Pan American Grain Co., Inc.

National Labor Relations Board - Administrative Judge Opinions

Feb 25, 2005

24-CA-009885 (N.L.R.B. Feb. 25, 2005)

JD-13-05

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES

PAN AMERICAN GRAIN CO., INC., and PAN
AMERICAN GRAIN MANUFACTURING. CO., INC.

and Case No. 24-CA-9885

CONGRESO DE UNIONES INDUSTRIALES
DE PUERTO RICO

Jose L. Ortiz, Esq., for the General Counsel.
Ruperto J. Robles, Esq., for the Respondent.

DECISION

Statement of the Case

GEORGE ALEMÁN, Administrative Law Judge. This case was tried on December 15,
2004, in San Juan, Puerto Rico. The complaint in this matter was issued on September 20,1 by
the Regional Director for Region 24 of the National Labor Relations Board (the Board) alleging
that Pan American Grain Co., Inc. and Pan American Grain Manufacturing Co., Inc., (jointly
referred to herein as the Respondent), has violated Section 8(a)(1) of the National Labor
Relations Act (the Act) by continuing to maintain in its employee manual an overly broad
distribution rule prohibiting employees from distributing any type of literature without prior
authorization. The Respondent admits having such a rule but denies that the rule violates the
Act.2

The parties were afforded full opportunity to appear at the hearing, to introduce relevant
evidence, to examine and cross-examine witnesses, and to file post-hearing briefs. On the
entire record, including my observation of the demeanor of the witnesses, and after considering
briefs filed by the General Counsel and the Respondent, I make the following
1 The unfair labor practice charge giving rise to the complaint was filed by Congreso de
Uniones Industriales de Puerto Rico (the Union) on June 8, 2004.
2 The parties stipulated that the rule has in fact been maintained by the Respondent in an
employee manual since around December 1997. The parties further stipulated that the
distribution rule carries sanctions which might be imposed for a violation of the rule, ranging
from a simple warning for a first offense, a suspension for a second offense, and discharge for a
third offense.
Findings of Fact

I. Jurisdiction

The Respondent, a Puerto Rico corporation with its principal office located in Guaynabo,
Puerto Rico, and other facilities located in Guaynabo and Bayamon, Puerto Rico, is engaged in
the importation, manufacture, and sale of grains, animal feed and related products, and in the
processing of rice. During the 12-month period preceding issuance of the complaint, the
Respondent, in the course and conduct of its business operations, purchased and received at
its above facilities goods valued in excess of $50,000 directly from points outside the
Commonwealth of Puerto Rico.3 The Respondent admits, and I find, that it is an employer
engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. I also find that
the Union is a labor organization within the meaning of Section 2(5) of the Act.4

II. Alleged Unfair Labor Practices

A. The issue

It is undisputed that since on or around December 1997, and continuing to date, the
Respondent has had a rule in its employee manual prohibiting the “[distribution] among
employees [of] written material of any type, not authorized by the Plant Manager or the Human
Resources Director in accordance with Company policy.” The sole issue before me is whether
the rule violates Section 8(a)(1) of the Act.

The General Counsel contends that the rule is on its face overly broad and thus
unlawful. The Respondent counters that the rule has never been enforced, that the Union
waived its right in 1997 to contest the validity of the distribution rule by not objecting to its
implementation of the employee manual containing the rule, and that the allegation is, in any
event, barred under Section 10(b).

3 The complaint alleges that Pan American Grain Co., Inc. and Pan American Grain
Manufacturing Co., Inc. constitute a single-integrated business enterprise. The Respondent
neither admits nor denies this allegation. It does, however, admit that Pan American Grain Co.,
Inc. and Pan American Grain Manufacturing Co., Inc. have been affiliated business enterprises
with common officers, ownership, directors, management, and supervision; that they have
formulated and administered a common labor policy affecting employees of its operations; that
they have shared common premises and facilities and have interchanged personnel with each
other, and that they have held themselves out to the public as a single integrated business
enterprise. On these admitted facts, I find that Pan American Grain Co. and Pan American
Grain Manufacturing Co. constitute a single integrated enterprise and a single employer within
the meaning of the Act. Judicial notice is taken of the fact that the Board has, in prior decisions
involving this same Respondent, found both companies to be a single-integrated business
enterprise nature. See, Pan American Grain Co., 343 NLRB No. 47 (2004) and Pan American
Grain Co., 343 NLRB No. 32 (2004).
4 Although the Respondent neither admits nor denies that the Union is a Section 2(5) labor
organization, the evidence of record makes clear the Respondent and the Union have had an
ongoing collective bargaining relationship since the mid-1980’s and has, in fact, entered into
collective bargaining agreements with the Union. These facts support a finding that the Union is
indeed a labor organization under Section 2(5). Also, see the prior Board decisions involving
this Respondent cited in fn. 4 above wherein the Union was found to be a Section 2(5) labor
organization.
B. Facts

Very little evidence was produced at the hearing regarding this matter. Counsel for the
General Counsel rested his case in chief without calling any witnesses. He did, however, call
the Union’s president, Jose Alberto Figueroa, as a rebuttal witness. The Respondent called its
Human Resources Director (herein HRD), Luis Juarbe Santiago, as its principal and sole
witness.

The facts show that the Respondent and the Union have had an ongoing collective
bargaining relationship since around 1986. HRD Juarbe was hired by the Respondent in
August 1999. His predecessor in that position was one Maria Roman Santos. In apparent
support of its waiver defense, the Respondent, through Juarbe, produced a letter, purportedly
written and sent to Figueroa by Ms. Roman on May 15, 1997, notifying him that, pursuant to the
management rights clause in the parties’ then collective bargaining agreement,5 copies of an
employee manual that was to be implemented on June 1, 1997, were to be distributed to all
employees, and that, should the Union wish to discuss any matter relating to the manual’s
contents, it should notify her at the Union’s earliest convenience. (RX-6).6 Juarbe did not have
first-hand knowledge of what transpired between Roman and the Union and/or Figueroa as he
was not yet employed by the Respondent. As to Roman’s May 15, 1997, Juarbe testified that
he found in a folder where all correspondence exchanged between the Respondent and the
Union in 1997 were kept. Juarbe claimed that no other documents relating to this matter,
including any reply by the Union to Roman’s letter, were found in the folder, and that he did not
know what happened as a result of Roman’s letter.

Juarbe testified that since becoming Human Resources director, he has been involved in
approximately 300 arbitration cases with the Union and that, in almost all those cases, the
employee manual has been used by both the Union and the Company as evidence. He
contends that the Union has never asked or demanded that the no-distribution rule be
rescinded, revoked, or deleted from the employee manual. He further claims to have personally
observed employees distributing literature or other documents on “company time and premises”
and that, since August 1999 when he first began with the Company, no employee has ever
been warned or disciplined for engaging in such activity.

On cross-examination, Juarbe admitted that he did not know if the employee manual
referenced in Roman’s May 15, 1997, letter, or the no-distribution rule at issue here, had been
the subject of negotiations which gave rise to the collective bargaining that expired in 1996, and
that neither the manual nor the disputed rule have been the subject of contract negotiations
during the time he has been employed by the Respondent.

Figueroa, on rebuttal, admitted receiving Roman’s May 15, 1997, letter along with the
employee manual referenced therein, but claims that he had indeed responded to Roman’s
letter in writing advising the Respondent that the Union was opposed to the unilateral
implementation of the employee manual.7 He contends that despite the Union’s stated

5 According to Roman’s letter, the parties’ most recent agreement expired on November 21,
1996.
6 Roman’s letter, written in Spanish, was duly translated by the interpreter at the hearing (Tr.
30-31).
7 Figueroa’s letter was not produced at the hearing. He contends that he has the letter but
that it was not brought to the hearing because he was advised by his attorney that he did not
need to bring anything. He did, however, offer to produce it if asked to do so.
opposition to the manual, the Respondent nevertheless put the manual into effect, prompting
the Union to file a charge with the Board. Finally, Figueroa testified that the employee manual
has been part of the parties’ ongoing negotiations for a new contract since 2000.

3. Discussion

Addressing the validity of the Respondent’s no-distribution rule, the Board has long
maintained that a rule prohibiting the distribution of literature on employees’ own time and in
nonworking areas is presumptively invalid. Our Way, Inc., 268 NLRB 394 (1983); Stoddard-
Quirk Mfg., 138 MLRB 615 (1962); also, Teletech Holdings, Inc., 333 NLRB 402, 403 (2001). It
has also held that “any distribution rule that requires employees to secure permission from their
employer prior to engaging in protected concerted activities on an employee’s free time and in
nonworking areas is unlawful. Teletech Holdings, supra; Brunswick Corp., 282 NLRB 794, 795
(1987). The Respondent’s rule does precisely that. Thus, the rule, on its face, prohibits the
distribution of all literature, regardless of whether it is to be done by employees on own time and
in nonworking areas, without the plant manager’s or HRD’s prior approval. Employees wishing
to distribute, for example, union literature on their own free time in nonworking areas could,
therefore, reasonably conclude from a plain reading of the rule that they would need their
Employer’s permission in order to exercise their Section 7 right in this regard. Consequently,
the rule as written in the employee manual is overly broad and presumptively invalid as it places
an unlawful “prior approval” requirement on the employees’ free exercise of their Section 7 right
to distribute literature on their own time and in nonworking areas.

When a rule is found to be presumptively unlawful, the employer bears the burden of
showing that it communicated or applied the rule in a way that conveyed a clear intent to permit
the distribution of literature during the employees’ free time in nonworking areas. Ichikoh Mfg.,
312 NLRB 1022 (1993), enfd. 41 F.3d 1507 (6th Cir. 1994); also, Our Way, supra at 395, fn. 6
and Trus Joist Macmillan, 341 NLRB No. 45 (2004). The Respondent here has produced no
evidence to show, nor for that matter has it claimed, that it communicated or, in some other
fashion, conveyed to employees that the prior approval requirement in its distribution rule did
not apply to the employees’ distribution of literature on their own free time in nonworking areas.
The fact that some employees may have ignored the rule in the past and not been disciplined
for it, as claimed by Juarbe, does not satisfy the Respondent’s burden of establishing that it
conveyed to employees its intent to allow them to distribute literature on their own free time in
nonworking areas without first having to obtain permission. Ichikoh Mfg, supra; also, Superior
Emerald Park Landfill, LLC, 340 NLRB No. 54, slip op. at 8 (2003); Cardinal Home Products,
338 NLRB 1004, 1006 (2003). Accordingly, I find that the Respondent has not met its burden in
this case, and that the rule as written and maintained is overly broad and unlawful.

I further find no merit to the Respondent’s claim that the Union’s alleged failure in 1997,
to object to the its implementation of the employee manual amounted to a waiver of the Union’s
right to thereafter challenge the validity of the solicitation rule contained in the manual. Thus,
contrary to the Respondent’s assertion at the hearing and on brief, there is no evidence that the
Union ever agreed to the 1997 implementation of the employee manual, much less to the
distribution rule itself. While the evidence does show that in 1997, the Respondent, through
Roman, advised the Union of its intent to implement the employee manual, Figueroa, as noted,
testified, without contradiction, that he, in fact, responded to Roman’s 1997 letter, in writing,
objecting to implementation of the employee manual. He further claimed to still have a copy of
the letter, although he did not bring it him to the hearing, which he offered to produce if
requested to do so.8 Neither side, however, requested its production.

I credit Figueroa’s claim and find that the Union, through Figueroa, did indeed object, in
writing, to the Respondent’s 1997 decision to implement the employee manual. The only
evidence produced by the Respondent to counter Figueroa’s claim in this regard is Juarbe’s
testimony that he found no such letter from the Union in the folder kept by the Respondent
containing all 1997 correspondence to and from the Union. However, as Juarbe began his
employment with the Respondent in August 1999, more than two years after the Roman letter
was sent, he clearly was not privy to what had transpired between the parties in 1997, and
clearly could not have known if the Respondent ever received such a response from the Union
to Roman’s letter. Moreover, there are any number of reasons to explain why no copy of the
Union’s letter was found in the Respondent’s own correspondence folder. The Union’s 1997
letter to Roman, for example, could very well have been misfiled, misplaced, lost, or accidentally
discarded by Roman or someone else. Finally, the Respondent could easily have challenged
Figueroa’s claim that he responded to Roman’s 1997, letter objecting to the employee manual
by taking him up on his offer to produce the Union’s response letter. Had Figueroa not been
able to produce the letter after claiming to have retained a copy, his credibility would have been
seriously undermined. The Respondent’s failure to make such a request of him leads me to
believe that the Respondent, in fact, knew that the Union had objected to the 1997
implementation of the employee manual, as claimed by Figueroa. In sum, the Respondent’s
claim that the Union somehow waived its right to challenge the implementation or validity of the
distribution rule contained in the employee manual lacks evidentiary support and is without
merit.

Nor do I agree with the Respondent’s claim that the complaint allegation is time-barred
under Section 10(b) because the distribution rule has been in existence since at least 1997, and
presumably never enforced. While it appears to be the case that the disputed solicitation rule
was promulgated in or before 1997, well outside Section 10(b)’s six-month limitation period, it is
not the actual promulgation of the rule that is being challenged here, but rather its continued
maintenance by the Respondent in its employee manual. The Board has held that Section
10(b) does not bar the filing of a charge alleging as unlawful the continued maintenance of a
facially invalid and presumptively unlawful rule, notwithstanding that its promulgation may have
occurred outside the 10(b) period. Control Services, 305 NLRB 435, 442 (1991); Alamo
Cement, 277 NLRB 1031, 1037 (1985). Thus, even if not enforced, the mere maintenance of an
overly broad distribution rule, the Board has stated, remains unlawful because it tends to chill
employees in the exercise of their Section 7 rights. Lutheran Heritage Village-Livonia, 343
NLRB No. 75, slip op. at 10 (2004); Cardinal Home Products, 338 NLRB 1004, 1006 (2003);
Beverly Health & Rehabilitation Services, 332 NLRB 347, 349 (2000). Accordingly, the
Respondent’s assertion that the complaint allegation is barred by Section 10(b) is rejected as
without merit. To find otherwise would be to grant the Respondent a license to interfere with
protected employee rights.

In sum, I find that the Respondent’s continued maintenance of its overly broad and
facially invalid distribution rule in the employee manual violates Section 8(a)(1) of the Act as
alleged.

8 When asked by the Respondent’s counsel why he did not bring a copy of the letter with
him to the hearing, Figueroa credibly explained that he did not do so because he had been
advised by his attorney that he did not need to bring anything with him to the hearing.
Conclusions of Law

1. The Respondent is an employer engaged in commerce within the meaning of Section
2(2), and Section 2(6) and (7) of the Act.

2. The Union is a labor organization within the meaning of Section 2(5) of the Act.

3. By maintaining an overly broad no-distribution rule that requires employees wishing to
distribute literature during their nonworking time in nonworking areas to first obtain permission
from its plant manager or Human Resources director, the Respondent has engaged in an unfair
labor practice affecting commerce within the meaning of Section 8(a)(1), and Section 2(6) and
(7) of the Act.

Remedy

Having found that the Respondent has engaged in certain unfair labor practices, I find
that it must be ordered to cease and desist and to take certain affirmative action designed to
effectuate the policies of the Act. The Respondent shall be required to rescind its unlawful no-
distribution rule, and to notify employees in writing of its rescission. See, Ingram Book, Inc., 315
NLRB 515, 516 (1994). The Respondent shall also be required to post an appropriate notice to
employees in English and Spanish.

On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended9

ORDER

The Respondent, Pan American Grain Co., Inc. and Pan American Grain Manufacturing
Co., Inc., Guaynabo, PR, its officers, agents, and representatives, shall

1. Cease and desist from

(a) Maintaining an overly-broad distribution rule.

(b) In any like or related manner interfering with, restraining, or coercing employees in
the exercise of the rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

(a) Amend its employee handbook by rescinding the unlawful overly broad rule on the
distribution of literature, and notify employees in writing that this has been done and that rule is
no longer in effect.

9 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and
Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec.
102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed
waived for all purposes.
(b) Within 14 days after service by the Region, post at its facilities in Guaynabo and
Bayamon, P.R., in English and Spanish, copies of the attached Notice marked “Appendix.”10
Copies of the Notice, on forms provided by the Regional Director for Region 24, after being
signed by the Respondent’s authorized representative, shall be posted by the Respondent and
maintained for 60 consecutive days in conspicuous places including all places where Notices to
employees are customarily posted. Reasonable steps shall be taken by the Respondent to
ensure that the Notices are not altered, defaced, or covered by any other material. In the event
that, during the pendency of these proceedings, the Respondent has gone out of business or
closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its
own expense, a copy of the Notice to all current employees and former employees employed by
the Respondent at any time since June 8, 2004.

(c) Within 21 days after service by the Region, file with the Regional Director a sworn
certification of a responsible official on a form provided by the Region attesting to the steps that
the Respondent has taken to comply.

Dated, Washington, D.C.

____________________
George Alemán
Administrative Law Judge

10 If this Order is enforced by a judgment of a United States court of appeals, the words in
the notice reading “Posted by Order of the National Labor Relations Board” shall read “Posted
Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
JD-13-05

APPENDIX

NOTICE TO EMPLOYEES

Posted by Order of the
National Labor Relations Board
An Agency of the United States Government

The National Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and obey this Notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities

WE WILL NOT maintain an unlawfully broad distribution policy.

WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.

WE WILL amend our employee handbook by rescinding the unlawful overly broad rule
regarding the distribution of literature, WE WILL and notify you in writing that this has been
done and that the rule is no longer in effect.

PAN AMERICAN GRAIN CO., INC. and
PAN AMERICAN GRAIN MANUFACTURING INC.
(Employer)

Dated By
(Representative) (Title)

The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
525 F. D. Roosevelt Avenue, La Torre de Plaza, Suite 1002, San Juan, PR 00918-1002
(787) 766-5347, Hours: 8:30 a.m. to 5 p.m.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST
NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS
NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, (787) 766-5377.