Lead Opinion
Trencor, Inc., a manufacturer of heavy construction equipment petitions for review of the National Labor Relations Board (the “Board”) order directing Trencor to bargain with the United Steelworkers of America (the “Union”). Trencor contends because the Union promised “the biggest party in Texas” if it won the election and dared the company illegally to match union “guarantees” to workers, the election was tainted. The Board cross-petitions for enforcement of its order. Although the Board’s treatment of the “guarantees” was not unreasonable, the Board failed to analyze the promise of a post-election party consistently with the Regional Director’s facts and this court’s precedent. We must therefore deny enforcement of the bargaining order and remand for further proceedings.
I. Background
On August 3, 1995, Trencor’s maintenance and production employees voted on whether the Union would serve as their exclusive collective-bargaining representative. Of 99 eligible voters, 70 voted for representation and 26 voted against.
After certification, Trencor refused to bargain with the Union. In November 1995, the Union filed an unfair labor practice charge and the Regional Director subsequently issued an unfair labor practice complaint. Trencor’s answer admitted its refusal to bargain, but alleged that Union misconduct tainted the election and that the Union’s certification was invalid. In its February 26, 1996 Decision and Order, the Board granted the General Counsel’s motion for summary judgment, concluding that Trencor’s objections were or should have been litigated in the representation proceeding and that no new evidence or special circumstances warranted reexamination of the representation proceeding. The order affirmatively requires Trencor to bargain with the Union, post appropriate notices, and comply with the Union’s requests for information.
On appeal, Trencor concedes that it has refused to bargain, but challenges the Board decision to certify the Union. Trencor’s challenge centers on three alleged improprieties committed by the Union on the eve of the election.
II. Standard of Review
The Board’s decision will be upheld by this court if it is reasonable and supported by substantial evidence in the record. NLRB v. McCarty Farms, Inc.,
III. Alleged Union Improprieties
A. Promise of the “Biggest Party in Texas”
Treneor complains that the Union offered conditional inducements to win employee support in the election. The day before the election, Union agent Bill Fears told employees that if the Union won the election, it would host “the biggest party in the history of Texas,” and that the Union would buy “all the food and beer.” Trencor primarily relies on NLRB v. Lou Taylor, Inc.,
In Lou Taylor, this court enforced a Board order in which the announcement of a company’s annual Christmas party in an employer’s campaign speech the day before the election was found to be illegal.
In Crestwood Manor, the Board invalidated an election because of a union’s promise to hold a one hundred dollar raffle for employees if the union won the election.
The Employer argues that since the Petitioner’s raffle was conditioned upon Petitioner’s prevailing in the election, the Hearing Officer correctly concluded that it was a promise of benefit which requires setting aside the results of the election. We find merit in the Employer’s conten-tion____ If we were not to so find, we might well envision future elections in which employers and unions alike might be tempted to promise employees all sorts of inducements — raffles, prizes, vacation trips, or whatever — if their side won the election. Such an intrusion into the election process would be highly undesirable. * * * * * *
Even if it could be said that the raffle was worth only $1.18 [one in eighty-five chance of winning one hundred dollars] to each employee, we could hardly countenance an offer of $1 to each employee for a union victory or loss.
Id.
The Board argues on appeal that a promise to hold a party,is qualitatively different from a promise to give a monetary benefit. Relying on the Third Circuit’s decision in NLRB v. L & J Equipment Co.,
The Board’s reasoning on appeal might be persuasive if it comported with the facts administratively found. But the Regional Director’s recommendations, adopted in full by the Board, admitted that the Union’s party invitation “may have served as a possible inducement to get employees to vote for the Union.” The Regional Director then concluded that “it does not amount to impermissible coercion [in] the absence of a linkage between the party and either a pre-election pledge of Union support or an actual vote for the Union,” citing Nu Skin International, Inc.,
Furthermore, Trencor contends that the monetary/non-monetary distinction drawn by the Board is not meaningful, since the benefits promised by the Union have some monetary value. Trencor also points to potential problems with this distinction, noting that substantial non-monetary benefits could potentially be more problematic than the $100 raffle in Crestwood Manor. The Board itself warned of the temptation to offer “all sorts of inducements” as a reason for finding the raffle to be illegal.
Ultimately, we are persuaded that the Board can not adopt the recommendation of the Regional Director, which notes that offering a party conditioned on the Union victory “may have served as a possible inducement to get employees to vote for the Union ...” but rests on flawed legal analysis, and then argue on appeal that offering a party could not reasonably have been seen as an inducement.
The Third Circuit decision in L & J Equipment makes the salient point that a one day or one night event might not sway an employee’s decision on a matter as important as whether to support Union representation.
Absent such a finding, this ease is not meaningfully distinct from Lou Taylor, or Crestwood Manor
Accordingly, we cannot uphold the Board’s decision to overrule Treneor’s objection on this issue. Trencor has presented prima fa-cie evidence that the Union conditioned “the receipt of benefits on favorable election results,” which “is impermissible conduct for parties engaged in the election.” Crestwood Manor,
B. Union “Guarantees”
On August 2,1995, the day before the election was to be held, the Union distributed flyers that listed numerous “guarantees” by the Union. The purported guarantees included several matters related to Union membership, such as Union dues payments, the right of employees to resign from the Union, the right of employees to file unfair labor practice charges against the Union, and a pledge to seek employee approval of any negotiated collective bargaining agreement. The Union also “guaranteed” that upon its victory, employees’ wages, benefits and working benefits would not suffer, and that the Union had negotiated improved terms for employees in every prior first contract negotiation. The Union representative, Bill Fears, signed his name under each guarantee, referring to the document as a signed contract between the Union and employees.
Trencor alleges that by making the guarantees, the Union offered employees “a financial benefit to which they would otherwise not be entitled” in the critical period prior to the election, thereby violating Board rules governing elections. See Mailing Services, Inc.,
The Board decision to overrule this objection was reasonable. Unions are permitted to promise the extension of existing membership benefits to employees. Dart Container of California,
C. Union’s “Catch 22” Tactics
Trencor’s better argument relates to the Union’s challenge to Trencor executives to make guarantees similar to those offered by the Union.
Trencor responded to the challenge by printing its own leaflet disputing the Union’s guarantees and pointing out that it was prohibited by law from making any type of similar promises. Trencor alleged that Union agent Bill Fears wrote handwritten responses on the face of Trencor’s leaflets. Trencor produced one such altered leaflet on which someone had handwritten in the margins
The Board counters that Trencor’s responsive leaflet apprised the employees of its views on the Union guarantees and the legal restrictions keeping the company from making similar promises, thereby rebutting the notion that it was backing down from the Union challenge. The Board also argues that there is no evidence that the handwritten message on Trencor’s leaflet came from a Union agent or was widely distributed. Ultimately, the Board relies on Midland Nat’l Life Ins. Co.,
Accepting Trencor’s allegation that the Union was responsible for the election day message,
Trencor urges that Midland is inapplicable because it is not alleging a simple misrepresentation, but rather is objecting to the Union’s challenging Trencor to make illegal promises on the eve of the election. Trencor contends the illegal challenge falls outside the category of misrepresentation and within the category of “campaign conduct, such as threats, promises, or the like, which interfere with employee free choice” and which the Board is still- pledged to protect against under Midland.
The Board’s decision to uphold the election on this basis is supported by substantial evidence in the record. Although it is unnecessary to decide the full scope of this court’s support of the Midland doctrine, we rely on the overarching principle, recognized in Rol-ligon, that employees must generally be trusted to sort through election propaganda and posturing in deciding how to vote. Contrary to Trencor’s protestations, the gravamen of its complaint is that the Union challenge was misleading, i.e., it put Trencor in a “false light.” Trencor’s efforts to place the Union conduct outside the “misrepresentation” framework fail because, irrespective of the outer bound of the Midland doctrine, Trencor has not demonstrated that the Union conduct was so deceptive that it inhibited employee free choice. Accordingly, the Board’s application of the Midland doctrine to this case was within the wide discretion granted to the Board by Congress. The Union’s attempt to challenge Trencor to do something that the Union surely knew the company could not do, on the eve of the election, is not an honest tactic and certainly not one that should be condoned.
CONCLUSION
For the foregoing reasons, DENY the Board’s cross-petition for enforcement of its bargaining order, and REMAND for further proceedings as described above.
ENFORCEMENT OF BOARD ORDER DENIED; CASE REMANDED.
Notes
. Nine ballots were challenged, but this number was insufficient to affect the election outcome.
. The Board also relies on several other cases which do not involve parties conditioned on a Union victory, but rather involve pre-election parties. Because pre-election parties induce employees to hear the message of the sponsor and because they are not conditioned on the sponsor's victory, the Board has tended to allow them. See, e.g., Peachtree City Warehouse, Inc.,
The only two cases, other than L & J Equipment, that involve promises of post-election parties or meal and alcohol purchases are Movsovitz & Son, Inc.,
Movsovitz itself did involve a promise that a union employee "would buy beer and whiskey for the Movsovitz employees” after the “Union won the election.” 78 LRRM at 1656. The Board acknowledged that "the fact that such promise was conditioned on a union victory in the election is troublesome," but went on to conclude that the promise involved a “type of minimal gratuity" that "is not such an emolument as can reasonably be expected to influence the employees' free choice in the election.” Id. However, once again, the precedent cited in support of this proposition involved a pre-election gift. See Jacqueline Cochran, Inc.,
The Movsovitz rationale is difficult to square with the Board’s diligent fight against conditional $1.18 gifts in Crestwood Manor. In any event, Movsovitz does not help the Board since neither it nor the Regional Director ever found that the Union’s promise of the "biggest party in the history of Texas” was a “minimal gratuity” that would not influence the employee's free choice. In fact, the Regional Director stated that the Union’s promise "may have served as a possible inducement to get employees to vote for the Union____”
In Osbrink, the union “distributed a leaflet in which it urged employees to vote for it and then attend a victory party .that evening.”
. Indeed, the' Board would be hard pressed to pursue the argument relied on by the Regional Director. Although offering benefits conditioned upon a pre-election demonstration of an employee’s support has certainly been scrutinized by the Board, Crestwood Manor and other decisions clearly demonstrate that offering benefits conditioned upon a union victory is inappropriate whether or not a pre-election show of support is required. Furthermore, Nu Skin involved a pre-election distribution of t-shirts known to be of nominal value.
. Both the dissent and the Board argue that the promise was minimal and could not be expected to influence the election. Nothing in the Regional Director's findings indicates that the benefit offered by the Union was “minimal.” Instead, the findings acknowledge the possible influence of the party could have on employees’ votes. And, although the report concludes that the offer "does not amount to impermissible coercion ...,” the legal basis for that conclusion — that there was an "absence of linkage between the party and either a pre-election pledge of Union support or an actual vote for the Union ...” is completely abandoned by the Board on appeal. On appeal, the Board argues that any victory party, regardless of any "linkage” between the promised benefit and a Union victory, is permissible. The Board’s appellate lawyers have not simply added citations to support the legal theory relied on below, they have clearly changed the theory why the Union activity was permissible.
.The Burlington Truck Lines court went on to quote Chenery at length:
[A] simple but fundamental rule of administrative law * * * is * * * that a reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency. If those grounds are inadequate or improper, the court is powerless to affirm the administrative action * * *. [Chenery,332 U.S. at 196 ,67 S.Ct. at 1577 ]
. As the Burlington Truck Lines court stated: "[t]he short answer to this attempted justification is that the Commission did not so find.”
. We are not, as Judge Garza suggests, indicating that Crestwood Manor overruled prior Board decisions that have addressed the circumstances in which parties are permissible. Crestwood Manor holds that even minor inducements conditioned on a union or company victory can be improper. The few prior Board decisions that have addressed parties offered on the condition of a union victory, as discussed in note 2, supra, rested on case-specific Board findings that the party offered could not reasonably have been perceived as an inducement to vote for the Union. There is no such finding here.
.The Union challenged Trencor officers to sign and date seven statements:
1. I guarantee the company will never cut wages, benefits, or other working conditions now in effect, unless it is voted on and accepted by a majority of workers here at our plant. (The same right union members have).
******
2. I guarantee the company will not increase the employees portion or co-pay for insurance costs, and will not reduce the present benefits under this plan ever.
******
3. I guarantee the company will select all future job openings by seniority and qualifications, rather than using the favoritism system we now use. Also if there is a difference of opinion in the selection process, the affected party can file a grievance up to and including arbitration to obtain justice.
******
4. I guarantee the company will end all favoritism in the plant, and treat all workers fairly and equally and stop the special treatment of a few favorites.
******
5. I guarantee in the future the company will notify all workers by Thursday of any weekend overtime, or workers will not be forced to work it, if they choose.
******
6. I guarantee any worker having a grievance on wages, benefits, or other working conditions, including any disciplinary actions, will have the right to present his or her grievance to top management and if it is not resolved to the workers satisfaction, the worker shall have the right steelworker members have to present the grievance to an impartial arbitrator accepted by both sides, whose decision will be final and binding on the company and the worker.
* * * =¡- * *
7.Finally, I guarantee the company will allow every worker a full voice and vote on all matters pertaining to wages, benefits, and all other working conditions. (The same right steelworker union members have).
******
If company officials will not sign each and every guarantee, how can you protect yourself without having these basic rights? ...
. See NLRB v. Exchange Parts Co.,
. The handwritten text was connected by an arrow to the typeset text of the company's flier which read:
Please understand this; the company by law cannot guarantee or promise you anything to get you to vote against the Union. What the Union salesman is doing is trying to get the company to violate the law by guaranteeing or promising you something so that if it loses the election it can possibly become your representative even though you don't want it. The company will not violate the law ’ and will not promise or guarantee anything.
(Emphasis in original).
. The Board argues on appeal that there is no evidence of Union involvement with the handwritten notes on Trencor's leaflets. This borders on the ridiculous. At the top of the same defaced leaflet, in the same handwriting, is written "TRENCOR, WHY DID YOU CUT OFF THE TOP PART OF THIS HANDBILL WE PUT OUT? IS IT [sic] ‘GUARANTEE’ WAS IN BIG CAPITAL LETTERS?” (emphasis in original). Surely, the reference to the "HANDBILL WE PUT OUT” supports the inference that the Union, who put out the prior handbill, also was responsible for the handwritten messages on Trencor's leaflet. Even if this was not patently obvious, the Board is required to take Trencor's allegations as true given that the Board entered summaty judgment for the Union without a hearing. McCarty Farms,
. Three other circuits have adopted the Midland doctrine. See NLRB v. Semco Printing Ctr., Inc.,
. The court noted that "both the Board and the courts have shown a reluctance to 'censor or police campaign propaganda unless the misrepresentations are so substantial that the un-coerced desires of the employees cannot be determined.’ " Rolligon,
. Trencor also contends that it not so much the misleading Union challenge as its last-minute timing that is objectionable. The company relies on the Kalin Construction Company, Inc.,
.The handwritten response to Trencor's statement that the law barred the company from making promises in the period before an election, when read critically, acknowledges by omission that Trencor's statement was accurate. The Union response only states that Trencor could make the requested promises "without a union being involved." See supra, note 10. Although suggesting that Trencor could make the disputed promises, the response does not actually dispute the substance of Trencor’s statement. This is not to say that the handwritten response is completely truthful, but we assume that employees can recognize the slanted rhetoric.
Dissenting Opinion
dissenting.
While I concur with the majority’s treatment of the union’s guarantees and its alleged “Cateh-22” campaign tactics, I cannot concur with its treatment of the alleged promise of a party and therefore respectfully dissent from its refusal to grant the Board’s petition for enforcement. My disagreement extends to several points, as I explain below.
In his report on Treneor’s objections to the election, the Regional Director for Region 16 stated as follows with respect to the issue of the party:
In support of this objection the Employer provided an employee witness who testified that a Union representative told an employee, a Union supporter, that when the Union won the election they were going to have the biggest party in the history of Texas and that he would buy all the food and beer for them. The Union employee supporter then, on or about August 2, 1995, told the Employer witness about the party.
Assuming the Union representative made the above statements at some point prior to the election about a prospective party and even assuming the employee who told of this party was an agent of the Union, such would not be a basis for setting the election aside.
While the party referred to may have served as a possible inducement to get employees to vote for the Union, it does not amount to an impermissible coercion of the absence [sic ] of a linkage between the party and either a pre-election pledge of Union support or an actual vote for the Union. Accordingly, the alleged prospective party cannot be a basis for setting the election aside. See Nu Skin International, Inc.,307 NLRB No. 46 . Accordingly, it is recommended this objection be overruled.
(emphasis added). The Board adopted the Regional Director’s findings and recommendations and overruled Trencor’s objections to the election.
The majority states that the Board’s legal analysis is flawed, and estops the Board from supplementing its legal citation with additional cases to demonstrate the consistency with which it has treated this issue. The majority also relies upon language in the Board’s decision that the party “may have served as a possible inducement.” The majority states: “Ultimately, we are persuaded that the Board cannot adopt the recommendation of the Regional Director, which notes that offering a party conditioned on a Union victory ‘may have served as a possible inducement’ but rests on a flawed legal analysis, and then argue on appeal that offering a party could not reasonably have been seen as an inducement.” Maj. op. at 272. The mar jority goes on to reject the Board’s legal argument by stating that “[t]he Board’s reasoning on appeal might be more persuasive if it comported with the facts administratively found.” Maj. op. at 271.
The majority errs in its treatment of the Board’s opinion. First, the language the majority alludes to is not a finding of fact on this issue. Even if it was, it is of no legal import because the Board determined that even if true, Trencor’s objection failed as a matter of policy because the alleged inducement — offering a victory party — was not an improper inducement, i.e. one that would serve as a ground for setting aside the election. Second, the majority finds error in the Board’s adoption of the report when legal authority cited within it is not exactly on point. Essentially, the majority holds that the Board is estopped from not relying specifically on the Nu Skin case and the Board’s analysis therein. What the majority overlooks is that the Board’s opinion in Nu Skin did nothing more than discuss the topic of unlawful inducements in light of guidance provided by the Supreme Court in NLRB v. Savair Mfg. Co.,
The majority is quite correct that agencies are not permitted to justify their actions in a judicial review proceeding on different grounds than those they relied upon at the time of that action. For us to sanction this sort of post hoc rationalization would allow agencies to engage in unprincipled decision making and would make us their accomplice. But this is not the type of situation the Court had in mind when it decided Chenery and Burlington Truck Lines. The Court has stated that “[w]hile we may not supply a reasoned basis for the agency’s action that the agency itself has not given, we will uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.” Bowman Transp. v. Arkansas-Best Freight Sys.,
In addition to its Chenery argument, the majority goes further and states that the Board’s decision is foreclosed by the decision of our court in NLRB v. Lou Taylor, Inc.,
The Supreme Court has long emphasized that, because the Board is the expert body in the field of labor relations, we are to give “considerable deference” to the Board’s position on policy determinations and are not to disturb it “as long as it is rational and consistent with the Act.” NLRB v. Curtin Matheson Scientific,
Nowhere, perhaps, is this deference greater than when the issue is whether the “laboratory conditions” of the election are alleged to-, have been upset. Section 9 of the Act gives the Board “the broad duty of providing election procedures and safeguards for elections and a wide discretion in determining when conduct did or did not jeopardize the untrammeled expression of employee free choice.” NLRB v. Sanitary Laundry,
In rejecting the Board’s determination here, the majority places this court at odds with the positions taken by our sister courts. The Third Circuit considered this precise
Reviewed under the proper standard, the Board’s policy must stand. Its position has been uniform for decades, as the majority opinion clearly demonstrates. Maj. op. at 270-72 n. 2. Because Congress did not mandate an outcome here but expressly left it to the Board to decide, it cannot be said that its determination is “manifestly contrary to the statute.” Its determination is neither arbitrary nor capricious. We have previously recognized “that clinical asepsis is an unattainable goal in the real world of union organizational efforts,” and accordingly are “conscious of the ‘realities of industrial life’ in our application of the controlling standard.’ ” McCarty Farms,
In sum, I believe that the Board’s opinion reflects the same argument it advances on judicial review, that its position is not foreclosed by any precedent of our court, and that the Board’s position is not “arbitrary, capricious, or manifestly contrary” to the Act. The employees’ 70-26 vote in favor of union representation should be upheld. Accordingly, I would deny Trencor’s petition for review and would grant the Board’s cross-petition for enforcement of its order.
. The 'majority's misinterpretation of this case carries over to its refusal to force Trencor to meet its burden of demonstrating that the alleged impropriety by the union influenced the outcome of the election, a requirement in ''laboratory conditions” cases such as this one. See, e.g., NLRB v. McCarty Farms,
. The majority’s attempt to distinguish Nu Skin by noting it was a pre-election benefit is unpersuasive, as is the extended footnote in which it attempts to cast doubt upon forty years of Board precedent because of a difference between pre- and post-election benefits that it believes renders suspect the Board's citation of one in the context of the other. Maj. op. at 270-72 nn. 2-3.
