Sprague Ponce Co.

National Labor Relations Board - Board Decisions

Feb 20, 1970

181 N.L.R.B. 281 (N.L.R.B. 1970)

SPRAGUE PONCE COMPANY 281
Sprague Ponce Company and Oil , Chemical and
Atomic Workers International Union , AFL-CIO,
Petitioner . Case 24-RC-3734
February 20, 1970
DECISION, ORDER , AND DIRECTION OF
SECOND ELECTION
BY MEMBERS FANNING, BROWN, AND JENKINS
Pursuant to a Stipulation for Certification upon
Consent Election executed on April 23, 1969, an
election by secret ballot was conducted on May 16,
1969, under the direction and supervision of the
Regional Director for Region 24, among the
employees in the stipulated unit. At the conclusion
of the election, the parties were furnished with a
tally of ballots which showed that of approximately
172 eligible voters, 165 cast ballots, of which 80
were for, and 82 were against, the Petitioner. There
were 3 challenged ballots The challenged ballots are
sufficient in number to affect the results of the
election. Thereafter, the Petitioner filed timely
objections to conduct affecting the results of the
election.
In accordance with the National Labor Relations
Board Rules and Regulations and Statements of
Procedure, Series 8, as amended, the Regional
Director conducted an investigation and, on
September 16, 1969, issued and duly served upon
the parties his report and recommendation on
objections and challenges, in which he recommended
that the challenges to the ballots be sustained, that
certain portions of the objections be overruled, and
that other portions be sustained and the election set
aside. Thereafter, the Employer filed timely
exceptions to the Regional Director's disposition of
that portion of the objections relied upon by the
Regional Director in recommending that the election
be set aside.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel
Upon the entire record in this case, the Board
finds:
1. The Employer is engaged in commerce within
the meaning of the Act, and it will effectuate the
purposes of the Act to assert jurisdiction herein.
2. The Petitioner is a labor organization claiming
to represent certain employees of the Employer.
3. A question affecting commerce exists
concerning representation of the employees of the
Employer within the meaning of Section 9(c)(1) and
Section 2(6) and (7) of the Act
4. The parties stipulated, and we find, that the
following employees of the Employer constitute a
unit appropriate for the purposes of collective
bargaining within the meaning of Section 9(b) of the
Act.
All production and maintenance employees
employed by the Employer at its factory at
Pampanos Ward, Ponce, Puerto Rico, including
X-Ray technicians, process technicians, equipment
maintenance technicians and group leaders; but
excluding all office clerical employees and plant
clerical employees, professional personnel,
department leaders, watchmen, laid-off
employees, guards and supervisors as defined in
the Act.
5 The Board has considered the Regional
Director's report, the Employer's objections thereto,
and the entire record in this case, and hereby adopts
his findings and recommendations.'
As framed by the Petitioner, the objections to the
conduct of the election, conducted on May 16, 1969,
were primarily concerned with the 24-hour period
immediately preceding the election, but also alleged
were "other acts of fragant [sic] and illegal abuse of
the free speech guaranty of the Act." In his
postelection investigation, the Regional Director
determined from several employees that a speech
was delivered on May 14, 1969, by the Employer's
General Manager, in which alleged threats of a
plant closing or removal were made. In sum,
according to the Regional Director, some seven
employees stated that the General Manager referred
to the financial difficulties the Employer and its
parent corporation, Sprague Electric Company,
were experiencing, the fact that the parent company
had already moved some of its installations to
Matamoros, Mexico, in an effort to avoid rising
labor costs, and that the Employer likewise might be
forced to transfer its operations to Matamoros if the
Petitioner won the election
In addition, the Regional Director also found that
the day before the General Manager's speech to the
employees, the Employer had distributed to the
employees a letter relating recent financial losses of
the company, a separate "comparative statement of
Consolidated Income," and a newspaper clipping
from the May 8, 1969, issue of the North Adams,
Massachusetts' Transcript bearing the headline
"Cheaper Labor Available - SPRAGUE WILL
TRANSFER PRODUCT LINE TO MEXICO."
The news article recounted the Employer's parent
company's decision to move one of its operations to
Matamoros, Mexico, to avoid labor costs.
Before issuing his report, the Regional Director
requested that the Employer submit any evidence
concerning the contents of the General Manager's
speech. In a written reply, dated August 8, 1969, the
Employer refused to furnish the requested
information on the ground that the Petitioner's
,in absence of exceptions thereto by either party, we adopt, pro forma,
the Regional Director' s recommendations that challenges to the ballots be
sustained and that objections to alleged verbal threats by pay clerks shortly
before the election be overruled
'The headquarters of Sprague Electric Company is located in North
Adams, Massachusetts
181 NLRB No. 45
282 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
objections concerned only the conduct occurring
during the 24-hour period immediately before the
opening of the polls. Thereafter, the Regional
Director in his Report noted his authority and
obligation to consider matters outside the scope of
the objections,' and weighing the uncontroverted
testimony of seven employee-witnesses with regard
to the General Manager's speech in the light of the
literature circulated by the Employer the day before,
found that the General Manager's speech contained
threats of plant closure if the Petitioner won the
election, thus interfering with the employees' free
choice in the election.
The Employer in its exceptions alleges that the
Regional Director arbitrarily broadened the scope of
inquiry without due notice, and relied on statements
of employees regarding the contents of the General
Manager's speech, which testimony does not
accurately reflect the actual remarks made. To
support its position, the Employer now, for the first
time, submits a copy of the General Manager's
address and additional campaign material which it
distributed prior to the election. The speech
contained the following statements:
WHAT THIS UNION DOEN'T SEEM TO REALIZE IS THAT
BOTH SPRAGUE ELECTRIC COMPANY AND SPRAGUE
PONCE COMPANY ARE ENGAGED IN A BATTLE FOR
SURVIVAL 1968 WAS THE WORST YEAR YEAR IN SPRAGUE
ELECTRIC COMPANY'S HISTORY ENDING IN A NET LOSS
OF NEARLY 3 MILLION DOLLARS THIS WAS THE FIRST
LOSS THAT THIS COMPANY HAD EXPERIENCED SINCE 1932
OR MORE THAN 36 YEARS SO FAR THIS YEAR WE HAVE
NOT BEEN ABLE TO REVERSE THIS TREND SPRAGUE
ELECTRIC'S OPERATING RESULTS FOR THE FIRST
QUARTER OF 1969 SHOWED A NET LOSS OF ABOUT $400,000
THE OPERATING RESULTS OF SPRAGUE PONCE DURING
THESE SAME PERIODS WERE NOT AS BAD AS SPRAGUE
OVERALL BUT WE DID EXPERIENCE A TREMENDOUS DROP
IN MANUFACTURING PROFITS IN 1968 SUCH REDUCTIONS
WAS OF ALMOST 75% IF IT WERE NOT FOR THE MONEY
THAT WE HAVE BEEN ABLE TO ACCUMULATE DURING
OUR PAST GOOD YEARS, WE WOULD NOW BE IN SERIOUS
FINANCIAL DIFFICULTY LAST YEAR WHEN SPRAGUE
PONCE BUSINESS DROPPED OFF DRAMATICALLY WE
WERE FORCED TO LAYOFF SOME OF OUR PEOPLE WE
ABSOLUTELY DID NOT WANT TO DO THIS - BUT, WE HAD
NO CHOICE TRYING TO REVERSE LOSSES, INCURRED IN
1968 SPRAGUE ELECTRIC COMPANY HAS UNDERTAKEN
'See, e g , Northlake Convalescent Hospital . 173 NLRB No 149,
International Shoe Company , 123 NLRB 682 Moreover , it is clear that
the Petitioner , in its exceptions , also alleged "other acts of fragant [sic]
and illegal abuse of the free speech guaranty of the Act" which presumably
would furnish sufficient notice to the Employer that conduct other than
that occurring during the 24-hour period immediately preceding the
election could be considered by the Regional Director See Thomas
Products Co , 169 NLRB No 55 Finally, as indicated above, the Regional
Director requested that evidence as to the contents of the speech,
concerning which substantial oral testimony had been already received
during the investigation of this case , be submitted by the Employer Under
these circumstances , we find that the Regional Director acted well within
his authority in considering the Employer 's address and, further , that the
Employer had ample actual notice that the speech was being considered by
the Regional Director
MANY PROGRAMS COMPANY WIDE TO IMPROVE OVERALL
EFFICIENCY AND INCREASE PRODUCTION ONE SUCH
PROGRAM , THE VEFAC PROGRAM, IS NOW BEING
CONDUCTED THROUGHTOUT THE ENTIRE SPRAGE
ELECTRIC COMPANY TODAY, WE FIND OURSELVES
COMPETING FOR BUSINESS NOT ONLY WITH OTHER
FIRMS IN THE U S BUT WITH OTHER PLANTS IN THE
SPRAGUE ELECTRIC COMPANY THAT PRODUCE EXACTLY
THE SAME PRODUCT LINES AS WE DO THE COMPETITION
IS SO GREAT THAT MANY ELECTRONIC FIRMS IN THE U S
HAVE BEEN FORCED TO MOVE THEIR PLANTS OUT OF THE
US TO TAKE ADVANTAGE OF THE EXTREMELY LOW
LABOR COSTS AVAILABLE IN AREAS LIKE TAIWAN AND
MEXICO JUST LAST WEEK, SPRAGUE ELECTRIC
ANNOUNCED THAT IT WAS MOVING ONE OF ITS
ESTABLISHED PRODUCT LINES FROM NORTH ADAMS,
MASS TO MATAMOROS, MEXICO WITH THE ONLY
PURPOSE OF TAKING ADVANTAGE OF THIS LABOR
SAVING I FIRMLY BELIEVE THAT WE, AT SPRAGUE
PONCE, CAN STILL OVERCOME THIS KIND OF
COMPETITION-BUT ONLY BY WORKING TOGETHER
[EMPHASIS SUPPLIED ]
Continuing on the subject of high labor costs the
General Manager summed up the position of the
Employer:
IF WE ARE TO CONTINUE IMPROVING YOUR WAGES AND
BENEFITS EACH YEAR AS WE HAVE FOR THE LAST
FIFTEEN YEARS WE MUST OPERATE MORE EFFECIENTLY
THAN OUR COMPETITION WE HAVE TO REMEMBER THAT
SPRAGUE PONCE IS IN THE ELECTRONIC COMPONENTS
BUSINESS AND NOT THE PETROCHEMICAL FIELD WHERE
THERE ARE GIGANTIC PROFITS AND LESS CONCERN FOR
LABOR COSTS SPRAGUE PONCE CANNOT PAY
PETROCHEMICAL BENEFITS WITHOUT ELIMINATING
ITSELF FROM THE COMPETITIVE MARKET OUT JOB
PROTECTION LIES IN OUR ABILITY TO PRODUCE A
QUALITY PRODUCT, ON TIME DELIVERY, AND A
COMPETITIVE PRICE NO UNION WILL EVER HELP US
ACHIEVE THESE GOALS WE SIMPLY CANNOT AFFORD
ANY LABOR PROBLEMS AT THIS TIME LET ALONE A WORK
STOPPAGE OR A STRIKE
Upon careful consideration of the above remarks,
and in view of the literature pertaining to the
removal of the parent company's operations to
Mexico which was distributed to the employees
prior to the General Manager's speech, we conclude
that these statements constituted veiled threats to
close the plant should Petitioner be selected as the
employees' bargaining representative, and that the
cumulative effect of these statements was to lead the
employees reasonably to fear that such action would
be taken by the Employer in the event of a victory
for the Petitioner.4 Moreover, we find no substantial
variance between the version of the speech given by
the seven employees relied upon by the Regional
Director and the Employer's actual remarks. We
therefore find that the Employer prevented the
'See Penland Paper Converting Corporation, 167 NLRB No 126, A
Werman & Sons, Inc, 154 NLRB 1037
SPRAGUE PONCE COMPANY
employees from expressing a free choice, and
thereby interfered with the election. In view of the
above, the Employer's request for further
investigation and a hearing are denied.
Accordingly, we shall order that the election be
set aside and direct that a second election be held.
ORDER
It is hereby ordered that the election conducted
herein on May 16, 1969, be, and it hereby is, set
aside.
[Directions of Second Election6 omitted from
publication I
'We also direct that the notice of election to be issued in this matter
include the following paragraph
283
The election conducted on May 16, 1969, was set aside because the
National Labor Relations Board found that certain conduct of the
Employer interfered with the employees ' exercise of a free and reasoned
choice Therefore a new election will be held in accordance with the
terms of this Notice of Election All eligible voters should understand
that the National Labor Relations Act, as amended , gives them the right
to cast their ballots as they see fit, and protects them in the exercise of
this right , free from interference by any of the parties
,in order to assure that all eligible voters may have the opportunity to
be informed of the issues in the exercise of their statutory right to vote, all
parties to the election should have access to a list of voters and their
addresses which may be used to communicate with them Excelsior
Underwear Inc, 156 NLRB 1236, N L R B v Wyman-Gordon Company.
394 U S 759 Accordingly, it is hereby directed that an election eligibility
list, containing the names and addresses of all the eligible voters, must be
filed by the Employer with the Regional Director for Region 21 within 7
days after the date of issuance of the Notice of Second Election by the
Regional Director The Regional Director shall make the list available to
all parties to the election No extension of time to file this list shall be
granted by the Regional Director except in extraordinary circumstances
Failure to comply with this requirement shall be grounds for setting aside
the election whenever proper objections are filed