NLRB v. Stark Electric Inc

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
v. No. 98-1403
STARK ELECTRIC, INCORPORATED,
Respondent.
On Application for Enforcement of an Order
of the National Labor Relations Board.
(9-CA-33933)
Argued: October 26, 1998
Decided: November 30, 1998
Before ERVIN and HAMILTON, Circuit Judges, and
ANDERSON, United States District Judge for the
District of South Carolina, sitting by designation.
_________________________________________________________________
Enforcement granted in part and denied in part by unpublished per
curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Preston Langdon Pugh, NATIONAL LABOR RELA-
TIONS BOARD, Washington, D.C., for Petitioner. James William
St Clair, ST CLAIR & LEVINE, Huntington, West Virginia, for
Respondent. ON BRIEF: Frederick L. Feinstein, Acting General
Counsel, Linda Sher, Associate General Counsel, Aileen A. Arm-
strong, Deputy Associate General Counsel, Peter Winkler, Supervi-
sory Attorney, NATIONAL LABOR RELATIONS BOARD,
Washington, D.C., for Petitioner.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
The National Labor Relations Board (the Board) petitions for
enforcement of its order finding that Stark Electric, Inc. (Stark Elec-
tric) committed violations of §§ 8(a)(1) and (a)(3) of the National
Labor Relations Act (NLRA). See 29 U.S.C.§§ 158(a)(1) and (a)(3).
For the reasons stated below, we grant the Board's petition in part and
deny it in part.
I
Stark Electric is an electrical contractor that performs work primar-
ily at commercial sites in and near Huntington, West Virginia. Stark
Electric's principal shareholder and field supervisor is Bill Stark, who
is in his early eighties. Stark Electric's president and office manager
is Karen Stark, Bill Stark's daughter.
At the beginning of 1996, Stark Electric had only two electricians,
Mike Hickman and Anthony Napier. By the end of January 1996,
Stark Electric had five electricians, Hickman, Napier, Terry Quintrell,
Jim Downs, and Mark Childers. Except for Napier, these five worked
continuously for Stark Electric at least through the end of July 1996.
Napier last worked for Stark Electric on April 5, 1996.
In mid-March 1996, Stark Electric began installing wiring and
electrical fixtures at a Lone Star Steakhouse in the Huntington area.
In mid-April 1996, Stark Electric began doing similar work at an
Applebee's Restaurant located in the Huntington area. These projects
2
caused Stark Electric to hire additional electricians. On April 1, 1996,
Stark hired Michael Mayo, who had worked for Stark Electric on and
off since 1992. Between April 9 and May 3, 1996, Stark Electric hired
Michael Price, Tim Stidham, Joseph Gregory, Joel Stidham, Joseph
Rose, and Dwayne Pennington.
For reasons not disclosed in the record, Joel Stidham and Joseph
Gregory left Stark Electric shortly after they were hired. In response,
Stark Electric hired Eric Wilburn on May 7.
After work on May 14, 1996, Price and Pennington met with Sher-
man Nicholas, the organizing coordinator for the International Broth-
erhood of Electrical Workers, Local 317, AFL-CIO (the Union), in a
parking lot adjacent to the Applebee's Restaurant project. Price and
Pennington signed cards authorizing the Union to represent them.
Soon after leaving Price and Pennington, Nicholas wrote the fol-
lowing letter to Bill Stark:
The purpose of this letter is to make you aware that this
office is assisting a group of your employees who wish to
organize and join the International Brotherhood of Electrical
Workers.
At no time will we attempt to disrupt your work nor will we
engage in any activities not protected under the National
Labor Relations Act.
Also, I would like to invite you to meet us to discuss the
benefits of being a Union contractor. If you would like to
talk to us concerning either of these matters, you can contact
myself or [our] Business Manager, William Taylor, at the
above address and phone number.
Nicholas' letter was received by Karen Stark on May 16, 1996. On
that day, Eric Wilburn signed an authorization card at the Union hall.
He also encouraged other employees to join the Union. Sometime in
May 1996, Michael Mayo signed an authorization card. Neither Price,
Pennington, Wilburn, nor Mayo informed Stark Electric that they had
3
signed authorization cards. Also, there is no evidence in the record
that Stark Electric knew which employees had signed authorization
cards or were otherwise sympathetic to the Union.
On May 17, 1996, Joseph Rose worked his last day for Stark Elec-
tric. On May 24, 1996, Tim Stidham worked his last day for Stark
Electric. On that same day, Bill Stark approached Eric Wilburn and
told him that he was discharged.
In late May and early June 1996, two electricians had a short stint
with Stark Electric. John Sharkey worked 27-1/2 hours during the
week of May 19-25, 1996. Jim Shope worked twenty-four hours from
May 23-25, 1996, and eight hours on June 1, 1996.
Price and Pennington's last day at Stark Electric was May 27,
1996. Bill Stark told Pennington, who was on the Applebee's Restau-
rant project that day, that he was not happy with his work. Karen
Stark told Price that Stark Electric had no more work for him.
The record reflects that the number of hours worked by electricians
at Stark Electric decreased markedly after May 25, 1996. The follow-
ing is a summary of the hours for which Stark Electric's electricians
were paid for the weeks ending May 4 through June 9:
Week ending May 4 Regular hours: 353.5
Overtime hours: 51.0
Week ending May 11 Regular hours: 406.5
Overtime hours: 0
Week ending May 18 Regular hours: 402.5
Overtime hours: 40.5
Week ending May 25 Regular hours: 431.0
Overtime hours: 31.0
Week ending June 1 Regular hours: 263.5
Overtime hours: 23.0
4
Week ending June 9 Regular hours: 230.0
Overtime hours: 1.5
The hours worked at the Lone Star Steakhouse and Applebee's
Restaurant projects also declined in late May and early June. For the
weeks ending May 25, June 1, June 9, and June 15, 1996, the electri-
cians worked 390, 191, 86-1/2, and ninety-eight hours, respectively.
For the week ending June 15, the electricians only worked two hours
at the Lone Star Steakhouse project.
Two days after Price and Pennington were discharged, a new
employee, Kevin Scaggs, started working for Stark Electric. After dis-
charging Price and Pennington and hiring Scaggs, Stark Electric had
six full-time electricians working for it. These were the four employ-
ees who had been with Stark Electric since January, (Hickman, Quin-
trell, Downs, and Childers), Mayo, who had worked for Stark Electric
in prior years, and Scaggs. On June 10, 1996, Terry Hunley began
working for Stark Electric. Hunley worked on several projects
through July 10, 1996.
Before the ALJ, the Board also introduced evidence concerning
Stark Electric's attempts at defeating unionization. For example, dur-
ing Dwayne Pennington's pre-employment interview, Bill Stark asked
him if he was "one of those Union bastards?" On a couple of occa-
sions after Pennington started working, Bill Stark asked him if he had
seen Nicholas on the job site. One day, Stark said he had to go to
another site because "that SOB Union organizer" was there. When
Stark returned, he said he just missed Nicholas, but said he would like
to get his hands on him.
Eric Wilburn also heard Bill Stark make derogatory comments
about the Union. Bill Stark said members of the Union were lazy, that
the Union protected the lazy, and that he would not have any mem-
bers of the Union working for him.
Michael Price heard Bill Stark say on one occasion that the "Union
SOBs" had called the fire marshal and, as a result, Bill Stark had to
send all the employees at the Lone Star Steakhouse project home. On
another occasion, Price heard Bill Stark say that if he caught the
5
"Union SOBs" at the Lone Star Steakhouse project, he would run
them off.
On June 3, 1996, the Union initiated this case by filing unfair labor
practice charges with the Board. The Board's General Counsel issued
a complaint on October 2, 1996. The ALJ held a hearing on February
5, 1997, and issued a decision on April 27, 1997. The ALJ found that
Stark Electric committed several violations of the NLRA. Specifi-
cally, the ALJ found that: (1) Stark Electric violated § 8(a)(1) of the
NLRA by making comments designed to defeat unionization; and (2)
Stark Electric violated § 8(a)(3) of the NLRA when it discharged Wil-
burn, Pennington, and Price because of their union activity. The
ALJ's order requires Stark Electric to cease and desist from the unfair
labor practices found and from otherwise interfering with, restraining,
or coercing employees in the exercise of their rights guaranteed by the
NLRA. The ALJ's order directs Stark Electric to offer reinstatement
and back pay to Wilburn, Price, and Pennington. The ALJ's order also
requires Stark Electric to expunge any record of its discriminatory
intent from its files, to notify the employees that this has been done,
and to post a remedial notice.
On November 7, 1997, the Board affirmed in all material respects
the ALJ's findings, conclusions, and remedial order. The Board now
petitions this court 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 November 7,
1997, constitutes a final order under the NLRA, and thus we possess
appellate jurisdiction pursuant to 29 U.S.C. §§ 160(e) and (f).
The Board's decision is to be upheld if its factual findings are sup-
ported by substantial evidence on the record. See 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
Preserving Co., 905 F.2d 803, 810 (4th Cir. 1990). "Substantial evi-
dence has been held to mean `such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.'" Id. (quoting
6
NLRB v. Aquabrom, Div. of Great Lakes Chem. Corp. , 855 F.2d
1174, 1178 (6th Cir. 1988)).
III
Stark Electric contends that substantial evidence does not support
the Board's decision holding that it violated § 8(a)(1) of the NLRA
when Bill Stark made comments designed to defeat unionization. We
disagree.
Under § 8(a)(1) of the NLRA, it is an unfair labor practice for an
employer "to interfere with, restrain, or coerce employees in the exer-
cise of the rights guaranteed in" § 7 of the NLRA. 29 U.S.C.
§ 158(a)(1). Section 7 guarantees employees, among other things, the
right to "self-organization, to form, join or assist labor organizations."
Id. If a right guaranteed by § 7 is implicated, a § 8(a)(1) violation is
established if, "under all the circumstances, the employer's conduct
may reasonably tend to coerce or intimidate employees." NLRB v.
Grand Canyon Mining Co., 116 F.3d 1039, 1044 (4th Cir. 1997). The
employer's language or acts need not be "`coercive in actual fact.'"
Equitable Gas Co. v. NLRB, 966 F.2d 861, 866 (4th Cir. 1992).
Rather, we must determine "whether the conduct in question had a
reasonable tendency in the totality of circumstances to intimidate." Id.The question of "[w]hether particular conduct is coercive is a `ques-
tion essentially for the specialized experience of the NLRB,'" Grand
Canyon, 116 F.3d at 1044.
Our § 8(a)(1) inquiry does not end here. We must also balance "the
employee's protected right against any substantial and legitimate
business justification that the employer may give for the infringe-
ment." Medeco Sec. Locks, Inc. v. NLRB, 142 F.3d 733, 745 (4th Cir.
1998). "[I]t is only when the interference with § 7 rights outweighs
the business justification for the employer's action that § 8(a)(1) is
violated." Textile Workers Union of America v. Darlington Mfg. Co.,
380 U.S. 263, 269 (1965); see also Eastex, Inc. v. NLRB, 437 U.S.
556, 570-74 (1978) (balancing interests). This determination is also
squarely within the specialized expertise of the Board. See Medeco
Sec. Locks, Inc., 142 F.3d at 745. "[I]t is the primary responsibility
of the Board and not the courts to strike the proper balance between
the asserted business justifications and the invasion of employee
7
rights in light of the Act and its policy." Jeannette Corp. v. NLRB,
532 F.2d 916, 918 (3d Cir. 1976) (citation and internal quotation
marks omitted). We must affirm the Board's balancing if it is rational
and consistent with the NLRA. See Beth Israel Hosp. v. NLRB, 437
U.S. 483, 501 (1978); Medeco Sec. Locks, Inc. , 142 F.3d at 745.
Accordingly, "an independent violation of § 8(a)(1) exists when (1)
an employer's action can be reasonably viewed as tending to interfere
with, coerce, or deter (2) the exercise of protected activity, and (3) the
employer fails to justify the action with a substantial and legitimate
business reason that outweighs the employee's § 7 rights." Medeco
Sec. Locks, Inc., 142 F.3d at 745.
In their totality, the statements made by Bill Stark set forth in Part
I of this opinion, supra 5-6, had a reasonable tendency to intimidate
employees from attempting to organize. Accordingly, the first two
prongs of a § 8(a)(1) violation are met. Cf. Equitable Gas Co. v.
NLRB, 966 F.2d 861, 867 (4th Cir. 1992) (employer's references to
union "hassles," his allusion to arming the bunnies and "letting them
shoot," and his claim that Equitable would increase automation and
the use of outside contractors if the union did not cooperate were
implied threats of reprisal for union activities); NLRB v. Nueva Eng'g,
Inc., 761 F.2d 961, 966 (4th Cir. 1985) (substantial evidence sup-
ported finding by the Board that employer's foreman coercively inter-
rogated employee regarding employee's union sympathies where
employer's opposition to union was clear, foreman had authority to
hire and fire as he saw fit and there was no evidence that the foreman
explained purpose of such questioning or gave employee any assur-
ances against retaliation); NLRB v. McCormick Concrete Co., 371
F.2d 149, 152 (4th Cir. 1967) (holding that statement that "a union
would do employees no good" can be unlawfully coercive). Because
Stark Electric offered no business justification for the statements at
issue, the third prong of a § 8(a)(1) violation is met. Accordingly, we
will enforce the decision of the Board finding that Stark Electric vio-
lated § 8(a)(1) of the NLRA when Bill Stark made comments
designed to defeat unionization.
IV
We next turn to consider whether we should enforce that portion
of the Board's order finding Stark Electric guilty of violating
8
§ 8(a)(3) of the NLRA. See 29 U.S.C.§ 158(a)(3). Discriminatory
discharge is an unfair labor practice under § 8(a)(3) of the NLRA, 29
U.S.C. § 158(a)(3).* However, an employer's actions violate this sec-
tion only if they are motivated by anti-union animus. See Goldtex,
Inc. v. NLRB, 14 F.3d 1008, 1011 (4th Cir. 1994). In FPC Holdings,
Inc. v. NLRB, 64 F.3d 935 (4th Cir. 1995), we set forth the standard
to be applied in § 8(a)(3) 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 employ-
ee'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.
Id. at 942 (citations and internal quotation marks omitted).
The issue in this case, then, is whether substantial evidence on the
whole record can sustain the Board's finding that the discharges of
Price, Pennington, and Wilburn were partly or wholly motivated by
the purpose of discouraging union activities at Stark Electric. See
NLRB v. Instrument 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 reasonable, "mere speculation as to the [employer's]
real motives registers no weight on the substantial evidence scale." Id._________________________________________________________________
*Section 8(a)(3) of the NLRA provides in pertinent part: "It shall be
an unfair labor practice for an employer . . . by discrimination 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).
9
(citations and internal quotation marks omitted). Of course, Stark
Electric can attempt to rebut the prima facie case once established by
presenting a valid business justification. See Goldtex, Inc., 14 F.3d at
1013.
In this case, the Board failed to establish what we have described
as § 8(a)(3)'s "most basic element," namely, that the employer was
aware of the employees' protected activities. Id. at 1011. While it is
true that Stark Electric was aware that the Union was "assisting a
group of employees" in organizing, there is no evidence that Stark
Electric had knowledge of which employees formed that "group," and
hence Stark Electric could not have known that Pennington, Price,
and Wilburn were engaged in protected activities.
We recognize that a company can violate § 8(a)(3) by discharging
employees who are not union sympathizers in an effort to send an
anti-union message or to otherwise discourage union membership.
See Medeco Sec. Locks, Inc., 142 F.3d at 744. However, the Board
must present some evidence that the discharges were motivated by
anti-union animus. Id. In this case, the Board did present evidence
that Bill Stark did not like unions and did not want union members
working for him. However, General Counsel never proved that the
discharges at issue were designed to discourage union activities.
Rather, the record reflects that the discharges of Price, Pennington,
and Wilburn were necessitated by available work, i.e., economic cir-
cumstances. Between May 25 and June 1, 1996, work performed by
Stark Electric's electricians declined from 462 to 286 hours. The two
major projects, the Lone Star Steakhouse project and the Applebee's
Restaurant project, were nearing completion. On these projects,
between May 25 and June 1, 1996, the hours worked by the electri-
cians decreased from 390 hours to 191 hours. Faced with the nearing
completion of two major projects, discharges were inevitable.
Because the discharges were necessitated by economic circum-
stances, the fact that the discharges of Price, Pennington, and Wilburn
occurred at a time when: (1) the electricians were attempting to orga-
nize; and (2) Bill Stark made certain comments designed to defeat
unionization, does not automatically infect all the discharges. Further,
the hiring of Scaggs shortly after the discharges does not help the
Board's cause. Before we can enforce the Board's order, substantial
10
evidence must exist that the discharges were for the purpose of dis-
couraging union activity. Goldtex, Inc., 14 F.3d at 1012. Such evi-
dence is absent in this case, and therefore, we must deny enforcement
of this portion of the Board's order. To hold otherwise, companies
such as Stark Electric "would lose the flexibility to control the size
of their work force when adverse economic conditions required a
reduction in personnel." Id.Because there is no evidence in the record suggesting that Stark
Electric knew of Price, Pennington, and Wilburn's union activities or
that the discharges were designed to send an anti-union message, the
Board's decision that Price, Pennington, and Wilburn were discharged
because of their union activity in violation of§ 8(a)(3) of the NLRA
is not supported by substantial evidence.
V
For the reasons stated herein, the Board's petition for enforcement
is granted in part and denied in part.
ENFORCEMENT GRANTED IN PART AND DENIED IN PART
11