Thomas E. Gates & Sons

National Labor Relations Board - Board Decisions

May 17, 1977

229 N.L.R.B. 705 (N.L.R.B. 1977)

THOMAS E. GATES & SONS
Thomas E. Gates & Sons, Inc. and United Association
of Journeymen and Apprentices of the Plumbing
and Pipefitting Industry of the United States and
Canada, AFL-CIO, Local 412, Petitioner. Case
28-RC-3049
May 17, 1977
DECISION AND CERTIFICATION OF
RESULTS OF ELECTION
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND MURPHY
Pursuant to authority granted it by the National
Labor Relations Board under Section 3(b) of the
National Labor Relations Act, as amended, a three-
member panel has considered the Petitioner's objec-
tions to an election held November 12, 1975,' and
the Regional Director's report recommending dispo-
sition of same. The Board has reviewed the record in
light of the Employer's exceptions and supporting
brief, and hereby adopts the Regional Director's
findings and recommendations2 to the extent consis-
tent herewith.
The Regional Director recommended that the
election be set aside, based upon Objection 1.3 We
disagree.
Employer is alleged to have made a material
misrepresentation when, 4 days prior to the election,
it circulated a letter to its employees in which it
misstated the existing wages which they could expect
to receive under the Petitioner's current contract.
Thus the letter stated that Petitioner's current
contract provided for a base rate of $9.19 per hour
with additional fringe benefits amounting to $2.13
per hour for a total of $11.32 per hour. The letter
further stated that only $9.19 of this total was "take
home" pay wages which represented a rate of $3.17
per hour less than the $12.38 hourly wage Employer
was paying the employees. In fact, however, Petition-
er's base rate under its current contract was $11.09
per hour with additional fringe benefits of $2.13 per
hour. Thus Petitioner's 1975 contract "package"
amounted to $13.22 per hour or $1.90 more than
represented by the Employer. The Regional Director
concluded the Employer's misrepresentation war-
ranted setting aside the election under the principles
set forth in Hollywood Ceramics Company, Inc., 140
NLRB 221, 224 (1962).
In Shopping Karl Food Market, Inc.,4 we carefully
reviewed the rule set forth in Hollywood Ceramics
and concluded that, on balance, the rule operates
more to frustrate employee free choice than to
further it. Thus, we there decided that we will no
longer adhere to the Hollywood Ceramics approach
and accordingly will not set elections aside on the
229 NLRB No. 100
basis of misleading campaign statements. 5 Since
Employer's statements herein amounted to no more
than misleading campaign statements they do not
warrant setting aside the election.6 Accordingly, we
hereby overrule Petitioner's Objection 1.
As the tally of ballots shows that a majority of the
valid votes have not been cast in favor of the
Petitioner, we shall certify the results of the election.
CERTIFICATION OF RESULTS OF
ELECTION
It is hereby certified that a majority of the valid
votes have not been cast for United Association of
Journeymen and Apprentices of the Plumbing and
Pipefitting Industry of the United States and Cana-
da, AFL-CIO, Local 412, and that said labor
organization is not the exclusive representative of all
the employees, in the unit herein involved, within the
meaning of Section 9(a) of the National Labor
Relations Act, as amended.
CHAIRMAN FANNING, dissenting:
For the reasons set forth in the dissent of Member
Jenkins and me in Shopping Kart Food Market, Inc.,
228 NLRB 1311, in which the Board majority
overruled Hollywood Ceramics,7 I would adopt the
Regional Director's report and set aside the election.
It is inconceivable to me that a wage misrepresenta-
tion (which the majority characterizes as a mislead-
ing campaign statement) of approximately $2 per
hour made at a time when no reply was possible
would not have a significant impact on the election.
l The election was conducted pursuant to a Stipulation for Certification
Upon Consent Election. The tally was: four for, and four against, the
Petitioner; there were no challenged ballots.
2 In the absence of exceptions, we adopt pro formau the Regional
Director's recommendation that Petitioner's Objection 2 be overruled.
3 The relevant portion of the Regional Director's report is attached
hereto and marked "Appendix."
4 228 NLRB 1311 (1977).
s As we noted in Shopping Kart, supra, we will intervene in those
instances where a party has engaged in such deceptive campaign practices as
improperly involve the Board and its processes, or the use for forged
documents which render the voters unable to recognize the propaganda for
what it is. Of course, we shall continue to oversee other campaign conduct
which interferes with employee free choice outside the area of misrepresen-
tations which had been objectionable only under the Hollywood Ceramics
rule.
6 Member Murphy agrees for the further reason that Employer's conduct
did not rise to the level of an egregious mistake of fact amounting to fraud.
See her concurring opinion in Shopping Karr, supra.
7 Hollywood Ceramics Company, Inc., 140 NLRB 221 (1962).
APPENDIX
THE OBJECTIONS
Objection No. I - That prior to the election and at a
time so close to the election that Petitioner did not have
an opportunity to respond, the Employer delivered to
employees in the stipulated unit a letter substantially
misrepresenting the amount of compensation received
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by employees working under the labor agreement
between the Mechanical Contractor's Association of
New Mexico, Inc. and Petitioner. In addition, in that
same written information to employees the Employer
incorrectly advised the employees that under the
"Union's Contract", the employees would receive less
compensation than the Employer was presently paying
them.
The investigation disclosed that on November 7, employ-
ees in the stipulated unit received from the Employer,
along with their paychecks, a letter (copy attached hereto
as Exhibit A) comparing their existing wages with what
they could expect to receive under the Petitioner's current
contract. The letter stated that the Petitioner's current
contract provided for a base rate of $9.19/hour with
additional fringes of $2.13/hour for a total of $11.32/hour.
The letter pointed out that only $9.19 of this total was
"take-home pay" which represented a $3.19/hour reduc-
tion from their existing take-home wages of $12.38/hour. It
appears that the Petitioner did not learn of the letter until
the night before the election and did not obtain a copy
thereof until early the next morning, just before the
election.
The position of the Petitioner is that the Employer's
letter understated, by $1.90/hour, the wages being received
under its current contract. A copy of the relevant portions
of that contract are attached hereto as Exhibit B. The
Employer's jobsite is some 45 miles away from Gallup,
New Mexico, the nearest basing point city defined in the
contract, which places it in an area described in the
contract as Zone 5. In Zone 5 the contract base rate is
$11.09/hour rather than $9.19/hour as given in the
Employer's letter. The entire amount of the 1975 "cost-of-
living" improvement has been placed in the area of fringe
benefits and this was correctly given in the Employer's
letter as $2.13/hour. The total 1975 contract "package"
amounts to $13.22/hour or $1.90 more than represented by
the Employer. Additionally, the Petitioner contends that
due to the remoteness of the jobsite and its long distance
from the Petitioner's headquarters in Albuquerque, New
Mexico, the employees could not readily contact the
Petitioner with regard to the Employer's distribution and
that the Employer's misrepresentation destroyed the
credibility of the Petitioner's representative.
The Employer's position is that while there may have
been a mistake in the presentation of the base rate paid
under the Petitioner's current contract, the basic theme of
the letter, that employees would receive less "take-home"
pay, was essentially correct. Additionally, it contends that
its letter was simply a response to information it had
received that the Petitioner had told employees that under
its contract they could receive $ .73/hour more (over the
Employer's rate of $12.48/hour) and that, beyond this, the
Petitioner had ample time (4 days) in which to respond to
the Employer's representations.
There appears to be no dispute as to the facts. The letter
distributed by the Employer contained a substantial, if
inadvertent, misrepresentation as to the benefits enjoyed
I Zarn, Inc., 170 NLRB 1135 (1%968); Western Health Facilities, Inc., 208
NLRB 56 (1974).
by employees covered by the Petitioner's contract with the
Mechanical Contractors Association of New Mexico, it
was distributed to employees some four days prior to the
election, and it was designed to respond to alleged
statements about potential wage improvements made by
Petitioner.
As a general rule the Board does not undertake to police
the utterances of a party to a representation election in the
absence of fraud or coercion. However, neither the Board
nor the courts will condone conduct which creates an
atmosphere rendering improbable a free choice of a
collective-bargaining representative by employees. The
Board's policy is to set aside an election conducted under
such circumstances where it appears that there has been a
material and substantial departure from the truth at a time
which prevents the other party from making an effective
reply so that the misrepresentation, whether deliberate or
not, may reasonably be expected to have a significant
impact on the election. Hollywood Ceramics Co., Inc., 140
NLRB 221, 224.
There is no question as to the materiality or importance
of the subject of wages to the employee, wages being "the
stuff of life for unions and members, the self same subjects
concerning which men organize and elect their representa-
tives to bargain," Gallenkamp Stores Co. v. N.L.R.B., 402
F.2d 525, 534 (C.A. 9, 1968), or that the misrepresentation
in this instance was substantial. The Employer's error in
"take home" pay alone amounted to 17 percent or about
$304/month. By the Employer's own calculations, the
employees' total loss under the Petitioner's contract would
have amounted to $510.40/month. A misrepresentation
related to a subject of such vital concern may reasonably
be expected to have a substantial effect upon an election.
Coca Cola Bottling Company of Louisville, 150 NLRB 397,
400 (1964). The only question here is whether or not the
misrepresentation was made at a time which prevented the
Petitioner from making an effective reply.
The Employer's jobsite is located on the Navajo Indian
Reservation at Navajo Pine, New Mexico, some 18 miles
from Window Rock, Arizona, which, in turn, is about 27
miles from Gallup, New Mexico. The Petitioner's office is
located in Albuquerque, New Mexico, which is 145 miles
from Gallup. Petitioner's representative, Wallace Sparks, is
responsible for the area in northern New Mexico north and
west of Albuquerque, some 10,000 square miles. The
investigation disclosed that Sparks had talked to employees
regarding wages prior to the distribution of the Employer's
letter. There is no dispute as to the fact that the Employer
then responded to an essentially correct statement by
Sparks with a substantial misrepresentation on the same
subject. Sparks did not learn of the letter until the night
before the election and was not able to obtain a copy of
that letter until just before the election.
The Employer contends that four days should have been
ample time for Sparks to have discovered and answered the
misrepresentation. I do not agree. The test is not one of
determining whether an arbitrary number of days elapsed
between the time of the misrepresentation and the
election.3 Instead, the determination must satisfy the
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THOMAS E. GATES & SONS
question of whether or not Sparks could reasonably have
been expected to know about the letter in time to
effectively counter the misrepresentation. In view of the
remoteness of the jobsite, its long distance from the
Petitioner's office, the large area which must be covered by
the Petitioner's representative, the uncontradicted evidence
that the Petitioner's representative did not learn of the
misrepresentation until the eve of the election, and the fact
that two of the four elapsed days fell on a weekend, I
conclude that the Petitioner did not have sufficient time to
counter the Employer's misrepresentation. I shall, there-
fore, recommend that this objection be sustained.
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