American Safety Equipment Corporation v. National Labor Relations Board

643 F.2d 693, 106 L.R.R.M. (BNA) 2836, 1981 U.S. App. LEXIS 19725

• Court: Court of Appeals for the Tenth Circuit
• Decided: March 3, 1981
• Docket: 79-1223
• Status: Published

Opinions

SEYMOUR, Circuit Judge.

American Safety Equipment Corporation (Company) engages in the manufacture, nonretail sale and distribution of automotive restraint systems. The International Association of Machinists and Aerospace Workers, AFL-CIO, sought to organize production and maintenance employees at the Company’s Palmyra, Missouri facility. A National Labor Relations Board representation election was held October 29, 1976. The Union lost, and it filed several objections to the Company’s conduct during the preelection period. After an investigation, the Regional Director overruled all the Union objections, but nonetheless set aside the election.

The Regional Director based his decision upon two rules in the Company’s employee handbook. One rule prohibited “distribution of unauthorized leaflets, papers, or other materials during working hours on Company property.” Rec., vol. II, at 301. The other stated that “only the recognized solicitations for charitable organizations and similar activities specifically approved by the Company will be permitted during working hours.”¹ Id. The Regional Director held that the no-solicitation, no-distribution rules constituted an interference with the employees’ organization rights.

The Company’s request for NLRB review of the Regional Director’s decision was telegraphically denied, and a second election was held January 14,1977. The Union won. The Company objected, claiming section 9(c)(3) of the Act, 29 U.S.C. § 159(c)(3), barred a second election because a valid election had been held in the preceding twelve-month period. The Regional Director overruled the Company’s objection and certified the Union as the employees’ bargaining agent. The Board denied the Company’s request for review of this decision in a written opinion² on January 26, 1978, approximately one year after the Union was certified.

No -negotiations took place between the Union and the Company during the Union’s certification year. Shortly after review was denied by the Board, the Union sent a letter to the Company requesting negotiations. A second Union letter again sought a bargaining meeting and requested pertinent information about Company employees. The Company did not respond to either communication. Subsequently, the Union filed the unfair labor practice charge that is the basis of this appeal, alleging the Company had refused to bargain and to supply requested information. The Board found violations of sections 8(a)(5) and (1)³ of the Act and directed the Company to bargain with the Union. The Company petitioned this court for review of the Board’s order. The Board cross-applied for enforcement.

The Company raises three issues on appeal. It argues 1) that the Board erred in setting aside the first election; 2) that even assuming the Company had an obligation to bargain after the second election, the Company did not illegally refuse to do so during the certification year; and 3) that after the year had expired, its refusal to bargain was based on a reasonable, good faith doubt as to the Union’s majority status. We find the first issue dispositive and, therefore, need not reach the other two questions.

The Company is charged with an unfair labor practice for refusing to bargain with the Union. The Company claims that it had no duty to bargain because the Union was defeated in what it contends was a valid first election. Thus, in determining whether the Company committed an unfair labor practice, we must decide if the Regional Director was justified in setting aside the first election.

Congress has given the Board wide discretion in supervising representation elections. NLRB v. Tower Co., 329 U.S. 324, 330, 67 S.Ct. 324, 327, 91 L.Ed. 322 (1946). This includes the right to set aside an election in which a party’s preelection conduct “reasonably tends to interfere with the voter’s free choice,” Independent, Inc. v. NLRB, 406 F.2d 203, 206 (5th Cir. 1969) (quoting NLRB v. Laney & Duke Storage Warehouse Co., 369 F.2d 859, 864 (5th Cir. 1966)), or unduly influences the election result. NLRB v. Tennessee Packers, Inc., 379 F.2d 172,180 (6th Cir. 1967). Our review of such a Board decision is limited to determining whether it is supported by substantial evidence on the record considered as a whole. Harlan # 4 Coal Co. v. NLRB, 490 F.2d 117, 125 (6th Cir. 1974); Tennessee Packers, 406 F.2d at 180. Substantial evidence is “more than a mere scintilla and connotes such relevant evidence as a reasonable mind would accept as adequate to support a conclusion.” Ann Lee Sportswear, Inc. v. NLRB, 543 F.2d 739, 742 (10th Cir. 1976).

In this case, the Regional Director conducted a full investigation of the objections made by the Union to the first election. Both the Union and the Company were given ample opportunity to present evidence, including sworn statements from witnesses, on the conduct of the election. The only basis found by the Regional Director for setting aside the first election was the no-solicitation, no-distribution rules in the Company handbook, which was given to every new employee.

The Board has determined that representation elections must occur under “laboratory conditions.” Tennessee Packers, 379 F.2d at 180 (quoting NLRB v. Blades Manufacturing Corp., 344 F.2d 998, 1003 (8th Cir. 1965)). In deciding whether such conditions have been disturbed, rules prohibiting solicitation or distribution during working hours, as opposed to working time, are presumed to interfere with employees’ organizational rights. See Essex International, Inc., 211 N.L.R.B. 749, 86 L.R.R.M. 1411, 1412 (1974). However, an “employer [may] show by extrinsic evidence that, in the context of the particular case, the ‘working hours’ rule was communicated or applied in such a way as to convey an intent clearly to permit solicitation during break-time or other periods when employees are not actively at work.” Id.

In setting aside the election on the basis of the two rules in the handbook, we conclude that the Regional Director erroneously applied the analysis in Essex to the facts before him. He recognized that under Essex an employer may rebut a prima facie presumption of invalidity by a showing that either the “working hours” rules were communicated or applied properly. But he failed to consider the evidence showing proper application in this case. To meet its burden the Company submitted four employee affidavits covering the solicitation issue. The industrial relations manager stated that employees were told their lunchtime and breaktime were their own to do with as they pleased and that employees were well aware the rules on solicitation and distribution applied only to actual working time. He also stated that employees openly engaged in Union activities, including the distribution of Union material during their nonwork time, and were not disciplined or prohibited from doing so. Two other employees stated that material for and against the Union was openly distributed at the plant during nonworking time and that no one was disciplined as a result. Although as noted by the dissent the Regional Director found only four instances in which employees were specifically informed that the rules only covered actual work time, the evidence clearly establishes that the rules were consistently applied properly by the Company. There is absolutely no evidence to the contrary. Furthermore, in overruling Union objections 2, 3 and 5, the Regional Director himself found that “in enforcing its no-solicitation, no-distribution rules, [the Company] did not engage in conduct which would provide a basis upon which the election may be set aside, inasmuch as the investigation failed to disclose that during the lengthy organizational campaign, the Employer enforced such rules disparately and took action only against employees who supported the [Union].” Ree., vol. II, at 298.

We agree with the dissent that we cannot choose between conflicting facts or inferences from facts. But here the evidence is uncontroverted that the rules were applied by the Company to permit proper Union solicitation. Consequently, the Company met the burden, imposed by Essex, of overcoming the prima facie invalidity of the rules.⁴ The Regional Director refused to consider the affidavit evidence presented by the Company. His decision can stand only if the rules are to be considered a per se interference with a representation election. As Essex indicates, such rules do not create an irrebuttable presumption. See also House of Mosaics, Inc., 215 N.L.R.B. 704, 88 L.R.R.M. 1428, 1430 (1974). Nor has this court ever held, in reviewing solicitation and distribution rules in a non-election setting, that the mere promulgation of such rules is a per se violation of the Act. See Groendyke Transport, Inc. v. NLRB, 530 F.2d 137, 141 (10th Cir. 1976); NLRB v. Shawnee Industries, Inc., 333 F.2d 221, 225 (10th Cir. 1964).⁵

The Regional Director’s conclusion that the record evidence did not overcome the presumptively “coercive effect” of the rules stands absolutely unsupported. The substantial and uncontradicted evidence showed that the Company applied the rules lawfully, and that the employees understood them to permit dissemination of Union information during nonwork time. Therefore, we find the Board’s decision affirming the Regional Director to be inexplicable and contrary to its own articulated policy. To the detriment of both parties, this error was aggravated by the Board’s one-year delay in announcing its decision.

Accordingly, we hold that the Board’s decision to set aside the first election is arbitrary, unsupported by substantial evidence, and an abuse of discretion. The petition for review is granted, and the decision and order of the Board is set aside. The cross-petition for enforcement is denied.

1 . The Company promulgated the rules in 1968 to regulate solicitations concerning highly controversial political issues at its already unionized California facility. These rules were adopted without modification when the Company began operation of the Palmyra plant in 1976.

2 . The decision is reported at 234 N.L.R.B. 501, 97 L.R.R.M. 1305 (1978).

3 . These sections provide:

“(a) It shall be an unfair labor practice for an employer—

“(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title;

“(5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) of this title.”

4 . Contrary to the assertion of the dissent, we are not placing the burden of proof on the employees or the Union. Rather, we are holding that the Company met its burden of producing sufficient evidence to rebut the prima facie invalidity.

5 . The Board has applied the Essex analysis in determining whether no-solicitation and no-distribution rules constitute a section 8(a)(1) violation. See House of Mosaics, Inc., 215 N.L.R.B. 704, 88 L.R.R.M. 1428 (1974). Therefore, our holding in Groendyke and Shawnee is relevant to the facts of this case. The situation here is very close to the one in Shawnee, where we pointed out that:

“The record contains no evidence that the rules were ever used to interfere with any union or any organizational activities; ... or that the rules were adopted for a discriminatory purpose. We see nothing in the record to sustain an inference that these rules ever have been, or ever will be, used in a forbidden manner. It is presumed that a person obeys the law and discharges the obligations imposed on him by law. Imagined possibilities are not enough. A charge of an unfair labor practice must be based on something more than suspicion. Here the only showing is the existence of the rules. In our opinion the mere promulgation of the rules is not per se a violation of the Act.”

333 F.2d at 225. In Groendyke the record showed that the rule was actively enforced in an unlawful manner to prevent any distribution or solicitation “on Company premises at any time.” 530 F.2d at 142. We therefore held the rule a violation of the National Labor Relations Act.