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Stein Seal Co. v. National Labor Relations Board

decided: September 4, 1979.



Before Adams, Rosenn and Higginbotham, Circuit Judges.

Author: Higginbotham


Stein Seal Company ("the Company") petitions for review of a final order of the National Labor Relations Board ("the Board") finding that it committed unfair labor practices by threatening to retaliate against employees because of their union activity, by restricting employee Ihor Shapolowenko's in-plant movements in order to stop his union discussions and by discharging Shapolowenko because of his union activity. The Board filed a cross-application for enforcement of its order. The petition for review will be denied and we will enforce the Board's order insofar as it relates to violations of Section 8(a)(1) of the National Labor Relations Act, as amended, ("the Act"), 29 U.S.C. ยง 158(a)(1),*fn1 arising from the implied threat of retaliation and the restriction of Shapolowenko's in-plant movements. We will deny enforcement of the order relating to the discharge of Shapolowenko.


Stein Seal Company is engaged in the engineering, development and manufacture of custom shaft seals at its plant in Philadelphia. It employs seventy persons, approximately forty-nine of whom are production or maintenance employees. The unfair labor practice charges involved in this appeal arose from the unsuccessful efforts of District 1, International Association of Machinists and Aerospace Workers, AFL-CIO ("the union") to organize the Company's production and maintenance employees.

The Regional Director for the Fourth Region of the Board, in response to an amended charge filed by the union, issued a complaint against the Company which charged that it was guilty of seven unfair labor practices: during a speech to employees, Dr. Philip C. Stein, the founder, president and co-owner of the Company, threatened to close the plant if the union won the election; Dr. Stein made a similar remark to Ed Goldring, a vice president of the Company, and William Drisch, an employee, which was overheard by another employee, Fred Torzon; Dave Baumann, a supervisor, made coercive statements to Walter Waerig and Ihor Shapolowenko, two employees who supported the union; Tie Eldridge, a supervisor, unlawfully interrogated William Bryan, an employee; Dr. Stein threatened retaliation against Shapolowenko during a speech to the employees; the Company unlawfully restricted Shapolowenko to his work area during the election campaign; and Shapolowenko was discharged by Dr. Stein after the election because of his union activities. The Company denied all the unfair labor practice allegations.

A hearing on the charges was held before an administrative law judge who found that the Company had violated Section 8(a)(1) of the Act by the following acts: Dr. Stein's statement in a speech to employees that he had received offers to buy the business; Baumann's conversation with Waerig and Shapolowenko; and Eldridge's interrogation of Bryan. He dismissed the complaint, however, insofar as it alleged that Dr. Stein stated in the presence of Torzon that he would close the plant if the union won the election. He also concluded that Dr. Stein had not threatened retaliation against Shapolowenko and that the Company acted lawfully when it instructed Shapolowenko not to leave the inspection room to obtain supplies since it was not required to permit him to solicit or campaign for the union on company premises during work time. Finally, he concluded that Shapolowenko was discharged not because of his union activities but because of what Dr. Stein considered in the heat of an argument to be misconduct.

The Board affirmed the findings and conclusions of the administrative law judge with three exceptions. Contrary to the administrative law judge, the Board found that the Company violated Section 8(a)(1) by Dr. Stein's statements that impliedly warned of retaliation against employee union activity and by restricting Shapolowenko's work movements in order to stop his union discussions. The Board also found that the Company discharged Shapolowenko because of his leading role in the union activity. These three findings by the Board are the subject of this appeal.


During the union campaign, three captive audience meetings were held at which Dr. Stein addressed the employees. At the second meeting, Dr. Stein discussed the opportunities the Company's employees had open to them and specifically mentioned the progress made by Ihor Shapolowenko. He pointed out that Shapolowenko began his employment with the Company with no particular experience at.$2.80 per hour and had progressed to $5. per hour. According to Dr. Stein's testimony, Shapolowenko had received seven or eight raises since joining the Company, and thus he had been given "full opportunity to develop himself." Transcript of Hearing, Appendix at 170a. He then stated:

I said of course I don't know whether we can expect gratitude, but I don't feel that someone ought to bite the hand that feeds him, and I have a fingertip that is missing and I held up my hand and said, "I have one finger that is missing, and I think I ought to pull it back before I get the rest of them nibbled off".

Id. Based on the testimony of two employees, credited by the administrative law judge, Stein analogized Shapolowenko's lack of gratitude to that of a dog who bites the hand that feeds him. Decision of Administrative Law Judge ("ALJ Decision") at 4 n. 6, Reproduced in Appendix at 289 n. 6. The administrative law judge concluded, however, that "nothing in Dr. Stein's words . . . constituted a threat to retaliate. His words, at most, were expressions of disappointment, annoyance and, perhaps, disgust." Id. at 290a.

The Board disagreed and concluded that "(t)he unmistakable impression left on the audience was that the ungrateful Shapolowenko or any employee who did likewise would thereafter be treated differently." Decision and Order of National Labor Relations Board ("Board Decision") at 2, Reproduced in Appendix at 307a. It held that these statements ...

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