National Labor Relations Board v. Ideal MacAroni Company

WELLFORD, Senior Circuit Judge.

The National Labor Relations Board (NLRB) petitions for enforcement of its order issued against the Ideal Macaroni Company (Ideal) to recognize and bargain with Teamsters Local 407, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the union). For the following reasons, we DENY the NLRB’s petition.

Ideal modernized part of its past-manufacturing operation by purchasing new' equipment in 1985. Due to an increase in demand for some of its products and certain problems with its machines, Ideal hired six new employees in October, 1985. By March, 1986, Ideal’s manufacturing problems had been alleviated and its need for employees declined. As a result, Ideal notified three employees on March 31 and April 1 that they would be laid off. Ideal told the employees to return their uniforms and clean out their lockers. Ideal paid the employees for one week of vacation, even *881though the employees were not yet entitled to that vacation.

According to testimony before the NLRB, one employee, upon being told that she would get paid for vacation, told her supervisor: “[T]hat sure tells me that we aren’t coming back.” In response, her superior stated that the layoff was supposed to be temporary. In addition, that employee and another testified before the NLRB that they were told that they would be called back to work in July to help with the annual cleaning of the plant.

On May 21, 1986, the NLRB conducted a representation election among Ideal’s employees. Fifteen employees voted for representation by Local 407 and fifteen employees voted against representation. In addition, there were four disputed votes: three by the laid-off employees and one by Hope Pepus. Ideal objected to the votes of the laid off employees and the union objected to the vote of Hope Pepus.1 A hearing was held before an administrative law judge (ALJ) who determined that Ideal had discriminated against the employees for their union sentiment by laying them off, and that the employees were entitled to vote in the representation election. The NLRB reversed the AU as to the discrimination charge because it found that the layoffs were for legitimate business reasons.

The NLRB, however, decided that the employees were entitled to vote in the election because at the time of the election these employees had a reasonable expectation of recall within a reasonable time in the future. The NLRB, accordingly, decided that the union prevailed by a vote of 18 to 16. The NLRB ordered Ideal to recognize and bargain with the union. Following Ideal’s refusal to bargain, the union filed an unfair labor practice charge against Ideal for its failure to recognize it as the employee bargaining representative. The NLRB issued a cease and desist order against Ideal and now petitions this court to enforce its order.

In its fifteen page decision, the NLRB only devoted a single paragraph to the “reasonable expectation of reemployment” question:

Alternatively, the judge found that at the time of the election the three employees had a reasonable expectation of reemployment within the foreseeable future, and that their ballots should accordingly be opened and counted. He found that the three employees were not told when they were hired the previous October that they were temporary employees, and that at the time of the layoff they were not specifically told that the layoff was permanent. Rather, they were told “somewhat vaguely” that recall could be in days, weeks, or months. The judge also noted that under the respondent’s recall policy the three employees had an apparent right to recall equivalent to the time already worked for the company, in this case approximately 5 months. The election was conducted approximately 2 months after the layoff. On these facts, and in agreement with the judge’s alternative finding, we find that the three employees had a reasonable expectancy of recall.

The decision was not unanimous on this subordinate issue. Footnote 15 of the NLRB decision reveals that “Member Cra-craft would sustain the challenges to ballots of the laid-off employees.” Like the dissenting board member, we also conclude that “the statements made to each of the employees on the occasion of their layoffs were vague as to when and if the employees were to be recalled.” We also conclude that the employer’s statements to employees, Gage, Tyree, and Nash would “not ... support a finding that the layoffs were temporary.” (emphasis added). In summary, we agree with member Craeraft’s basic conclusion2:

*882[T]he Respondent has established on the basis of the surrounding objective facts (those which are relied on in reversing the judge’s finding that the layoffs were not discriminatory), that there is not a reasonable expectancy of recall.

The board member’s dissent adds that the changes at Ideal with regard to installation of new machinery “necessitated the layoff[s],” and “were not the type of changes ... reflective of fluctuations in the workload which would support a finding that employees could reasonably expect ... [to] be recalled.”

The NLRB spent twelve pages of its decision explaining that the AU was incorrect in finding that the layoffs of Gage, Tyree, and Nash were unlawful. Rather, it found that Ideal had a “need for fewer packers ... before the start of the union campaign.”3 The NLRB found it important, and we agree, that it continue its analysis of the employee work hour situation at Ideal beyond May of 1986. There was a good business reason for the layoffs. No one was hired to replace the employees laid off. We, accordingly, find no basis to hold that any of these employees had a reasonable expectation of recall.

The NLRB cited no case authority for its holding to the contrary, nor did the AU in his discussion of “voting eligibility.” This court reviews the NLRB’s decisions to ensure they are supported by substantial evidence. NLRB v. State Planning & Finishing Co., 738 F.2d 733, 737 (6th Cir.1984); 29 U.S.C. § 160(e).

NLRB v. Franklin Art Glass Studios, Inc., 675 F.2d 106 (6th Cir.1982), held, without elaboration or a hearing, that an “employee on sick leave due to a work-related injury had a reasonable expectation of being re-called,” and that two laid off employees were eligible to vote.4 None of these Ideal employees had a work-related injury; none were on a sick leave; all were recent hires, in a work environment requiring consistently fewer employee work hours, and Franklin Art Glass offers no rationale or factual detail in respect to its holding on eligibility.

In Sol-Jack Co., 286 N.L.R.B. 1173 (1987), the NLRB reversed the AU’s finding of reasonable expectation of recall despite the testimony of the laid off employee that a “part-owner” had told him that “he might be back to work in 1 or 2 weeks.” On the election day about three weeks later, however, the employer told the employee in question that the layoff was permanent. The test described in Sol-Jack was a consideration of “all the facts and circumstances in the record ... on the date of election, [to determine whether] ... an individual will return to work in the near future.” (emphasis added). The NLRB in Sol-Jack considered the employers’ past experience, its future plans, and the circumstances of the layoff, and found “[w]hen the objective factors involved indicate a laid-off employee had no reasonable expectancy of recall, vague statements by the employer about the chance or possibility of the employee being hired will not overcome the totality of the evidence to the contrary.” The instant case has circumstances comparable to those in Sol-Jack. Based on the Sol-Jack rationale, we conclude that there was no reasonable expectation of recall in the near future. It was significant in Sol-Jack and in the situation of Ideal that both had a sound business reason for laying off the employees unrelated to any union campaign.

*883We addressed a similar issue in NLRB v. Apex Paper Box Co., 976 F.2d 733 (6th Cir.1992) (Table disposition), where this court applied the proper test to the facts, explaining:

Although the general test for determining temporary layoff is reasonable expectancy of recall, the test is only a prediction. As the employees were recalled prior to the election, the reasonable expectancy of recall test is inapplicable, as a predictive test is not necessary. Nevertheless, the laid-off employees had a reasonable expectancy of recall, as: (1) their layoff was not due to either a temporary or a permanent loss of business; (2) Employer’s business remained strong, as steps to resume lost production and recall the laid-off employees were taken immediately; (3) Employer urged the employees to remain in contact with them; (4) every qualified employee who completed an application was recalled; and (5) the recalls took place both before and after the payroll eligibility cutoff date.5

In Apex Paper Box, this court applied the substantial evidence test and reversed the NLRB’s conclusion, as we do in this case.

The total number of employees in the pertinent department of Ideal reflects and objectively supports the NLRB’s finding that the layoffs in question were a part of the declining need for packer employees. There were 18 in November, 1985; 13 in March, 1986; 10 in April, 1986; and 10 in August, 1986. The controverted statements by the employer representative are certainly inconsistent with the actual employment facts, and were, at best, vague and ambiguous, even if credited by the AU.6 The NLRB’s finding that the layoffs were not unlawful due to the business needs of the company supports this decision. There was not substantial evidence to predict the re-hire of these employees at the time of the election. There is no legal precedent cited on comparable facts, which would support the summary and cursory decision of the NLRB in this case. We affirm the reasoning of the NLRB on the legality of the layoffs, but we find the decision on reasonable expectation of recall to lack a substantial basis of support.

For the reasons indicated, we REVERSE the NLRB on the pivotal issue of recall in this case and set aside its order and direction requiring Ideal to recognize the union.

. The NLRB subsequently determined that Pe-pus was entitled to vote. Pepus' vote is not an issue for this appeal.

. Footnote 15 of the NLRB’s decision constitutes a concise statement of the decision of the dissenting member, who would set aside the ALJ’s rulings, findings, and conclusions against Ideal on this record.

. Footnote 11 of the NLRB decision explains the rationale for its conclusion reversing the ALJ's decision in this regard by analyzing monthly hours worked: November, 1985, 2788 (5 week total); December, 2187; January, 1986, 2254; February, 1999; March, 1963; April, 1607; May, 1967 (for 5 weeks); June, 1627; July, 1140 (for 3 weeks).

. We have not ignored Franklin Art Glass Studios, which sets out:

We agree with the Board that no hearing was necessary regarding the three challenged ballots. Based upon the undisputed facts, the Board was entitled to conclude that the two laid-off employees casting these ballots and the one employee on sick leave due to a work-related injury had a reasonable expectation of being recalled.

675 F.2d at 106. Franklin Art Glass Studios did not elaborate on its decision and, thus, it is difficult to understand the dissent’s lengthy interpretation of its cursory decision.

. The dissent is critical of our reviewing the facts underlying the Board’s decision. This test, as found in Apex, requires this court to look to several factors, most of which require a review of the facts.

. We note a further matter of concern in this case. The election in question occurred in May, 1986. The AU rendered his decision in February, 1988. The NLRB did not render its decision for another three years, and we now decide this case still a year later. In in light of the closeness of the prior election almost seven years ago, it would be better for all concerned to have a new election if the employees of Ideal pursue their right to have this union (or another) represent them. See NLRB v. Thill, Inc., 980 F.2d 1137 (7th Cir.1992).