National Labor Relations Board v. Allis-Chalmers Corporation

680 F.2d 1166, 110 L.R.R.M. (BNA) 2817, 1982 U.S. App. LEXIS 18324
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 16, 1982
Docket81-1504
StatusPublished
Cited by14 cases

This text of 680 F.2d 1166 (National Labor Relations Board v. Allis-Chalmers Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Labor Relations Board v. Allis-Chalmers Corporation, 680 F.2d 1166, 110 L.R.R.M. (BNA) 2817, 1982 U.S. App. LEXIS 18324 (7th Cir. 1982).

Opinions

PECK, Senior Circuit Judge.

This is a petition by the National Labor Relations Board (NLRB) for enforcement of its order that Allis-Chalmers begin collective bargaining with a union at Allis-Chal-mers’ Batavia, Illinois plant. Allis-Chal-mers has refused to bargain in order to contest the validity of a representation election conducted pursuant to a Stipulation for Certification Upon a Consent Election Agreement. See, 29 C.F.R. § 102.62(b).

The results of the election, conducted August 31, 1979, showed 96 votes for the union, 81 votes against, and two ballots challenged. Pursuant to the NLRB’s regulations contained in 29 C.F.R. § 102.69, Allis-Chalmers filed timely objections to union conduct that allegedly affected the results of the election. Specifically, Allis-Chalmers contended that the union had engaged in misrepresentations, threats, bribery and unlawful promises of benefits to employees.

A regional director of the NLRB conducted an ex parte investigation of Allis-Chal-mers’ objections pursuant to the Board’s Rules and Regulations, 29 C.F.R. § 102.-69(d). That investigation did not involve a hearing, but rather included the director’s review of evidence submitted by the parties and gathered by the director. Based on that investigation, the regional director issued a “Report on Objections.” That report concluded that each of Allis-Chalmers’ objections should be overruled and recommended that the union be certified.

Allis-Chalmers filed exceptions to the regional director’s report and a brief in support of various arguments that the director had erred in both the findings of fact and in the conclusions reached in the report. Al-lis-Chalmers requested that the Board not adopt the regional director’s report, but rather return the matter to the region and order a hearing so that Allis-Chalmers’ objections could be further developed. In the alternative, Allis-Chalmers requested that the Board set aside the election.

As required by 29 C.F.R. § 102.69(c) and (g), the regional director transmitted “the record” to the Board. The record transmitted did not include the complete file of documentary evidence compiled by the regional director in investigating Allis-Chal-mers’ objections. It is not clear from the materials submitted to this Court whether the Board considered any materials other than the regional director’s report and the objections. However, the Board takes the position, if only for the purposes of this case,1 that the regulations did not require the regional director to transmit or the Board to review any evidentiary material gathered by the regional director.

In a one-page decision, the Board adopted the regional director’s findings and recommendations and certified the union. That decision was reached upon the Board’s review of “the record in light of the exceptions and briefs.” No hearing was permitted before the Board because the Board determined that Allis-Chalmers had raised no material issues of fact requiring a hearing.

Allis-Chalmers continued its refusal to bargain with the union, and General Counsel sought summary judgment on an unfair labor practice charge against Allis-Chal-mers. The Board issued a notice to Allis-Chalmers to show cause why summary judgment should not be granted. In re-[1168]*1168spouse, Allis-Chalmers again argued that the election had been made invalid by improper union conduct, and further asserted that the Board’s adoption of the regional director’s report was defective because the Board did not examine the full record developed by the director.

The Board refused to consider Allis-Chal-mers’ allegations of improper pre-election activity by the union, stating that those contentions had been, or should have been, fully litigated at the prior proceeding. The Board rejected Allis-Chalmers’ contention that the Board erred by not reviewing the entire investigative record before adopting the regional director’s findings and recommendations. The Board concluded that it had discretion, under 29 C.F.R. § 102.69, to adopt the director’s report without reviewing the evidentiary bases for that report because Allis-Chalmers had failed to raise any substantial issues regarding the validity of the election. The Board granted summary judgment on the unfair labor practice charge and ordered Allis-Chalmers to begin collective bargaining with the union. The present petition for enforcement followed.

In response to the Board’s petition for an enforcement order, Allis-Chalmers continues to assert that the election was tainted by improper pre-election union activities. Allis-Chalmers also argues that the Board’s failure to review the entire evidentiary record developed by the regional director renders the Board’s order to begin collective bargaining unenforceable.

It is well settled that the question whether to set aside a representation election because of incidents occurring during the campaign is a matter for the sound discretion of the Board. Rockwell Manufacturing Co., Kearney Div. v. N.L.R.B., 330 F.2d 795, 796 (7th Cir.), cert, denied, 379 U.S. 890, 85 S.Ct. 161, 13 L.Ed.2d 94 (1964). See, N.L.R.B. v. Wyman-Gordon Company, 394 U.S. 759, 767, 89 S.Ct. 1426, 1430, 22 L.Ed.2d 709 (1969). This Court will, therefore, “defer to the Board’s expertise unless we are prepared to say that the discretion residing in the Board was abused.” Follett Corp. v. N.L.R.B., 397 F.2d 91, 95 (7th Cir. 1968). Because we conclude that the Board abused its discretion in adopting the regional director’s report without examining the evidence considered by the director, we do not reach the question whether the Board’s conclusion that the election was valid was substantively correct. Indeed, because the evidentiary file compiled by the regional director has never been made a part of the record, we are no more able to evaluate the substance of Allis-Chalmers’ objections to the regional director’s findings and conclusions than was the Board when it adopted the director’s report.

A number of recent decisions conclude that the Board must review the administrative record developed by a regional director before it can adopt the director’s report in cases where a party objecting to an election conducted pursuant to 29 C.F.R. § 102.69(b) has proffered evidence that raises substantial and material issues as to the validity of a regional director’s report. See, N.L.R.B. v. Decibel Products, Inc., 657 F.2d 727, 729 (5th Cir. 1981); N.L.R.B. v. Belcor, Inc., 652 F.2d 856, 859 (9th Cir. 1981); Prestolite Wire Division v. N.L.R.B.,

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680 F.2d 1166, 110 L.R.R.M. (BNA) 2817, 1982 U.S. App. LEXIS 18324, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-labor-relations-board-v-allis-chalmers-corporation-ca7-1982.