King Elec Inc v. NLRB

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 9, 2006 Decided March 7, 2006

No. 04-1440

KING ELECTRIC, INCORPORATED,
PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,
RESPONDENT

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS,
LOCAL 8,
INTERVENOR

Consolidated with
05-1012

On Petition for Review and
Cross-Application for Enforcement
of an Order of the National Labor Relations Board

Maurice Baskin argued the cause for petitioner. With him
on the briefs were Alan G. Ross and Lesley A. Pate.

Philip A. Hostak, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
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were Arthur F. Rosenfeld, Acting General Counsel at the time
the brief was filed, Margery E. Lieber, Acting Associate General
Counsel at the time the brief was filed, Aileen A. Armstrong,
Deputy Associate General Counsel, and Robert J. Englehart,
Supervisory Attorney. Steven B. Goldstein, Attorney, entered an
appearance.

Basil W. Mangano was on the brief for intervenor. Joseph
M. D'Angelo entered an appearance.

Before: HENDERSON and TATEL, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.

SILBERMAN, Senior Circuit Judge: King Electric, Inc., an
electrical contractor in Toledo, Ohio, seeks review of an NLRB
order to bargain with the International Brotherhood of Electrical
Workers, Local Union Number 8. King challenges the union’s
certification based on the union’s conduct prior to and on the
day of an election. We grant King’s petition.

I

The union filed an election petition in June 2001 (almost
five years ago)1 seeking representation of a unit of
approximately ten employees. During the campaign, union
representatives described certain benefits that the union made
available to employees of union-signatory employers. Most
notably the employees were told that they were eligible for

1
See, e.g., Cogburn Health Ctr., Inc. v. NLRB, __ F.3d __, __,
2006 WL 435406, at *8 (D.C. Cir. Feb. 24, 2006) (describing “the
Board’s extraordinary delays in case processing”).
 3

employment referrals to union-signatory contractors via a Joint
Apprenticeship Training Committee (JATC) because at least
51% of King’s employees had signed authorization cards, and
under the program — supposedly approved by the Labor
Department — once that threshold was passed, the union was
“allowed” to put employees in the program regardless of
whether the union won or lost the election. According to the
Board, without the “51% rule,” King employees would not have
been eligible for JATC referrals because King was not a
union-signatory employer.

On the day of the election, a Board agent set up a polling
center in a stockroom at King, and nine employees voted.
Shortly before polling was to begin, the agent directed the two
present union representatives to leave the voting area and not to
stand outside the stockroom door, such that employees would
have to pass them on their way to vote. The representatives
asked if they could wait in their car, and after determining that
the car was parked across the street from King’s offices, the
Board agent replied that the car was fine. Instead of going to
their car, however, the representatives went to a shaded area
behind a building off King’s property, approximately forty to
fifty feet from the stockroom door, and along one of two
driveways leading to King’s property. At one point after the
polls had opened, a King employee, Dennis Stewart, arrived and
stopped to speak with the union representatives. The three were
approached by other employees who had already voted, and
after approximately a minute and a half of conversation, Stewart
departed for the stockroom to vote. Some minutes later, another
employee, Scott Widmer, drove onto King’s property and
stopped to speak briefly with the union representatives before
voting.

The union ultimately prevailed with five votes in favor of
the union and four against; the day following the election, six of
 4

King’s ten employees quit and went to work for union-signatory
companies pursuant to union referrals. King filed an objection
to the election claiming improper electioneering on election day
and that the union had improperly promised benefits to
employees during the campaign. One hearing officer concluded
that the union’s conduct on election day was insignificant.
Another hearing officer examined the improper benefits claims.
Although acknowledging that the “[u]nion promised jobs with
union signatories,” the hearing officer concluded that the union
had done so “win, lose, or draw” — “these promises were not
made in exchange for a pledge of [u]nion support from the
employees,” nor contingent on a union victory in the election.

King refused to bargain with the union and challenged the
two hearing officers’ determinations in a consequent unfair labor
practice proceeding. King also claimed that the Board should
recognize that “unusual circumstances,” i.e., that six of the ten
employees quit the day after the election, relieved it of any duty
to bargain with the union. The Board, as is typical, declined to
reexamine the hearing officers’ determinations in the unfair
labor practice proceeding and rejected the “unusual
circumstances” defense.

II

We can easily dispose of two of petitioner’s arguments.
The union’s election day conduct clearly did not constitute
impermissible electioneering under Board rules that we have
approved. The hearing officer credited the testimony of one of
the union representatives that he and another were forty to fifty
feet away from the stockroom door and off King’s property, and
although King disputes these findings, it presents no grounds
allowing us to quarrel with the hearing officer’s credibility
determinations. See Cadbury Beverages, Inc. v. NLRB, 160 F.3d
24, 28 (D.C. Cir. 1998). Nor was there a violation of the
 5

Board’s “Milchem Rule,” which provides that “sustained
conversation with prospective voters waiting to cast their
ballots, regardless of the content of the remarks exchanged,
constitutes conduct which, in itself, necessitates a second
election.” Milchem, Inc., 170 N.L.R.B. 362, 362 (1968); see
also Nathan Katz Realty, LLC v. NLRB, 251 F.3d 981, 991 (D.C.
Cir. 2001). The union representatives spoke with only two
employees before they voted, for one-and-a-half minutes and
three minutes, respectively, and at a distance of fifty-five to
sixty-five feet from the voting booth.

To be sure, the Board also applies a multi-factor test to
determine whether the electioneering, even if it did not violate
Milchem, was nonetheless objectionable because it
“substantially impaired the exercise of free choice.” Overnite
Transp. Co. v. NLRB, 140 F.3d 259, 270 (D.C. Cir. 1998)
(citation and internal quotation marks omitted). That test
considers “the nature and extent of the electioneering, whether
it happened within a designated ‘no electioneering’ area,
whether it was contrary to the instructions of the Board’s
election agent, whether a party to the election objected to it, and
whether a party to the election engaged in it.” Id.; see also
Nathan Katz Realty, 251 F.3d at 991. As the hearing officer
concluded, while the activity at issue was engaged in by parties
to the election — the union representatives — all other factors
militate against a finding of substantial impairment. The
contacts between the union representatives and employees
Stewart and Widmer were of short duration and innocuous in
nature, there was no designated “no electioneering area,” the
representatives did not act contrary to the Board agent’s
instructions, and King Electric president John King, while aware
of the union representatives’ presence, never complained to the
Board agent while the polls were open.
 6

King relies on Nathan Katz Realty’s statement “that a party
engages in objectionable conduct sufficient to set aside an
election if one of its agents is continually present in a place
where employees have to pass in order to vote.” 251 F.3d at
993. In this case, only two employees passed the union
representatives on their way to vote; the rest were already on
King’s property at the time the polls opened. And in any event,
the union representatives were positioned along only one of two
driveways leading to King’s property. The two employees could
have bypassed the union representatives had they so desired.

The Board therefore was not unreasonable in determining
that the union representatives did not engage in impermissible
electioneering. As we have said previously, “[t]he
representation election process under the NLRA is not an
abstract exercise in achieving ideal conditions,” Amalgamated
Clothing & Textile Workers Union v. NLRB, 736 F.2d 1559,
1563 (D.C. Cir. 1984), and “it is unrealistic to expect parties or
employees to refrain totally from any and all types of
electioneering in the vicinity of the polls,” Overnite Transp. Co.,
140 F.3d at 269 (citation and internal quotation marks omitted).

Nor do we think there is much to petitioner’s “unusual
circumstances” argument. The Board has never applied that
doctrine, which sometimes justifies an employer’s petition for
relief from a continuing obligation to bargain with an incumbent
union, see Brooks v. NLRB, 348 U.S. 96, 98-99, 103 (1954), to
allow a challenge to a certification where a number of
employees have left after an election, see Pearson Educ., Inc. v.
NLRB, 373 F.3d 127, 133 (D.C. Cir. 2004). That is not to say
that the Board could not do so, but we think the Board is clearly
within its legitimate policy-making role when it determines, as
it did here, that a turnover of employees is not a fundamental
change in the unit justifying invocation of the “unusual
circumstances” doctrine. As we note below, however, we do not
 7

think that the actions of the six employees on the day following
the election were irrelevant.

III

Turning to the allegations that the union improperly
promised benefits to the employees in the campaign, the parties
agree that a union may not offer employees a “tangible
economic benefit” in the pre-election period. Freund Baking
Co. v. NLRB, 165 F.3d 928, 931-32 (D.C. Cir. 1999). To be
sure, a union can promise benefits to which employees would be
entitled as union members or as employees of a union-signatory
company, see Int’l Bhd. of Elec. Workers, Local Union 103
(Drew Electric Co.), 312 N.L.R.B. 591, 592-93 (1993); but such
a promise cannot be contingent on the vote results, nor would it
be appropriate, the Board concedes, for the union to make such
a promise contingent on employees’ staying to vote on election
day. If the union retained discretion whether to award such
benefits — the employees were not actually entitled to referral
to union-signatory employers — then the union’s promise to do
so in this case could be thought a quid pro quo for a majority’s
voting for the union or, at least, staying to vote on election day.

Petitioner argues that the very fact that “more than half the
bargaining unit took the [u]nion up on its offer by quitting their
employment with King the day after the election and receiving
immediate placement by the [u]nion,” demonstrates that such an
improper contingent promise had been made. King asserts that
its employees would not have been entitled to referrals under the
JATC program without the union’s waiver. In other words, the
employees’ behavior tends to show that they understood that the
union had such discretion.

The hearing officer, however, credited the testimony of a
union official that the union’s policy to enroll King employees
 8

in the JATC referral program was pursuant to Labor Department
guidelines and contingent only on the majority of employees’
signing authorization cards, such that employees would be
eligible “win, lose, or draw” in the election.2 The testimony of
John King and one employee to the effect that the union had
offered job referrals (at higher pay) if the employees would stay
through the vote was rejected as not credible. And the hearing
officer regarded the circumstantial evidence that more than half
of the employees quit the day after the election to work at union-
signatory companies as irrelevant, since she believed it was
inappropriate to consider post-election evidence in determining
whether the union had engaged in pre-election objectionable
conduct.

Although we are obliged to defer to evidentiary findings —
particularly when they are based on credibility determinations,
see Amalgamated Clothing & Textile Workers Union, 736 F.2d
at 1563; see also Universal Camera Corp. v. NLRB, 340 U.S.
474 (1951) — when the Board (or any agency) is “engaged in
simple factfinding, unconstrained by substantive presumptions
or evidentiary rules of exclusion, it is not free to prescribe what
inferences from the evidence it will accept and reject, but must
draw all those inferences that the evidence [including
circumstantial evidence] fairly demands.” Allentown Mack
Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 378 (1998); see also
id. at 371. The hearing officer pointed to no Board policy that
would have precluded her from considering the employees’
post-election conduct as circumstantial evidence supporting
petitioner’s contention (nor could we imagine any such rule of
evidence as reasonable). Therefore, her finding cannot be

2
Petitioner seemed to raise an interesting argument that the
Department of Labor guidelines themselves are inconsistent with the
NLRA, but we cannot consider it because it was not raised before the
Board.
 9

thought supported by substantial evidence. Of course had she
considered that evidence and still credited the union witness, we
might well have deferred to her finding — but she did not.

That is not the only defect in the hearing officer’s decision.
As we have indicated, a union’s grant to employees of a benefit
to which they are not otherwise entitled, during an election
campaign, is still objectionable — perhaps a violation of the
Act3 — whether or not conditioned on how employees vote in an
election. The union representative’s testimony before the
hearing officer regarding the “51% rule” was equivocal. During
cross-examination, union representative Roy Grosswiler testified
that “in organizing in regards to apprenticeship,” the union can
“circumvent the selection procedure . . . when [it] [has] an
employer where 51 percent of their employees have signed
authorization cards.” Then the union is “allowed to [offer]
direct entry into [the] apprenticeship program[,] rather than
[requiring the employees to] go through the selection
procedure.” On re-direct Grosswiler added, “we’ve been doing
that for eight years.” This begs the question whether the union
employed the “51% rule” in the normal course, during
organizing or otherwise, or whether it was merely something
that was in the union’s discretion to offer in appropriate
situations — perhaps when necessary in order to encourage pro-

3
See Freund Baking Co., 165 F.3d at 931 (noting that “the Act .
. . bars both crude and subtle forms of vote-buying on the part of the
union and citing NLRB v. Savair Mfg. Co., 414 U.S. 270, 279 (1973),
which held that a union’s promise of “a special benefit to those who
sign up for a union” runs afoul of “[t]he right of a free choice . . .
inherent in the principles reflected in § 9(c)(1)(A)” of the Act). But
compare 29 U.S.C. § 158(b)(1)(A) (prohibiting labor organizations’
restraint or coercion of employees in the exercise of their rights), with
id. § 158(a)(1) (on the part of employers, also prohibiting
“interfer[ence]” with such rights).
 10

union votes. Had the hearing officer concluded, on the basis of
Grosswiler’s testimony, that the “51% rule” was invariably
employed by the union, we might have been willing to defer to
such a finding.

But the hearing officer never made a finding that the union
treated the “51% rule” as binding on it and thereby
unconditionally available to employees. To be sure, the hearing
officer stated “that employment with union-signatory companies
was not conditioned on the employees’ support for the union,”
but that is really not an answer to this question. If the union had
promised the employees a benefit that was not automatic with
union membership, it would be objectionable even if
conditioned on neither the result of the vote nor an employee’s
willingness to stay for the vote. See Freund Baking Co., 165
F.3d at 931.

IV

Based on the foregoing, we grant King’s petition for review
and deny the Board’s cross-application for enforcement.