National Labor Relations Board, Petitioner, v. Aluminum Casting & Engineering Co., Inc., Respondent.
No. 99-4187
United States Court of Appeals For the Seventh Circuit
Argued September 6, 2000—Decided October 13, 2000
328 NLRB No. 2, 1999 WL 678727
On Application for Enforcement of an Order of the National Labor Relations Board. Nos. 30-CA-12855, et al.
OPINION
Diane P. Wood, Circuit Judge. This case has lain in labor relations limbo for nearly six years, between a union victory in an election that was ultimately set aside and the holding of a new election. In the meantime, the company has (quite happily, we may assume) been operating union-free, and the National Labor Relations Board (the Board) has been pursuing a series of unfair labor practice charges based on conduct both before and after the contested election. Eventually the Board found that the company, Aluminum Casting & Engineering Co., or ACE/CO, had committed a number of violations of the National Labor Relations Act,
I
ACE/CO is a Milwaukee company in the business of manufacturing automobile parts. From 1971 to
To avoid undue repetition, we discuss the particular events during the organizing campaign that followed in connection with the particular charges the Board brought. It is enough to say here that the election took place on January 5 and 6, 1995. Of the 396 ballots cast, 193 were in favor of the Union and 183 were against; challenged and void ballots would not have changed the result. On the other hand, it turned out that many of the ballots were flawed because of erroneous translations into the several languages spoken at the workplace, including Hmong and Vietnamese. Following a June 1995 hearing on these objections filed by ACE/CO, the Board set aside the January 1995 election and directed that a new one take place. To this day, it has not set a new date, because (as the administrative law judge in this case put it), “further processing of the representation case is blocked by the unfair labor practice charges in this case.”
The charges to which the administrative law judge (ALJ) referred were filed by the Regional Director of the Board. There was a hearing on these charges in February 1998, and ALJ William G. Kocol issued a decision in May 1998, to which both ACE/CO and the Board‘s General Counsel filed exceptions. The Board ultimately found that ACE/CO had violated the National Labor Relations Act (the Act) in a number of respects: (1) by failing to follow its established practice of giving an annual across-the-board wage increase in early 1995 and by engaging in conduct that indicated to the employees that the failure to receive this increase was the Union‘s fault; (2) by prohibiting solicitation “except when all concerned are relieved from duty,” (3) by reimbursing only certain anti-union employees for vehicle damage their cars suffered on or near company premises, contrary to its normal practice; (4) by directing employees to report any pressure to sign union authorization cards; and (5) by declaring in its employee handbook its intention “to do everything possible” to remain union-free. The Board‘s remedial order requires ACE/CO to rescind the no-solicitation rule, to rescind the challenged handbook language, and to
II
Our review of the Board‘s findings of fact and application of the law is deferential, as both parties recognize. See, e.g., Beverly California Corp. v. NLRB, Nos. 98-3177, et al., 2000 WL 1286248, at *5 (7th Cir. Sept. 13, 2000). The Board‘s findings of fact are conclusive if they are supported by substantial evidence on the record as a whole.
A. Across-the-Board Wage Increase
The Board found that ACE/CO violated sections
Section
A critical factual question underlies this part of the Board‘s case: did ACE/CO have an established practice of granting annual across-the-board wage increases at the time the Union began its organizing campaign in late 1994? Both the ALJ and the Board found as a fact that it did, and so the question for us is whether that finding is supported by substantial evidence. Once we have resolved that point, the rest of this part of the case falls in place. ACE/CO‘s position is that it was between a rock and a hard place during the campaign: if it granted the wage increase, it would violate section
With respect to that factual issue, the ALJ decided to begin his consideration of ACE/CO‘s practice in 1989, the first year after the collective bargaining relationship with the earlier union had terminated. In February 1989, the company announced that its hourly employees would receive a 10-cent per hour wage increase effective February 13, 1989, and an additional five-cent per hour increase effective August 14, 1989. Individual incentive rates would be adjusted proportionately, and the merit pay system would remain unchanged. The next year, the company announced on February 5, 1990, that a 15-cent per hour across-the-board wage increase would take effect on February 12, 1990, and that the utility rate for all employees would increase by five cents per hour on August 13, 1990. In 1991, there was no general wage increase, but in 1992, on February 7, ACE/CO announced an increase effective February 17 in the utility rate of 20
It was against this backdrop that the ALJ evaluated what happened in 1995. As noted above, some time in the middle of 1994, the Union began its organizing drive at ACE/CO‘s facility. In mid-October 1994, company representatives met with new employees, in part to discuss the Union‘s organizing effort. At that time, they assured the group that each year the company:
reviews what is happening in the Milwaukee market place with wages and benefits. It looks at the year‘s performance for the Company, and then decides what type of wage and benefit adjustment can be made. An announcement is usually made in January of each year. That‘s what happens each year--when there is no union.
Aluminum Casting, 2000 WL 678727, at *12. During a meeting in November 1994, company officials again told the employees that annual wage and benefit reviews occurred each year in November and December, that the company was then in the process of conducting that review, that it would decide what changes to recommend, that the announcement of the change would be made in January, and that the change would take effect in February.
Yet another reiteration of this message occurred at a December 7 meeting of the employees. In response to employees’ questions regarding when they would get their next pay adjustment, company representatives answered as follows:
In addition to merit increases [the company] surveys in January the wages of comparable companies in the Milwaukee area in order to
provide pay adjustments to remain competitive. This is particularly important in a tight job market as currently exists in the Milwaukee area. Our past and present practice is to conduct the survey in the Fall, to announce the increase in late December of [sic] early January, and to put the increase into effect in February.
Obviously if a union comes in, wages would be subject to the process of bargaining and wage programs could not be changed up or down during that process. The law does not provide time guidelines as to how long negotiations could last. That could take months or years.
Id. A number of additional statements along these lines were also made.
In our view, these statements provided ample evidentiary support for the ALJ‘s finding, affirmed by the Board, that ACE/CO indeed had a regular practice of giving annual across-the-board wage increases when economic circumstances warranted; the evidence showed that ACE/CO usually concluded that circumstances did warrant an increase (before the contested 1995 decision, it reached this conclusion in every year except 1991). It is also notable that the company continuously reaffirmed its normal practice to the employees throughout the election campaign. It did not develop any reluctance to give an across-the-board increase until after it learned the results of the January 5-6, 1995, election. The Board was entitled to conclude that ACE/CO‘s current explanation for the decision not to give an early 1995 general wage adjustment--its desire to abandon across-the-board measures in favor of a purely merit and incentive-based system--was an afterthought, at least as applied to 1995.
Given the fact that ACE/CO had an established practice, its arguments that it was caught in a no-win situation cannot prevail. Indeed, it is when an employer during an organizing campaign departs from its usual practice of granting benefits that it creates trouble for itself. In that situation, the Board is entitled to infer an intent to influence the upcoming election and conclude that the employer‘s conduct violated the Act. See, e.g., Shelby Memorial, 1 F.3d at 557; Don‘s Olney Foods, 870 F.2d at 1285. As we said in Don‘s Olney Foods:
[i]n order not to unfairly influence a union election, the employer must maintain the pre-union status quo respecting employee benefits, viewed dynamically; that is, expectations of upcoming benefits created by the employer either by promises or through a regular pattern of
granting benefits cannot be disappointed without proof of a union-neutral justification.
870 F.2d at 1285. The Board here was not persuaded by ACE/CO‘s efforts to show that kind of union-neutral justification in its alleged transition to a different philosophy of compensation or its alleged effort to preserve an influence-free election environment.
Immediately after the election, ACE/CO issued a statement to the employees on January 9 announcing that its failure to grant the annual wage increase was not because of the election, but instead because the company wanted to preserve the laboratory conditions needed for a fair election. In February 1995, it similarly said that it was postponing any wage increase until the election was certified, again noting that it did not wish to interfere with employee free choice. (Obviously this would not have interfered with anyone‘s free choice in the already-completed January 1995 election; it had to be a forward-looking statement that anticipated success in setting that election aside and conducting a new one--a step that had not yet occurred.)
Other statements like this were made throughout the spring, but the one that had the greatest impact on the ALJ appeared in a leaflet distributed on June 27, 1995, after the January election had been set aside. The leaflet was entitled “One Year Later,” and it contained the following passage:
Just about a year ago, the UE started its effort to get into our plant and your pockets. Remember the big promises of $1.00 an hour increases, new benefits and quick successes?
Since then, there have been no increases in wages except for those under plans started by [the company] before the Union. No changes in benefits have occurred.
The NLRB has just concluded four months of hearings concerning election objections. However, the legal proceedings may go on for many more months and possibly even years. We have had employees threatening other employees, employees filing charges and lawsuits against other employees. Instead of trying to bring us together, the UE has turned group against group, employee against employee.
In the one-year period before the UE stuck its nose in, you had a wage increase, a new pay for knowledge program, and benefit changes. Ask yourself--weren‘t we all a lot better off?
An employer may deviate from its normal practice of granting wage increases during an organizing campaign when it advises its employees that an expected raise is to be deferred pending the outcome of the election, to avoid the appearance of election interference. See Parma Indus., Inc., 292 NLRB 90, 91 (1988). But in those situations, the employer must also take care to convey the message that the adjustment will be awarded whether or not the employees select a union. Shelby Memorial, 1 F.3d at 558. Not only did ACE/CO fail to communicate that message (just like the employer in Shelby), but it went further and attempted to blame the union for the lack of the across-the-board benefit. Or, to put the same point more accurately, the ALJ and the Board were entitled so to construe the evidence before them, including the leaflet and the other statements made throughout the spring of 1995.
Finally, the ALJ and the Board concluded that at least as of 1995, the merit and incentive programs were still complementary to the across-the-board adjustments, and they were not perfect substitutes for the established system. They were impressed by the fact that in all of its explanations for its failure to adjust the wages, ACE/CO never once mentioned the development of an alternative system; instead, it just blamed the union. In fact, in meetings held in November 1994 and December 1994, it discussed both its expanded training and development programs and its intention to give the annual wage increase.
Based on this record, the Board was entitled to conclude that ACE/CO‘s decision in early 1995, just after the Union had won the initial election, not to give an annual across-the-board wage adjustment, violated sections
B. Prohibition of Solicitation
The Board found that ACE/CO violated section
ACE/CO points out that a presumptively invalid rule can be rescued by evidence that the rule was communicated or applied in such a way as to permit solicitation during break times and lunch. See, e.g., Essex Int‘l, Inc., 211 NLRB 749, 750 (1974). That, it claims, is just what it did. In 1994, it posted another no solicitation rule in its cafeteria that only prohibited solicitation during working time and working hours, and defined working time in a way that clearly excluded breaks and lunch periods. But the rule posted in the cafeteria made no reference to the Rule of Conduct, nor did it tell the employees which rule took precedence. Cf. Beverly, 2000 WL 1286248, at *16; Publishers Printing Co., 317 NLRB 933, 934 (1995), enforced, 106 F.3d 401 (6th Cir. 1995); Essex, 211 NLRB at 750. Conscientious employees who had read both the Rule of Conduct and the posting in the cafeteria would not have known what was or was not permitted. Particularly in the absence of evidence like that in Essex, 211 NLRB at 750, showing that employees were explicitly told that they could solicit during lunch and break times, we conclude that the Board‘s decision was supported by the evidence and is entitled to enforcement.
C. Reimbursements for Vehicle Damage
During the organizing campaign, vehicles belonging to four employees were damaged while they were parked on or near company property. The victims, all union opponents, thought that the Union was responsible for the vandalism, and they complained to management. There was no evidence that this was so, nor was there any evidence that the damage to the cars had even occurred while the employees were at work. Nevertheless, ACE/CO reimbursed the employees for the damage in amounts ranging from $40 to $350. Noting that the
This finding is amply supported by the evidence. The ACE/CO Director of Labor Relations conceded that the company never announced any general offer to employees that they could obtain reimbursement for damage to cars parked on or near its property. Instead, the Director admitted that the company had offered these reimbursements in conversations in which the recipients were providing anti-union statements in connection with the election challenge.
D. Union Authorization Cards
On March 13, 1995, ACE/CO distributed a memorandum in which it requested employees to inform their supervisors when they were approached by someone and asked to sign a union authorization card. Specifically, the memorandum said “If anyone puts you under pressure to sign a union card, tell your supervisor and we‘ll take every legal step to see that the union stops.” This was, of course, after the contested election and during the time when the possibility of a new election was recognized by everyone. ACE/CO witnesses testified that the company had received reports that certain employees had been threatened and pressured, and that this was a protective measure.
Requests from an employer to report “threats” to employees are not unlawful, as the ALJ acknowledged. See Liberty House Nursing Homes, 245 NLRB 1194, 1197 (1979). But “threats” (which had been addressed by an earlier February 2 memorandum) and “pressure” are two different things, in spite of ACE/CO‘s efforts to conflate them here. A management witness testified that one employee complained that he felt pressured because the Union had visited his home 13 times, but the witness admitted that the employee never said that he felt threatened. The ALJ and the Board found that the March 13 statement violated section
ACE/CO‘s only response to this claim is to urge
E. Employee Handbook
Last, we consider the Board‘s conclusion that ACE/CO violated section
The ALJ (and then the Board) found that this statement, taken in the context of other unfair labor practices, was itself unlawful because the employees might understand it as conveying the message that ACE/CO would use even illegal tactics to keep a union out. The Board relied on its decision in Gravure Packaging, Inc., 321 NLRB 1296 (1996), in which it had found a violation of section
One thing seems clear--evaluations of statements like the one before us must be made in the full context of each case. While that normally counsels deference to the Board, it does not imply a rubber stamp. The objective evidence in this case gives no reason to believe that the employees would have perceived the ACE/CO
III
Last, we consider ACE/CO‘s challenge to the Board‘s remedial order. Most of the order addresses remedies for the violations we have discussed; the section that relates to the handbook, part 2(a), we set aside because we have found that there was no underlying violation. This leaves section 2(c), which reads as follows:
[ACE/CO must] [t]ake the following affirmative action necessary to effectuate the policies of the Act:
(c) Make whole all employees who were not granted annual wage increases in 1995 to date in the manner set forth in the remedy section of [the judge‘s decision, as modified by the Board‘s decision] (emphasis added).
ACE/CO argues that the Board did not have before it the question of any wage increases for years following 1995, and thus this order is inherently overbroad. At most, it claims, the order should address only the contested 1995 annual increase.
As we noted in Beverly, the Board‘s choice of a remedy is entitled to special deference. 2000 WL 1286248, at *24. Section
First, we consider the scope of the violation. As we emphasized earlier, the key to the Board‘s finding of a violation was the factual determination that ACE/CO had a normal practice of granting some kind of annual, across-the-board, wage increase to its employees. In that
Importantly, the order expressly did not bind ACE/CO to a perpetual practice of granting this particular kind of wage adjustment. To the contrary, it provided that “[t]he exact amounts of the wage increases due employees shall be determined in compliance proceedings, and shall be computed to the extent appropriate . . . . At the compliance stage, [ACE/CO] shall be given the opportunity to establish that even if it had followed its normal practice concerning annual wage increases, no increase would have been given in a particular year.”
At oral argument, we asked counsel for the Board whether the language of the proviso meant (1) that ACE/CO would have to live forever with a presumption that its compensation system included some measure of across-the-board adjustments, even if cost-of-living increases or other external factors led to no change in a particular year, or (2) that ACE/CO would have the opportunity during compliance proceedings to show that it had completely abandoned across-the-board adjustments as a tool of company policy, in favor of the targeted merit, incentive, training, and development raises it has touted in its briefs. We were assured in unequivocal terms that the Board‘s order means the second of these two options. Thus, if, for example, in compliance proceedings relating to the year 1996, ACE/CO introduced evidence that it had abjured across-the-board raises forever, and the General Counsel could not show that this was untrue or pretextual, not only would that suffice to excuse ACE/CO from making any adjustments for 1996, but it would also establish this new baseline for future years as well.
On that understanding, we find that the Board‘s order is entitled to enforcement. ACE/CO sees no reason why hostility to unions would be seen to have anything to do with its decisions not to implement across-the-board raises for 1996 and years following, but it is hard to see why it
IV
For the reasons stated, we Enforce in part and Remand in part for the Board to conform its order to this opinion. Costs on appeal shall be borne by ACE/CO.