General Steel Products, Inc. And Crown Flex of North Carolina, Inc. v. National Labor Relations Board

445 F.2d 1350

• Court: Court of Appeals for the Fourth Circuit
• Decided: July 14, 1971
• Docket: 14316_1
• Status: Published

Opinions

THOMSEN, District Judge.

Petitioners, found by the Board to constitute a single employer, will be referred to collectively as General Steel. In 1964 intervenor, the union, attempted to organize General Steel’s employees. Claiming that it held signed authorization cards from a majority of General Steel’s employees, it requested recognition and a bargaining meeting. The Board found that the union had obtained valid cards from 120 of the 207 employees in the unit in question. General Steel refused to recognize the union, stating that it did not believe the union’s claim of majority status. The union filed a petition for a representation election; an election was ordered and the union was defeated.

The Board then found: (1) that during the union’s campaign General Steel had engaged in coercive activity in violation of § 8(a) (1) of the Act; and (2) that General Steel’s refusal to bargain was not motivated by a good faith doubt as to majority status, and violated § 8 (a) (5). Thereupon the Board issued an order requiring General Steel to bargain with the union.

On petition to review, this court affirmed the Board’s finding that General Steel had engaged in conduct violative of § 8(a) (1), and enforced those portions of the order directing General Steel to cease and desist from coercing its employees and to post appropriate notices. But this court held that the violations of § 8(a) (1) found by the Board were not so extensive or pervasive as to prevent the conduct of a valid secret election, and denied enforcement of the bargaining order.¹ General Steel Products, Inc. v. N.L.R.B., 398 F.2d 339 (1968).

The Supreme Court granted certio-rari, consolidated the case with two other cases from this Circuit and with the Sinclair case [National Labor Relations Board v. Sinclair Co., 397 F.2d 157] from the First Circuit, and filed an opinion sub nom. N.L.R.B. v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969). After discussing generally the propriety of a bargaining order as a remedy for a § 8(a) (5) refusal to bargain where an employer has committed independent unfair labor practices which have made the holding of a fair election unlikely or which have in fact undermined a union’s majority and caused an election to be set aside, 395 U.S. at 610-613, 89 S.Ct. at 1938-1939, the Court said:

“Before considering whether the bargaining orders were appropriately entered in these cases, we should summarize the factors that go into such a determination. Despite our reversal of the Fourth Circuit below in Nos. 573 and 691 on all major issues, the actual area of disagreement between our position here and that of the Fourth Circuit is not large as a practical matter. While refusing to validate the general use of a bargaining order in reliance on cards, the Fourth Circuit nevertheless left open the possibility of imposing a bargaining order, without need of inquiry into majority status on the basis of cards or otherwise, in ‘exceptional’ cases marked by ‘outrageous’ and ‘pervasive’ unfair labor practices. Such an order would be an appropriate remedy for those practices, the court noted, if they are of ‘such a nature that their coercive effects cannot be eliminated by the application of traditional remedies, with the result that a fair and reliable election cannot be had.’ * * *

“The only effect of our holding here is to approve the Board’s use of the bargaining order in less extraordinary cases marked by less pervasive practices which nonetheless still have the tendency to undermine majority strength and impede the election processes. The Board’s authority to issue such an order on a lesser showing of employer misconduct is appropriate, we should reemphasize, where there is also a showing that at one point the union had a majority; in such a ease, of course, effectuating ascertainable employee free choice becomes as important a goal as deterring employer misbehavior. In fashioning a remedy in the exercise of its discretion, then, the Board can properly take into consideration the extensiveness of an employer’s unfair practices in terms of their past effect on election conditions and the likelihood of their recurrence in the future. If the Board finds that the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies, though present, is slight and that employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order, then such an order should issue. * * *

“We emphasize that under the Board’s remedial power there is still a third category of minor or less extensive unfair labor practices, which, because of their minimal impact on the election machinery, will not sustain a bargaining order. There is, the Board says, no per se rule that the commission of any unfair practice will automatically result in a § 8(a) (5) violation and the issuance of an order to bargain. See Aaron Brothers, supra.” ² 395 U.S. at 613-615, 89 S.Ct. at 1940.

The Court noted that in Sinclair (the case from the First Circuit) the Board had made a finding, left undisturbed by the Court of Appeals, that the employer’s threats of reprisal were so coercive that, even in the absence of a § 8(a) (5) violation, a bargaining order would have been necessary to repair the unlawful effect of those threats. The Board therefore did not have to make the determination called for in the intermediate situation (now usually called the “second category”); i. e., whether the risks that a fair rerun election might not be possible were too great to disregard the desires of the employees already expressed through the cards. The Court further noted that in General' Steel and the other cases from the Fourth Circuit, the Board had not made a similar finding that a bargaining order would have been necessary in the absence of an unlawful refusal to bargain. Nor had it made a finding that, even though traditional remedies might be able to ensure a fair election, there was insufficient indication that an election (or a rerun in General Steel) would definitely be a more reliable test of the employees’ desires than the card count taken before the unfair labor practices occurred. The Court also noted that we had ruled in General Steel that available remedies short of a bargaining order could guarantee a fair election.³ The Court said:

«-» * * We think it possible that the requisite findings were implicit in the Board’s decisions below to issue bargaining orders (and to set aside the election in General Steel); and we think it clearly inappropriate for the court below to make any contrary finding on its own * * *. Because the Board’s current practice at the time required it to phrase its findings in terms of an employer’s good or bad faith doubts * * *, however, the precise analysis the Board now puts forth was not employed below, and we therefore remand these cases for proper findings.” 395 U.S. at 616, 89 S. Ct. at 1941.

On remand, General Steel filed with the Board a motion for further hearing, to present further evidence and briefing. It alleged that it had had no opportunity to brief or argue before the Board the new issue created by the opinion of the Supreme Court in Gissel; and offered to prove “that there was a change of ownership of these Respondents and of the persons responsible for the conduct of labor relations, and such new owners and persons responsible for labor relations were accustomed to dealing with organized labor and had no hostility to the union involved in this case or reason to do otherwise than to recognize rights as established by the Act.”

The Board issued a notice granting all parties the opportunity to file statements of position with respect to the matters raised by the Court’s remand. General Steel replied, reiterating the position set out in its motion, and stating in greater detail the facts it offered to prove. The Board refused, however, to grant a hearing at which General Steel might attempt to prove the proffered facts. The Board filed a “Supplemental Decision” reciting the history of the case,⁴ and stating:

“Having reexamined this case in the light of the Gissel guidelines, we reaffirm our earlier conclusion that the Respondent violated Section 8(a) (5), not because Respondent lacked a good-faith doubt as to the Union’s majority status when it refused the Union’s bargaining request, but because of its refusal to bargain with the Union while engaging in its campaign of unfair labor practices to undermine the Union’s support among its employees.”

After briefly summarizing the Gissel opinion, the Board said:

“We are convinced that a bargaining order is justified in this case. The Respondent’s campaign to defeat the Union’s organizational efforts consisted of serious and extensive acts of interference, restraint, and coercion as found above. The Respondent’s unfair labor practices were so flagrant and coercive in nature as to require, even absent the 8(a) (5) violation we have found, a bargaining order to repair their effect. Our further view is that it is unlikely that the lingering effects of the Respondent’s unlawful conduct would be neutralized by resort to conventional remedies which would have produced a fair rerun election. We therefore find that the employee sentiment as expressed through the authorization cards is a more reliable measure of the employees’ desires on the issue of bargaining representation than a rerun election, and that the policies of the Act would be better effectuated by a bargaining order to remedy the 8(a) (5) as well as the 8(a) (1) violations.

“Accordingly, we reaffirm the unfair labor practice findings and the remedy provided therefor in the original Decision and Order.”

This action by the Board was similar to its action in practically all of the cases remanded as a result of Gissel. The apparent unwillingness of the Board to consider seriously the new questions raised by Gissel has been sharply criticized. N.L.R.B. v. American Cable Systems, Inc., 427 F.2d 446, at 448, 449 (5 Cir. 1970), rehearing en banc denied, 427 F.2d 449 (1970), cert. denied, 400 U.S. 957, 91 S.Ct. 356, 27 L.Ed.2d 266; ⁵ N.L.R.B. v. General Stencils, Inc., 438 F.2d 894, at 905 (2 Cir. 1971). Compare N.L.R.B. v. Lou De Young’s Market Basket, Inc., 430 F.2d 912 (6 Cir. 1970); G.P.D., Inc. v. N.L.R.B., 430 F.2d 963 (6 Cir. 1970); Clark’s Gamble Corp. v. N.L.R.B., 422 F.2d 845, 847 (6 Cir. 1970). And see N.L.R.B. v. Kostel Corp., 440 F.2d 347 (7 Cir. 1971), where the Court held that the Board had failed to make the detailed analysis required by Gissel, but the Court undertook to make that analysis itself rather than remand the case to the Board.

Two principal questions are presented in this case: whether the Board should have held a hearing to receive evidence and argument on the issues as modified by the Supreme Court in Gissel; and whether at such a hearing the Board should consider facts which have developed since the original hearing before the Board.

We agree with the Second Circuit in General Stencils, supra:

“* * * we do not believe the Court thought that all the Board needed to do in deciding whether to dispense with the admittedly superior method of the election process to determine employee sentiment, 395 U.S. at 603, 89 S.Ct. 1918, was, in Judge Goldberg’s apt phrase, to use a ‘litany, reciting conclusions by rote without factual explication,’ NLRB v. American Cable Systems, Inc., 427 F.2d 446, 449 (5 Cir.), cert. denied, 400 U.S. 957, 91 S.Ct. 356, 27 L.Ed.2d 266 (1970).” 438 F.2d 894, at 901.⁶

A reviewing court should not usurp the functions of the Board; but it should review what the Board has done and see that the Board does not act arbitrarily. A court cannot fulfill its function if the Board does not find the relevant facts and give the court a fair statement of the reason it concludes that a particular action is appropriate. Here the Board declined even to permit an inquiry into the facts which should govern its decision. The parties, the employer and the union, the employees who want the union and the employees who do not want the union, are entitled to a full and fair consideration of the facts and the law by the Board. The supplemental decision in this case does not indicate that such consideration was given.

In General Stencils, supra, the Second Circuit vacated the bargaining order and remanded that portion of the case to the Board for further findings and conclusions. The Court said:

«* * jn thjg connection the Board may find it desirable to take additional evidence with respect to employee turnover, see NLRB v. American Cable Systems, Inc., supra, 427 F. 2d at 448 and the dissent of Judge McCree in G.P.D., Inc. v. NLRB, supra, 430 F.2d at 965-966, or on other matters — a course that would seem particularly appropriate in light of the fact that the case was tried on the basis of a legal standard different from that now applied.” 438 F.2d at 905.

Some of the events General Steel sought to prove on remand had occurred prior to the first hearing before the Board. They were not developed in the record at that time, for they were not relevant to an inquiry about the employer’s good faith in his rejection of the proffered card count. The Supreme Court’s decision in Gissel has made those facts not only relevant but controlling. Whether or not evidence of events subsequent to the original decision of the Board should be considered, each party should have the right to present evidence, cross-examine the other side’s witnesses and argue the questions which the Supreme Court has stated now control the case.⁷

Whether at such a hearing the Board should receive evidence of events after the Board’s original decision presents a more difficult question. We recognize the importance of the principles stated in N.L.R.B. v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), and Franks Bros. Co. v. N. L. R. B., 321 U.S. 702, 64 S.Ct. 817, 88 L.Ed. 1020 (1944), and reiterated in Gissel, 395 U.S. at 611, 89 S.Ct. 1918, 23 L.Ed.2d 547— that an employer should not be allowed to profit from his own wrongful refusal to bargain. On the other hand, the primary purpose of a bargaining order is not punitive; it is to protect the rights of the employees, and to insure that their wishes will be carried out. The Supreme Court recognized in Gissel that a fair election is usually the best way to determine the wishes of the employees.

In this ease, as in American Cable Systems, supra, the Board refused to consider evidence offered by the Company that later events had made a fair election possible. The Fifth Circuit said:

“ * * * The Board’s refusal to consider these changes occurring in the intervening years was apparently predicated on the opinion of the Ninth Circuit in NLRB v. L. B. Foster Co., 9 Cir., 1969, 418 F.2d 1. In Foster the complaint was made that changes occurring between the Board’s original order and the enforcement proceeding made enforcement of the bargaining order inequitable. The court refused to consider those changes and enforced the order based on the Board’s original findings. The Foster case, however, is distinguishable because although it was decided after Gissel it did not involve a remand in light of that case to the Board for additional findings. In the instant case a different situation obtains. The Board’s original findings were inadequate under the teachings of Gissel and the case had to .be remanded to the Board for further findings. We think that on remand the Board should have taken the opportunity to consider the then existing situation at American Cable to determine whether the electoral atmosphere was still so contaminated that a bargaining order was then justified.” 427 F.2d at 448.

We do not intimate that in other circumstances the Board on remand should receive evidence of what has happened since the Board’s original decision. In this case, however, the employer was successful in this Court in his attack on the bargaining order; and the Supreme Court did not hold that General Steel was a first category case, as it did in the case of Sinclair; the Court remanded this case “for proper findings”. In these circumstances the Board ought not to limit its inquiry to events occurring prior to the first unfair labor practice hearing, but should receive proof of any material fact occurring up to the date of the new hearing bearing upon a determination whether or not a fair election could be held.⁸

We, therefore, remand this case to the Board for further proceedings not inconsistent with the views expressed herein.

Remanded.

1 . This court added the following as footnote 3 to that opinion:

“Whether or not the election actually held was properly held invalid, we do not decide, but the § 8(a) (1) violations found to have occurred were not so pervasive that available remedies were not reasonably calculated to assure a free exercise of tlie employees’ choice by secret ballot rather than by resort to a count of questionable cards.” 398 F.2d at 340.

2 . 158 N.L.R.B. 1077, at 1079 (1966).

3 . The Court referred to footnote 3 in our former opinion, set out as footnote 1 herein.

4 . The Board said:

“In its Decision of March 11, 1966, the Board found that the Respondent violated Section 8(a) (1) of the Act, both before and after the Union’s demand for recognition, by engaging in coercive interrogation of employees concerning their union activities; threatening employees with discharge for engaging in such activities or for voting for the Union; suggesting that unionization might hurt business and make new jobs more difficult to obtain; warning employees that strikes and other dire economic consequences would result if the Union were to win the election; and asserting that, although it would have to negotiate if the Union won the election, the Respondent could negotiate endlessly and would not have to sign any agreement. With respect to the Section 8(a) (5) allegation, the Board found that, (1) the Union had obtained valid authorization cards from a majority of the employees in an appropriate bargaining unit at the time of its demand for recognition and, therefore, was entitled to represent the employees for collective-bargaining purposes, and (2) as demonstrated by its unfair labor practices, the Respondent’s refusal to bargain on and after August 14, 1964, was motivated not by a good-faith doubt of the Union’s majority status, but by a desire to gain time in which to dissipate that status, in violation of section 8(a) (5). The Board issued a bargaining order to remedy the Respondent’s unfair labor practices.”

5 . After the remand to the Board in American Cable Systems and other cases, the Board entered a supplemental decision and order in Gibson Products Co. v. Retail Clerks Union, Local No. 390, 185 N.L.R.B. No. 74 (1970), setting forth the reasons for its disagreement with the Fifth Circuit.

6 . The Second Circuit opinion continued:

“ * * * Despite the Board’s aversion to utilizing its rule-making powers and the conceded impracticability of framing a rule that would cover every possible variation of employer misconduct, this is a situation where Professor Davis’ proposal of a rule ‘limited to resolving one or more hypothetical cases, without generalizing,’ would reveal at least some of the Board’s thought processes to unions, employers, and reviewing courts, and would bring about a degree of certainty and uniformity that, as will appear below, does not seem to have been attained. Failing that, there could be an opinion by the full Board illuminating how it meant to apply its Gissel-given authority — a course particularly important for an agency that is forced by the press of business so often to delegate its authority to three-member panels. Failing that, the Board should explain in each case just what it considers to have precluded a fair election and why, and in what respects the case differs from others where it has reached an opposite conclusion. * * * ” 438 F.2d at 901.

7 . The Board did not suggest that the motion for further hearing did not adequately state the facts which General Steel wished to prove. The Board called on the parties to submit “statements of position” with respect to the issues, and did not in its decision question the adequacy of the statement submitted by General Steel. It simply decided the case on the evidence taken at the original hearing.

8 . More than employee turnover is involved here. There was a proffer to prove a complete change in ownership and management with a resultant departure by resignation, discharge or demotion, of the perpetrators of the unfair practices. The change, whether effected before or after the unfair labor practice hearing, materially altered the situation, and should be considered by the Board on remand, in light of the principles stated in Gissel, quoted above.