National Labor Relations Board, and Stationary Engineers, Local 39, International Union of Operating Engineers, Intervenor v. Nevis Industries, Inc., D/B/A Fresno Townehouse

Citations: 647 F.2d 905; 107 L.R.R.M. (BNA) 2890; 1981 U.S. App. LEXIS 12546Docket: 80-7131

Court: Court of Appeals for the Ninth Circuit; June 8, 1981; Federal Appellate Court

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Nevis Industries, Inc. petitioned for review of a decision from the National Labor Relations Board (NLRB) regarding its conduct after acquiring the Fresno Townehouse hotel in April 1977. Prior to the acquisition, the hotel's engineering employees were represented by Stationary Engineers, Local 39, while other service employees belonged to Motel Service Employees, Local 62. Nevis chose not to retain the engineering employees, including their supervisor, Brewer, and refused to negotiate with Local 39. Allegedly, Nevis conditioned the retention of one employee, Alford, on his resignation from Local 39 and attempted to persuade employees represented by Local 62 to withdraw from their union.

The Administrative Law Judge (ALJ) concluded that Nevis violated section 8(a)(1) of the National Labor Relations Act by trying to convince Local 62's service employees to disaffiliate from their union and by making Alford's employment conditional on leaving Local 39. The ALJ also found violations of section 8(a)(1) for not retaining Chief Engineer Brewer and sections 8(a)(1) and (3) for not retaining four engineers due to their union membership. Nevis was also found to have violated section 8(a)(5) by refusing to bargain with Local 39. The NLRB affirmed the ALJ's findings, with some dissent among its members, and issued a cease and desist order, requiring Nevis to compensate the engineers for lost wages, offer them reinstatement, and engage in negotiations with Local 39.

The key legal issues raised include whether substantial evidence supports the NLRB's findings of violations regarding employee rights interference, the legal standards applied for the refusal to retain engineers due to union membership, and the refusal to negotiate with Local 39.

Enforcement of the Board's order is required if the Board applied the law correctly and its factual findings are supported by substantial evidence. The Board's legal interpretations receive considerable deference, and its findings must be upheld even if the reviewing court might draw different conclusions from the same evidence. Evidence must be considered in totality, including both supportive and contradictory evidence.

The Board determined that Nevis violated section 8(a)(1) by interfering with the rights of retained employees under section 7 of the Act. Specifically, Nevis's manager, Snider, improperly influenced banquet waitresses by asserting the establishment would become non-union and offering benefits exceeding those from the union. Snider further urged maid employees to withdraw from Local 62 and threatened to terminate those participating in union activities, actions which Nevis does not contest, resulting in a waiver of the right to challenge these findings.

Regarding employee Alford, the Board found that his continued employment was contingent upon resigning from Local 39. Nevis disputed this conclusion, but substantial evidence supports the Board's finding, including Snider's encouragement for Alford to resign and threats made against other employees regarding union participation. The Administrative Law Judge (ALJ) discredited Snider's contradicting testimony, a credibility determination the court will not overturn without compelling evidence.

Furthermore, the Board held that Nevis violated sections 8(a)(1) and (3) by refusing to retain engineers because of their union membership and to avoid bargaining obligations with Local 39. Nevis argued that the Board misapplied the legal standard for determining unlawful motivation, asserting a lack of substantial evidence supporting the Board's finding of unlawful intent. The standard for identifying an unfair labor practice requires showing unlawful motivation aimed at discouraging union membership or interfering with protected rights.

In cases where an employee's discharge is influenced by both legitimate business reasons and protected union activities, the court requires the General Counsel to establish that the protected activity was the primary motivation for the discharge. Recent procedural changes by the Board now require the General Counsel to demonstrate that the protected conduct was "a motivating factor" in the discharge decision. Subsequently, the onus shifts to the employer to prove that the employee would have been terminated regardless of their protected activities.

The Board is permitted to amend its procedural rules, provided its decisions are rational and consistent with the National Labor Relations Act (NLRA). The Wright Line rule, which supports this burden-shifting framework, aligns with the legislative intent that employers must justify discharges based on valid causes, and recognizes that employers typically possess the best evidence regarding their motivations.

The Board concluded that the General Counsel successfully demonstrated that anti-union bias influenced the decision not to retain certain engineers. The employer, Nevis, did not substantiate its claim that the discharge would have occurred irrespective of the protected conduct. Testimony indicated that the manager, Snider, aimed to dismiss employees to avoid union obligations, specifically targeting strong union members. Snider proclaimed intentions to run a non-union operation and abruptly terminated the engineering crew while failing to engage with them about their employment status. Notably, at the time of termination, there was an urgent need for experienced engineers due to malfunctioning air conditioning, yet Snider only hired one inexperienced replacement.

Snider's decision not to hire certain engineers was primarily based on their poor work attitude, supported by negative reports from a leasing agent and others, although none testified. He acknowledged receiving positive feedback on two engineers but claimed that watch engineers were unnecessary and overpaid, although these factors did not influence his decision. Snider cited "technicalities" as the reason for not hiring one engineer, without disclosing specifics. The Board determined that Snider's justifications were pretextual, reinforcing the notion that the true motivation was related to union activity, as established in case law.

The Board found that Nevis violated section 8(a)(1) by refusing to retain Chief Engineer Brewer, which Nevis argued was based on an incorrect legal standard. Under the Act, supervisors are not considered employees and are not protected if they engage in activities that would be protected for non-supervisory employees. However, there are limited exceptions allowing for employer conduct toward supervisors to violate the Act, mainly when a supervisor is disciplined for refusing to commit an unfair labor practice, testifying before the Board, or discharging a pro-union crew under pretext. Reinstatement for supervisors has been ordered primarily to remedy harm to rank-and-file employees, but mere fear of job loss does not justify reinstatement, and no precedent supports reinstating supervisors based solely on a series of terminations.

The Board mandated the reinstatement of Brewer, concluding that his termination was intended to suppress employees' rights under section 7, reflecting a broader anti-union strategy. The Board asserted that employees would not distinguish between an employer's right to limit union activities among supervisors and their own rights to engage in such activities, necessitating Brewer's reinstatement to alleviate this coercive impact. However, Congress has explicitly chosen not to safeguard the pro-union actions of supervisors, indicating that reinstating supervisors in coercive contexts could undermine legislative intent. Reinstatement may be warranted only when it is the sole means to counteract an employer's coercive actions; in this case, reinstating the employees themselves would suffice. 

The Board presupposed that Local 39 would have represented a majority of the engineers had Nevis not unlawfully refused to retain them, a position supported by case law. Nevis contended that this presumption was countered by evidence that the engineers would not accept the offered wages. If Nevis had not unlawfully dismissed the engineers, it would have had to negotiate with Local 39, although it was not bound by previous wage agreements. The Board's directive for Nevis to bargain with Local 39 stems from this unlawful refusal. 

Nevis acknowledged its unfair practices regarding the service employees, with substantial evidence supporting claims of conditioning Alford's retention on his resignation from Local 39 and dismissing the engineers due to anti-union sentiment. However, the Board misapplied the legal standard in ruling that Nevis violated section 8(a)(1) through Brewer's dismissal. The Board's order is enforced except regarding Brewer's reinstatement, and the petition for review is denied except concerning that issue.