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National Labor Relations Board v. Permanent Label Corp.

decided: June 30, 1981.



Before Seitz, Chief Judge, and Hunter and Garth, Circuit Judges. Argued Nov. 4, 1980. Reargued In Banc May 11, 1981. Before Seitz, Chief Judge, and Aldisert, Adams, Gibbons, Hunter, Weis, Garth, Higginbotham and Sloviter, Circuit Judges.

Author: Seitz


The National Labor Relations Board (Board) petitions for enforcement of its order against Permanent Label Corporation (Company). To remedy the many unfair labor practices that the Board found the Company had committed, the Board ordered the Company to cease and desist from certain unlawful actions, to reinstate and grant backpay to certain employees, and to recognize and bargain collectively with the Distributive Workers of America, District 65 (Union). The Company resists enforcement on the ground that the various findings of unfair labor practices made by the Board, and the remedies ordered by the Board, are not supported by substantial evidence on the record as a whole.


Our factual narration is based on the findings of the Administrative Law Judge (ALJ), which were adopted by the Board. In February 1977, a Company employee, Bernard Daly, contacted a Union agent and began talking to his fellow employees about the advantages of organizing their plant. Daly ceased his organizing activities when Supervisor Michael Bevilacqua informed him that he could be fired for talking about the Union while in the plant.

Daly resumed his organizing efforts in September 1977, after he and employee Michael Roberts were contacted by, and met with, Union organizer Tom Acosta. Together, Roberts and Daly interested other employees in joining the organizing effort. They recruited, among others, Eleanor Ott, Dorothy Saracco, and Elton DeMonteverde. By mid-October, Union organizer Acosta began holding meetings at which employees signed authorization cards, paid Union dues, and formed a Union organizing committee.

In late October 1977, Supervisor Bevilacqua became aware of rumors of organizing activities in the plant. He investigated these rumors, asking Daly if he knew anything about an attempt by the Company's employees to organize. Daly denied any knowledge of such activity.

On November 1, 1977, Daly was summarily discharged by the Company, allegedly for excessive absenteeism. The next day Ott was discharged, allegedly for the same reason. Neither employee had ever received a warning or disciplinary notice concerning excessive absenteeism.

Two days after the discharges of Daly and Ott, Company Vice-President Robert Tancredi met with employees on each of the plant's three shifts and delivered a speech expressing the Company's opposition to the Union. In this speech, Tancredi told employees that the Union could promise them more than the employer, but could only guarantee that they would pay monthly dues; that only the Company could guarantee job security; that it was important for job security to maintain the current level of business; that unionized plants sometimes became uncompetitive and found it difficult to stay in business; and that thus far the Company's success had been accomplished without outside interference.

In the meeting with second-shift employees, Tancredi permitted Roberts to read a petition directed to management that had been signed by approximately thirty employees. This petition asserted that the discharges of Daly and Ott were unjust, and that both should be rehired. Tancredi accepted the petition from Roberts and said he would consider it and return with an answer. Tancredi then adjourned the meeting, stating that he would stay and talk to employees about their grievances.

On November 9, the Union filed a complaint with the Board, and served a copy on the Company. This complaint asserted that the allegedly unlawful discharges of Daly and Ott constituted unfair labor practices. On November 15, Daly and Ott accepted the Company's offer of reinstatement, but the Company treated their two-week absence as justified suspension and offered them no back pay.

During the course of the organizing campaign, Production Control and Office Manager Jack Studt approached many employees individually, asking why they thought they needed a union and what problems or grievances they had about conditions in the plant. Studt told the employees that he thought the Company could resolve the problems within one year without the Union.

On November 11, 1977, Union organizer Acosta, accompanied by some members of the in-plant organizing committee, met with Plant Manager Doug Contreras. Acosta presented sixty-seven signed authorization cards and asked the Company to recognize the Union. The proposed bargaining unit included approximately 125 employees. Contreras replied that he did not recognize either the organizing committee or the Union as the representative of the employees. The Union filed a representation petition with the Board on November 14, 1977.

The Company's antiunion efforts continued after the Union had presented the authorization cards as evidence of its majority support. For example, on November 18, 1977, employee Zenaida Esquilin asked Saracco, who was a member of the employees' in-plant organizing committee, for a Union authorization card for a co-worker, Maria Garcia. Garcia signed the card. However, before she could return it to Saracco, foreman Bevilacqua confronted her and asked who had given her the card. She explained that it came from Esquilin and Saracco. Later that day, foreman Bevilacqua called Saracco into his office and told her not to pass out Union cards on Company time. He also told her that while she might talk to other employees on her break time, she could not at any time pass out Union cards or literature while on Company property.

On November 29, 1977, Roberts stationed himself at an employee entranceway near an employee parking lot in order to distribute information leaflets to employees arriving at the plant for their work shifts. Supervisor Robert Sanders told Roberts that he would be subject to disciplinary action if he continued to distribute the information leaflets. Although Roberts was stationed on Company property, he distributed the literature only in a nonwork area during his off-duty time. As a result of the Company's threat of disciplinary action, Roberts ceased distributing materials.

Later that day, employees Roberts, Ott and Robert Linderoth and Ott attended a Board conference with Company representatives. One half hour before they were to start their work shifts, Roberts called the plant to say they would be five or ten minutes late for work. On the phone, Supervisor Sanders, who earlier had threatened Roberts with discipline for distributing literature, told Roberts that the Company had instituted a policy that foreclosed employees who were late for a shift from working during that shift. Consequently, Sanders informed Roberts that all three employees should consider themselves suspended for the day. Sanders was acting under Plant Manager Contreras' instructions; Contreras, in turn, received his orders from Vice-President Tancredi, who was attending the Board conference and had called and told Contreras that the three employees would not be able to check into work on time.

During this period Company President Al Contreras, who normally spent little time at the Clifton plant, spoke individually with approximately 500 Clifton employees, expressing the Company's opposition to the Union. In the course of these conversations President Contreras coercively interrogated employees, solicited grievances, coerced employees to campaign against the Union, discouraged employees from wearing Union buttons, promised benefits, and threatened reprisals or other adverse consequences if the Union was elected as the employees' bargaining representative. For example, Contreras apparently offered employee Mia Mehmeti assistance for schooling and reassured Ott that she was eligible for health insurance. He stated to employees Iwanicki and Linderoth that if the Union was elected he would no longer care about the Company and not work hard for it because the Union would "ruin him" it was clearly implied that along with his downfall would go that of the Company.

In the week of December 6, Plant Manager Contreras summoned Linderoth, Saracco, and Alice Gorski to his office. Vice-President Tancredi testified that he was aware of this meeting and its purpose. Some department and shift supervisors were present. The three employees were advised that they were considered to be supervisors; therefore, it was unlawful for them to engage in Union activity. Further, they were informed that the Company had the right to take action against them if they engaged in Union activity. The employees testified that they left this meeting with the understanding that each was in jeopardy of being fired if he or she had anything more to do with the Union. The three employees had never been advised that they were supervisors, and they did not consider themselves, nor did their fellow employees consider them, to be supervisors.

One week before the December 30, 1977 election, the Company paid year-end bonuses to all of its employees. In January 1977, the Company had posted a notice on the employee bulletin board announcing that to be eligible for a 1977 year-end bonus an employee had to have been on the Company payroll on December 31, 1976. This notice was removed at the end of November. The Company did not replace it with a new explanation of bonus eligibility or a statement of change in Company policy. Instead, one week prior to the election, the Company paid the 1977 year-end bonus to all its employees, including those with less than one year service.

Finally, on December 28, 1977, two days before the representation election, President Contreras delivered a prepared speech to employees on each of the shifts. He noted that he expected the Company to grow but that the introduction of the Union into the plant would hinder that growth. He stated:

Our largest customer, the Mennen Company, which accounts for some 40% of this plant's sales is nonunion. We are the sole decorator of Mennen packages. They have felt comfortable with our clean record of no union trouble and no strikes at Permanent Label over the past 25 years. Sometimes when a company is unionized, customers divide their business between two or more vendors with different union contract expiration dates. They do this to eliminate the possibility of being cut off by a strike. I don't want to give the impression that just because a union is in a company there will be a strike, but we have shown you District 65's strike record, and you have seen the emphasis on strikes in their constitution.

The ALJ found that there was no basis in fact for Contreras' predictions.

On December 30, 1977, the representation election was held. The Union lost by a vote of sixty-five to sixty-four, with six challenged ballots. The filing of these unfair labor charges followed.


The Board adopted the conclusion of the ALJ that the Company had committed several unfair labor practices during the pre-election period. The Board also adopted the recommendation of the ALJ that a bargaining order was necessary to remedy the unfair labor practices, but it modified the ALJ's bargaining order to run from November 11, 1977, the date on which the Union presented the Company with authorization cards signed by a majority of the employees and demanded recognition. The Company urges that we find that neither the findings of unfair labor practices nor the conclusion that a bargaining order was a necessary remedy is supported by substantial evidence on the record as a whole. The Board adopted the following conclusions of law:

1. In October December 1977, by soliciting grievances and promising benefits and correction of grievances if the employees would forget the Union, and by threatening no correction of grievances and loss of jobs if they brought the Union in; by granting bonus benefits, just prior to the election; by coercive interrogation of employees concerning organizing, who supplied Union cards, and employee interest in the Union; by interfering with the employees wearing Union insignia; by promulgating and enforcing rules prohibiting solicitation by employees of Union memberships in plant work areas on nonwork time, and distribution of Union literature by employees in nonwork areas during nonwork time; by coercion to induce or attempt to induce influential employees to induce other employees to cease Union support; and by instructing nonsupervisory employees, under threat of discipline, to cease support of the Union, Respondent engaged in unfair labor practices in violation of Section 8(a)(1) of the Act.

2. By discharging employees Bernard Daly and Eleanor Ott on November 2, 1977, because of their Union activity and to discourage employees interest and membership in the Union, Respondent engaged in unfair labor practices in violation of Section 8(a)(3) and (1) of the Act. The change of their discharge, on November 16, 1977, to suspension without pay for the prior two weeks, reduced the severity of the discriminatory action but continued the violation of Section 8(a)(3) and (1) of the Act.

3. By suspending for one day without pay, on November 29, 1977, employees Michael Roberts, Robert Linderoth, and Eleanor Ott, because they attended a Board conference to assist the Union with the representation petition, Respondent engaged in unfair labor practices in violation of Section 8(a)(4) of the Act.

4. By refusing to recognize and bargain with the Union as representative of a majority of the employees as requested on November 11, 1977, but instead engaging, from the end of October to the end of December 1977, in commission of the unfair labor practices enumerated in paragraphs 1, 2 and 3 above, Respondent undermined the majority in the unit of employees that the Union represented, and made impossible the holding of a fair representation election. Respondent's refusal to bargain and embarking upon this course of misconduct constituted an unfair labor practice in violation of Section 8(a)(5) of the Act.

6. Respondent's pre-election unfair labor practices nullified the results of the December 30, 1977 representation election, and these unfair labor practices cannot be corrected by conventional remedies, including a rerun election. Accordingly, it is appropriate and necessary that Respondent be ordered to bargain with the Union ....


Before we reach the question whether the bargaining order should be enforced, we address the contention of the Company that the findings that it committed several unfair labor practices under the National Labor Relations Act, 29 U.S.C. ยง 158 (1976) (Act), are not supported by substantial evidence on the record as a whole. First, the Company argues that the finding that it engaged in unfair labor practices in violation of section 8(a)(1) of the Act lacks sufficient evidentiary support. We have reviewed the record evidence, and we have no hesitancy in finding that it forms more than a sufficient legal basis for the Board's conclusion. The Company apparently bases primary reliance on its contention that some of the ALJ's credibility findings were improper. Given the strong deference that we accord to credibility findings of the ALJ, we cannot say that they lack substantial record support. In any event, the totality of the record fully supports the ALJ's ultimate conclusions, even assuming infirmity in some of the few credibility findings challenged. Therefore, we conclude that the Company clearly overstepped the bounds of legality and violated section 8(a)(1) many times during the organization campaign.

Second, we consider the Board's determination that the Daly and Ott discharges, later converted to suspensions, were unfair labor practices under section 8(a)(3) and (a)(1) of the Act. The Company's basic contention seems to be that it was not aware of the Union organization effort at the time of the discharges; therefore, such discharges could not properly be attributable to antiunion animus.

We have reviewed the entire record and we believe that the evidence amply supports the conclusion that these initial discharges constituted unfair labor practices. When the reasons given by the Company for the discharges are viewed in light of the circumstances surrounding the discharges, we believe that the ALJ and the Board were justified in finding these reasons to be mere pretexts. We conclude that the finding that the discharges of Daly and Ott violated section 8(a)(3) and (a)(1) of the Act is amply supported by the record.

Third, the Company challenges the Board's finding that the one-day suspensions of Roberts, Linderoth and Ott, when their attendance at a Board conference caused them to be ten minutes late for their work shifts, were unfair labor practices in violation of section 8(a)(4). We believe that the record as a whole more than warrants the conclusion reached by the Board that the suspensions were retaliatory actions because of the employees' assistance to the Union. Therefore, these suspensions violated section 8(a)(4).

Finally, the Board adopted the conclusion of the ALJ that the Company's numerous unfair labor practices interfered with the free choice of the Company's employees, and therefore destroyed the "laboratory conditions" desirable for the conduct of a Board election. As a result, the Board concluded that the election of December 30, 1977 must be set aside. We think that the record findings, which we have found sufficient to support the findings of numerous violations of the Act, clearly support this determination.


The Company contends that there is not substantial evidence to support the Board's conclusion that a bargaining order should issue because the Company violated section 8(a)(5) of the Act by refusing to recognize and bargain with the Union as requested on November 11, 1977, and instead engaging in the unfair labor practices detailed above, which both undermined the Union's majority status and prevented the holding of a fair election. As our previous discussion has demonstrated, substantial evidence on the record as a whole supports the plethora of unfair labor practices found. However, it is established, at least in this circuit, that when the Board imposes a bargaining order, it must articulate the factors that justify the choice of this remedy over the ordering of a new election. See, e. g., Hedstrom Co. v. NLRB, 558 F.2d 1137 (3d Cir. 1977); NLRB v. Armcor Industries, Inc., 535 F.2d 239 (3d Cir. 1976). If the ALJ provides a statement of reasons for recommending that the Board impose a bargaining order, the Board need only specifically adopt the findings and reasoning of the ALJ. A separate articulation by the Board of the reasons for imposing a bargaining order is unnecessary. See Kenworth Trucks v. NLRB, 580 F.2d 55, 62-63 (3d Cir. 1978).

Nevertheless, the Company argues that the Board should have provided a statement of reasons justifying the imposition of a bargaining order independent of that provided by the ALJ because it modified the ALJ's bargaining order to run from the date of the Union's demand for recognition based on its card majority and not the date of the first unfair labor practice.*fn1 In making this argument, the Company relies on Rapid Manufacturing Co. v. NLRB, 612 F.2d 144 (3d Cir. 1979). According to the Company, Rapid Manufacturing Co. prohibits the Board from supporting a Gissel II bargaining order by relying on conduct that occurred before the Union demanded recognition. We do not read Rapid Manufacturing Co. this broadly. Obtaining a majority of Union authorization cards is a continuing process, and the length of time it takes to achieve a majority varies from plant to plant, often depending on the number of employees involved. We believe that in some circumstances the Board may properly consider unlawful conduct that occurred before the Union demanded recognition in determining whether the employer's course of unlawful conduct was sufficiently pervasive to undermine the Union's majority support and to make the possibility of a fair rerun election slight, and thus to support the imposition of a Gissel II bargaining order. Forbidding the Board from considering such conduct sets an artificial time barrier and ignores the possible cumulative effect of antiunion activity.

In this case, the course of unlawful conduct commenced approximately two weeks before the Union demanded recognition. The Union had already obtained a significant number of authorization cards. Therefore, we do not believe that the Board is precluded from relying on the statement of reasons for imposing a bargaining order ...

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