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Behring International Inc. v. National Labor Relations Board

decided: April 7, 1982.



Before Gibbons, Weis and Garth, Circuit Judges.

Author: Weis


One of the most persistent sources of labor litigation is the controversy that arises when an employee's discharge is based on dual motives-one being a legitimate business consideration and the other antiunion animus. In an effort to resolve the recurring controversy over its approach to this problem, the National Labor Relations Board adopted a rule which permits a finding of a violation if the employee would not have been discharged but for his union activity. Wright Line, a Division of Wright Line, Inc., 251 N.L.R.B. 1083 (1980). As part of its rule, the Board shifts the burden of proof on this issue onto the employer after the General Counsel has established a prima facie case. We conclude that the Board's causation test is right, but that the procedural aspect is wrong because it runs afoul of statutory provisions on the burden of proof. Since the Board misallocated the burden in this case, we remand for further consideration.

On March 13, 1977, Teamsters Local No. 478 began an organizing campaign at a warehouse operated by Behring International in Edison, New Jersey. A majority of the warehouse employees voted against the union in the election held on April 25, and no objections were filed. About ten days after the election, however, three employees were laid off, followed by five more on June 3. Meanwhile, on May 26, Behring subcontracted for replacement labor with an outside firm.

On July 26, the union charged Behring with unfair labor practices and, after a hearing, an ALJ found against the company. The Board affirmed the findings of the ALJ, issued a cease and desist order and, in addition, directed reinstatement of the employees with back pay.

The ALJ found that the company violated § 8(a)(1) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1) (1976), on several occasions before and shortly after the election.*fn1 In one instance, two employees, acting as agents for the company, convened a meeting of their fellow workers during business hours at the warehouse. The two employees told the workers that they would be better off without a union, and said that the company would subcontract their work or close the plant if the union were voted in. They also solicited a document requesting that the union petition be withdrawn.

After the meeting, the company established a grievance committee, an action which the ALJ categorized as a pre-election benefit. The company had already reclassified three receiving clerks to higher-paid positions in the week after the election petition was filed, and later granted an across-the-board pay raise at a point when objections to the election would still have been timely.

Another § 8(a)(1) violation was found to have occurred when the company diverted freight to a facility owned by a different firm in order to emphasize that work was slow and jobs were in jeopardy. The company also intimated that the employees might lose their stock option and profit-sharing plans, as well as their pension benefits, if the union won the election. Finally, three days before the election, a supervisor interrogated an employee to discover the names of the persons who had started the union's organizing effort and to learn how each of the employees would vote.

The ALJ also found that the eight discharges and the decision to subcontract violated § 8(a)(3) of the Act, 29 U.S.C. § 158(a)(3) (1976).*fn2 Behring had argued that its actions were prompted by a severe decline in business at the warehouse, and the ALJ agreed that "subcontracting the warehouse labor ultimately could be financially beneficial." Nevertheless, he concluded that "although the Respondent eventually could have reduced its costs by laying off most of its own warehouse employees and by subcontracting their work ..., the Respondent was motivated, at least in part, in so doing at that time by a desire to reduce the possibility of another union election in the future."

With one minor exception, the Board affirmed the findings of the ALJ and adopted his recommendations, determining that the company's economic defense to the § 8(a)(3) charges "failed to rebut the General Counsel's prima facie case" of unlawfully motivated discharges. To support this conclusion, the Board referred to its ruling in Wright Line, a Division of Wright Line, Inc., 251 N.L.R.B. 1083 (1980).

Behring raises three contentions on appeal. First, it claims that the § 8(a) (1) findings are not supported by substantial evidence and rest upon erroneous credibility determinations by the ALJ. Second, it asserts that it was denied a fair hearing because the ALJ revoked a subpoena duces tecum served on a Board agent who had investigated an earlier charge against the company. Third, it attacks the Board's Wright Line test for § 8(a)(3) violations as improperly shifting the burden of proof on the issue of the company's motive for discharging its employees and subcontracting its work.

We see no need to discuss the § 8(a)(1) violations at length. Behring strongly contests the findings of the ALJ and we might well have come to a different conclusion had we tried the case in the first instance. Our role, however, is limited to determining whether there is substantial evidence in the record as a whole to support the Board's findings of fact. 29 U.S.C. § 160(e) (1976). Similarly, credibility resolutions generally rest with the ALJ when he considers all the relevant factors in his explanation. Edgewood Nursing Center, Inc. v. NLRB, 581 F.2d 363, 365 (3d Cir. 1978). Since we cannot say that substantial evidence is lacking here, we must reject the company's challenges to the § 8(a)(1) findings.

As for the subpoena, Behring surmised that the testimony and notes of the Board agent would reveal admissions impeaching the credibility of the General Counsel's witnesses. The agent had secured statements from employees in the course of investigating an earlier charge that had been withdrawn for cause. At the hearing, however, the ALJ revoked the subpoena after the company was given access to the statements obtained from the witnesses. The Board upheld the ALJ's action because the information sought by Behring fell within the " "limited evidentiary privilege which protects the informal investigatorial and trial-preparatory processes of regulatory agencies ...

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