National Labor Relations Board v. Windemuller Electric, Inc., and Construction Employment Services, Inc.

Citations: 34 F.3d 384; 147 L.R.R.M. (BNA) 2302; 1994 U.S. App. LEXIS 25137Docket: 92-6240

Court: Court of Appeals for the Sixth Circuit; September 14, 1994; Federal Appellate Court

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The case involves the National Labor Relations Board's (NLRB) petition for enforcement of a remedial order against Windemuller Electric, Inc. and Construction Employment Services, Inc., both identified as joint employers. Windemuller, a non-union electrical contractor based in Michigan, contested the NLRB's findings after a minority-owned temporary labor supplier, CES, failed to appear. The court needed to address four primary issues concerning alleged unfair labor practices: 

1. Whether a comment from Windemuller’s owner regarding an influx of union employment applications interfered with employees' rights.
2. The legitimacy of Windemuller’s request to remove union stickers from company hard hats while allowing other union insignia on employees' clothing.
3. Evidence supporting claims that three temporary employees were laid off due to union activities.
4. Justification for the reassignment and effective termination of a fourth employee due to intended organizational activity.

The court ruled in favor of Windemuller on the first, second, and fourth issues but found substantial evidence supporting the NLRB's conclusion on the third issue regarding premature layoffs. Windemuller employed 130-150 workers in 1990 and utilized CES for temporary labor, which was founded by Roosevelt Tillman to provide various trades to contractors.

Mr. Tillman represented CES at a hearing and testified that the first temporary employees sent to Windemuller were two apprentices in late 1989. Windemuller Electric received over 100 job applications that year, with 26 submitted on October 18 by International Brotherhood of Electrical Workers (IBEW) members, including union leaders. Many applications included letters warning that failure to consider them could lead to National Labor Relations Board (NLRB) intervention. Despite processing the applications, Windemuller did not hire any of the applicants, leading the unions to file unfair labor practice charges with the NLRB, alleging discrimination based on union membership. An administrative law judge found insufficient evidence to prove that Windemuller discriminated against the union applicants.

On January 17, 1990, Windemuller held a meeting where Mike Windemuller humorously referenced the prior surge of union applications, suggesting to attendees that the company had received many applications from the union. The general counsel of the NLRB contends this comment constituted an unfair labor practice, implying to employees that union applicants would not be considered. However, evidence shows that Windemuller had hired union members in the past and continued to do so shortly after the meeting, recalling an IBEW member and hiring a female apprentice.

Windemuller aimed to enhance its workforce diversity by increasing the number of African-American and minority employees. In May 1990, Mike Windemuller and superintendent Kirk Strong met with Roosevelt Tillman from CES to explore recruitment strategies. Following this meeting, they reviewed 20 to 30 job applicants, pre-approving about 10, including four with union backgrounds, indicating that union affiliation did not disqualify them from consideration.

On May 11, 1990, Strong requested several electricians from Tillman for short-term assignments. Tillman contacted the pre-approved applicants, leading to five CES employees starting work on May 14, 1990, at a construction site for the Upjohn Company, where Windemuller had already deployed electricians. 

At this site, all workers, including the CES employees, were required to wear hard hats in designated colors, with Windemuller assigned yellow. The CES employees received yellow hard hats with Windemuller’s name and safety booklets. The next day, four of these employees adorned their hard hats with union stickers and wore union-related clothing. 

Dick Thompson, a Windemuller superintendent, reacted negatively to the union items displayed on the hard hats, expressing to management that such displays were inappropriate since Windemuller was not a union contractor. Although no immediate action was taken, Thompson later instructed the CES employees to remove all stickers except those identifying Windemuller and emergency contact information, emphasizing the company's ownership of the hard hats.

Mike Windemuller testified that he advised Mr. Thompson to disregard union paraphernalia except for the stickers on company hard hats and instructed the workers to remove unauthorized stickers for marketing and safety reasons. The CES employees complied and removed the union stickers. 

During the week of May 14, the Austin Company halted work on a power riser contract, leading to the reassignment of three electricians to other tasks. On May 17, Superintendent Dick Thompson informed foreman Barry Alan that he would lay off three CES workers, specifically Sosnowski, Tishhouse, and Ketchum. Alan noted that higher-paid workers from other contractors were typically laid off first, but Thompson stated he had been directed to lay off the three union workers instead, keeping apprentice Mike Stackpole due to cost considerations.

On May 18, the laid-off workers reported back to the CES office, where Roosevelt Tillman expressed surprise and offered them alternative work. The three Windemuller electricians began working on the lower-level project on May 21. Barry Alan mentioned that one worker borrowed from Allied Electric quit that week, while the others returned to Allied after finishing their assignment.

The final point involves Bill Quick, an electrician who worked for a unionized contractor from June to July 1990. After being laid off, he applied for a position at CES on August 6, discussing his work experience with Tillman, including his Michigan master electrician's license. Quick clarified that his license did not equate to holding a contractor's license at that time, as it only allowed him to apply for one after paying a fee.

Tillman employed Quick and assigned him to Windemuller for a job as a journeyman electrician, initially expected to last one to two weeks, but Quick believed it would extend into early October. Quick began work on August 7 and informed Windemuller personnel of his prior employment at Kemp Electric. When questioned by foreman Fred Syswerda about union membership, Quick stated he was not a member. 

After Quick's second day, Tillman attempted to contact him regarding reassignment due to a remodeling project by Tillman's mother, which required a licensed electrician. Quick, who had the necessary experience and believed he was licensed, was intended for this work. Tillman delivered a timecard and handbook to Quick on August 9, leaving a message that he would call the next day. 

Despite not being a union member, Quick was in contact with IBEW Local 445 regarding potential union work and agreed to act as a 'salt,' receiving a union organizing pin to wear. He first wore this pin on August 9, the same day Windemuller received a letter from Local 445 stating Quick was engaged in organizing activities protected by the National Labor Relations Act. Syswerda expressed disappointment over Quick's union affiliation claim, although Quick clarified his status. 

Quick planned to leave work early on August 10 for a trip to Tennessee and confirmed with Syswerda that this was acceptable. He later informed Tillman that he would report to the CES office on August 13 for new assignments, adhering to Tillman's request.

Tillman hired electrician Darwin Patterson to replace Quick at the Windemuller job site starting August 13, 1990. Quick, returning from Tennessee, met with Tillman that morning and was instructed to work at Tillman's mother's residence, which he did on August 14 and 15, repairing circuits and installing lighting fixtures. On August 16, Quick began procuring materials for an electrical service change and informed Tillman on August 17 that he needed to renew his expired contractor's license to obtain a permit for the work.

On August 20, Quick submitted his timecard for the previous week, but Tillman disputed the hours claimed for Thursday and Friday, leading to a disagreement over Quick's hourly rate. Quick became upset and left, which Tillman considered a voluntary resignation. Both Tillman and Windemuller testified that they did not request Quick's removal from the job site.

In response, IBEW Local Union 107 filed unfair labor practice charges against CES and Windemuller on August 14, alleging Quick's removal was retaliatory. An amended charge on August 22 claimed CES constructively discharged Quick for union activities. On December 27, the NLRB's general counsel issued a complaint asserting that Windemuller and CES were joint employers, alleging multiple violations of the National Labor Relations Act, including refusing to hire union applicants, prohibiting union insignia, coercively interrogating employees about union activities, and causing layoffs. The complaint specifically stated that Quick's removal from the Upjohn site was also a violation.

On February 11, 1991, an administrative law judge (ALJ) conducted a hearing that lasted ten days, resulting in a comprehensive 777-page transcript and extensive documentation. The ALJ then issued a decision and order spanning 33 single-spaced pages, which included detailed findings of fact and conclusions of law. Windemuller objected to parts of this decision, subsequently filing a brief with the National Labor Relations Board (NLRB), which on March 9, 1992, issued a brief order that corrected one date but affirmed the ALJ's decision in all other respects. On September 29, 1992, the NLRB sought enforcement of its order from the court. The court's primary role is to review the record to determine if the NLRB's decision is backed by substantial evidence, adhering to the standards set by the Supreme Court, which emphasizes the necessity of judicial oversight while respecting the Board's findings.

The excerpt highlights that Section 8(a)(1) of the National Labor Relations Act prohibits employers from interfering with employees' rights to organize. However, it also affirms the protection of free speech under the First Amendment. The Act's Section 8(c) states that expressing views, as long as they do not include threats or promises, cannot be deemed an unfair labor practice. The government must exercise caution in censoring speech, ensuring that only actual coercive or threatening employer speech is regulated. In a specific instance, Windemuller commented on the numerous employment applications submitted from the union, which the ALJ confirmed were indeed from that date, illustrating the delicate balance between employee rights and employer speech.

Windemuller likely preferred not to be unionized, a sentiment understood by his audience, which prompted laughter at his comment about a surge in union applications. This jest, deemed spontaneous and unplanned, lacked any overt threats. While humorous remarks can sometimes imply threats, the context here does not support such an interpretation. The ALJ found no evidence that Windemuller threatened to break the law or discriminate against union activists, acknowledging that he was aware of the legal implications of such actions. Previous representation elections indicated his familiarity with the rules, and the ALJ noted that Windemuller’s comment did not suggest discrimination against union applicants. Furthermore, a subsequent request from Kalamazoo Branch Manager Bill DeDoes for referrals did not imply a coordinated effort to exclude union applicants, especially given that the applications were several months old and likely outdated. The record contained no evidence that Windemuller’s remarks were intended to create an intimidating atmosphere for employees regarding union organization, contrasting with precedents where direct testimony of intimidation existed.

Barry Alan, identified as the union 'salt,' provided testimony indicating that management did not issue veiled threats regarding hiring IBEW members during a January meeting. His statements were corroborated by the absence of contrary testimonies from the Kalamazoo-area workforce. Consequently, there is no substantial evidence to support a violation of Section 8(a)(1) of the National Labor Relations Act from the meeting.

Regarding the company's request to remove union stickers from company-owned hard hats, the Administrative Law Judge (ALJ) concluded that Windemuller sought their removal because it is a nonunion firm and considered the hard hats as company property. The ALJ framed the issue as primarily a legal question. Citing precedent from Malta Construction Co., the ALJ ruled that prohibiting employees from wearing union stickers constituted a violation of Section 8(a)(1). However, the company allowed union insignia on personal clothing items, which were not subject to the same restrictions. The hard hats were acknowledged as company property by the employees, leading to the conclusion that the company’s action was not an unfair labor practice, as it had the right to prevent its property from displaying union messages while allowing personal items to display such insignia.

The United States Supreme Court has established a clear precedent that union organizational rights cannot override employer property rights, as demonstrated in cases like Lechmere, Inc. v. NLRB. Specifically, labor unions do not have the right to utilize an employer's property for union communications if employees can be effectively reached through other means. This principle extends to employees who support a union; they cannot use employer property for union messaging, provided they have access to their own property for such purposes. Previous cases, such as Standard Oil Company of California and Andrews Wire Corp., support this view by affirming an employer's right to prohibit union insignia on their property while allowing employees to display it on their personal items.

The Board contended that the aforementioned cases did not apply due to 'special circumstances' justifying the employers' restrictions, but the argument was criticized for downplaying the importance of property rights. The Fifth Amendment safeguards against deprivation of property without due process and mandates just compensation for public use, underscoring the significance of property rights recognized by the framers of the Constitution.

The Supreme Court has consistently upheld the primacy of property rights over organizational rights in the absence of a compelling need. In the case at hand, the record indicates no such need exists, thus legally justifying Windemuller’s decision to prohibit union insignia on its hard hats. Additionally, the record confirms that three Windemuller employees became available for reassignment due to a change in the general contractor's plans during the week of May 13, 1990.

Windemuller's decision to assign three regular employees to a lower-level project, displacing three others, raises questions about whether the layoff was discriminatory against three union supporters. The Administrative Law Judge (ALJ) found that these union members would not have been laid off as early as May 18 but for their union activities, with at least two expected to remain employed longer absent anti-union discrimination. Although there are doubts about the ALJ's estimates and reasoning, there is still enough evidence to support a finding of discrimination in the layoffs. 

Notably, on May 15, superintendent Dick Thompson expressed anger over union stickers displayed by temporary employees, which suggests anti-union sentiment. Additionally, foreman Barry Alan testified that Kirk Strong indicated that employees from other contractors would be laid off first, despite a typical "last in, first out" policy that would suggest the opposite. On May 17, Thompson identified three CES employees, all of whom displayed union symbols, for layoff, using the term "union people," which undermines Windemuller's position.

Windemuller failed to adequately explain why Randy Miller, a non-union CES employee, was retained while union members were laid off, although another CES union supporter, Mike Stackpole, was kept on due to being an apprentice and thus less costly. Windemuller's brief suggests various reasons for preferring to release temporary personnel before those borrowed from other contractors, but these justifications do not sufficiently counter the evidence of discriminatory intent.

The record lacks evidence showing that considerations influenced the selection process for layoffs. Bill DeDoes, identified as the decisionmaker by Thompson, did not justify the choice to lay off three union workers instead of three higher-paid employees from other contractors. Although there are ambiguities in the record, they are insufficient to overturn the finding of discriminatory layoffs on May 18.

Regarding Bill Quick, a master electrician hired as a temporary by Windemuller, he displayed his union organizer’s pin shortly after starting. Roosevelt Tillman instructed Quick to report to CES for a new job, which the ALJ speculated was influenced by Quick's union affiliation. However, evidence indicates that Tillman had already decided to assign Quick to the job before learning of his union ties. Tillman was overseeing electrical work for his mother’s apartment renovation, which required a licensed contractor. He called Quick to discuss the job on August 8, 1990, unaware of Quick’s union status.

The ALJ's theory that Tillman’s call was not for reassignment lacked support, as Quick was anticipating the timecard that Tillman dropped off at the job site. The ALJ also found it implausible that Tillman would remove a qualified employee from a company job simply to assist his mother, questioning the business practices of CES if such behavior were typical.

The ALJ noted that if Tillman had genuinely intended for Quick to perform remodeling work, he would have delayed the offer until fall when the company had fewer obligations, indicating that the remodeling was not urgent. The ALJ emphasized that Quick's replacement, Darwin Patterson, could seamlessly take over his duties, supported by prior notice of the change. The assertion that Tillman could have postponed the remodeling work is dismissed as unfounded, as there is no evidence of Tillman's willingness to leave the project unfinished despite the lack of urgency.

Furthermore, the ALJ concluded that by offering Quick only an independent contractor position, Tillman effectively terminated him as an employee, although this allegation was not included in the amended complaint from the Board's general counsel. Evidence showed Quick was willing to work as a contractor and left due to disputes over hours charged and desired pay, not because of a requirement to function as an independent contractor.

The ALJ also recommended dismissing some allegations against CES while confirming others, including CES's illegal inquiries about union affiliations from Patterson and Wolfsen. Although the finding regarding Wolfsen was questioned, CES did not challenge it and accepted enforcement of the remedial order. Lastly, the ALJ found that Windemuller and CES jointly determined essential employment terms for electricians referred by CES, labeling them as joint employers, a finding that Windemuller did not contest nor deny liability for CES's illegal questioning of Patterson.

Enforcement of the order against Windemuller is partially granted, specifically regarding the interrogation of Darwin Patterson and the layoff of employees Thomas Sosnowski, Steven Tishhouse, and Larry Ketchum. However, enforcement is denied for all other aspects. Senior Circuit Judge Wellford concurs with the majority opinion except for Part III C, where he dissents regarding the classification of Windemuller Electric, Inc. and Construction Employment Services, Inc. (CES) as joint employers. He expresses concerns over the characterization of Windemuller as a joint employer, highlighting that its principals acted independently and noting the irony of being tagged as such for seeking to hire minority employees.

Wellford agrees with the enforcement related to Patterson's interrogation but disagrees with the enforcement concerning the layoff of the three CES employees, arguing that their temporary employment (one to four weeks) and the potential violation were minimal. He finds no evidence of a coercive environment at Windemuller against union activities. Furthermore, he points out that Windemuller has operated on an open-shop basis since 1970, with no substantial union activity since then. He notes that a union member, Alan, was treated fairly by Windemuller despite his union affiliation and received a merit pay increase. Additionally, the timing of a significant call related to the case is emphasized as an important factor.

Mr. Tillman testified that he instructed Mr. Quick to report for reassignment on Friday, a detail omitted from a prehearing affidavit prepared by an NLRB representative. After informing Patterson of his hiring, Tillman inquired if Patterson was affiliated with a union, to which Patterson replied he was not. Tillman suggested that while Patterson could lie about it, he often could discern truthfulness through conversation. On September 20, Tillman reviewed journeyman electrician Keith Wolfsen's application, noting a lack of current professional affiliations. When asked, Wolfsen mentioned his membership in the RESCS, but Tillman did not pursue further inquiries. CES did not participate in the enforcement proceedings. Windemuller argued for the removal of stickers based on marketing and safety concerns; however, the ALJ found no substantial evidence supporting these claims. The excerpt references the Fifth Amendment, emphasizing its importance alongside other constitutional rights. Lastly, CES, established in May 1989, has not been confirmed as still operational, given its absence from the proceedings.