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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. ยงยง 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 ...

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