The Board
cross-petitions this Court for enforcement of
that order and, for the reasons stated herein, we
enter final judgment enforcing the Board’s
decision and order in full.
I. Facts
Jet Star is a corporation primarily engaged in
the business of delivering jet fuel to airports.
The Company employs 180 employees at seventeen
terminals nationwide. It has forty employees and
seventeen trucks at its facility in Hammond,
Indiana.
John Krueger, the Jet Star employee who is the
subject of the Board’s unfair labor practice
charge in this case, was a driver at the
Company’s Hammond facility. He began working for
Jet Star in July 1995, and received Company
safety awards in both 1995 and 1996. The Company
also gave Krueger a quarterly safety bonus, as
well as a gift certificate in appreciation for
his help in handling damaged trucks. Prior to
coming to work at Jet Star, Krueger had
accumulated approximately ten years experience
driving trucks and approximately twenty years
experience as an automobile mechanic.
In March 1996, Krueger and another driver
visited the offices of Teamsters Local 142 and
told officials of that union that the drivers at
Jet Star were interested in improving their wages
and working conditions. Soon after, Krueger began
to speak with other drivers about improving their
benefits. Krueger also attended union meetings
and distributed union buttons and authorization
cards. Local 142 eventually filed a petition for
certification as the employees’ collective-
bargaining representative, and the Regional
Director of the NLRB scheduled a representation
election for June 1996.
During the election campaign, the Company
instituted mandatory meetings with its drivers at
which its management argued against union
representation. Krueger defended the union at
these meetings, and insisted that the employees
deserved higher wages. When the union election
was conducted, Krueger served as the union
observer. Jet Star employees voted against union
representation nineteen to fourteen.
In 1996 and early 1997, at about the same time
as the union campaign, Jet Star began to
experience excessive clutch and transmission
failures in trucks at its Hammond facility. As a
result of these problems, the Company was forced
to make two costly transmission replacements in
truck #296, as well as two transmission
replacements and a clutch replacement in truck
#298. Jet Star believed these equipment failures
to be a direct result of employee abuse. The
Hammond Terminal Lead Mechanic, Bill Atkins,
informed Jet Star’s Chief Executive Officer,
Darryl Guiducci, that it was Krueger who was
abusing the trucks.
In response to its equipment problems, Jet Star
scheduled Safety Performance Observations
("SPOs") for nine drivers at the Hammond
facility, including Krueger. During the SPOs,
Guiducci, who oversees maintenance at the
Company, rode with each driver and observed how
he operated the truck. When he rode with Krueger,
Guiducci noticed that Krueger was starting the
truck from a stopped position in fourth or fifth
gear and was slipping the clutch badly. When a
truck is operated in this manner, excessive heat
is generated and the clutch and transmission can
burn out, causing serious damage and
necessitating extensive repairs.
At the conclusion of his SPO with Krueger,
Guiducci informed Krueger that he would have to
cease starting the truck in fourth or fifth gear
because it caused the clutch to slip and
consequently burned out the clutch and the
transmission. Krueger acknowledged that he was
starting the truck in this manner, but stated
that he did not know it would damage the truck.
Guiducci then demonstrated the proper way to
start the truck, and told Krueger to watch an
instructional video on the proper use of the
clutch. Krueger was not formally disciplined at
this time.
In January 1997, the Company informed the
drivers that they would be hauling gas fuel, and
Krueger inquired as to whether they were to
receive a higher wage for carrying a more
dangerous fuel. The Company denied this request
for a pay raise. At about this time, several
drivers approached Krueger about starting another
union campaign. Krueger told them that they would
have to wait a year before they could hold
another election, but he urged them to go to the
union hall and "to stay together."
After other drivers began to express interest
in a renewed union campaign, Krueger contacted
officials at Teamsters Local 705. He explained to
a representative at Local 705 that several of the
drivers had expressed concern about the
leadership of Local 142, and asked the
representative how Local 705 would go about
addressing the drivers’ concerns. In total,
Krueger had approximately six or seven
conversations with union officials at Local 705.
In February 1997, at the request of union
supporter Wesley Gillian, Jet Star dispatcher Amy
Gregory faxed a copy of Local 705’s bylaws to
driver John Ramos. The faxed document was
received at the motel at which Ramos was staying,
but he never received the document. Eventually,
Ed Bell, Jet Star’s Director of Operations,
obtained a copy of the bylaws. Gregory was then
asked if she knew anything about the bylaws by
the Hammond facility’s Terminal Manager, Mark
Smith. When Gregory responded that she did not,
Smith stated: "[W]e need[ ] to start pushing the
issue of writing drivers up. And three in
particular because they are getting the [u]nion
vote." According to Gregory, Smith named Krueger
as one of the drivers he was particularly
concerned about. Gregory also testified that she
overheard a conversation between Smith and Bell
during which Smith said he needed some reason to
fire Krueger.
On March 10, 1997, Krueger left the Hammond
facility to deliver a load of jet fuel to Midway
Airport in Chicago, Illinois. While Krueger was
exiting the terminal parking lot, Fleet Manager
Robert Mulligan and Terminal Manager Smith
observed him starting the truck in too high a
gear. Krueger completed his delivery to Midway
and, when he informed the Company he had extra
fuel remaining, he was instructed to make a
second delivery that he successfully completed.
When Krueger reported to work on March 11,
1997, he was told that Smith wanted to see him.
When Krueger reported to Smith’s office, he was
given a discharge form signed by Smith and
witnessed by Mulligan. The form stated that
Krueger was being discharged for abuse of
equipment in violation of Company Rule
I(a)(4)./1 Smith told Krueger that the discharge
was not his idea, and that the order came from
Company headquarters. Gregory testified that
after Kreuger left she overheard Smith say, "[W]e
finally got him."
On April 17, 1997, Krueger filed an unfair
labor practice charge against Jet Star with the
Chicago regional office of the NLRB. In his
charge, Krueger alleged that Jet Star violated
Sections 8(a)(1) and 8(a)(3) of the NLRA when it
terminated his employment based upon his union
activities. The Chicago regional office issued a
complaint on the charge and a hearing was
conducted before ALJ Robert Giannasi on June 29
and 30, 1998.
On September 16, 1998, the ALJ ruled that Jet
Star discriminatorily discharged Krueger in
violation of Sections 8(a)(1) and 8(a)(3) of the
NLRA. The case was then transferred to the NLRB.
On March 27, 1999, the NLRB issued its decision
and order adopting the ALJ’s rulings, findings,
and conclusions. Jet Star now petitions for
review of the NLRB’s March 27 decision and order,
and the NLRB cross-petitions for enforcement of
that order.
II. Analysis
The Board affirmed the decision of the ALJ in
which the ALJ found that in discharging Krueger
Jet Star violated Sections 8(a)(1) and 8(a)(3) of
the NLRA. Section 7 of the Act guarantees
employees "the right to self-organization, to
form, join, or assist labor organizations, to
bargain collectively through representatives of
their own choosing, and to engage in other
concerted activities for the purpose of
collective bargaining or other mutual aid or
protection . . . ." 29 U.S.C. sec. 157. Section
8(a)(1) protects these rights by making it an
unfair labor practice for employers "to interfere
with, restrain, or coerce employees in the
exercise of [their Section 7 rights] . . . ." 29
U.S.C. sec. 158(a)(1). Section 8(a)(3) also helps
to effectuate employees’ ability to unionize by
prohibiting employers from "discriminati[ng] 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. sec. 158(a)(3).
It is well-established that Jet Star violated
Sections 8(a)(1) and 8(a)(3) of the NLRA if it
discharged Krueger because of his union
activities. See NLRB v. Transportation Management
Corp., 462 U.S. 393, 398 (1983); NLRB v. Joy
Recovery Tech. Corp., 134 F.3d 1307, 1314 (7th
Cir. 1998); NLRB v. Dorothy Shamrock Coal Co.,
833 F.2d 1263, 1266 (7th Cir. 1987). We first
look to whether the NLRB’s General Counsel,
representing Krueger, established a prima facie
case that the employer acted with an unlawful
motivation. See Transportation Management, 462
U.S. at 398; Wright Line, a Div. of Wright Line,
Inc., 251 N.L.R.B. 1083, 1089 (1980), enforced 662
F.2d 899 (1st Cir. 1981), cert. denied, 455 U.S.
989 (1982). If so, we then look to whether the
employer was able to rebut that evidence or to
show that the job action would have been taken
even in the absence of the employee’s protected
activities. See Transportation Management, 462
U.S. at 398; Wright Line, 251 N.L.R.B. at 1089.
In this case, Jet Star first contends that the
Board’s decision was in error because the General
Counsel failed to establish a prima facie case of
discrimination. To make out a prima facie case,
the General Counsel must show: (1) that the
employee engaged in a protected activity; (2)
that the employer had knowledge of the employee’s
activities; and (3) that the employer acted with
anti-union animus. See Director, Office of
Workers’ Compensation Programs, Dep’t of Labor v.
Greenwich Collieries, 512 U.S. 267, 278 (1994).
In order to uphold the Board’s determination, we
need only find that the decision is supported by
substantial evidence in the record considered as
a whole. 29 U.S.C. sec. 160(e); see Universal
Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951);
Beverly Farm Found., Inc. v. NLRB, 144 F.3d 1048,
1051 (7th Cir. 1998). Under the substantial
evidence standard, a court may not "dabble in
factfinding, . . . [or] displace reasonable
determinations simply because [it] would have
come to a different conclusion if [it] reviewed
the case de novo." NLRB v. Augusta Bakery Corp.,
957 F.2d 1467, 1471 (7th Cir. 1992) (quoting NLRB
v. P*I*E Nationwide, Inc., 923 F.2d 506, 513 (7th
Cir. 1991)).
In challenging the evidence supporting the
Board’s decision, Jet Star argues that the
Company had no knowledge, at the time it
discharged him, of Krueger’s union activities
following the defeat of Local 142 in the June
1996 representation election. In this regard, Jet
Star notes that Krueger himself testified that he
did not wear or distribute any union
paraphernalia in the presence of Company
officials after the election, and that he did not
inform Jet Star management of his union
activities nor identify himself as a union
spokesperson at any Company meetings. Jet Star
contends that the only hint it had of Krueger’s
union affiliation was his union activities prior
to the certification election, and his
participation as an observer in that election.
The Company’s knowledge of Krueger’s union
activities was primarily established by
dispatcher Gregory’s testimony. Gregory testified
that in January 1997, Terminal Manager Smith
announced his intention to begin "writing up"
Krueger and two other drivers who were "getting
the [u]nion vote." Furthermore, Gregory stated
that she overheard Smith tell Director of
Operations Bell that he had to find some reason
to fire Krueger. Finally, after Krueger was
fired, Gregory overheard Smith say "we finally
got him." This testimony as to Smith’s comments
is evidence that Smith had knowledge of Krueger’s
union activities, and strongly supports an
inference that the Company’s discharge of Krueger
was motivated by the Company’s anti-union animus.
See Dorothy Shamrock Coal, 833 F.2d at 1267
(stating that "comments [that] demonstrate a
’manifest hostility’ toward union activity . . .
are relevant in determining the Company’s motive
for its conduct").
Jet Star does acknowledge that Gregory’s
testimony indicates knowledge of Krueger’s union
activities on the part of the Company, but
asserts that this testimony was so incredible
that the ALJ should have disregarded it. We must
affirm credibility determinations made by the
ALJ, and adopted by the Board, in the absence of
extraordinary circumstances. See J.C. Penney Co.
v. NLRB, 123 F.3d 988, 995 (7th Cir. 1997);
Dilling Mechanical Contractors, Inc. v. NLRB, 107
F.3d 521, 524 (7th Cir. 1997). Such extraordinary
circumstances "include a clear showing of bias by
the ALJ, an utter disregard for uncontroverted
sworn testimony or the acceptance of testimony
which on its face is incredible." Carry Co. of
Il., Inc. v. NLRB, 30 F.3d 922, 928 (7th Cir.
1994). In this case, Jet Star argues that the
ALJ’s credibility determination as to Gregory’s
testimony was irrational and patently incredible
because her testimony was manifestly contradicted
by other evidence in the record.
Gregory testified that she faxed a set of Local
705’s bylaws to a union supporter at a Milwaukee
hotel, but that she did not know what the
documents were. According to Jet Star, this
testimony was contradicted by that of another Jet
Star driver, Wesley Gillian, who testified that
he gave Gregory the bylaws to fax and stated,
"John wanted to see a copy of the bylaws." In
addition, Jet Star argues that Gregory herself
testified that Gillian asked her to fax a copy of
the bylaws, and that she admitted during cross
examination that she "faxed some bylaws of the
union to a Super 8 in Milwaukee." Jet Star
contends that both Gillian’s and Gregory’s
statements contradict Gregory’s assertion that
she did not know she was faxing a copy of the
bylaws, and that the ALJ therefore erred in
finding her testimony credible.
The deferential standard of review that we
apply to the credibility determinations of the
ALJ is based on our desire to avoid
"redetermining credibility ’on the basis of a
cold record.’" Joy Recovery, 134 F.3d at 1312
(quoting Carry Co., 30 F.3d at 928). In this
case, Jet Star has failed to show that the ALJ’s
acceptance of Gregory’s testimony was irrational
or patently incredible because none of the
testimony cited by the Company clearly
contradicts that of Gregory. Gillian’s testimony
indicates that he told Gregory that the document
to be faxed was a copy of the bylaws, but it does
not establish that Gregory in fact knew they were
bylaws. And, while Gregory herself referred to
the documents as bylaws, it is possible that this
reference only indicates the state of her
knowledge at the time she testified. Gregory’s
reference to bylaws does not prove that she knew
the documents were bylaws at the time she faxed
them, and does not demonstrate that the ALJ’s
credibility determination was irrational or
patently erroneous.
In addition to Smith’s comments about Krueger,
the timing of the discharge itself supports an
inference that Krueger was dismissed because of
his union-related activities./2 See NLRB v.
O’Hare-Midway Limousine Serv., 924 F.2d 692, 697
(7th Cir. 1991) (holding that the timing of a
discharge may indicate the existence of an
unlawful motive). At the time Krueger was
discharged, Jet Star employees had expressed
interest in renewing a campaign to unionize the
Hammond facility. Furthermore, Krueger’s
discharge came only shortly after Smith expressed
concern about drivers who were "getting the union
vote," and after he specifically stated that
management needed a reason to fire Krueger. The
timing of Krueger’s discharge, coupled with the
evidence of anti-union animus presented by the
General Counsel, provides a sufficient basis for
the Board’s finding that Jet Star committed an
unfair labor practice by discharging Krueger
because of his union activities. See NLRB v.
Shelby Memorial Hosp. Ass’n, 1 F.3d 550, 568 (7th
Cir. 1993) (stating that an employer’s
discriminatory motive can be proved through
circumstantial evidence); Justak Bros. & Co. v.
NLRB, 664 F.2d 1074, 1077 (7th Cir. 1981) (same).
Jet Star attempts to rebut the inference that
it fired Krueger based upon his union activities
by arguing that it actually discharged him
because of its good-faith belief that he was
abusing equipment. According to Jet Star, it was
not Krueger’s union activities that led to his
firing, but rather the damage to the trucks
Krueger caused through his consistent mishandling
of them. Jet Star further contends that because
of his abusive treatment of equipment, Krueger
would have been fired even in the absence of his
union-related efforts. The Board rejected the
Company’s abuse of equipment rationale as a
pretext, and we look only to whether there was
substantial evidence in the record to support
such a finding. 29 U.S.C. sec. 160(e); see
Universal Camera Corp., 340 U.S. at 488; Beverly
Farm Found., 144 F.3d at 1051.
In this case, Jet Star claims that it
discharged Krueger because he was abusing the
equipment by starting trucks in too high a gear.
Yet when Smith and Mulligan allegedly saw Krueger
exit the parking lot in fourth or fifth gear on
March 10, 1997, Krueger was not called back to
work nor was he prevented from making a second
delivery that day. Moreover, Krueger was never
formally warned about the potential consequences
of abusing the trucks, and was discharged without
even a cursory investigation into the reported
misconduct. See NLRB v. Advanced Transp. Co., 979
F.2d 569, 574 (7th Cir. 1992) (holding that
evidence of a cursory investigation can give rise
to an inference of an unlawful motive). While
this evidence is not conclusive as to Jet Star’s
motivation, it does provide sufficient
evidentiary support for the Board’s determination
that the abuse of equipment rationale offered by
Jet Star was a pretext to cover the fact that
Krueger was discharged because of his union
activities.
The Board’s conclusion that the abuse of
equipment justification was only a pretext is
further supported by Jet Star’s handling of
previous problems with employees abusing
equipment. Other drivers who damaged Company
trucks in minor ways were apparently not fired
for their first offense. Rather, the only first-
time offenders the Company did discharge were
those involved in serious accidents with high
degrees of damage. While the Company contends
that the clutch and transmission failures
involved in this case are more analogous to the
major damage that led to previous dismissals, the
Board disagreed. More significantly, the Board
found that Jet Star failed to present any
concrete evidence that it believed that Krueger’s
operation of the trucks led to the damage the
Company claims to have sustained./3 Absent a
more conclusive connection between Jet Star’s
dismissal of Krueger and its asserted belief that
Krueger caused the damage to Jet Star’s trucks,
we cannot determine that the Board erred in
finding Jet Star’s asserted justification
pretextual. See NLRB v. Thor Power Tool Co., 351
F.2d 584, 587 (7th Cir. 1965) (stating that the
Board may disregard an employer’s asserted
justification when it "furnishe[s] the excuse
rather than the reason" for the action).
Jet Star complains that even accepting the
Board’s pretext finding, the Board did not go on
to determine whether Jet Star would have fired
Krueger even had he not engaged in union
activity. However, that argument is necessarily
answered by our conclusion that there was
sufficient evidence in the record to support the
Board’s determination that the Company’s asserted
justification was pretextual. Where the Board
finds that the proffered reason for a discharge
was pretextual, we cannot conclude that the
discharge would have occurred in the absence of
the protected activity. See Wright Line, 251 N.L.R.B.
at 1089. Furthermore, the Board’s pretext finding
lends added support to its determination that Jet
Star discharged Krueger based on his union
activities. See Union-Tribune Publishing Co. v.
NLRB, 1 F.3d 486, 490-91 (7th Cir. 1993);
Shattuck Denn Mining Corp. v. NLRB, 362 F.2d 466,
470 (9th Cir. 1996) (stating that where an
employer’s stated justification is pretextual, it
can be inferred "that the motive is one that the
employer desires to conceal--an unlawful motive--
at least where, as in this case, the surrounding
facts tend to reinforce that inference"). In
these circumstances, we cannot conclude that the
record lacks substantial evidence supporting the
Board’s conclusion that Jet Star’s asserted non-
discriminatory rationale was pretextual.
III. Conclusion
We find that there is substantial evidence in
the record to support the Board’s conclusion that
Jet Star violated Sections 8(a)(1) and 8(a)(3) of
the NLRA by firing Krueger because of his union-
related activities. Accordingly, we deny Jet
Star’s request to set aside the Board’s decision
and order dated May 27, 1999, and enter final
judgment enforcing that decision and order in
full.
/1 Company Rule I(a)(4) is titled "Tampering with
and/or abusing Company owned or leased
equipment," and is set forth in the employee
handbook. According to the handbook, a violation
of Rule I(a)(4) is a major violation and the
punishment for a first infraction is a minimum
one-week suspension without pay or,
alternatively, termination.
/2 Jet Star argues that the timing of Krueger’s
discharge actually supports an inference that it
was not union-related. According to Jet Star, if
it wanted to terminate Krueger based upon his
union activities, it would have done so in
November 1996 after he was observed starting the
truck in too high a gear during the Safety
Performance Observation. In such circumstances,
an employer’s decision not to terminate an
employee at the first opportunity could undermine
an inference of anti-union animus. Carry Co., 30
F.3d at 929 n.4; NLRB v. Newman-Green, Inc., 401
F.2d 1, 4 (7th Cir. 1968). However, at the time
Guiducci conducted the SPOs, there was no
indication that Jet Star was concerned about
unionization. Local 142 had already been
defeated, and the new union movement had not yet
begun. In contrast, by March 1997, Jet Star was
aware of Krueger’s renewed union activities, and
had reason to be concerned about potential
unionization at its Hammond facility.
/3 The only evidence Jet Star presented of Krueger’s
mishandling of the trucks was Guiducci’s
testimony and notes that Krueger started the
truck in too high a gear during his Safety
Performance Observation, and the testimony of
Smith and Mulligan that they observed Krueger
exit the Company parking lot in too high a gear.
Were the ALJ to have credited this testimony, Jet
Star could certainly argue that the record
supported its contention that Krueger was
discharged for an abuse of equipment. However,
the ALJ rejected this testimony as incredible,
and did not believe the Company’s asserted
justification. Because we do not second-guess an
ALJ’s credibility determinations absent
extraordinary circumstances, Augusta Bakery
Corp., 959 F.2d at 1467, and because we do not
find any such circumstances present in this case,
we find no evidence in the record that supports
Jet Star’s argument that its abuse of equipment
rationale was not pretextual.