Ishikawa Gasket v. NLRB

• Court: Court of Appeals for the Sixth Circuit
• Decided: January 7, 2004
• Docket: 02-1310
• Status: Published

Opinion

RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310 ELECTRONIC CITATION: 2004 FED App. 0007P (6th Cir.) File Name: 04a0007p.06 _________________ COUNSEL UNITED STATES COURT OF APPEALS ARGUED: Maurice G. Jenkins, DICKINSON, WRIGHT, FOR THE SIXTH CIRCUIT PLLC, Detroit, Michigan, for Petitioner. David Seid, _________________ NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent. ON BRIEF: Maurice G. Jenkins, ISHIKAWA GASKET AMERICA , X Jennifer K. Nowaczok, Paul R. Bernard, DICKINSON, INC., - WRIGHT, PLLC, Detroit, Michigan, for Petitioner. David Seid, Aileen A. Armstrong, Frederick C. Havard, Petitioner/ - NATIONAL LABOR RELATIONS BOARD, Washington, - Nos. 02-1167/1310 Cross-Respondent, - D.C., for Respondent. > , _________________ v. - - OPINION NATIONAL LABOR RELATIONS - _________________ BOARD , - Respondent/ - BOYCE F. MARTIN, JR., Circuit Judge. Ishikawa Gasket Cross-Petitioner. - America, Inc. seeks review of the National Labor Relations - Board’s decision that it violated section 8(a)(1) and (3) of the N National Labor Relations Act (29 U.S.C. § 158(a)(1) and (3)), On Petition for Review and Cross-Application by reducing its annual bonus for hourly production employees for Enforcement of an Order of the during a union organization effort. The Board cross-applies National Labor Relations Board. to enforce its order. For the following reasons, we affirm. No. 8-CA-31292. I. Argued: October 21, 2003 The facts are well documented in the administrative law judge’s report, which was adopted and incorporated in the Decided and Filed: January 7, 2004 Board’s order. The facts relevant to this Court’s review, however, are summarized as follows. Before: MARTIN and SUTTON, Circuit Judges; MILLS, District Judge.* Ishikawa Gasket America, Inc., a wholly-owned subsidiary of Ishikawa Gasket of Japan, Inc., manufactures head and manifold gaskets for the automotive industry at its production facility located in Bowling Green, Ohio. Ishikawa’s * administrative offices are located in Farmington Hills, The Hon orable R ichard M ills, United States District Judge for the Central District of Illinois, sitting by designation. Michigan. The Bowling Green facility began operations with

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only twelve employees, but has since grown to more than two Additionally, Makowski and Kendrick created a racist hundred employees. Prior to the acquisition by the leaflet and constructed it so that it appeared to be authored by International Association of Machinists and Aerospace the union with the intention that it would dissuade employees Workers, AFL-CIO, of an interest in Ishikawa’s employees, from organizing. The document referred to the “Japs an attempt to organize the employees occurred in October bomb[ing] Pearl Harbor” and stated that, “We give you your 1997, and a second attempt occurred approximately a year own bomb to drop on the sneaky BASTARDS!!!” Finally, later. the supervisors began an unprecedented practice of soliciting the employees’ complaints and after discovering that the In 1999, Ishikawa employees began another attempt to employees’ chief complaint was the management, Vice organize and Ishikawa’s reaction to this campaign gave rise President Masanori Yamanami fired several supervisors to this litigation. Apparently, the organization attempt including Kendrick and Makowski. coincided with internal management disputes and the development of two management factions, which were chief On November 30, the Union filed a petition to represent among the employees’ complaints. The campaign against the Ishikawa’s employees. Two days prior to the election to union organization started at the top with President determine whether the union would represent the employees, Tsunekazu Udagawa’s command that the supervisors “must President Udagawa reminded the employees that their not let this drive[] succeed at any cost. You must stop it, complaints were taken care of and there was no reason for a period.” Many of the supervisors shared President union. A stipulated election was held on January 21, 2000 Udagawa’s distaste for unions and began a relentless and the employees overwhelmingly voted against the union. campaign against the union and those who supported the cause. A consolidated complaint alleging various violations of the National Labor Relations Act was filed on October 30, 2000. Examples of Ishikawa’s repeated attempts to dissuade Relevant to this appeal, the complaint specifically alleged that union supporters are well preserved in the record, but a few Ishikawa reduced its annual Christmas bonus from fifteen bear mention. Notably, supervisor Dave Kendrick convinced cents per hour worked in a forty-hour work week to thirteen employees to surveil the union activities that were occurring cents per hour worked in a forty-hour work week and that the and promised them compensation in return. Joe Makowski, reduction was based upon and in retaliation for the Vice President of Manufacturing in charge of the Bowling employees’ organization attempt. Green facility, compiled a list of pro-union and anti-union employees and later looked to it to develop ways to “put a The administrative law judge found that Ishikawa had stop to the Union.” Much of the surveillance focused on violated section 8(a)(1) of the National Labor Relations Act employee Julie Wilson, the person who spearheaded the (29 U.S.C. § 158(a)(1)) by chilling the efforts to organize, campaign for union representation or, as Makowski called soliciting employee grievances in an attempt to persuade her, the “pain in the [expletive]”or the “Union antagonist.” employees that a union was unneeded, surveilling the Upon Ishikawa’s direction, the supervisors removed union employees’ union activities, distributing inflammatory literature located in the production facility. Indeed, Kendrick literature, and discriminatorily warning and suspending and other managers began making a “morning walk-through” Wilson and terminating her employment because of her union to discover and remove any union paraphernalia. activities and because she had previously filed charges with the Board. Finally, the administrate law judge found that Nos. 02-1167/1310 Ishikawa Gasket Am. v. NLRB 5 6 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310

Ishikawa violated section 8(a)(1) and (3) of the Act by overturned only if it is unsupported by substantial evidence, reducing the employees’ bonuses because of their union even if this Court were to draw a contrary conclusion had it activities. engaged in de novo review. See id.; Gen. Fabrications Corp., 222 F.3d at 225. With slight modifications, the Board adopted the administrative law judge’s findings. The Board issued an An employer runs afoul of 29 U.S.C. § 158(a)(1) when it order which required Ishikawa to cease and desist its unfair engages in conduct that is designed to “interfere with, labor practices and to post a remedial notice that stated that it restrain, or coerce employees in the exercise” of their right to had violated the Act and explained the rights of the organize. Relatedly, an employer commits a violation of 29 employees. Additionally, the Board required that Ishikawa U.S.C. § 158(a)(3) when it discriminates in the terms or reinstate Wilson and make her whole for any losses she conditions of employment as a means of discouraging union suffered, and to make the production employees whole for the membership. This Court has adopted a burden-shifting unlawful reduction in the Christmas bonus. Ishikawa appeals approach to determine whether anti-union animus motivated only the Board’s decision that Ishikawa’s reduction of the an employer’s decision. See Gen. Fabrications, 222 F.3d at employees’ bonuses violated the Act. The National Labor 226. First, the Board must establish a prima facie case by Relations Board cross-applies to enforce its order issued demonstrating that “the employee’s protected activities were against Ishikawa. Because Ishikawa failed to challenge the a motivating factor in the employer’s decision.” Id. Second, Board’s findings with respect to all other violations of the Act the burden shifts to the employer to demonstrate by a beside the bonus issue, we conclude that the Board is entitled preponderance of the evidence that it would have made the to summary enforcement of the Board’s findings that went same decision regardless of the fact that the employees unchallenged. See N.L.R.B. v. Gen. Fabrications Corp., 222 engaged in protected activity. Id. F.3d 218, 231-32 (6th Cir. 2000). B. II. Ishikawa argues that it made its decision to reduce the A. annual bonus before it was aware of the organization attempt and, therefore, its decision could not have been motivated by This Court’s review of the Board’s decision is limited. The anti-union animus. In support of this assertion, Ishikawa Board’s findings of facts are conclusive unless they are points to an electronic message dated November 16, 1999, in unsupported by substantial evidence. Id. at 225. Substantial which President Udagawa and Vice President Yamanami evidence exists when the evidence is “adequate, in a discussed decreasing the amount of the bonuses. The record, reasonable mind, to uphold the [Board’s] decision.” Id. however, belies this argument. We find that there is (internal quotations and citations omitted). When presented substantial evidence in the record which demonstrates that with conflicting factual inferences, this Court is not at liberty Ishikawa made its decision fully aware that its employees to draw an inference different from the inference drawn by the were attempting to organize. Board. Stark Ceramics, Inc. v. N.L.R.B., 375 F.2d 202, 205 (6th Cir. 1967). The Board’s determination that Ishikawa was As an initial matter, Ishikawa makes no attempt to motivated by an improper purpose in its decision to reduce overcome Yamanami’s testimony that when considering the Christmas bonus is a question of fact that may be whether to reduce the bonuses he considered the union Nos. 02-1167/1310 Ishikawa Gasket Am. v. NLRB 7 8 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310

activity “very seriously.” This statement alone demonstrates then this Court must find that Ishikawa’s decision to reduce that Ishikawa was clearly aware of the ongoing union the employees’ bonuses was motivated by that same concern. organization attempt when it made its decision. Additionally, As Ishikawa argues, “[g]iven the pervasive affect [sic] of when asked whether at “the time you made the decision to factionalism throughout the Bowling Green facility, there is reduce the bonuses, [was he] aware that there was a Union no way to separate the decision to reduce the managers’ organizing drive going on at the Bowling Green plant,” bonuses from the decision to reduce employee bonuses.” Yamanami replied: “Yes, I do.” Additionally, Ishikawa argues that if the factions were the real reason to reduce the managers’ bonuses then there would be Moreover, Yamanami testified that he had not made his no reason to also reduce the managers’ bonuses at the final decision to reduce the bonuses until late November. At Farmington Hills, Michigan, facility because the factionalism that time, Ishikawa was not only aware of the union activity, was only a problem at the Bowling Green facility. Again, we but had launched the campaign against the union. Indeed, by find Ishikawa’s arguments unpersuasive. late November, Wilson had conducted two union meetings from her home that Ishikawa’s supervisors had instructed First, we note that regardless of Ishikawa’s motivation for anti-union employees to monitor. Additionally, by late- reducing the managers’ bonuses, there was substantial November the supervisors had begun to take down union evidence in the record that demonstrates that the decision to literature located in the Bowling Green facility. reduce the employees’ bonuses was motivated by Ishikawa’s desire to chill protected activity. Stated differently, Furthermore, the record demonstrates that as early as Ishikawa’s motivation for reducing the managers’ bonuses is November 2 the management knew of the union organization simply irrelevant to its motivation for reducing the attempt. On that date, Kendrick had confirmed his suspicions employees’ bonuses. With that said, however, the record that the employees were attempting to organize and in a demonstrates that the decision to reduce the managers’ meeting shortly after this confirmation, President Udagawa bonuses was made because of the factionalism and made his statement that the supervisors “must not let this performance related reasons, which are legitimate reasons to drive[] succeed at any cost. You must stop it, period.” Thus, reduce the bonus. Yamanami himself testified that when we find Ishikawa’s argument that it made its decision to determining whether to pay bonuses to its management, it reduce the bonus without knowledge that the employees were considered the managers’ performance. Specifically, attempting to organize unpersuasive in light of the substantial Yamanami stated: “for the managers, we determine the bonus evidence in the record to the contrary. by the performance.” As the Board noted, the management was “the area where Yamanami had his main problem,” C. whereas there was no such legitimate explanation to reduce the employees’ bonuses. Second, Ishikawa presents no Ishikawa also argues that the fact that it also reduced the evidence to demonstrate that Ishikawa had ever before treated managers’ bonuses and at a much higher rate, fifty percent, its management and production employees differently negates the Board’s conclusion that the decision to reduce the determined by whether they worked at the production facility employees’ bonuses was based upon an anti-union or the administrative facility. Instead, the only evidence we motivation. Further, Ishikawa argues that because the Board have before us suggests that Ishikawa was group-minded, as accepted the conclusion that the decision to reduce the opposed to facility-minded. managers’ bonuses was because of the management factions, Nos. 02-1167/1310 Ishikawa Gasket Am. v. NLRB 9 10 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310

In sum, we find that substantial evidence supports the First, in Citizens Hotel the Board found no direct evidence Board’s finding that Ishikawa’s anti-union animus motivated of anti-union motivation, whereas in this case there was its decision to reduce the employees’ bonuses. Indeed, the abundant evidence of anti-union motivation. Id. Second, in most crucial piece of evidence demonstrating Ishikawa’s Citizens Hotel the court described the evidence of the Hotel’s motivation in reducing the bonus went uncontradicted by deteriorating financial condition as “overwhelming” evidence Ishikawa in its brief presented to this Court. That is, Ishikawa that “the hotel was suffering great and increasing losses.” Id. announced its decision to reduce the employees’ bonuses, on In this case, however, the Board found that Ishikawa was less the heels of its statement that “the Japanese take the posting than forthcoming about its financial situation and what little of flyers for a Union as threat [sic] and they wouldn’t tolerate financial information that Ishikawa had presented actually any third party coming into their plant.” At oral argument, showed an improvement in productivity and profitability. however, Ishikawa suggested that the statement that it was Indeed, the sparse financial information that Ishikawa going to reduce the employees’ bonuses actually came before provided showed increased sales from $26,205,587 in 1998 the statement regarding the posting of union flyers. to $28,948,426 in 1999. Also, the net losses decreased from Regardless of which statement preceded the other, Ishikawa $4,495,729 in 1998 to $2,019,904 in 1999. Although the has made no effort to explain the linking of these two financial information demonstrated that the accumulated statements and how this Court could construe their linking as deficit continued to grow, the minimal information that anything other than that Ishikawa made its 1999 bonus Ishikawa provided left the Board without an explanation or a reduction decision because of the union organization events. way in which the Board could distinguish “how and why Ishikawa’s silence on this issue is deafening and we conclude [Ishikawa] established its bonus in past years as compared that Ishikawa’s decision to reduce the employees’ bonuses with 1999 and [how] it established that it would have was unlawfully motivated. decreased an admitted incentive based bonus when in fact the financial results for 1999 show apparent success in that it had III. a major profit gain over the previous year.” Ishikawa has presented the defense that it had a legitimate We find that Ishikawa has not met its burden of establishing business reason for its decision, and thus, it would have made by a preponderance of the evidence that it would have made its decision to reduce the employees’ bonuses even absent any the same decision regardless of the fact that its employees anti-union motivation. Ishikawa argues that its deteriorating were engaged in protected activity. Gen. Fabrications Corp., financial condition motivated its decision to reduce the 222 F.3d at 226. Ishikawa’s asserted business justification is employees’ bonuses. Ishikawa relies on National Labor simply unpersuasive in light of its increased productivity and Relations Board v. Citizens Hotel Company, 326 F.2d 501 profitability and because even the sparse financial information (5th Cir. 1964), in support of this argument. In Citizens that Ishikawa had provided warned of its lack of reliability. Hotel, the Fifth Circuit found that even though the Hotel had Indeed, the letter introducing the financial information warns established a practice of paying its employees a Christmas that “[w]e have not audited or reviewed the accompanying bonus, its decision to end the practice did not establish an financial statements and, according[ly], do not express an anti-union motivation in light of the Hotel’s financial opinion or any other form of assurance on them.” situation. Id. at 506. We find Ishikawa’s reliance on Citizens Hotel misplaced. Nos. 02-1167/1310 Ishikawa Gasket Am. v. NLRB 11

Based on the foregoing, we AFFIRM the decision of the Board and GRANT the Board’s petition for enforcement of its order.