Somerset Welding & Steel

National Labor Relations Board - Board Decisions

Aug 22, 1994

314 N.L.R.B. 829 (N.L.R.B. 1994)

829
314 NLRB No. 138
SOMERSET WELDING & STEEL
1 304 NLRB 32 (Member Cohen did not participate in the original
decision).
2 Somerset Welding & Steel v. NLRB, 987 F.2d 777 (1993).
3 The Respondent also filed a motion to reopen the record to take
evidence concerning changes in management and employee turnover.
The Charging Party and the General Counsel filed oppositions to the
motion to reopen. The General Counsel also filed a motion to con-
solidate the instant proceeding with other pending cases involving
the Respondent; the Charging Party joined this motion and the Re-
spondent filed an opposition. In view of our disposition of this case,
we deny the motions to reopen and consolidate.
4 We note that only Tims Sr.’s plant closure statement has been
remanded to us and not his threats of termination or lost benefits.
In the underlying decision the administrative law judge found, and
we agreed, that Tims Sr.’s threats of termination and loss of benefits
violated the Act. Those findings remain undisturbed by the remand.
Somerset Welding & Steel, Inc. and United Steel-
workers of America, AFL–CIO–CLC. Cases 6–
CA–19922, 6–CA–20034, 6–CA–20096, 6–CA–
20250, and 6–RC–9822
August 22, 1994
SUPPLEMENTAL DECISION, ORDER, AND
DIRECTION OF SECOND ELECTION
BY MEMBERS STEPHENS, DEVANEY, AND COHEN
On August 13, 1991, the National Labor Relations
Board issued its Decision and Order1 finding that the
Respondent violated Section 8(a)(5), (3), and (1) of the
National Labor Relations Act. The violations found in-
cluded: coercively interrogating employees, threatening
employees with plant closure, loss of benefits, loss of
jobs, loss of wages, and discharge. The Board also
found an unlawful denial of a wage increase. The
Board set aside the election held in Case 6–RC–9822
and issued a bargaining order under the test set forth
in NLRB v. Gissel Packing Co., 395 U.S. 575 (1969).
The Respondent filed a petition for review with the
United States Court of Appeals for the District of Co-
lumbia Circuit. On January 22, 1993, the court issued
its decision.2 The court enforced the 8(a)(3) violation
and most of the 8(a)(1) violations as found by the
Board, but remanded the case to the Board for consid-
eration of three issues: (1) whether the statements of
the Respondent’s chairman, Sidney Riggs, violated the
Act, and, if so, whether his violations are needed to
support a remedial bargaining order; (2) whether the
statements of Plant Superintendent John Tims Sr. about
plant closures and Plant Manager Dwight Clyde’s prof-
itability remark violated the Act, and, if so, whether
their statements, along with those of Vice President
Guy Rush, Supervisor Roger Pyle, and Supervisor Rod
Berkley, as well as Clyde’s other statements, were so
pervasive as to warrant a remedial bargaining order;
and (3) whether, assuming a bargaining order is other-
wise warranted, changes in management and employee
turnover have made a bargaining order unnecessary
under the court’s standard.
In April 1993, the Board advised the parties that it
had accepted the remand and invited statements of po-
sition. Thereafter the Charging Party, the General
Counsel, and the Respondent filed statements of posi-
tion. The Respondent filed a reply to the Charging Par-
ty’s and General Counsel’s statements.3
The Board has delegated its authority in this pro-
ceeding to a three-member panel.
We have considered the original decision and record
in light of the court’s decision and the Charging Par-
ty’s, General Counsel’s, and the Respondent’s state-
ments of position. We accept the court’s decision as
the law of the case and have decided to modify the
Board’s original decision by finding that Tims Sr.’s
plant closure statement violated the Act, finding that
Clyde’s profitability remark did not violate the Act,
finding that Riggs’ statements did not violate the Act,
and by deleting the Gissel bargaining order and direct-
ing a second election.
Issues on Remand
We consider the issue of the lawfulness of Chairman
Sidney Riggs’ communications with the employees to
be the paramount issue for our consideration, but we
shall begin our analysis by considering the statements
of Plant Superintendent John Tims Sr. and Plant Man-
ager Dwight Clyde.
A. Statement of Tims Sr.
The judge found that, on the eve of the election,
Plant Superintendent John Tims Sr. told an em-
ployee—his son, John Tims Jr.—that, if he could, he
would fire his son and that the plant would close and
employees would lose benefits if the Union won. The
judge found that Tims Sr.’s references to removal of
benefits and discharge as reprisal for union activity
violated Section 8(a)(1). It appears that the judge inad-
vertently failed to find specifically that Tims Sr.’s
threat of plant closure as a reprisal for union activity
also violated Section 8(a)(1). We find that Tims Sr.’s
statement to Tims Jr. that the plant would close if the
Union won violated Section 8(a)(1) of the Act.4 Addi-
tionally, in view of the nature of the statements, we are
not persuaded by the Respondent’s argument that Tims
Sr. was not speaking in his capacity as a company rep-
resentative. Although the credited testimony indicates
that Tims Sr.’s threat was not disseminated and thus
had limited impact on the unit, we find that the threat
itself violated Section 8(a)(1).
B. Statement of Clyde
The judge found that, after a mandatory meeting,
Plant Manager Dwight Clyde showed employees what
purported to be a profit sheet indicating that the con-
struction of three completed trailers had generated only
830 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
5 987 F.2d at 780.
a slight profit. He told the employees that with any
wage increases ‘‘there’d be no way that shop could
continue to go.’’ The judge concluded, and we af-
firmed, that Clyde had the right to demonstrate the
slight profit involved in producing these three trailers
but that Clyde’s supporting statements were insuffi-
cient to privilege any comment suggesting that the
trailer plant would close in the event of a wage in-
crease. According to the judge, Clyde’s remark was
tantamount to a warning that the employees could not
have their jobs and also a wage increase, so if they
supported the Union for that reason, they had better
vote ‘‘no.’’ (304 NLRB at 43.)
The court, in remanding this issue to the Board,
cited NLRB v. Gissel Packing Co., 395 U.S. at 618,
where the Supreme Court declared that a ‘‘prediction
must be carefully phrased on the basis of objective fact
to convey an employee’s belief as to demonstrably
probable consequences beyond his control.’’ The court
further stated that, ‘‘Clyde’s comments seem to us to
satisfy Gissel.’’5 The court also analogized the plants
in this case to the restaurant industry, citing NLRB v.
Shenanigans, 723 F.2d 1360, 1368 (7th Cir. 1983), and
found that the Respondent here, which the court char-
acterized as a small manufacturer, was ‘‘competent to
recognize that if a plant is barely turning a profit on
its product, any wage increase threatened its profit-
ability and ultimately its survivability.’’ As the court
clearly indicated that it would view Clyde’s statement
as a prediction ‘‘carefully phrased’’ on the basis of
‘‘objective fact’’ to convey his belief about ‘‘demon-
strably probable consequences beyond his control,’’ we
are constrained to find on the law of the case that
Clyde’s profitability statement did not violate the Act.
C. Communications of Chairman Riggs
The court has remanded to us the issue of Chairman
Sidney Riggs’ communications with employees. As
fully set forth by the judge, in the weeks preceding the
election Chairman Riggs held a series of four manda-
tory meetings at the various Somerset plants. In addi-
tion to his presentation, Riggs answered questions from
employees. He declared that it was ‘‘survival time’’ in
the Somerset labor market. He talked of numerous
plants in the area, almost all of them unionized, that
had recently closed. He stressed that he ‘‘had an obli-
gation to learn from these problems and try to structure
Somerset Welding so that the same thing doesn’t hap-
pen to it.’’ He talked about Abex Company which
early in its operations was struck by the Steelworkers
and ‘‘never reopened as a viable business after that.’’
Riggs also spoke about nearby U.S. Steel’s shutdown,
stating that this had occurred after management had
tried, without success, to obtain concessions from the
Steelworkers. In that context Riggs stated that ‘‘if
we’re not careful and we don’t learn from what’s
going on here, that it could happen in Somerset.’’ He
told employees,
most of them had much more to gain by Somerset
Welding & Steel plant being there and being a
strong company than I did. I had a couple years
to work yet. Most of them had twenty . . . to
thirty years to work yet. Obviously their employ-
ment would generate much more from the com-
pany than I was ever going to get out of it.
He also told employees that wage rates were as high
as the Respondent could afford and that increases had
to come from profits, but that there were none to di-
vide.
Riggs told the employees that the wages and bene-
fits the employees presently enjoyed would be subject
to negotiation, explaining:
There is [sic] many ways to structure the pay
scale in a plant. If you would go to job classifica-
tions, everybody that’s doing that job got the
same rate of pay and we would be in chaos. We
were paying all that our business could stand to
pay. Our average rate was commensurate with the
business around us . . . including the union plants
around us. All of it would have to be laid on the
table, all of the fringe benefits, the vacation, the
paid holidays, pension plan, the whole thing
would have to be laid out. We would have to pick
and choose . . . everything would be reviewed,
not eliminated, it could be reviewed. [N]othing
would change until this contract is arranged.
Riggs also stated to employees that benefits would
have to be ‘‘restructured.’’ He said that the Respond-
ent’s existing labor cost package was all that it could
afford, so if more was given in wages, it would have
to come from other existing benefits such as pension
or hospitalization. Riggs admitted that he might have
used the words ‘‘bargaining from scratch’’ to convey
that:
[Y]ou have to start someplace. Normally in a bar-
gaining situation . . . a person in our position
would lay out the lowest figures they could. In
this case it would be the minimum wage.
The Respondent also sent numerous mailings to em-
ployees. In the first mailing, the Respondent stressed
its need to remain competitive. The letter noted that
competitiveness had enabled the company to ‘‘get new
orders and customers and continue to provide jobs.’’ It
opined that the Union would make the Respondent less
competitive, and that ‘‘all of us have a lot to lose if
an outside union like the Steelworkers organizes Som-
erset Welding . . . .’’
Another mailing stated:
831SOMERSET WELDING & STEEL
6 The judge in the underlying decision found that Riggs’ comments
transcended 8(c) guarantees and violated the Act by associating
unionization with loss of jobs. The judge also found that Riggs’
communications were offered as a fear-inspiring suggestion of what
was likely to occur at the Respondent’s plants and his statements as
to bargaining from ‘‘zero’’ or ‘‘scratch’’ threatened a loss of exist-
ing benefits.
7 987 F.2d at 781.
8 Id. at 781.
[J]ob security means having a job to go to on a
regular basis. The Steelworkers do not provide
you with a job or pay your wages, the company
does. Your job security, therefore, depends upon
the company being able to remain competitive
and stay in business. We have provided new jobs
and good wages while many union companies are
closing their doors. We attribute this to our ability
to remain competitive.
. . . .
Customers are likely to place orders with a com-
pany which provides the best service for the best
price. You might ask yourself: ‘‘If I were the cus-
tomer, would I be likely to give an order to a
company where it might be delayed by strikes, ar-
guments, and restrictive work rules, or would I
give the order to a company which is free to pro-
vide the special attention and consideration which
the job might require?’’
. . . .
You have a big stake in the company continuing
to be competitive. Only by being competitive in
terms of both quality and price can we get new
orders and customers to provide jobs. This is par-
ticularly true because we bring a significant
amount of work into Somerset County from out-
of state. Even with the added costs which are in-
volved when we deal with out-of-state customers,
we must still be able to do the work competitively
or lose the business.
An additional letter stated:
[T]he presence of the Steelworkers could hurt our
business. We could lose jobs because customers
might be afraid to give work to a company which
could have a strike or labor unrest.
In our earlier decision we did not pass on Riggs’
communications,6 because we found that the other
8(a)(3) and (1) violations required a remedial bar-
gaining order. The court has now remanded this issue
to us for our consideration. The court observed, ‘‘The
Board may have avoided the issue because it deter-
mined that Riggs’ conduct did not violate the Act,’’7
citing Shenanigans, supra, and with the cautionary
statement that, ‘‘[w]ithout Riggs’ conduct, however,
there is not sufficient evidence that the effect of the
supervisors’ coercive threats was pervasive and the
bargaining order therefore cannot be upheld.’’8 After
careful consideration, and noting the court’s state-
ments, we conclude that the written and oral commu-
nications of Chairman Riggs did not violate the Act.
We construe the court’s references to the Seventh
Circuit’s decision in Shenanigans, supra, as a holding
that Shenanigans should guide our evaluation of
Riggs’ statements. In Shenanigans, the court found,
contrary to the Board, that certain employer statements
were lawful. Among the statements found lawful were
ones made by one of the company’s (Shenanigans) co-
owners regarding the competitive nature of the res-
taurant business in Decatur, Illinois. He stated that:
Unions do not work in restaurants . . . . The bal-
ance is not here. . . . If the Union exists at She-
nanigans, Shenanigans will fail. That is it in a
nutshell. . . . I won’t be here if there is a Union
within this particular restaurant. I am not making
a threat. I am making a statement of fact. . . . I
respect anyone who wants to join the Union if
that in essence is a workable place and can afford
to pay Union wages. We can’t in the restaurant
business.
The owner went on to state that the only restaurant in
Decatur that was unionized was struggling, and that if
Shenanigans raised its prices in order to pay union
wages its customers would switch to the nonunion res-
taurants, whose prices would be lower. He added:
Shenanigans can possibly exist with labor prob-
lems for a period of time. But in the long run we
won’t make it. The cancer will eat us up, and we
will fall by the wayside. And if you walk into this
place five years down the road, if there is a Union
in here, then I guarantee you it won’t be a res-
taurant. I don’t know what it will be. But wher-
ever you people will be working in this town, in
Decatur, it will not be in a Union restaurant. It
will be in a non-Union restaurant, because there
is a Union in town, it’s at the Sheridan, and I
think they only use one or two waitresses during
the week and maybe three on the weekends. And
you get Union wages, and I doubt if you get hard-
ly any tips.
I am not making a threat. I am stating a fact.
When you are dealing with the Union you had
better consider the pros and cons. I am sure there
is a lot of pros that are involved. I haven’t looked
into them in that great of detail because this is my
first experience with them. I only know from my
mind, from my heart and from my pocketbook
how I stand on this. And I don’t like the idea of
looking at a Union as far as my employees are
concerned.
The Seventh Circuit found the speech noncoercive.
As a general proposition, the court noted that a com-
832 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
9 Sec. 8(c) protects an employer’s right to address the issue of
union representation, provided that its views are devoid of threat of
reprisal or promise of benefit.
10 723 F.2d at 1367.
11 Id. at 1368.
12 Id. at 1368.
pany has the right under Section 8(c)9 to state its ‘‘side
of the case’’ against unionization but it may not threat-
en retaliation against employees for joining the union.
The court also expressed the view that ‘‘since the only
effective way of arguing against the union is . . . to
point out . . . the adverse consequences of unioniza-
tion, one of which might be closure,’’ distinguishing
between lawful advocacy and threats of retaliation can
be difficult.10 The court found that the ‘‘line between
predicting adverse consequences and threatening to
bring them about is a fine one’’11 and the ‘‘prediction
must be carefully phrased on the basis of objective fact
to convey an employer’s belief as to demonstrably
probable consequences beyond his control,’’ citing
NLRB v. Gissel Packing Co., 395 U.S. at 618.
In Shenanigans, supra, the court found that the com-
pany owner provided ‘‘objective’’ support for his pre-
dictions by pointing out the competitive nature of the
restaurant business and the fact that only one other res-
taurant in the area was unionized and it was doing
poorly. The court found that ‘‘more was not re-
quired.’’12 The court went on to state that it did
not read Gissel to require the employer to develop
detailed advance substantiation in the manner of
the Federal Trade Commission . . . at least for
predictions founded on common sense and general
experience. A small company in the restaurant
business should not have to hire a high-powered
consultant to make an econometric forecast of the
probable consequences of unionization on the res-
taurant business in Decatur. The usual assumption
that [the] employer holds all the cards in dealing
with employees is reversed when a large national
union is waging an organizational campaign
against a small service company. The company
may not threaten retaliation; but the tenor of
Block’s [co-owner] remarks, remarks for which
there was some objective basis, was not that the
company would close the restaurant out of spite
if the union got in but that he believed the res-
taurant business in Decatur too fragile for a res-
taurant to survive if union wage scales were paid.
To forbid expression of that opinion would not
serve the interests of Shenanigans’ employees, for
unionization might in fact hurt rather than help
them in the long run. [723 at 1368.]
As we have noted, the court of appeals in this case
relied on Shenanigans, supra. Applying the reasoning
of Shenanigans as the law of the case, we find that
Riggs was presenting the employees with the Respond-
ent’s ‘‘side of the case’’ and was not threatening retal-
iation. Based on our interpretation of Shenanigans, we
find that Riggs’ comments, under the standards of that
case, did not cross the line from lawful advocacy to
unlawful threats. In his statements to the employees,
Riggs noted his view of the competitive nature of the
tractor and trailer manufacturing industry, and pointed
out that many plants in the area that had been union-
ized had failed. Much like the restaurant owner in De-
catur who, the Seventh Circuit held, did not have to
get a ‘‘high powered consultant to make an econo-
metric forecast of the probable consequences of union-
ization on the restaurant business in Decatur,’’ so, too,
the owner of a small tractor and trailer business in
Somerset, Pennsylvania, need not do so. As chairman
of the Respondent, Riggs was in a position to assess
the effect of increased costs on the Respondent’s oper-
ations. Thus, contrary to the judge in the underlying
decision, we find, on the law of the case, that Riggs’
statements did not go beyond Section 8(c) and thus did
not violate Section 8(a)(1) by associating unionization
with loss of jobs. Nor, in this posture, do we agree
with the judge’s finding that the statements on plant
closing were offered as fear-inspiring suggestions of
what was likely to occur at the Respondent. Rather, we
find that Riggs stated to employees possible con-
sequences of unionization over which he had no con-
trol and that his communications did not violate the
Act.
With reference to Riggs’ comments regarding bar-
gaining from ‘‘zero,’’ ‘‘scratch,’’ or ‘‘the minimum
wage’’ such statements must be judged with reference
to the context in which they are made. An employer
can tell employees that bargaining will begin from
‘‘scratch’’ or ‘‘zero’’ but the statements cannot be
made in a coercive context or in a manner designed to
convey to employees a threat that they will be de-
prived of existing benefits if they vote for the union.
See Belcher Towing Co., 265 NLRB 1258 (1982). Ad-
ditionally, employees can be told that bargaining will
start from zero but they cannot be threatened with loss
of benefits and left with the impression that all they
will ‘‘get’’ is what the union can restore to them.
Plastronics, Inc., 233 NLRB 155 (1977). Here, we
have found that Riggs’ other communications did not
violate the Act. Thus, we do not find that Riggs’ state-
ments threatened to deprive employees of existing ben-
efits or left them with the impression that they would
only get back what the Union could restore. Rather
Riggs discussed the reality of negotiating and bargain-
ing, which is that benefits can be both gained and lost.
He specifically told the employees the benefits would
be ‘‘reviewed not eliminated.’’ We find under BI-LO,
303 NLRB 749 (1991), that he was making lawful
statements that benefits could be lost through bargain-
ing rather than an unlawful threat that benefits would
833SOMERSET WELDING & STEEL
13 In this regard, as previously noted, the court said:
Without Riggs’ conduct, however, there is not sufficient evi-
dence that the effect of the supervisors’ coercive threats was
pervasive and the bargaining order therefore cannot be upheld.
[987 at 781.]
14 We are advised that the Respondent has complied with all of
the terms of the Board’s earlier Order as enforced by the court of
appeals.
15 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.’’
be taken away and the Union would have to bargain
to get them back.
We have found that Riggs’ communications did not
violate the Act. In light of the court’s admonition that
a bargaining order would not be warranted unless
Riggs’ statements violated the Act,13 we are con-
strained to conclude that a Gissel bargaining order is
not warranted in this case. We shall delete the bar-
gaining requirement from our original Order, reopen
the representation proceeding, and direct that a second
election be held.
ORDER14
The National Labor Relations Board orders that the
Respondent, Somerset Welding & Steel, Inc., Som-
erset, Pennsylvania, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Threatening employees with plant closure in the
event of unionization.
(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) Post at it Somerset, Pennsylvania place of busi-
ness copies of the attached notice marked ‘‘Appen-
dix.’’15 Copies of the notice, on forms provided by the
Regional Director for Region 6, after being signed by
the Respondent’s authorized representative, shall be
posted by the Respondent immediately upon receipt
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.
(b) Notify the Regional Director for Region 6 in
writing within 20 days from the date of this Order
what steps the Respondent has taken to comply.
IT IS FURTHER ORDERED that Case 6–RC–9822 is
severed and remanded to the Regional Director for Re-
gion 6 for the purpose of conducting a second election.
[Direction of Second Election omitted from publica-
tion.]
APPENDIX
NOTICE TO EMPLOYEES OR MEMBERS
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 the National Labor Relations Act and has or-
dered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protec-
tion
To choose not to engage in any of these pro-
tected concerted activities.
WE WILL NOT threaten you with plant closure in the
event of unionization.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise
of the rights guaranteed them by Section 7 of the Act.
SOMERSET WELDING & STEEL, INC.