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National Labor Relations Board v. Armcor Industries Inc.


filed: May 1, 1978.



Author: Rosenn

Before ROSENN and HIGGINBOTHAM, Circuit Judges and VAN ARTSDALEN, District Judge*fn*

ROSENN, Circuit Judge

For the second time since 1974 the National Labor Relations Board ("Board") is before this court seeking enforcement of an order requiring Armcor Industries, Inc., ("Armcor") to bargain with the United Electrical, Radio, and Machine Workers of America ("UE"). In the initial petition for enforcement in this case, we concluded that there was substantial evidence to support the Board's finding that Armcor had engaged in unfair labor practices. We granted the Board's petition for that part of its order requiring the company to cease and desist from such practices and granted as well the part reinstating two unlawfully discharged employees with back pay.N.L.R.B. v. Armcor Industries, Inc., 535 F.2d 239 (3d Cir. 1976). However, we denied enforcement of the Board's order requiring the company to bargain because of the Board's failure to clearly articulate the basis for the order.

We remanded the case to the Board for "further analysis and findings on the necessity for a bargaining order," and instructed the Board to "consider whether present conditions at the plant are still so contaminated as to warrant" such an order. Id. at 246. The Board, however, has disregarded our mandate and almost two years later has again petitioned for enforcement of a bargaining order on nothing more than it originally presented to us. The petition fails to consider the present conditions at Armcor and ignores the rights of the substantially expanded workforce which has developed at the plant since the time of the original order. Because the Board's conclusions are totally speculative, because no further evidence was taken by the Board and, because the Board has not given adequate consideration to the policy favoring a free election over a bargaining order, we once again must deny enforcement.


In May of 1974, the UE acquired signed authorization cards from nineteen of Armcor's twenty-three employees. In response to the proposed unionization of its plant, Armcor instituted a counter campaign which included coercive interrogation of employees and threats of economic reprisals, including a threat to close the plant. Armcor further created the impression of surveillance, encouraged activity by a rival labor organization, and promised benefits to employees if they refrained from participation in union activities. In addition, the company discharged two employees, one of whom was Michael Rossi, a prominent union activist. The Board found these actions to constitute violations of sections 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1), 158(a)(3) (1970), and ordered Armcor to cease and desist from its unfair labor practices, reinstate the dismissed employees with back pay, and begin immediate bargaining with the union.

When we remanded the case to the Board, we specifically instructed it to justify the bargaining order in light of the conditions existing at Armcor at the time of the remand and the preference for a free election. N.L.R.B. v. Armcor Industries, Inc., supra, 535 F.2d at 246. Instead the Board has given us an elaborate explanation of why the initial bargaining order would have been necessary at the time of the unfair labor practices. The failure to address the current conditions as required by our mandate is fatal to the petition now before us.

The Board has maintained throughout this proceeding that the present conditions at Armcor should be given minimal weight in assessing the need for a bargaining order.The Board contends that bargaining is warranted if sufficient reason for an order existed at the time of the unfair labor practice. We reject this contention and hold that this court will not enforce a bargaining order issued after a remand unless the Board has given full consideration to the changed circumstances at the plant at the time of the remand. The Board must demonstrate that the effects of the unfair labor practice linger after the changed circumstances and that such effects make a bargaining order necessary. See N.L.R.B. v. American Cable Systems, Inc., 427 F.2d 446 (5th Cir.), cert. denied, 400 U.S. 957 (1970). An assessment of the Board's basis for a bargaining order here, reveals inadequate consideration of the changed circumstances at Armcor.*fn1


At the time of Armcor's unfair labor practices, the union had obtained authorization cards from nineteen of the twenty-three hourly employees at the plant - the four non-signatories apparently were relatives of the management. By the time of the remand in this case, Armcor had expanded by almost 49% to 34 hourly employees. Of this new workforce, only eight employees had previously signed cards. The reason for the departure of the other signatories does not appear in the record. The Board asserts that the employees may have left because of Armcor's prior anti-union activities; Armcor contends that the employees left voluntarily to seek opportunities elsewhere. By December 31, 1977, Armcor was a substantially different company than it was at the time of its labor violations.*fn2 The record also demonstrates that Armcor has fully complied with the orders issued by the Board, has reinstated with back pay or offered reinstatement to the two employees illegally discharged, and has not committed any other unfair labor practice since its original transgression.

With these additional circumstances, the Board concluded that the violations by Armcor were "sufficiently serious and extensive and their effects so lingering, that in all of the circumstances of this case" a bargaining order should be issued. Armcor Industries, Inc., 227 N.L.R.B. 1543, 1544 (1977). An analysis of their opinion, however, reveals that this holding is based almost entirely on speculative conclusions concerning the effect that the employer's acts would have had if the workforce at Armcor had remained constant. There is no finding or analysis, other than pure conjecture, as to the effect of the prior illegal activities of the employer on the workforce at the time of our remand.

The Board determined that Armcor's violations were serious and extensive, because of the following factors, all of which were before us on the initial petition for enforcement and none of which concern prevailing conditions at the plant at the time of the remand.

(1) The relatively small complement of 23 employees at the plant magnified the impact of the illegal acts;

(2) The fact that five employees had face-to-face confrontations with management increased the impact of the employer's conduct;

(3) The incidents of coercive interrogation were carried out by the President and Vice-President of Armcor, not by lower-level functionaries;

(4) The nature of the violations, including threats of retaliation for union activity and closure of the plant were extremely intimidating;

(5) The impact of the company's unlawful campaign was heightened by the company's immediate action against the union at the first sign of organization;

(6) The short time span of the entire campaign by the union and the employer's response; and

(7) The illegal dismissals of the union's leaders. Armcor Industries, Inc., supra, 227 N.L.R.B. at 1544-45.

These factors, however powerful as a basis for a bargaining order had the workforce remained constant, do not take into account the present conditions at the plant, as required by N.L.R.B. v. Armcor Industries, Inc., supra. The Board recognized this and stated that in conformity with our instructions it would consider present circumstances.

Armcor asked the Board to note two salient facts: (1) that the union had lost its card majority between the time of the unfair labor practices and the remand and (2) that the workforce had changed substantially since the commission of the unfair acts. The Board found no "merit in these arguments." Armcor Industries, Inc., supra, 227 N.L.R.B. at 1545.

As to the current lack of card majority, the Board stated that such a state of affairs could be seen as proof that Armcor's illegal activities caused the employee's support for the union, once dissipated, to remain dormant. Id. As to the turnover of employees, the Board stated that eight of the original employees remained at the plant, including the primary union organizer who was discriminatorily discharged and reinstated with back pay. The Board found that his presence made it "reasonable to infer" that the activist's enthusiasm and the enthusiasm of the other employees "has been, and will continue to be, dampened by the recollection of the company's unswerving and unlawful opposition to their efforts on behalf of the union." Id.*fn3 Furthermore, the Board thought it reasonable to infer that the former cardholders would relate to the new employees their experience as to the company's likely hostile response to union activism. Therefore, the Board concluded that the changes at the Armcor plant were insufficient to dispel the taint of the unfair labor practices.


The Board's "analysis" of the present conditions at the Armcor plant is nothing more than a subjective interpretation of the facts. We asked the Board for further analysis and findings; yet the Board made no investigation into the present conditions at the plant or the structure of the workforce, interviewed no witnesses, and decided the case solely on the statements of counsel. Such indifference is in no way responsive to our mandate.

The Board might as easily have speculated that the reinstatement of the illegally dismissed employees with back pay would boost employee confidence in their ability to organize, because it would demonstrate that employer misconduct is not tolerated. Similarly, the Board could have noted that the lack of a card majority was not caused by the illegal actions of the employer, but was caused, at least in part, by natural attrition. That these explanations are at least as plausible as those accepted by the Board indicates that the Board has not given us an adequate justification for the order to bargain. The Board should have undertaken additional steps as directed by our mandate to ascertain whether conditions at the plant at the time of remand were still so contaminated as to warrant a bargaining order, knowing that secret elections are the preferred method of ascertaining whether a union has majority support. N.L.R.B. v. Gissel Packing Co., 395 U.S. 575, 602 (1969).

The expertise of the Board requires due deference on our part, but as our recent case of N.L.R.B. v. Craw, 565 F.2d 1267 (3d Cir. 1977) (per curiam) (refusal to enforce bargaining order of the Board) demonstrates, we will not abdicate our reviewing powers. In Craw, we reiterated the admonition of Armcor that the Board must "make specific findings" and "clearly explicate the basis" of its decision to issue a bargaining order. Id. at 1271. We reaffirmed our statement in Hedstrom v. N.L.R.B., 558 F.2d 1137 (3d Cir. 1977) that we would not enforce a bargaining order which merely characterizes an unfair labor practice as "extensive" and "far-reaching." Id. The Board's consideration of the present circumstances confronting Armcor is nothing more than mere hypothesis by the Board and is not sufficient to provide the detailed findings and analysis demanded by Armcor and Craw.

In Armcor we stated that present conditions should be considered in conjunction with the knowledge that "'secret elections are generally the most satisfactory - indeed the preferred method of ascertaining whether a union has majority support.'" N.L.R.B. v. Armcor Industries, Inc., supra, 556 F.2d at 246, citing, N.L.R.B. v. Gissel Packing Co., supra, 395 U.S. at 602. At the time of the remand, 26 of the 34 employees at Armcor were not present when the unfair labor practices were committed.If the company were ordered to bargain, none of these employees will have had an opportunity to state a preference for or against the union. All will be conscripted regardless of their desires. The Board expresses concern whether the past union organizers will once again pick up the gauntlet in view of their previous experience - the Board even speculates that the former activists will discourage union activity. This simply is not the issue. It ignores the teaching of Gissel that a bargaining order is an extraordinary remedy and must only be made when a fair election cannot be held. Nothing the Board states demonstrates the improbability of a fair election. Neither Armcor nor any other labor law infractor deserves protection from the consequences of its actions, but employees deserve and have the right to freely express their choice for or against a union by secret ballot, except in the extraordinary circumstances described in Gissel .

Unless the Board can demonstrate that the present employees are so intimidated that they probably cannot make a knowing and free choice in a supervised election, we should not enforce a bargaining order. We do not mean by this that we will not enforce a proper bargaining order of the Board entered at the time of its finding of an unfair labor practice. In fact, had the Board properly supported its bargaining order in the first instance, or had conditions at Armcor continued as they were at the time of the illegal activities, we would not have hesitated in enforcing the bargaining order.*fn4

For the foregoing reasons, we will deny enforcement. The cause will be remanded for proceedings not inconsistent with this opinion.

HIGGINBOTHAM, Circuit Judge, dissenting

After remand of this case to the Board pursuant to our decision in Armcor I, 535 F.2d 239 (1976), the Board issued a supplementary decision and order reaffirming its April 11, 1975 order which required Armcor to bargain with UE. Upon remand the Board concluded:

In view of the presence here of a card majority in favor of the Union, we do not have to resolve the issue of whether or not the company's unlawful practices standing alone are sufficient to place this case in the category of "exceptional cases" described by the Gissel Court. Even assuming, arguendo, that the Company's violations of the Act cannot be fairly characterized as "outrageous," they are nonetheless sufficiently serious and extensive, and their efforts so lingering, that in all the circumstances of this case it is plain that "employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order." Gissel, 395 U.S. at 614-615.

227 N.L.R.B. No. 231, 5 (1977). I would hold that the Board has provided sufficient findings and analysis to warrant our enforcement of the Board's bargaining order.

This case has been in progress since May 31, 1974, when Michael Rossi filed charges against Armcor. I agree with the majority that the passage of time since the Board's original order to bargain in April, 1975, and the reaffirmance of its order in January, 1977, must be addressed by the Board. Yet, imposing upon the Board, as the majority does, a requirement that it acquire further evidence of the present conditions at the plant and interview witnesses is impracticable and not required by the Supreme Court's Gissel opinion.

In Gissel, 395 U.S. at 612, 89 S. Ct. at 1939, the Court stated that a bargaining order is designed for the twin purposes of remedying past election damage and deterring future employer misconduct. The greatest concern for the Board in fashioning an appropriate remedy is the assurance of employee free choice.The Board's January 26, 1977 decision demonstrates that it has adequately considered the facts of this case in fashioning the appropriate remedy.

Several factors present in this case demonstrate that, as a result of the employer's unlawful conduct, the laboratory conditions necessary to ensure a fair election are not present. The union had a sufficient card majority after obtaining nineteen signed authorization cards out of a total "rank and file" employee population of twenty-three. The prominent union activist, Rossi, was unlawfully discharged for such an extended period of time that a substantial back pay award in the amount of approximately $15,000 (including interest) was warranted. An election was never held in the plant; yet, the strong card majority, once present, would indicate that UE could have been successful.

Armcor urges that since it has given back pay to the unlawfully discharged employee, Rossi, its "effective legal response... can do nothing else but give other employees assurance that they, if [they] wish, may have the UE, or any other union." Compliance with a court order does not necessarily dispel the past effects of an employer's misconduct; Armcor had no alternative but to obey the orders of the court. Perhaps Armcor's compliance with this Court's order merely means to some employees that if they are unlawfully fired and if they are willing to forego wages for a substantial period of time the company will eventually reinstate them with back pay if ordered to do so by the Board and if that order is enforced by this court.

The majority carefully discusses employee turnover at the Armcor plant; however, they have omitted one salient factor in concluding that as of December 31, 1977, "Armcor was a substantially different company." Although the plant's workforce has changed, it was conceded at oral argument that the same president and vice-president who violated the law in 1974 still hold the same offices. The impact of their actions in what is still a relatively small workforce is more than "pure conjecture" as characterized by the majority.

The majority has criticized the Board for not making further factual findings as to the present conditions at the Armcor plant. My colleagues do not maintain that the Board's, in their words, "subjective interpretation" is erroneous. Instead, the majority states that there are other explanations that are "at least as plausible" as those offered by the Board. Because I find no basis for requiring the Board to conduct additional factual inquiries, I would accept the Board's interpretation of the possible impact of Armcor's past unlawful conduct on the present employees. In this case, although this court may posit the possibility that a traditional remedy may be adequate, I find no basis for rejecting the Board's finding that the employees would "on balance, be better protected by a bargaining order." Gissel, 395 U.S. at 614, 89 S. Ct. at 1940.

We must be mindful of the Supreme Court's statement in Gissel, 395 U.S. at 612, 89 S. Ct. at 1939 n.32:

In fashioning its remedies under the broad provisions of § 10(c) of the Act (29 U.S.C. 160(c)), the Board draws on a fund of knowledge and expertise all its own, and its choice of remedy must therefore be given special respect by reviewing courts. See Fibreboard Paper Products Corp. v. NLRB, 397 U.S. 203, 85 S. Ct. 398, 13 L. Ed. 2d 233 (1964). "[It] is usually better to minimize the opportunity for reviewing courts to substitute their discretion for that of the agency." Consolo v. FMC, 383 U.S. 607, 621, 86 S. Ct. 1018, 1027, 16 L. Ed. 2d 131 (1966).

Armcor did engage in unfair labor practices and the Board has carefully analyzed why these practices could have a sufficiently continuing impact upon the employees to warrant a bargaining order. Unlike the majority I find the Board's analysis adequate to show that a bargaining order is now warranted; to do otherwise, would entail the substitution of our discretion for that of the Board.*fn1

In Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 46 U.S.L.W. 4301, 4302 (U.S. April 3, 1978), the Supreme Court emphasized that some recent decisions of the courts of appeals have "seriously misread or misapplied [the] statutory and decisional law cautioning reviewing courts against engrafting their own notions of proper procedures upon agencies entrusted with substantive functions by Congress." With all respect and deference to my distinguished colleagues, I believe that they have here disregarded that admonition.

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