Nestle Ice Cream Co. v. National Labor Relations Board

46 F.3d 578
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 14, 1995
DocketNos. 93-6307, 93-6410
StatusPublished
Cited by2 cases

This text of 46 F.3d 578 (Nestle Ice Cream Co. v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nestle Ice Cream Co. v. National Labor Relations Board, 46 F.3d 578 (6th Cir. 1995).

Opinion

RYAN, Circuit Judge.

Petitioner/Cross-Respondent, Nestle Ice Cream Company, petitions for review of a National Labor Relations Board decision holding that Nestle committed an unfair labor practice by refusing to bargain with the intervenors, General Teamsters & Food Processing Local Union 87 and Operating Engineers Local 501 (the Unions). The Board petitions for enforcement of its bargaining order.

We deny enforcement and reverse the Board’s bargaining order because the Unions conferred impermissible preelection benefits on Nestle employees, rendering invalid the representation election in which the Unions were chosen.

I.

On November 18, 1991, the Unions jointly petitioned to represent the production and maintenance employees at Nestle’s Bakersfield, California, ice cream plant. Nestle and the Unions agreed to hold a representation election, and scheduled the election for March 13, 1992. Just prior to election day, the Unions staged several campaign events. On March 9 or 10, the Unions distributed flyers publicking that Teamsters President Ron Carey would make an “important announcement” on March 12. Around that time, the Unions distributed another set of flyers; these invited employees to hear President Carey make a “major announcement for Nestle employees, that may have a sizea-ble impact on their future!”

As advertised, on the day before the election, Carey made two appearances. First, during the afternoon, Carey appeared at the plant’s entrance and announced that the Teamsters had filed a lawsuit against Nestle. This announcement attracted local newspaper attention. Then, in the evening, approximately 100 of the 334 Nestle employees at[580]*580tended the advertised Teamsters meeting. As related by Nestle employees, Carey said “he wanted employees to vote for the unions.” Carey then presented an $18,000 check to a Teamsters member from another company; the check represented an arbitration backpay award secured with the Teamsters’ help. Next, a Teamsters attorney, David Rosenfeld, reported that the Teamsters “had filed a lawsuit against Nestle to get backpay for employees, double or triple the amount ... owed.” “Nestle had not paid employees the right amount of wages,” Ro-senfeld asserted, and the Teamsters’ “calculations” estimated that “$35,000 per employee” was due. According to the Board’s Regional Director, Rosenfeld also warned that “there were no guarantees of winning the suit; it would be a long and difficult battle.”

Carey then said that the union needed the employees’ votes. Finally, Ward Allen, a Teamsters’ business agent, stated, “[W]e’re doing this for you, you’ve got to support us,” referring to the lawsuit. Flyers bearing reproductions of portions of the complaint filed in the lawsuit were distributed. Apparently, after the announcement about the lawsuit, the prospect of winning $35,000 was the centerpiece of employee conversation. On March 13, election day, at least one employee heard over forty employees talking about the damages award; others confirmed that they too heard employees discussing the money. The Unions won; the tally of unchallenged ballots showed 192 for and 126 against the Unions.

On election day, Nestle removed the Teamsters’ suit to federal court; the Teamsters had sued in California state court. Ostensibly filed under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1964, the complaint alleged that Carnation Company, Nestle’s predecessor, unlawfully recognized Teamsters Local 87 as the Bakersfield collective bargaining representative in 1988. The Teamsters alleged that Nestle, Carnation, and former Teamsters officials conspired to enter into the unlawful recognition so that Carnation could pay “substantially less wages and benefits” than would otherwise be paid “if there had been legitimate good faith bargaining with a freely and lawfully chosen bargaining representative.” The former Teamsters officials allegedly entered into the “scheme ... so that money would be paid to Local 87 and therefore directly and indirectly would be paid” to the officials. The Teamsters purported to “bring this action in its representative capacity on behalf of all past and current employees of the diary [sic] plant.” For damages, the Teamsters sought “reimbursement” of “unlawfully exacted dues” for “[t]he class which Plaintiffs [Teamsters] represent.” In addition, it was alleged that “[t]he class of employees represented by Plaintiffs has been damaged in a sum of lost wages and benefits.”

On August 11, 1992, the district court dismissed the complaint for failure to state a claim, but granted the Teamsters ten days to amend the complaint. After amending the complaint, Nestle again moved to dismiss for failure to state a claim; this time, however, Nestle also moved for sanctions. Before the district court could decide the motions, the Teamsters agreed to a dismissal of the complaint with prejudice; in exchange, Nestle withdrew its motion for sanctions. The district court approved the stipulated dismissal on October 26, 1992.

Meanwhile, on March 19,1992, Nestle filed objections to the Unions’ preelection conduct. After an investigation, the regional director overruled Nestle’s objections. Nestle filed exceptions to the regional director’s report, along with supporting affidavits and exhibits. The Unions opposed the exceptions, but apparently did not file supporting affidavits.

On May 28, 1993, the Board adopted, without a hearing, the regional director’s findings and recommendations. Nestle Dairy Sys., Inc., 311 N.L.R.B. 987 (1993) (2-1 decision). The majority held that the Unions had not conferred a benefit on the employees by filing the lawsuit. Id. at 987-88. Also, the majority found that even if the filing of the suit conferred a “tangible” benefit, the benefit was not “sufficiently substantial or direct to warrant finding that it would have a reasonable tendency to interfere with the employees’ free choice in the election.” Id. at 988. Furthermore, the Board expressed a “public policy” concern that a decision [581]*581against the Unions would have a “chilling effect” on a union’s salutary initiation of suits and administrative proceedings, noting that the First Amendment guarantees a right of access to courts. Id. The majority analogized the Unions’ suit to Occupational Safety and Health Administration (OSHA) complaints and unfair labor practice charges. Id. Accordingly, the Board certified the Unions.

In order to obtain judicial review, Nestle refused to bargain with the Unions. On June 15, 1993, the Unions filed an unfair labor practice charge against Nestle. Ultimately, on September 24, 1993, the Board found that Nestle had committed an unfair labor practice and ordered the company to bargain with the Unions. Nestle filed this timely petition for review of the Board’s decision; the Board cross-applied for enforcement of its bargaining order. The Unions are intervenors on appeal.

II.

Nestle raises five issues on appeal. However, because we dispose of the case on the conferring of impermissible benefits, we discuss that issue only. Nestle complains that the Unions conferred an impermissible pre-election benefit on Nestle employees by filing the class action lawsuit. Nestle analogizes the instant facts to cases in which the Board and this court have set aside elections because unions dispensed preelection benefits to voting employees.

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Bluebook (online)
46 F.3d 578, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nestle-ice-cream-co-v-national-labor-relations-board-ca6-1995.