National Labor Relations Board v. Keystone Pretzel Bakery, Inc.

Citations: 696 F.2d 257; 112 L.R.R.M. (BNA) 2349; 1982 U.S. App. LEXIS 22971Docket: 81-2067

Court: Court of Appeals for the Third Circuit; December 28, 1982; Federal Appellate Court

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The National Labor Relations Board (NLRB) filed an application for enforcement against Keystone Pretzel Bakery, Inc., citing violations of sections 8(a)(1), 8(a)(3), and 8(a)(5) of the National Labor Relations Act. The NLRB determined that Keystone engaged in activities discouraging union membership and refused to negotiate with a union that had majority support through membership cards. As a remedy, the NLRB imposed a bargaining order. Keystone, which operates a pretzel production facility in Lancaster, Pennsylvania, was acquired in December 1976 by Glen Hyneman and Horace Groff. The Bakery and Confectionary Workers International Union of America began organizing efforts shortly thereafter, securing authorization from 17 of 29 employees by June 1, 1977. An unfair labor practice charge was filed after Keystone's actions hindered the union's efforts. An administrative law judge initially ruled that although Keystone had violated labor laws, the union lacked the necessary majority support for a bargaining order. However, the NLRB later issued an order in May 1979, affirming the union's status and the impact of Keystone's unfair practices on the election process, which justified the bargaining order. Keystone's motion to remand for additional evidence regarding changes in the bargaining unit was granted by a two-judge panel in October 1980, but the NLRB's motion for reconsideration was denied by the court in banc.

The Board informed the parties of their opportunity to submit statements regarding issues from a remand. Accepting the employer's affidavit on personnel changes as true, the Board determined that no evidentiary hearing was necessary and maintained its prior bargaining order. Keystone opposed enforcement, arguing: 1) lack of sufficient evidence for the Board's findings of unfair labor practices; 2) errors in defining the appropriate bargaining unit; 3) incorrect determination of majority authorization for the Union to negotiate on behalf of the bargaining unit; and 4) inadequacy of the Board's reasoning for the bargaining order. 

The Board found that Keystone violated section 8(a)(1) of the Act by interfering with employees' rights to organize, as evidenced by employee surveillance, coercive interrogations, and intimidation of employees regarding union activity. Additionally, Keystone allegedly solicited grievances while promoting anti-union sentiments and discriminated against union supporters in pay raises. The administrative law judge's findings regarding these violations were adopted by the Board and supported by substantial evidence. 

The Board's discretion in defining appropriate bargaining units under section 9(b) was affirmed, with a consensus on including twenty-eight employees, while Keystone contested the exclusion of seven others, three of whom were identified as supervisors and thus legally excludable. The findings regarding the supervisory status were supported by substantial evidence.

Russ Yoder, a truck driver whose work mainly occurred outside the plant, was excluded from the bargaining unit by the administrative law judge due to a lack of community interest with plant employees, a decision supported by the Union's preference for his exclusion. The Board endorsed this determination, indicating no abuse of discretion. Conversely, Joanne Herbst, initially questioned as a casual employee, was ultimately included in the bargaining unit, which now comprises all full and part-time production and maintenance employees, excluding truck drivers, office clerical staff, and statutory supervisors. This unit consists of twenty-nine members, including a stipulated list of twenty-eight and Herbst.

The General Counsel presented seventeen authorization cards, demonstrating a majority support for the union among the twenty-nine approved members. These cards, which authorize the Bakery and Confectionery Workers Local No. 6 to represent the signers for collective bargaining, were authenticated and not challenged for authenticity by Keystone. Keystone's objections centered on the sufficiency of the General Counsel's evidence, claiming a lack of testimony confirming that employees read the cards before signing. However, under the precedent set by Cumberland Shoe Corp., the presence of duly authenticated cards that indicate authorization for collective bargaining suffices unless evidence shows the employees were misled about the purpose of the cards. The Supreme Court has validated this approach, affirming the Board's decision on the matter.

The Board's standard for addressing allegations of misrepresentation by the Union and misunderstandings by employees regarding authorization cards is articulated in the cases of Cumberland Shoe Corp. and Levi Strauss Co. According to the Cumberland Shoe doctrine, if an authorization card clearly states that the signer permits the Union to represent them for collective bargaining (not for election purposes), it will be counted unless evidence shows the employee was misled to believe the card was solely for an election. The General Counsel establishes a prima facie case for collective bargaining by providing clear authorization cards from a majority of the bargaining unit, allowing the employer to recognize the union and initiate a bargaining relationship without further inquiry into the employees' intentions. If an employer declines to acknowledge a majority based on these cards, the burden of proof does not shift to the General Counsel to show the employees were not misled. The presumption is that employees intend to uphold what they sign unless unequivocal evidence indicates otherwise. The claims made by Keystone that the General Counsel did not prove majority representation are dismissed. The validity of certain cards is challenged based on union organizer Murray's testimony regarding three employees, indicating they understood the card's purpose to be related to securing an election for contract negotiations.

Murray testified during cross-examination that he informed employees whose cards were solicited that the cards would be used to obtain a Board-supervised election at the plant. His statements regarding the cards' purpose were truthful, as authorization cards serve dual purposes: securing a representation election if the employer does not recognize a card majority. However, neither Murray nor other witnesses specified that the cards' only purpose was to trigger a representation election. The Board found that Murray’s statements did not contradict the clear language on the cards, which authorized the Union to represent the signers for collective bargaining. The Board concluded there was no evidence that Murray intentionally misled the employees regarding the cards’ purpose. Thus, the Board considered the cards as valid evidence of the Union's majority representation in the bargaining unit, consistent with prior legal precedents. The Supreme Court in General Steel Products emphasized that misrepresentation claims must be substantiated by clear communication from the solicitors regarding the cards' purpose. The court upheld that unless an employee was explicitly told the card's sole purpose was for an election, signing the card is presumed to be an authorization for Union representation. In Hedstrom Company v. NLRB, it was determined that cards signed by employees informed that an election was a purpose were valid for establishing majority representation. Consequently, Murray’s testimony did not sufficiently challenge the General Counsel's prima facie case of majority representation, and the Board's determination that a majority of employees authorized the Union was backed by the evidence of seventeen cards.

The Board's reasoning supports a bargaining order based on a card majority under Gissel II principles, where an employer's unfair labor practices do not completely preclude a free election but undermine union support. Two key inquiries remain: the adequacy of the Board's initial justification for the bargaining order and its rationale on remand. The Board initially justified the order by detailing the Respondent's unlawful actions, including surveillance of union activities, selective wage increases, and a coercive employee meeting that undermined union strength and distorted the election process. It found that these practices severely damaged union support within a week and that traditional remedies were unlikely to restore fair election conditions. 

In its supplemental decision, the Board determined that evidence of employee turnover did not necessitate modifying the original order, citing that the Respondent's unfair practices have lasting effects on employee choices. The Board highlighted the coerciveness of the Respondent’s substantial wage increases amidst union activities, which effectively eliminated the union's rationale for existing. It emphasized that the outcome of an unlawful poll revealing no support for the union illustrated the success of the Respondent's coercive tactics, reinforcing the message that rejecting the union correlated with receiving better compensation and benefits.

Employees deviating from an antiunion stance may face future benefits withholding, perpetuating a chilling effect on their free choice. Evidence shows that nearly half of current employees were present during the Respondent's campaign of unlawful practices, including surveillance and implied promises of benefits for rejecting union support. All 14 employees who experienced these practices received an unlawful pay raise, indicating awareness and exposure to the Respondent's misconduct. The Respondent's actions remain unaddressed, and there has been no assurance against recurrence. Even if the majority of employees currently oppose the Union, this sentiment is influenced by the Respondent's unfair labor practices. Historical precedent holds that a union's loss of majority status due to such practices does not negate the need for a bargaining order. Delays in the Board's decisions have not diminished the coercive impact of the Respondent's actions, nor has the Respondent demonstrated any prejudice from these delays. The Board's rationale for reaffirming a bargaining order is consistent with established legal standards, rejecting challenges to its adequacy. The order will be fully enforced. A concurring opinion expresses concern over the validity of union authorization cards, particularly regarding whether employees read them before signing, emphasizing the importance of protecting employees' rights to vote on union affiliation.

The Supreme Court's ruling in NLRB v. Gissel Packing Co. establishes that authorization cards should be deemed valid for determining union representation unless there is clear and deliberate cancellation of their meaning by a union representative. In this case, the court concluded that statements made to employees regarding the cards' purpose did not constitute misrepresentation strong enough to invalidate the cards. Consequently, the validity of these cards is upheld.

Dissenting opinions argue against the Board’s reliance on the authorization cards, citing the importance of secret elections as the preferred method for selecting a bargaining representative. Concerns were raised about the potential undermining of employees' freedom to choose their representatives when relying on cards, especially given instances of employee turnover that were not adequately examined. The dissent emphasizes that some employees were misled about the cards' purpose, believing they were only for election purposes rather than designating a union representative. The Administrative Law Judge (ALJ) found insufficient evidence that the employees understood they were designating the union as their representative, which the Board disputed, maintaining the cards' prima facie validity based on the organizer's statements and the cards' language. The ALJ's concern was that the burden of proof rested with the General Counsel to demonstrate majority support, which was not met.

The Board's finding of no inconsistency between the union organizer's representations and the authorization cards is questioned, suggesting an incomplete evaluation of the General Counsel's prima facie case regarding card validity. The Supreme Court's caution in NLRB v. Gissel emphasizes the need for vigilance against misrepresentation in card solicitation. The Court supports the Cumberland rule, which validates a card unless it’s proven that the signer was informed it was solely for election purposes, focusing on the overall context rather than specific wording. The Court warned against a rigid application of this rule, referencing General Steel, where authorization cards were deemed valid despite conflicting statements from a union representative, as the trial examiner found that the signers were aware of the card's implications. In contrast, the current case lacks such evidence; the ALJ determined that there was no proof that signers read the cards, and the evidence indicated they signed under the belief it was for an election, contradicting the cards’ designation of the union as the representative. The Board acknowledged the importance of whether the employees read the cards but still deemed them valid without evidence of reading, suggesting an overextension of its authority in pursuing a bargaining order beyond the limits set by the Supreme Court.

A variance between a solicitor's oral representations and the printed terms on a union authorization card does not automatically invalidate the card. The Supreme Court's ruling in Gissel established that employees are generally bound by the language of what they sign unless explicitly instructed to disregard it. Key points include that oral representations can potentially invalidate a card if they lead an employee to disregard the printed language, highlighting the importance of the employee's awareness of the card's text. If an employee signs without reading due to misrepresentations, the intent expressed in the text may not reflect their true intent. In cases where no evidence shows the signer understood the card’s terms, it can be concluded that the signature resulted from misrepresentation. The General Counsel bears the burden to prove a union majority but did not adequately address this issue in the current case, as it relied on testimony that contradicted the authorization card's text, moving beyond mere authenticity of the signatures.

A witness highlighted discrepancies between the representation of union cards and the actual printed content, challenging the validity of those cards. The General Counsel's case relied on this ambiguity, meaning he could not simply prove authenticity to establish a prima facie case. The Board was required to consider all evidence when determining if the General Counsel had proven a union majority. Under the General Steel standard, if testimony had confirmed that three employees understood the cards they signed, it could indicate their consent to union representation despite any inconsistencies in the organizer's claims. However, without such testimony, the evidence only demonstrated that employees signed cards with the belief it might lead to an election, which does not constitute proof of consent.

The Board's assertion of a union majority is inconsistent with its own standards for ensuring free choice in secret elections. The card-signing process, fraught with issues like peer pressure and misrepresentation, should require stricter standards than those for elections. The Board prohibits electioneering at polling places to protect employee voting rights but fails to apply similar scrutiny to cards obtained under misleading circumstances. The standards should favor proving a majority through evidence as compelling as that from a secret election.

Furthermore, the Board inadequately addressed changes in the bargaining unit, which expanded from 29 to 33 employees over three years post-unlawful practices, with only 14 of the original employees still present, and only 7 of those having signed union cards. The employer's motion to remand for additional evidence was granted, but the Board opted not to hold a hearing and accepted the employer's affidavit as accurate, yet did not revise its bargaining order. The Board justified its decision by noting that a significant portion of current employees had been present during the unfair labor practices, maintaining that the employer's misconduct remained unresolved.

The Board concluded that the impact of the Respondent's unfair labor practices remains unchanged despite the passage of time or employee turnover, indicating that traditional remedies would not effectively mitigate these impacts or ensure a fair election. The only evidence available was the employer's affidavit, which was deemed insufficient to support the Board's conclusions. There was no evidence to substantiate claims that a fair election could not have occurred in 1980 or that a cease and desist order would not have prevented interference. A dissenting opinion emphasized the necessity for regulatory bodies, like the Commission, to provide rational bases for their decisions, paralleling the expectations for judicial conduct. The Board's actions did not adequately comply with prior court orders, leading to a bargaining order that infringed on employee rights under the National Labor Relations Act. The desire to punish the employer unintentionally harmed the employees, contradicting the Act's purpose. The court highlighted that enforcing a bargaining order on such a sparse record would be a failure of judicial responsibility. It was noted that other unfair labor practice findings were sufficiently supported by the evidence, rendering the need to address a specific remark—considered non-coercive by an administrative law judge—unnecessary.

The National Labor Relations Board (NLRB) did not determine whether excluding Leroy Hyneman and Michael Boaman from the bargaining unit constituted an abuse of discretion due to their close ties with management. Respondent argued against the validity of signed cards from 97 employees, claiming that the employees were misled by statements indicating the cards would be used for an election, that they could vote however they chose, and that their signatures would remain confidential except for the Board's use. The conclusion drawn is that these statements do not invalidate the cards for their intended purpose. Previous case law supports this, indicating that assurances about the usage of the cards were not absolute. For example, in L'Eggs Products and Tipton Electric, it was established that the solicitation of cards did not guarantee they would be used solely for election purposes. Additionally, a union representative's explanation of the card’s purpose was found insufficient to negate the clear intent of the card itself. Judicial review in these matters is emphasized as critical, akin to the historical significance of the Statute of Uses.