Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Jeannette Corp. v. National Labor Relations Board

filed: March 22, 1976.



Seitz, Chief Judge, Gibbons and Rosenn, Circuit Judges.

Author: Rosenn


ROSENN, Circuit Judge

Petitioner, Jeannette Corporation (the Company) discharged an employee, Cheryl McNeely, for discussing wages with other employees in violation of a company rule prohibiting employees from discussing wage rates among themselves, and for allegedly misrepresenting that she had received a salary increase. The National Labor Relations Board (the Board) found that McNeely's actions constituted concerted activities within the protection of Section 7 of the National Labor Relations Act, 29 U.S.C. § 157 (1970), and that the Company's rule inhibits organizational activities among its employees. Accordingly, the Board held that both the discharge and the rule violate Section 8(a)(1) of the Act, 29 U.S.C. § 158(a)(1) (1970). The Company has petitioned to review these findings and set aside the Board's order that McNeely be reinstated and that the Company cease and desist from enforcement of its rule. The Board has cross-petitioned for enforcement.*fn1 We hold that the rule was invalid and the discharge violated the Act.

The Company, a manufacturer of glass, ceramic, and plastic products, employs at various locations in its plant clerical workers who are salaried and not represented by any labor organization. Its rule prohibiting discussion of wages has been in effect for a number of years, but was never reduced to writing. Despite the rule, it appears that salaries prevailing at the plant were frequently a topic of discussion among the employees.

McNeely was hired on July 15, 1974, at a salary of $435 per month to serve primarily as secretary to Vice-President Mallory. At that time, she was informed that the $435 "was only a starting salary" which would be increased as soon as she demonstrated her ability to handle the job. Within less than two months after she began work, McNeely became unhappy with what she regarded as her low wages. Between the latter part of August and her termination on September 6, she had several conversations with Debra Groves and Paula Caranese, also secretaries, concerning the low clerical salaries paid by the Company. Almost every day during that period, McNeely spoke with Groves, usually in the ladies' room before work and sometimes at Groves' desk. Both of them used these occasions to express their dissatisfaction with the prevailing clerical salaries, and in particular, their own salaries. McNeely encouraged Groves to seek a raise. By August 30, both employees had decided to speak to their respective bosses and "do something about" getting raises.

On September 6, McNeely spoke to Vice-President Mallory and requested a raise. Mallory replied that he would consider the matter. McNeely thereafter informed Groves of her action and Groves responded that she had also requested a raise. McNeely also told Caranese about the request. Caranese, however, became upset by this news and voiced some discontent to her boss, pointing out that she had been with the company for a longer time than McNeely but was making a smaller salary. Her superior reported this conversation to Mallory, who, after discussion with the personnel director, decided to terminate McNeely. She was told that she had broken the Company's policy prohibiting wage discussions among employees. An additional reason given McNeely for her discharge was that she had misrepresented to Caranese that she (McNeely) had in fact received a $100 salary increase, and misrepresented to Mallory that the personnel director had promised her such an increase. In all other respects, the Company found that McNeely's work was "very satisfactory" and that she presented no problems.

The Board first attacks the Company's unwritten rule, claiming that it is an unqualified prohibition of wage discussions among employees. Such discussions, the Board argues, can be an integral part of organizational activity, and a rule banning the exchange by employees of wage information can significantly inhibit the employees' exercise of their Section 7 rights to engage in concerted activities for mutual aid and protection.

Rules governing the conduct of employees on company time and property are often necessary and an employer has a right to maintain them. This right, however, is not "unlimited in the sense that [it] can be exercised without regard to any duty which the existence of rights in others may place upon [the] employer . . . . Opportunity to organize and proper discipline are both essential elements in a balanced society." Republic Aviation Corp. v. National Labor Relations Board, 324 U.S. 793, 798, 89 L. Ed. 1372, 65 S. Ct. 982 (1945).

It is obvious that higher wages are a frequent objective of organizational activity, and discussions about wages are necessary to further that goal. "The right of self-organization depends in some measure on the ability of employees to learn the advantages of self-organization from others." N.L.R.B. v. Babcock & Wilcox Co., 351 U.S. 105, 113, 100 L. Ed. 975, 76 S. Ct. 679 (1956). That is not to say that every wage discussion is protected activity.*fn2 It is sufficient for finding the rule prima facie violative of section 8(a)(1) to note that wage discussions can be protected activity and that an employer's unqualified rule barring such discussions has the tendency to inhibit such activity. Cf. N.L.R.B. v. Burnup & Sims, Inc., 379 U.S. 21, 23, 13 L. Ed. 2d 1, 85 S. Ct. 171 (1964); N.L.R.B. v. Hudson Transit Lines, Inc., 429 F.2d 1223, 1227 (3d Cir. 1970).

Once it is established that the employer's conduct adversely affects employees' protected rights, the burden falls on the employer to demonstrate "legitimate and substantial business justifications" for his conduct. N.L.R.B. v. Fleetwood Trailer Co., Inc., 389 U.S. 375, 378, 19 L. Ed. 2d 614, 88 S. Ct. 543 (1967); N.L.R.B. v. Jemco, Inc., 465 F.2d 1148, 1152 n.7 (6th Cir. 1972). In weighing the justifications offered by the employer, we must heed the Supreme Court's admonition that "[it] is the primary responsibility of the Board and not of the courts 'to strike the proper balance between the asserted business justifications and the invasion of employee rights in light of the Act and its policy.'" N.L.R.B. v. Fleetwood Trailer Co., supra, 389 U.S. at 378, quoting N.L.R.B. v. Great Dane Trailers, 388 U.S. 26, 33-34, 18 L. Ed. 2d 1027, 87 S. Ct. 1792 (1967).

The only evidence in the record tending to justify the rule is the testimony of Vice-President Mallory. Mallory opined that "spending one's time standing around discussing salary is . . . a waste of time, [and] secondly, it is a disruptive thing . . . ." The Company's brief argues that the rule limits "jealousies and strife among employees."

The first part of Mallory's testimony suggests that the rule is intended to insure that employees work during working hours. An employer might adopt and enforce a rule prohibiting employee wage discussions during working time, in the absence of evidence that it was adopted for discriminatory purposes. Cf. Republic Aviation Corp. v. N.L.R.B., supra, 324 U.S. at 803 n.10. A rule barring wage discussions among employees without any limitation as to time or place would presumably forbid employee discussions on breaks, in waiting time, before and after hours of work, during luncheons, and in restrooms. ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.