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Hunter Douglas Inc. v. National Labor Relations Board

argued: July 22, 1986.


On Petition for Review of National Labor Relations Board, NLRB Docket Nos. 22-CA-13511 and 22-CA-13588. On Cross-Application for Enforcement of an Order of the National Labor Relations Board, NLRB Board Docket Nos. 22-CA-13511 and 22-CA-13588.

Author: Sloviter

Before: GIBBONS, WEIS, and SLOVITER, Circuit Judges.


SLOVITER, Circuit Judge.

Before us is a petition for review by Hunter Douglas, Inc. from a decision and order of the National Labor Relations Board and a cross-application by the Board for enforcement of its order. The portion of the order contested by Hunter-Douglas involves the Board's determination that Hunter Douglas' discharge of most of the second-shift employees at its Maywood, New Jersey plant violated sections 8(a)(1) and (3) of the Labor Management Relations Act (the "Act"), 29 U.S.C. §§ 158(a)(1)(3), and that Hunter Douglas' questioning of employee Victor Nunez violated section 8(a)(1) of the Act, 29 U.S.C. § 158(a)(1).



Hunter Douglas manufactures window coverings and distributes both components for window coverings and window covering manufacturing equipment to fabricators and assembles the coverings itself. In the United States, it operates plants in Maywood, New Jersey; Dallas, Texas; Ontario, California; and Kent, Washington. The present case involves its actions at the Maywood plant.

During the summer of 1984 that plant operated on two shifts, with 63 employees on the first shift and 42 employees on the second. In August 1984, an employee informed Jose Lugo, the business agent of Local 404 of the United Electrical, Radio & Machine Workers of America, that Maywood employees were seeking to form a union. Subsequently, there were four meetings of plant employees at the union's offices. The first, on August 29, 1984, was attended by six employees. Later meetings on September 15 and 29 and October 20 were attended by small but increasing numbers of employees. During this period, employees were also distributing union leaflets at the plant. At the fourth meeting, union authorization cards were distributed, and, by October 24, 1984, 73 signed authorization cards had been obtained, 36 from first-shift employees and 37 from second-shift employees.

In late August or early September 1984, John Santalla, the Maywood plant manager, received an anonymous letter mentioning the names of several employees who were trying to organize a union. Santalla then created employee committees, which he met with on September 18, 20 and 27 and October 5 and 17 in the plant cafeteria on working time. At the meetings, employees complained of working conditions, such as problems with the heating system, air conditioning, bathrooms, and cafeteria. Santalla said he would try to resolve these problems. The employees also mentioned the possibility of receiving more pay. Santalla replied that the company was trying to initiate an incentive pay plan. Medical insurance was also discussed. At the third meeting, Santalla asked each of the employees whether their previous employer had had a union, to which some responded that it had and others that it had not. At the fourth meeting, Santalla distributed a list of proposed shop rules for the committee's consideration. One of the rules prohibited solicitation of employees if either the soliciting or the solicited employee was on working time. Another of the rules prohibited distribution of handbills and literature in plant working areas.

In October 1984, Santalla asked a machine operator, Victor Nunez, who went to Santalla's office to get a band-aid, whether it was true that Nunez wanted to join the union. Nunez replied "John, you know that I promised you that I do not want to know anything about unions, and I am not going to join any unions." App. at 683. Santalla then told Nunez no one else was to know about the conversation. A second conversation occurred in the area of the restrooms. Santalla said that he wanted to ask Nunez a confidential question and inquired whether it was true that the employees "were trying to get the Union back in place." App. at 684. Nunez replied, "I promised you that I wasn't going to get into a union, and I don't want to talk about it anymore." App. at 684.

On October 24, 1984, Hunter Douglas discharged 35 of the 42 second-shift employees and the second-shift supervisor. It is the General Counsel's position that the company's motive in discharging the second-shift employees was to inhibit union activity.

Hunter Douglas, on the other hand, argues that these firings resulted from legitimate business reasons stemming from its strategy to cease all work for retail customers. Even before the events at issue, Hunter Douglas had sold its products primarily through independent fabricators. For approximately 90 percent of its window coverings, Hunter Douglas would produce the components but then distribute them to its network of fifty to sixty fabricators who were responsible for assembly and retail sales. In the spring and summer of 1984, Hunter Douglas decided to direct all orders through its fabricator network. In August 1984, it advised retail customers that after August 31, 1984 all orders should be directed to its fabricators.

Hunter Douglas claims that it realized this strategy would give it excess production capacity, and that in spring 1984 it began to plan ways to reduce that capacity. Between March and July 1984, it reduced management personnel by 50%. It made similar cuts in space requirements and inventory during summer and fall 1984. Hunter Douglas claims that it would have had reduced manufacturing manpower needs at the Maywood plant in early September 1984, but that it was able to stave off a long-planned reduction in manufacturing workers at the Maywood plant because of orders from J.C. Penney, one of its largest fabricators. Penney had oversold its capacity and sought production assistance from Hunter Douglas the first week in September.

On October 18, 1984, O. B. Kelley, Hunter Douglas' Vice President of Sales and Marketing, learned that Penney would place no more orders with Hunter Douglas. Kelley informed George Shouldis, Vice President and General Manager of Hunter Douglas. On October 23, 1984, the loss of the Penney orders was confirmed. That same day Shouldis instructed John Brown, Director of Manufacturing, to develop a plan to reduce manpower. That same day, Brown, after consultation with Santalla, recommended to Shouldis that the second shift be eliminated. On the next day, October 24, 1984, with no notice, 35 of the Maywood plant's 42 second-shift employees and the second-shift supervisor, Jose Algarin, were informed of their discharge. Hunter Douglas explains that the dismissal without notice was effected to spare its employees from feelings of "unrest" and "discomfort". App. at 795. Local 404 formally demanded recognition from Hunter Douglas on October 29, 1984.



Local 404 filed three unfair labor practice charges against Hunter Douglas, which were consolidated in a complaint issue by the Regional Director. Following a hearing, the Administrative Law Judge found, inter alia : that Hunter Douglas had violated sections 8(a)(1) and (2) of the Act by establishing committees, soliciting grievances, granting benefits and promulgating prohibitions on solicitation and distribution, all as a means of discouraging union organization; and that there was not sufficient evidence to show that Algarin, the second-shift supervisor, had been discharged for his refusal to commit unfair labor practices.

With respect to the activities at issue here, the ALJ dismissed the allegation that elimination of the second shift was an unfair labor practice. The ALJ found: "Respondent [Hunter Douglas] had knowledge of the Union's activities, Santalla displayed animus towards the Union and the timing of the discharges was such that they occurred during the Union campaign." App. at 40. He stated that although 90% of the second-shift employees had signed authorization cards, the discharges occurred before Hunter Douglas was aware of the signing of the cards and before Local 404 demanded recognition. The ALJ stated it was "questionable", but did not decide whether the General Counsel made a prima facie showing that protected conduct was a motivating factor in the decision to eliminate the second shift. App. at 40. He found no violation had occurred because he concluded that Hunter Douglas would have eliminated the second shift even in the absence of the protected conduct.

The ALJ also concluded that the questioning of Victor Nunez about union activities was not coercive under the totality of the circumstances and therefore was not an unfair labor practice. Noting that Nunez was not summoned to Santalla's office on the first occasion and that the two met casually near the restrooms on the second occasion, the ALJ found that Santalla's inquiries were the kind of "casual questioning concerning union sympathies" permitted by the Act. App. at 39 (quoting Graham Architectural Products Corp. v. NLRB, 697 F.2d 534, 541 (3d Cir. 1983)).

Only the General Counsel filed exceptions to the ALJ's decision. The Board affirmed the ALJ's rulings, findings, and exclusions except with respect to the discharge of the second shift and the interrogation of Nunez. Hunter Douglas, 277 NLRB No. 123, slip op. at 7 (Dec. 23, 1985). The Board held that the ALJ's analysis of the discharge of the second shift was faulty because it failed "to consider record evidence that demonstrates that the second shift was selected for layoff in order to defeat the union campaign." Id. at 3. Drawing different inferences from the facts on record, the Board concluded that the General Counsel made a prima facie case that union animus was a motivating factor in the layoff of second-shift employees, and that Hunter Douglas failed to show by a preponderance of the evidence that those employees would have been laid off in the absence of union activity and animus. Id. at 7. It thus held that the discharge of its second-shift employees violated sections 8(a)(1) and (3) of the Act.

The Board also rejected the ALJ's conclusion that Santalla's questioning of Nunez was not coercive. The Board stressed that Santalla told Nunez the inquiries were confidential, that the questions had no legitimate purpose, and that Santalla was a plant manager who had conducted the interrogation in a calculated fashion. Id. at 6-7. The Board, therefore, held that Santalla's questioning of Victor Nunez on two occasions violated Section 8(a)(1) of the Act because it tended to interfere with the exercise of employees' protected rights. Id. at 7.


Standard of Review

We must sustain the Board's findings of unfair labor practices if they are supported by substantial evidence on the record considered as a whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 487-91, 95 L. Ed. 456, 71 S. Ct. 456 (1951); Graham Architectural Products Corp. v. NLRB, 697 F.2d 534, 537 (3d Cir. 1983). Similar deference is granted the Board's inferences from facts which, if supported by substantial evidence, may not be displaced even though this court acting de novo might have reached a different conclusion. Universal Camera, 340 U.S. at 488; Herman Brothers, Inc. v. NLRB, 658 F.2d 201, 209 (3d Cir. 1981); NLRB v. Garry Manufacturing Co., 630 F.2d 934, 937 (3d Cir. 1980).

Here, the Board disagreed with the ALJ. Hunter Douglas contends that this should subject the Board's findings to stricter scrutiny by this court. See Eastern Engineering & Elevator Co. v. NLRB, 637 F.2d 191, 197 (3d Cir. 1980). See also Allbritton Communications Co. v. NLRB, 766 F.2d 812, 817 (3d Cir. 1985), cert. denied, 474 U.S. 1081, 106 S. Ct. 850, 88 L. Ed. 2d 891 (1986) ("When, as here, the Board rejects certain findings made by an ALJ, this 'substantial evidence' standard is cast in a special light"). The Board, on the other hand, argues that when the differences between the Board and the ALJ stem solely from different inferences from the overall record evidence, we are to attach no special weight to the ALJ's contrary conclusions, since it is the Board's decision that is under review. See Stein Seal Co. v. NLRB, 605 F.2d 703, 706 (3d Cir. 1979); NLRB v. Duquesne Electric & Manufacturing Co., 518 F.2d 701, 704-05 (3d Cir. 1975).

This issue was discussed in our in banc decision in Hedstrom Co. v. NLRB, 629 F.2d 305 (3d Cir. 1980), cert. denied, 450 U.S. 996, 101 S. Ct. 1699, 68 L. Ed. 2d 196 (1981), where we stated:

The Board is not in any way inhibited by inferences drawn by the ALJ. To the contrary, the authority to draw legitimate inferences from proven facts is exclusively the Board's, not the ALJ's or the court on review of the Board's order. Indeed, we have consistently held that "the Board has the power to draw different conclusions from evidentiary facts" presented to the ALJ, including conclusions that directly contradict those reached by the ALJ. (citations omitted). If more than one inference may be drawn from a given set of facts, therefore, the conclusion of the Board will control unless it is unreasonable.

Id. at 316.

In this case, the Board did not make credibility findings that differed from the ALJ. Instead, the Board exercised its authority to draw "legitimate inferences from proven facts." We must therefore review its findings under the generally applicable substantial evidence standard. See Garrett ...

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