E & L Transport Co.

National Labor Relations Board - Board Decisions

Dec 31, 1998

327 N.L.R.B. 408 (N.L.R.B. 1998)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 386
E & L Transport Company and Local 710, Highway
Drivers, Dockmen, Spotters, Rampmen, Meat
Packing House and Allied Products Drivers and
Helpers, Office Workers and Miscellaneous
Employees, Chicago/Vicinity, Illinois. Case 13–
CA–29431
December 31, 1998
SUPPLEMENTAL DECISION AND ORDER
BY MEMBERS FOX, LIEBMAN, AND BRAME
On October 18, 1994, the National Labor Relations
Board issued its Decision and Order in this proceeding,1
which adopted with modifications a decision by Admin-
istrative Law Judge Russell M. King Jr. finding, inter
alia, that the Respondent had violated Section 8(a)(3) and
(1) of the Act by refusing to consider for hire and refus-
ing to hire any of four employees for a confidential sec-
retary position. Subsequently, the Respondent petitioned
the Seventh Circuit for review of the Board’s Order, and
the General Counsel cross-petitioned for enforcement of
the Order. In a decision issued on June 5, 1996,2 the
Seventh Circuit denied enforcement in part, granted en-
forcement in part, and remanded to the Board the issue of
whether the Respondent had discriminated against any of
the four employees by failing to consider them as appli-
cants for the position of confidential secretary.
On August 28, 1996, the Board notified the parties to
this proceeding that it was accepting the remand from the
Seventh Circuit, and that they could file statements of
position regarding the issues raised by the remand. The
Respondent then filed a motion to reopen the record on
remand, a brief in support thereof, and a statement of
position; the General Counsel filed a statement of posi-
tion, and an opposition brief to the Respondent’s motion
to reopen the record; the Charging Party filed a statement
of position; and the Respondent filed a reply to the Gen-
eral Counsel’s and the Charging Party’s statements of
position.
Regarding the issue on remand, the Seventh Circuit
noted that the Board, in its underlying decision, had ap-
plied reasoning different from that of the administrative
law judge while affirming his conclusion that the Re-
spondent had violated Section 8(a)(3) and (1) of the Act
by refusing to consider four union members for the posi-
tion of confidential secretary. The Board had observed,
first, that the judge had not determined whether the al-
leged confidential position had actually met the “labor
nexus” test.3 The Board had then stated that assuming
that the position at issue did meet the “labor nexus” test,
applicants for that position are still within the definition
of “employee” and, as a result, are accorded the antidis-
crimination protections of the Act pursuant to Phelps
Dodge Corp. v. NLRB, 313 U.S. 177, 182–187 (1941).4
The Board had then articulated a defense for employers
charged with discriminating against applicants for confi-
dential labor nexus positions:5

1 315 NLRB 303.
2 85 F.3d 1258.
3 The court indicated that the “labor nexus” test “denotes those em-
ployees who, as a result of their close association with management,
have traditionally been afforded limited protections under the Act. The
NLRB’s definition, approved by the Supreme Court in NLRB v. Hen-
dricks County Rural Electric Membership Corp., 454 U.S. 170, 189
(1981), provides that employees with a labor nexus include only ‘those
employees who assist and act in a confidential capacity to persons who
formulate, determine, and effectuate management policies in the field
of labor relations.’” 85 F.3d at 1264 fn. 3.

[A]n employer would have to show more than mere
membership in a union or past union activities in order
to disqualify an applicant for being considered for a
confidential position; rather, the employer would have
to prove by objective evidence that it has reasonable
grounds for believing that an applicant will be disloyal
or will impair business operations. 315 NLRB at 304
fn. 10.

The Seventh Circuit found that the scope of the
Board’s defense for employers charged with discriminat-
ing against applicants for confidential positions was
more limited than the defense that the Board has ac-
corded employers that discharge current confidential
employees. The court found that, under previous Board
decisions, “an employer is entitled to transfer or dis-
charge a confidential employee where the employer can
prove that there was ‘more than a conjectural possibility’
that the employee ‘might’ disclose confidential labor
relations information,”6 citing Raytheon Corp., 279
NLRB 245, 248 (1986). As the Board there explained,
the “suspicion, doubt, or fear that an employee with ac-
tual or potential access to confidential labor relations
material might divulge or leak it is sufficient to justify an
employer’s action against an employee.” Id. at 249,
quoting Emanuel Hospital, 268 NLRB 1344, 1348
(1984).7
The court also noted, however, that there is one “sig-
nificant limitation” to the defense available to employers
who transfer or terminate current confidential employees:
an employer cannot escape liability where its action was
motivated not by a genuine desire to protect its confiden-
tial information but rather by a desire to retaliate against
the individual for his union activities. 85 F.3d at 1266,
citing Lucky Stores, 269 NLRB 942, 945 (1984).
The court stated that it could see no reason for the dis-
parity in treatment accorded by the Board between appli-
cants and current confidential employees. 85 F.3d at
1266–1267. The court summarized as follows:

[W]e hold that the Board’s decision in the instant case
requiring an employer to prove with objective evidence
that the applicant will be disloyal with evidence other

4 315 NLRB at 304.
5 85 F.3d at 1263–1264.
6 Id. at 1266.
7 85 F.3d at 1266.
327 NLRB No. 76
E & L TRANSPORT CO. 387
than the applicant’s union membership or past union
activities is not a rational construction of the Act. In-
stead, the Board’s defense to employers who terminate
confidential employees where there is more than a con-
jectural possibility of disclosure is also a proper defense
against charges of discrimination in the hiring for con-
fidential positions with a labor nexus. 85 F.3d at 1268.

The court further noted that this defense (denoted the
“mere possibility” defense) applies only to applicants for
positions that involve access to confidential labor rela-
tions material which, by definition, includes labor nexus
positions. Thus, in remanding the issue of whether the
Respondent had unlawfully refused to consider the four
union members as applicants for the confidential secre-
tary position, the court stated that (1) the Board had to
make a determination as to whether or not the confiden-
tial secretary position at issue had a labor nexus; and (2)
if the Board found it to be a confidential position with a
labor nexus, the Board must then reach the issue of
whether the employer adequately proved the “mere pos-
sibility” defense. The court also noted that whether the
defense protects an employer from liability depends on
whether the possibility of disclosure of confidential in-
formation, or a different, improper motive, caused the
employer not to interview or hire the applicants. 85 F.3d
at 1268.
Accepting the court’s remand as the law of the case,
we first address whether the confidential secretary posi-
tion at issue here has a labor nexus. This position was
held by Judy Nilsen, who worked as the confidential sec-
retary to Terminal Manager Ron O’Reilly. O’Reilly was
the highest ranking management official at the terminal.
According to his unrebutted testimony, his duties in-
cluded conducting labor relations and interacting with
Gene Wade, the business manager for Local 710, and
other union officials. O’Reilly was responsible for nego-
tiating agreements between the Respondent and Local
710, and for processing grievances at the local level. On
behalf of the Chicago terminal, he also was responsible
for suggesting changes to the collective-bargaining
agreement between the Company and the Union in
preparation for upcoming contract negotiations.
As confidential secretary to O’Reilly, Nilsen handled
reports involving accidents, injuries, workers’ compensa-
tion claims, and maintained the personnel files of the
drivers and mechanics represented by the Union. She
handled correspondence between O’Reilly and the Un-
ion, assisted in processing grievances, and prepared
documentation of the processing of the grievances at the
local level hearings. She also typed the minutes of the
local level hearings on grievances. The record shows
that Nilsen prepared numerous labor-related documents
at O’Reilly’s direction, including correspondence from
O’Reilly to employees and management personnel at the
Chicago facility and to the Union regarding labor and
policy matters; correspondence concerning Company
policy with upper management; disciplinary notices and
correspondence concerning discipline of drivers; docu-
mentation of grievances and grievance proceedings; and
other management and labor related matters.
Of particular importance is the fact that on behalf of
the Chicago terminal, Nilsen typed a memorandum from
O’Reilly to Larry Murray, the Company’s director of
labor relations, which contained O’Reilly’s proposed
changes to the collective-bargaining agreement between
the Company and the Union. The memorandum was
dated November 20, 1990, and applied to a collective-
bargaining agreement which was to expire on May 31,
1991, and for which negotiations had not yet begun.
Nilsen also typed a letter dated November 1, 1990, from
O’Reilly to Perchie Adkins, vice president of the Com-
pany, regarding proposed cutbacks and layoffs for the
remainder of 1990 at the Chicago terminal. Nilsen also
prepared suspension and discharge notices to employees,
and interoffice memoranda concerning labor relations
policies at the Chicago terminal.
As noted, the Supreme Court, in NLRB v. Hendricks
County Rural Electric Membership Corp., 454 U.S. 170,
189 (1981), endorsed the Board’s definition that employ-
ees in a position with a labor nexus “assist and act in a
confidential capacity to persons who formulate, deter-
mine, and effectuate management policies in the field of
labor relations.” More specifically, in Intermountain
Rural Electric Assn., 277 NLRB 1, 4 (1985), the Board
stated that to satisfy the labor nexus test an employee
must be “involved in a close working relationship with
an individual who decides and effectuates management
labor policy and is entrusted with decisions and informa-
tion regarding the policy before it is made known to
those affected by [such decisions].” Here, it is clear that
O’Reilly formulated, determined, and effectuated the
Respondent’s labor relations policies at the Chicago ter-
minal. Further, the record also is clear that Nilsen both
prepared confidential documents and had regular access
to confidential information regarding reports or corre-
spondence documenting the Respondent’s position in
collective bargaining and labor relations policy matters
before this information was transmitted to the Union or
to the employees at issue. Thus, in light of her ongoing
access to labor relations information before the Union or
the employees involved became aware of such informa-
tion, we find that the confidential secretary position held
by Nilsen was that of a confidential position with a labor
nexus. Associated Day Care Services, 269 NLRB 178,
181 (1984).
We turn now to the second prong of the court’s re-
mand, whether the Respondent in this case has ade-
quately proved the “mere possibility” defense. In this
regard, we note that the Respondent has filed a motion to
reopen the record on remand and a brief in support
thereof. The Respondent contends that the “mere possi-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 388
bility” defense set out by the court did not exist for ap-
plicants to confidential positions before the court’s ruling
in this matter; thus, the parties did not know nor could
they have known of this defense before the court issued
its opinion and remanded the proceeding to the Board for
application of the new defense. Therefore, the Respon-
dent contends that the parties could not adduce sufficient
evidence or argue that defense prior to the time the re-
cord closed. The Respondent argues that it is possible
that testimony regarding the concerns of its management
relating to the possibility of disclosure of labor-related
matters by confidential employees with strong union
affiliations, if adduced and credited, could produce a
different result on the issue of the Respondent’s alleged
discrimination regarding the confidential secretary posi-
tion. Thus, the Respondent requests the Board to grant
its motion to reopen the record and adduce testimonial
and/or documentary evidence in support of the “mere
possibility” defense.
In light of the fact that the “mere possibility” defense
was set out by the Seventh Circuit and was not known by
the parties as a possible defense in this proceeding until
after the hearing had closed, we agree with the Respon-
dent that the parties should now be granted an opportu-
nity to adduce evidence and to formulate arguments and
positions regarding this defense. Thus, we grant the Re-
spondent’s motion to reopen the record on remand, and
we shall remand this proceeding to an administrative law
judge for the taking of evidence on this issue.
IT IS ORDERED that this proceeding be remanded to
the chief administrative law judge for assignment, and
for the taking of further evidence regarding the “mere
possibility” defense articulated by the Seventh Circuit.
The judge shall prepare and serve on the parties a sup-
plemental decision containing findings of fact, conclu-
sions of law, and a recommended Order in light of the
Board’s remand. Following service of the supplemental
decision on the parties, the provisions of Section 102.46
of the Board’s Rules and Regulations shall apply.