Selkirk Metalbestos, North America, Eljer Manufacturing, Inc. v. National Labor Relations Board

United States Court of Appeals,

Fifth Circuit.

No. 96-60336.

SELKIRK METALBESTOS, NORTH AMERICA, ELJER MANUFACTURING, INC.,
Petitioner-Cross-Respondent,

v.

NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.

July 7, 1997.

Petition for Review and Cross-petition for Enforcement of an Order
of the National Labor Relations Board.

Before WIENER and PARKER, Circuit Judges, and LITTLE,* District
Judge.

PER CURIAM:

The petitioner, Selkirk Metalbestos, North America, Eljer

Manufacturing, Inc. ("Eljer") petitions this court for review of an

order of the National Labor Relations Board ("NLRB" or "Board")

relating to unfair labor practice charges. The Board

cross-petitions for enforcement of its order. We grant the

petition for review and deny the petition for enforcement.

FACTUAL AND PROCEDURAL HISTORY

Eljer is a corporation engaged in the manufacturing of

equipment for heating and cooling systems at its plant in Nampa,

Idaho. The company has recognized the Sheet Metal Workers Local

213, AFL-CIO (the "union") as the collective bargaining

representative of the production and maintenance employees since

1977. Since that time, there have been successive collective

*
District Judge of the Western District of Louisiana, sitting
by designation.

1
bargaining agreements between Eljer and the Union, the most recent

of which was in effect from July 8, 1988 through July 8, 1991.

In June 1991, Eljer and the Union began negotiations for a

successor agreement, with the final bargaining session being held

on February 24, 1993; however, the parties were unable to agree on

a new contract. The points on which the parties were unable to

agree were wages, the retroactivity of any wage increase, personal

holidays, the retirement income benefits plan, and Eljer's demand

that each employee make a monthly contribution or "copayment"

toward the cost of his health insurance plan.

On January 5, 1993, during the negotiations, the union's

regional director and negotiator sent a letter to Eljer's

vice-president stating that because the health plan copayment

remained a roadblock, the union needed information related to

current and projected health insurance costs to the company and the

employees. On January 15, 1993, the vice-president responded to

the union's request, stating that it was under no legal obligation

to open confidential company records and would not provide the

information requested.

Prior to the final bargaining session between Eljer and the

union, a petition was filed with the Board's regional office

seeking to decertify the union as the collective bargaining

representative of Eljer's unit employees. A decertification

election was scheduled for April 15, 1993. During the period

preceding the April 15 election, Eljer conducted a campaign urging

employees to vote to decertify the union. As part of the campaign,

2
Eljer's management posted opposition notices on the bulletin board,

made speeches to employees, corresponded in writing to employees,

and offered responses to employee questions which were read aloud

to unit employees.

On April 15, the decertification election was conducted and

the employees voted 73 to 68 to decertify the union as the

employees' collective bargaining representative. Around April 20,

the union filed objections with the Board alleging that Eljer had

committed unfair labor practices during the campaign in violation

of section 8(a)(1) of the National Labor Relations Act (the "Act"),

29 U.S.C. § 158(a)(1), and that such had affected the election's

outcome. On May 26, 1993, the Board's Regional Director issued a

decision and order finding merit in certain of the union's election

objections and ordered that the election be set aside and a new

election conducted.

Shortly after the April 15 election and the filing of the

objections by the union, Eljer withdrew its recognition of the

union and refused to negotiate further with the union. It

subsequently introduced a new grievance and arbitration procedure

that differed from the procedure in the collective bargaining

agreement. Eljer also implemented a previously proposed wage

increase as well as health insurance changes over the union's

objections. Following Eljer's actions, the union filed further

charges that Eljer refused to bargain in good faith by not

providing the union with relevant requested information and by

implementing the above actions all in violation of sections 8(a)(1)

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and (5) of the Act, 29 U.S.C. § 158(a)(1) and (5).

Based on the foregoing, the Board ordered Eljer to cease and

desist the unfair labor practices and to cease and desist from

restraining or coercing employees in the exercise of the rights

guaranteed them in section 7 of the Act,1 29 U.S.C. § 157. The

Board also ordered Eljer to recognize and bargain with the union,

to provide the Union with updated health plan information, to

rescind the changes to the grievance and arbitration process, and

to rescind the health insurance copayment and reimburse the

copayments already deducted from employee paychecks. Eljer was

also required to post copies of a remedial notice.

Eljer now petitions this court for review of Board's order,

asserting that it had no legal duty to provide the requested

1
In adopting the administrative law judge's ("ALJ" 's)
decision in part, the Board found that Eljer violated sections
8(a)(1) of the Act by committing unfair labor practices during the
election to decertify the Union, specifically by telling employees
that the Union had prevented them from receiving a wage increase;
by promising employees that they would receive a retroactive wage
increase if they voted to decertify the Union; by implicitly
promising employees that they would be given a 401(k) plan; and by
threatening employees with adverse consequences if the union
prevailed in the vote.

The Board also reversed the ALJ in part and found that
Eljer violated section 8(a)(1) of the Act by promising
employees a plan for the handling of their complaints if they
voted to decertify the Union.

The Board additionally found that Eljer violated sections
8(a)(1) and (5) of the Act by refusing to provide the Union
with requested health benefit information. Finally, the Board
found that various post-election actions by Eljer violated
sections 8(a)(5) and (1) of the Act: withdrawing recognition
of the union, unilaterally making changes in the contractual
grievance and arbitration process, and unilaterally
implementing a copayment requirement.

4
information to the union during the bargaining process. Eljer also

contends that the Board erred by finding that its actions and

statements constituted unfair labor practices under the Act,

because its statements and actions were neither coercive nor

threatening, the statements constituted protected free speech, and

it had a good faith doubt as to the union's status in representing

the unit employees following the election. The Board

cross-petitions for enforcement of its order.

DISCUSSION

This court reviews the NLRB's factual determinations for

substantial evidence. Universal Camera Corp. v. NLRB, 340 U.S.

474, 71 S.Ct. 456, 95 L.Ed. 456 (1951); NLRB v. Cal-Maine Farms,

Inc., 998 F.2d 1336, 1339 (5th Cir.1993). The Supreme Court has

defined substantial evidence as "more than a scintilla. It means

such relevant evidence as a reasonable mind would accept to support

a conclusion." Universal Camera Corp., 340 U.S. at 477, 71 S.Ct.

at 459. In determining whether the NLRB's factual findings are

supported by the record, we do not make credibility determinations

or reweigh the evidence. Cal-Maine Farms, Inc., 998 F.2d at 1339-

40 (citing cases).

In cases in which we review the Board's legal determinations,

the Board's determination must be affirmed if reasonable,

consistent with the Act and based on factual findings supported by

substantial evidence. Nat'l Fabricators, Inc. v. NLRB, 903 F.2d

396, 399 (5th Cir.1990) (citing cases).

A. Setting Aside the Decertification Election

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 Where unfair labor practices that violate section 8(a)(1) of

the Act occur prior to an election, the Board has discretion to set

aside the election on the basis of the employer's pre-election

conduct. NLRB v. Groendyke Transport, Inc., 493 F.2d 17 (5th

Cir.1974). The Board has wide discretion in its supervision of

representation elections. Our review is limited to determining

whether its decision was reasonable and is supported by substantial

evidence. NLRB v. Hood Furniture Mfg. Co., 941 F.2d 325, 328 (5th

Cir.1991); NLRB v. New Orleans Bus Travel, Inc., 883 F.2d 382, 384

(5th Cir.1989). Representation elections are not lightly set

aside. Hood Furniture, 941 F.2d at 328. The party challenging the

election must demonstrate that unlawful acts materially affected

the results of the election. New Orleans Bus Travel, 883 F.2d at

384. In challenging a representation election, the objecting party

bears the entire burden of adducing prima facie facts sufficient to

invalidate the election. Hood Furniture, 941 F.2d at 328.

Conclusory allegations or proof of mere misrepresentations or

physical threats are insufficient to meet this heavy burden. Id.

Specific evidence of specific events is required that shows not

only that the acts occurred, but also that they "interfered with

the employees' exercise of free choice to such an extent that they

materially affected the results of the election." Id. (quotation

and citation omitted).

The union makes three suggestions as support for its

contention that Eljer engaged in unfair labor practices which

affected the outcome of the election: (1) that Eljer coerced its

6
employees by threatening bad and serious consequences if they

selected the union as their representative for collective

bargaining; (2) that it promised employees a retroactive wage

increase, a plan for handling their complaints, and implicitly

promised a pension plan if the union was not selected; and (3)

that it made statements to employees that the union had prevented

them from receiving a pay raise. As we explain below, the NLRB's

reliance on these instances as support for ordering a new election

was unreasonable because they did not constitute unfair labor

practices in violation of section 8(a)(1) of the Act. Given such,

we must indulge the strong presumption that ballots cast under

specific NLRB procedural safeguards reflect the true desires of the

employees and deny the Board's petition for enforcement of its

order requiring a new election. See Hood Furniture, 941 F.2d at

328.

1. Conduct Preceding Election

The Board found that prior to holding the decertification

election Eljer engaged in acts and conduct violative of section

8(a)(1) of the Act through coercive and threatening pre-election

statements and by way of promises of benefits made to influence the

outcome of the election. It specifically found that Eljer

threatened its employees with negative consequences and unspecified

harm if they voted for continued representation by the union;

promised employees a retroactive wage increase and a plan for

handling their complaints, and implicitly promised a pension plan

if employees did not select the union; and stated to employees

7
that the union had prevented them from receiving a pay raise.

Eljer argues that the Board erred, contending that the

campaign statements were neither coercive nor threatening, and that

its statements and bulletin board postings constituted protected

free speech under section 8(c) of the Act.

Under section 8(a)(1) of the Act, it is an unfair labor

practice "to interfere with, restrain, or coerce employees in the

exercise of the rights guaranteed in [section 7 of the Act]." 29

U.S.C. § 158(a)(1). At the same time, section 8(c) of the Act

provides that an employer has the right to express "any views,

argument, or opinion" so long as "such expression contains no

threat of reprisal or force or promise of benefit." 29 U.S.C. §

158(c). The Supreme Court has noted that section 8(c) "manifests

a congressional intent to encourage free debate on issues dividing

labor and management," Linn v. United Plant Guard Workers of Am.,

383 U.S. 53, 62, 86 S.Ct. 657, 663, 15 L.Ed.2d 582 (1966), while at

the same time does not "serve this interest by immunizing all

statements made in the course of a labor controversy," Id. at 63 n.

5, 86 S.Ct. at 663 at n. 5.

a.

In analyzing an employer's statements for promised benefits,

there is no requirement of an express statement that particular

benefits would be given in exchange for a vote to decertify. Dow

Chem. Co., Texas Div. v. NLRB, 660 F.2d 637, 644 (5th Cir.1981).

Instead, the Act is violated by statements from which promises may

reasonably be inferred. Id.

8
 The Board found that Eljer promised the Union employees a

retroactive wage increase and a plan for handling their complaints,

and implicitly promised them a pension plan if they did not select

the Union.

As to the Board's determination regarding whether a plan for

handling employee complaints was promised as a benefit, the plant

manager prefaced his statement on that issue—that without a union,

he would discuss with employees the development of a plan for

handling complaints—with a clear disclaimer that it would be

illegal to promise that there would be an employee committee to

review complaints. In addition, the plant manager set forth no

specific grievance procedure. The Board was unreasonable in its

determination that such constituted an inferable promise of a

grievance or complaint procedure.

With respect to the Board's finding that Eljer made an

implied promise that it would provide each employee with a 401(k)

savings plan, the Board was also unreasonable. While the plant

manager stated that "every employee not represented by the Union

has a 401(k) plan," he also stated that "I cannot promise that

there will be a 401(k) plan in this plant if the Union is voted

out. It would be illegal for me to promise that." The statement

regarding the unrepresented employees' 401(k) plan was a protected

statement of fact which was followed by an overt disclaimer of any

promise. "Section 8(c) of the Act is completely devoid of meaning

unless it permits an employer to portray its practice with respect

to its unrepresented employees so that they could decide whether

9
they wanted to secure unrepresented status." Dow Chem., 660 F.2d

at 644.

b.

The Board found that Eljer's comment that the Union had

prevented the employees from receiving any pay raise was a

violation of section 8(a)(1) of the Act. While immediately

preceding the election, the plant manager stated and posted the

company's position that without the union, Eljer could implement a

pay raise, the Board was unreasonable in regarding such as an

implied promise of a benefit. The statements regarding a pay raise

related to a statement of the recognized fact that Eljer had made

an offer of a wage increase, to which the union had not agreed.

Section 8(c) protects the right of an employer to make truthful

statements of existing facts. Dow Chem., 660 F.2d at 644. In

addition, the plant manager later stated that he could not "promise

any retroactivity if the Union is voted out."

c.

An employer violates section 8(a)(1) when the employer's

questions, threats or statements tend to be coercive. NLRB v.

Brookwood Furniture, Div. of U.S. Indus., 701 F.2d 452, 459 (5th

Cir.1983). "The coercive tendencies of an employer's conduct must

be assessed within the totality of circumstances surrounding the

occurrence at issue." Id. An unlawful threat is established if,

under the totality of the circumstances, an employee could

reasonably conclude that the employer is threatening economic

reprisals if the employee supports the union. Id. at 459. Given

10
the totality of Eljer's statements and the surrounding

circumstances, the Board's determination that Eljer threatened its

employees with retaliation if they selected the union as their

representative was unreasonable. While Eljer stated that there

would be negative consequences to voting for the union, the plant

manager also communicated to employees that each employee was

entitled to his opinion and that one's vote would not result in

retaliatory discrimination. There is no surprise in Eljer's

expressed desire for the union's decertification and there were no

accompanying campaign statements that would imbue Eljer's

predictions of negative consequences with a more sinister meaning.

See Dow Chem., 660 F.2d at 644.

d.

Finally, we note that our conclusion that the Board was

unreasonable in the above recited unfair labor practices findings

derives from the context of this representation election. This

union had represented these employees for many years so that the

employees were familiar with and well-informed of the union's and

management's spokespersons, as well as what those parties had

provided and could be trusted to provide (or not to provide) in the

future. This decertification election of a long-time union

bargaining agent was, of course, a situation distinct from a

first-time election to unionize an employer.

2. Request for Health Plan Information

Eljer asserts that it did not violate section 8(a)(1) and (5)

of the Act when it failed to provide health plan costs in response

11
to the union's request. Eljer contends that because it had

previously provided the union with information in August 1991, it

was thus not compelled to provide any more information concerning

the health plan, and, alternatively, the union's request was overly

vague and broad.

It is an "unfair labor practice for an employer to refuse to

bargain collectively with the representatives of his employees...."

29 U.S.C. § 158(a)(5). Under this duty to bargain, an employer has

a duty "to provide information that is needed by the bargaining

representative for the proper performance of its duties." NLRB v.

Leonard B. Hebert, Jr. & Co., Inc., 696 F.2d 1120, 1124 (5th

Cir.1983) (quoting NLRB v. Acme Indus. Co., 385 U.S. 432, 435-36,

87 S.Ct. 565, 568, 17 L.Ed.2d 495 (1967)). An employer's refusal

to furnish information relevant to a union's negotiation or

administration of a collective bargaining agreement may constitute

a breach of the employer's duty to bargain in good faith. Id. The

key inquiry is whether the information sought by the union is

relevant to its duties. Id.

Among the union's requests was the following statement: "The

union must have all pertinent information with respect to present

and projected [insurance] cost to both the company and the

employees." As we have explained before, the Supreme Court has

adopted a liberal, discovery-type standard by which the relevancy

of the requested information is judged. Id. Even assuming a proper

production request and the presumptive relevance of insurance costs

generally, Eljer rebutted any presumption of relevance for the

12
requested information by responding to the union's request with the

fact that the information had already been disclosed eighteen

months previous and thus no additional information should be needed

by the union; any such information was irrelevant. The union

failed to show how its duties were impaired by the lack of any more

current information that may have been available, i.e., that any

existing information was indeed relevant to the bargaining issue.

See Id. at 1124. Therefore, we find unreasonable the Board's

determination that Eljer's previous production of insurance

information did not satisfy the union's request and was thus an

unfair labor practice.

B. Eljer's Withdrawal of Recognition of the Union and Unilateral
Changes

Eljer contends that the Board erred by finding that it

violated section 8(a)(1) and (5) of the Act by withdrawing

recognition from the union, by unilaterally making changes in the

contractual grievance and arbitration procedure, and by

implementing a health insurance copayment requirement. Eljer

asserts that it had a good faith doubt as to the union's status in

representing the unit employees following the decertification

election and thus its actions were consistent with the Act. The

Board counters that Eljer unlawfully withdrew recognition of the

Union, and that Eljer failed to meet its statutory bargaining

obligation when it unilaterally changed its employees' terms of

employment.

It is a well-accepted rule that an employer has no duty to

bargain when it has a good faith and reasonable doubt of a union's

13
continued majority status. See, e.g., Dow Chem., 660 F.2d at 656-

57. The employer must demonstrate by clear and convincing

evidence, NLRB v. A.W. Thompson, Inc., 651 F.2d 1141, 1143 (5th

Cir.1981), its good faith belief, founded on a sufficient objective

basis, that the union no longer represented a majority of the

employees. United Supermarkets, Inc. v. NLRB, 862 F.2d 549, 554

(5th Cir.1989).

Because the Board was unreasonable in its findings of unfair

labor practices, as we have explained in the preceding discussion,

the Board could not reasonably conclude that Eljer violated

sections 8(a)(5) and (1) of the Act by withdrawing recognition from

the union and subsequently instituting the copayment and grievance

procedure. The election results provided Eljer with a sufficient

objective basis for its good faith doubt that the union no longer

represented the majority of the employees, and thus it was relieved

of its duty to bargain under the Act. See Dow Chem., 660 F.2d at

654, 656-57 (holding that employees' statutory right to free choice

under section 7 of the Act would be abrogated by requiring a

continued duty to bargain after union lost fair decertification

election and restating rule that employer has no duty to bargain

when it has a good faith and reasonable doubt of union's continued

majority status); see also Hood Furniture, 941 F.2d at 328 (noting

strong presumption that ballots cast under specific NLRB procedural

safeguards reflect employees' true desires).

CONCLUSION

For the foregoing reasons, Eljer's petition for review is

14
GRANTED, the Board's order and decision are VACATED and the Board's

petition for enforcement is DENIED.

15