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Frito-Lay Inc. v. National Labor Relations Board

decided: September 26, 1978.



Before Aldisert, Van Dusen and Hunter, Circuit Judges.

Author: Hunter


Frito-Lay, Inc. petitions for review, and the National Labor Relations Board (Board) cross petitions for enforcement, of the Board's decision holding that Frito-Lay committed unfair labor practices arising out of a union representation election. The Board found that Frito-Lay violated sections 8(a) (1), (3), and (5) of the National Labor Relations Act, 29 U.S.C. ยงยง 158(a)(1), (3), and (5) (1976).*fn1 Since this court finds substantial evidence in the record as a whole to support the sections 8(a)(1) and (5) violations, the cease and desist and bargaining orders will be enforced. However, the section 8(a) (3) violation is not supported by substantial evidence and this court will not enforce the Board's order requiring the reopening of one of Frito-Lay's plants and the reinstatement and award of back pay to the discharged employees.


The dispute involves a manufacturing plant located near Sharon, Pennsylvania, where Frito-Lay produced potato pellets, an intermediate product from which Munchos Brand Potato Crisps are made. Frito-Lay is a corporation employing some 15,000 employees with 37 manufacturing plants of which 18 are union organized.

In June, 1974 Frito-Lay began a process of hiring production and maintenance employees for the Sharon facility. Since the plant was to use an "Open Management" system of employee organization,*fn2 the job applicants were screened for their ability to adapt to this structure. After the Sharon plant had been prepared for opening but before the commencement of production, Frito-Lay noted a decrease in demand for the Munchos product. Nevertheless, it decided to open the Sharon facility in September, 1974.

Demand for Munchos continued to decrease. In December, 1974 Frito-Lay began studies concerning the shutdown of the Sharon plant. In January, 1975 a study by engineering personnel and management officials recommended that Sharon be closed. However, no final decision was made at that time.

The union organizing campaign began during the first week of February, 1975. By February 6, 1975 the Union had obtained authorization cards from 21 of the 41 employees. The next day, Union Representative Frank Scalish advised the Sharon plant manager of the Union's majority status and requested recognition. The request was refused. On February 18, 1975 Frito-Lay Vice President for Labor Relations, Leonard Clegg, indicated his desire to resolve the issue by a representation election. By February 20, 1975 the Union had obtained authorization cards from seven additional employees raising its total to twenty-eight. In late February, 1975 the company agreed to a consent election which was later scheduled for March 18 and 19, 1975.

During February and March, 1975 the company conducted a series of meetings and discussions with employees out of which many of the alleged section 8(a)(1) violations arose. Also in late February, 1975, Frito-Lay announced a twenty-five cents per hour across the board raise in pay which first appeared in the employees' paychecks on March 14, 1975.

The Union lost the representation election by a vote of 22 to 17. Shortly thereafter, the Union filed objections to the election and unfair labor practice charges against Frito-Lay. In April, 1975 Frito-Lay decided to close the Sharon plant. The decision was announced to the employees on May 14, 1975 and production ceased in early June, 1975. The company continued to manufacture the potato pellets at a plant (Brookhollow II) in Dallas, Texas where they had also been manufactured before and during the operation of the Sharon facility.

The Administrative Law Judge (ALJ) found that Frito-Lay had committed acts which violate sections 8(a)(1), (3), and (5) of the Act. He issued an order to Frito-Lay to cease and desist from certain unlawful practices, to pay limited back pay to former employees of the plant, to establish a preferential hiring list for former Sharon employees at other Frito-Lay facilities, and if Frito-Lay reopened the Sharon facility, to reinstate the former employees and to bargain with the Union.

The Board, in addition to the violations found by the ALJ, ruled that the decision to close the plant was itself a section 8(a)(3) violation. It ordered that the plant be reopened, that back pay be awarded to former employees for the entire time that the plant had been closed, and that Frito-Lay ...

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