Before Gibbons and Higginbotham, Circuit Judges and Ziegler, District Judge.*fn*
The National Labor Relations Board petitions pursuant to section 10(e) of the National Labor Relations Act, 29 U.S.C. §§ 151-187, 160(e) (1976), for enforcement of its order against Atlas Lumber Company (Atlas) and Local Union 522, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America (Local 522). The order prohibits Atlas from recognizing Local 522 as the exclusive bargaining representative of its employees or from giving effect to a collective bargaining agreement between Atlas and Local 522.*fn1 The Board held that Atlas violated section 8(a)(1) and section 8(a)(2) of the Act and that Local 522 violated section 8(b)(1)(A) of the Act when on May 16, 1977 they entered into a contract at a time when Local 522 did not represent a majority of employees of the appropriate bargaining unit. We deny enforcement of the order.
Atlas, a new business, commenced operation as a building supply dealer at Camden, New Jersey, on April 15, 1977. On April 20, Local 522 wrote to Atlas stating that it intended to organize the employees of Atlas. Some time in April, an Atlas employee, Miller Garrett, approached Local 326, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America (Local 326), and obtained authorization cards from Local 326. Atlas had ten or eleven employees at the time, and by May 4 Garrett had obtained at least seven authorization cards. On May 4, Local 326 wrote to Atlas:
This is to advise you that a majority of your Drivers and Yard employees have signed authorization cards indicating their desire to have this Local Union represent them.
We have been in contact with your employees and are now actively organizing them. We request your co-operation and ask that you abide by their wishes in accordance with the applicable law.
Please consider this letter a request for recognition on their behalf in accordance with the applicable law.
Letter from Frank Sheeran to Mr. Bernie Liedman (May 4, 1977).
This letter was not received by Atlas until May 9. No officer of Local 326 ever visited Atlas or made contact with any Atlas employee other than Garrett. Local 326 had no information about the size or composition of an appropriate Atlas bargaining unit at the time when Sheeran wrote the May 4 letter. In May, 1977, Local 326 did not represent any bargaining units in New Jersey.
On May 13, James Rizzo, a business representative of Local 522, appeared at Atlas' Camden facility and asked Bernie Liedman, Atlas' president, to agree to the terms of an existing contract between Local 522 and the Building Supply Dealers of New Jersey, a multi-employer bargaining unit. Liedman declined to do so unless Local 522 offered proof that it represented a majority of the Atlas employees. Prior to the May 13 meeting, Local 522 had had no contact with any of those employees.
On May 16, Rizzo returned to Atlas with authorization cards from ten employees, nine of whom had previously signed authorization cards for Local 326. There is no evidence that Atlas knew anything about the number of cards held by Local 326 other than the information as represented in Sheeran's May 4 letter. Liedman, after verifying the employee signatures on the ten Local 522 cards, signed a memorandum agreement with that Local binding Atlas to the Building Supply Dealers of New Jersey contract. On May 23, ten days after ...