PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

NATIONAL LABOR RELATIONS BOARD,
Petitioner,

UNION OF NEEDLETRADES,
INDUSTRIAL AND TEXTILE EMPLOYEES,
AFL-CIO, CLC,
                                                                     No. 98-1137
Intervenor,

v.

FLAMBEAU AIRMOLD CORPORATION,
Respondent.

On Application for Enforcement of an Order
of the National Labor Relations Board.
(11-CA-17591)

Argued: October 26, 1998

Decided: May 26, 1999

Before WILKINS and NIEMEYER, Circuit Judges, and
BLAKE, United States District Judge for the
District of Maryland, sitting by designation.

_________________________________________________________________

Petition for enforcement granted by published opinion. Judge Blake
wrote the majority opinion, in which Judge Wilkins joined. Judge
Niemeyer wrote a dissenting opinion.

_________________________________________________________________

COUNSEL

ARGUED: David Arthur Fleischer, NATIONAL LABOR RELA-
TIONS BOARD, Washington, D.C., for Petitioner. John Raymond
Sapp, MICHAEL, BEST & FRIEDRICH, L.L.P., Milwaukee, Wis-
consin, for Respondent. David Malcolm Prouty, UNITE, AFL-CIO,
CLC, New York, New York, for Intervenor. ON BRIEF: Frederick
L. Feinstein, Acting General Counsel, Linda Sher, Associate General
Counsel, Aileen A. Armstrong, Deputy Associate General Counsel,
NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Petitioner. Jonathan O. Levine, Mark E. Toth, MICHAEL, BEST &
FRIEDRICH, L.L.P., Milwaukee, Wisconsin, for Respondent. Jona-
than R. Harkavy, PATTERSON, HARKAVY & LAWRENCE,
Greensboro, North Carolina, for Intervenor.

_________________________________________________________________

OPINION

BLAKE, District Judge:

This case is before the court on the application of the National
Labor Relations Board ("NLRB" or "Board") for enforcement of its
November 1997 order requiring Flambeau Airmold Corporation
("Flambeau") to bargain with the Union of Needletrades, Industrial,
and Textile Employees, AFL-CIO, CLC ("Union") as the exclusive
collective bargaining representative of the employees at Flambeau's
manufacturing facility located in Roanoke Rapids, North Carolina.
Flambeau contends that it need not bargain with the Union because
the certification election in which the Union prevailed was rendered
invalid by a racially inflammatory rumor that spread throughout the
plant the day before the election. Because we conclude that the
Board's decision to certify the Union was reasonable and supported
by substantial evidence, we enforce the Board's order.

I.

Flambeau operates a blow molding plastics plant in Roanoke Rap-
ids, North Carolina. On March 22, 1996, the Union filed an election
petition with the NLRB seeking to represent "[a]ll production, main-
tenance, shipping and receiving employees" at the plant. A secret bal-
lot election under the Board's supervision was held at the plant on
May 2, 1996. The Union won the election by 96 votes to 94 votes.
Flambeau filed timely objections to conduct affecting the results of

                    2
the election. Pertinent to this proceeding, Flambeau contended that
the Union had "made objectionable racial appeals during the initial
pre-election period which interfered with the laboratory conditions
necessary for a free and fair election." A hearing was held on June 12-
13, 1996, before an NLRB Hearing Officer in order to resolve the
issues raised by Flambeau's objections.

The evidence developed at the hearing revealed that on May 1,
1996, the day before the election, a rumor began to circulate among
Flambeau's employees to the effect that during a supervisor's meeting
held that morning, one of the white managers had referred to employ-
ees as "niggers." Two-thirds of Flambeau's approximately 200
employees are African-American, and the Union campaign had
included what could be interpreted as appeals to racial solidarity.1 The
Hearing Officer found that the rumor had spread widely throughout
the plant prior to the election, but that neither the source of the rumor
nor its truth or falsity could be determined. The Hearing Officer fur-
ther found that both pro-company and pro-Union employees, as well
as both white and black employees, had contributed to the rumor's
spread.

Flambeau's position is that this patently offensive rumor "made
racial hatred an issue in the election" and "so inflame[d] the racial
feelings" of the employees as to render the election fundamentally
unfair. The Hearing Officer below disagreed. Applying a third-party
conduct standard, the Hearing Officer concluded that, although the
rumor "would upset any social[ly] conscious individual," it had not
"destroyed the laboratory conditions necessary for a free and fair elec-
tion" or "aggravate[d] the situation to the point of rendering a free
election impossible." Accordingly, he recommended that Flambeau's
objections to the election be overruled and that a certification of rep-
resentative be issued. The Board adopted the Hearing Officer's find-
ings and recommendations and certified the Union on April 8, 1997.
In its decision, the Board held that "the rumored remark, and the cir-
culation of the rumor on the day of the election, did not so inflame
_________________________________________________________________
1 As the dissent acknowledges, however, up until May 1, 1996, there
was no evidence of any explicit racial appeals and no suggestion that the
employees could not have exercised an uninhibited free choice.

                    3
and taint the atmosphere in which the election was held that a rea-
soned basis for choice was impossible."2

Thereafter, in order to obtain judicial review of the Board's deci-
sion, Flambeau refused to bargain with the Union. The Union
responded by filing an unfair labor practices charge against the com-
pany. On November 7, 1997, the NLRB issued a Decision and Order
finding that Flambeau's refusal to bargain with the Union violated
sections 8(a)(5) and (1) of the National Labor Relations Act, 29
U.S.C. §§ 158(a)(5), (1). Since Flambeau continues to refuse to bar-
gain with the Union on the grounds that it was improperly certified,
the Board now seeks enforcement of its November 1997 order.

II.

The results of a Board-supervised representation election are pre-
sumptively valid. NLRB v. Columbia Cable T.V. Co., 856 F.2d 636,
638 (4th Cir. 1988). This presumption reflects Congress's decision to
"entrust[ ] the Board with a wide degree of discretion in establishing
the procedure and safeguards necessary to insure the fair and free
choice of bargaining representatives by employees." NLRB v. A.J.
Tower Co., 329 U.S. 324, 330 (1946). We may not substitute our
judgment for that of the Board, even if we would have made a differ-
ent decision had the matter been before us de novo. So long as the
Board's decision is reasonable and based upon substantial evidence
in the record considered as a whole, it must be upheld. See 29 U.S.C.
§ 160(e); Universal Camera Corp. v. NLRB , 340 U.S. 474, 488
(1951).

"The Board's stated goal in regulating the conduct of representa-
tion elections is to `provide a laboratory in which an experiment may
be conducted, under conditions as nearly ideal as possible, to deter-
mine the uninhibited desires of the employees.'" Case Farms of North
Carolina, Inc. v. NLRB, 128 F.3d 841, 844 (4th Cir. 1997) (quoting
_________________________________________________________________
2 We believe the dissent is in error when it asserts that in reaching this
decision, the Board did not consider various factors that the Board tradi-
tionally has applied when determining the validity of representation elec-
tions, including the closeness of the vote and the timing of the
misconduct in relation to the election. See Joint Appendix, p. 382.

                    4
General Shoe Corp., 77 N.L.R.B. 124, 127 (1948), enforced, 192 F.2d
504 (6th Cir. 1951)). Although the Board strives to maintain "labora-
tory conditions," a union election "by its nature is a heated affair,"
NLRB v. Herbert Halperin Distrib. Corp., 826 F.2d 287, 290 (4th Cir.
1987), and must be evaluated "in the light of realistic standards of
human conduct," Case Farms, 128 F.3d at 844 (citation omitted).

Where pre-election conduct is alleged to have invalidated a repre-
sentation election, the party seeking to overturn the election, in this
case Flambeau, bears the heavy burden of proving by specific evi-
dence not only that campaign improprieties occurred, but also that
they prevented a fair election. NLRB v. Hydrotherm, Inc., 824 F.2d
332, 334 (4th Cir. 1987). In evaluating such a challenge, less weight
will be afforded the comments and conduct of third parties than those
of the employer or union. Herbert Halperin, 826 F.2d at 290.3 In
Herbert Halperin, which involved alleged threats of violence and job
loss as well as "appeals to racial fears," we held that an election will
be set aside for third-party misconduct "only if`the election was held
in a general atmosphere of confusion, violence, and threats of vio-
lence, such as might reasonably be expected to generate anxiety and
fear of reprisal, to render impossible a rational uncoerced expression
of choice as to bargaining representative.'" Id. (quoting Methodist
Home v. NLRB, 596 F.2d 1173, 1183 (4th Cir. 1979)). This is an
objective test that does not require the Board or the court to examine
the individual thought processes of every employee who may have
been influenced by the alleged third-party misconduct.

In this case, the Board found that neither Flambeau nor the Union
was responsible for starting the unfortunate rumor at issue. Although
supporters of both sides contributed to its circulation around the plant,
this is an inadequate basis for attributing the rumor to either party.
_________________________________________________________________
3 Indeed, the dissent acknowledges the many valid reasons why it is
essential to impose a higher standard for setting aside an election where
third-party misconduct is involved, rather than conduct attributable to the
party who may be benefitted thereby. As explained in Herbert Halperin:
"The obvious reasons are that third parties are not subject to the deterrent
of having an election set aside, and third party statements do not have the
institutional force of statements made by the employer or the union." 826
F.2d at 290.

                    5
The Board's decision to treat the rumor as third-party misconduct,
therefore, was reasonable and supported by substantial evidence. In
light of the test for third-party misconduct enunciated in Herbert
Halperin, supra, we agree with the Board that the rumor "did not so
inflame and taint the atmosphere in which the election was held that
a reasoned basis for choice was impossible." We acknowledge, as did
the Board, that the vote was close, and that there was indirect evi-
dence that one employee's vote may have been affected by the rumor.
That is not sufficient, however, to invalidate the Board's conclusion,
based on all the evidence, that the rumor did not make a free and fair
election impossible.

Contrary to the dissent, we believe that the disposition of this case
is directly controlled by our decision in Herbert Halperin. In Herbert
Halperin, the company challenged the Board's decision to certify the
union following an election "in which racial appeals and animosities
allegedly played some part." Id. at 288. Among the third-party mis-
conduct which occurred in that case were the comments "white sons-
of-bitches" and "goddamn white boys" made by black pro-union
employees about pro-management white employees. Id. at 289. The
company argued that these and other similar comments warranted set-
ting aside the election.4 This court disagreed. While we condemned
the employees' use of racial epithets, we nonetheless held that the
comments did not "suggest an atmosphere inflamed by racial tension"
or "reflect the combination of union involvement and racial, ethnic or
religious prejudice that requires an election to be overturned." Id. at
292-93. We think a similar conclusion is required under the circum-
stances of the present case.

Accordingly, we hold that the Board's decision to certify the Union
was reasonable and supported by substantial evidence in the record as
a whole. The Board's petition for enforcement of its November 1997
order is granted.

IT IS SO ORDERED
_________________________________________________________________
4 We cannot agree with the dissent that the comments made in Herbert
Halperin are any less an appeal to racial prejudice or an expression of
bigotry than the use of the offensive epithet in this case.

                    6
NIEMEYER, Circuit Judge, dissenting:

The majority approves a representation election that was decided
by a single vote in a context where it is virtually certain that a perni-
cious, racially inflammatory rumor, which circulated the day before
the election, materially altered the outcome of the election. According
to the rumor, a member of management, which was predominantly
white, had, during a meeting on the day before the election, called the
employees, who were predominantly black, "a bunch of niggers." If
the facts of this case, which I describe in greater detail, below, do not
meet virtually any standard for setting aside representation elections,
I cannot conceive of any election that would be set aside because of
racially inflammatory conduct.

To affirm the election, the majority has squeezed the facts of this
case under the holding of a single, entirely inapposite case and has
ignored more than 35 years of more relevant precedent from this
court, from our sister circuits, and from published decisions of the
National Labor Relations Board. When applying all of the relevant
precedent, one can come to only one conclusion -- that the represen-
tation election in this case must be set aside.

Applying a standard derived from our precedent, as well as the pre-
cedent of other circuits and the National Labor Relations Board, I
conclude that the rumor in this case (1) represented the type of con-
duct that would inevitably pollute the election atmosphere necessary
for the exercise of choice and (2) undoubtedly altered the outcome of
election in this case. Accordingly, I would deny the Board's applica-
tion for enforcement of its order.

I

At a representation election conducted by the National Labor Rela-
tions Board ("NLRB") at Flambeau Airmold's plant at Roanoke Rap-
ids, North Carolina, on May 2, 1996, the employees voted in favor of
the Needletrades, Industrial and Textile Employees (the "Union"), 96
to 94. After the Board certified the Union as the exclusive collective-
bargaining representative of the employees, Flambeau Airmold
refused to bargain with the Union, contending that the election was
not "free and fair." A Department of Labor hearing officer rejected

                     7
Flambeau Airmold's objections to the election, and the Board, by
order dated April 8, 1997, affirmed the election and certified the
Union as the employees' exclusive collective-bargaining agent. When
Flambeau Airmold refused to bargain with the Union, the Board
issued an order dated November 7, 1997, finding that Flambeau Air-
mold committed an unfair labor practice by refusing to bargain, in
violation of §§ 8(a)(5) and (1) of the National Labor Relations Act,
29 U.S.C. §§ 158(a)(5), (1). 324 NLRB No. 162. On appeal to this
court, the record of the Board certification proceedings was made part
of the record in the unfair labor practice proceeding. See 29 U.S.C.
§ 159(d).

The facts of record are not disputed. The stipulated unit for the rep-
resentation election at the Flambeau Airmold plant consisted of 200
employees, two-thirds of whom were African-American. The Union's
campaign leading up to the election was conscious of this racial
makeup. Union organizers maintained a record of each member-
employee's race and conducted a campaign that invoked both Chris-
tian and civil rights messages. Literature circulated on behalf of the
Union contained numerous citations to the Bible as well as references
to class struggle and the inequity between rich and poor, alluding to
management as masters and employees as workers who"slaved" for
the company. One circulated letter quoted the New Testament, "Mas-
ters, give unto your servants that which is just and equal; knowing
that ye also have a Master in heaven." Another letter stated, "Where
is the respect for the older workers that have slaved so hard for the
company and their customers." Union supporters circulated letters to
employees from the Reverend Jesse L. Jackson and from the Ministe-
rial Alliance for Concerned Citizens. They also circulated letters
referring to Martin Luther King, Jr., Malcolm X, Abraham Lincoln,
and John F. Kennedy. One pro-Union leaflet referred to Flambeau
Airmold's general manager as "`Good Ole' Bill Budzien," and
another appeared to mock Flambeau Airmold by implying that it
wanted its employees to have the following "Qualifications: Weak
minds, Strong backs, Easily controlled, Dedicated to Bill Budzien,
Pro management, High School Diploma (optional)."

The Union also produced a campaign videotape which showed
statements by a number of Flambeau Airmold employees, all of
whom were African-American. It contained footage of African-

                    8
American children and adults going to church, statements by three
African American ministers, including Jesse Jackson, who cited Mar-
tin Luther King and Jesus. It also showed statements by white work-
ers at other plants that were unionized, talking about how their jobs
were better because of unionization. The video combined an appeal
to racial solidarity with appeals based on religion and implied prom-
ises that a union would improve wages and working conditions.

For the period before May 1, 1996, however, the record contains
no evidence of any explicit racial appeals and none of the parties sug-
gests that the employees could not, up until then, have exercised an
uninhibited free choice.

On May 1, 1996, however, one day before the election, the circum-
stances changed. On that day, a rumor circulated at the plant that, at
a supervisors' meeting that morning, a white manager had referred to
the employees as "a bunch of niggers." The rumor, which circulated
quickly and widely, took on different forms. One employee testified
that she was told that plant employees "were almost called a bunch
of niggers." Another employee heard that the word"nigger" was used
in a supervisors' meeting. Another employee testified that a co-
worker told her that "he heard, in the supervisors' meeting that [a
manager] had said the N word." No one knows who started the rumor,
and no evidence was presented that there was any truth to the rumor.
Indeed, the meeting at which the racial slur was reputed to have been
used was attended by an African-American manager who testified
that no such remark was made.

By the time that the election occurred, virtually every employee
knew about the rumor. One pro-Union employee testified that she had
not heard of the rumor, but the hearing officer refused to credit that
testimony. Some of the employees believed the rumor to be true while
others believed it to be false. Plant management also learned of the
rumor, but made an apparently strategic decision not to "mess with
it."

At the hearing on Flambeau Airmold's objections to the election,
the hearing officer suppressed testimony as to how the rumor affected
employees' votes. During Flambeau Airmold's efforts to introduce
such evidence, he stated:

                    9
          Listen, I have directed the -- Mr. Beightol, the counsel for
          the Employer, to not ask questions that would reveal[the
          witness'] sentiments toward unionization, changing her
          mind at any time or what she conveyed to anyone as it
          relates to her feelings toward unionization. I do not see the
          relevancy of that. We're interested in this rumor and this
          rumor alone.

Notwithstanding the hearing officer's position on this type of evi-
dence, testimony was received without objection from an employee
in the unit, Carolyn Banks, that at least one employee in the unit
changed her vote because of the rumor. Banks reported a conversation
she had with Shirley High in which High indicated that she changed
her vote because the rumor was "the last straw for her."

In his findings of fact, the hearing officer did not refer to the testi-
mony of Carolyn Banks, which provided evidence that Shirley High
changed her vote. But otherwise he summarized fully the testimony
of the witnesses and concluded that the "material facts" were not in
dispute. He found that "an unidentified individual" caused the rumor
to circulate on May 1 after the supervisors' meeting ended at 10:00
a.m. He found that no evidence established the origin of the rumor but
that it nonetheless was "widely disseminated in the plant." He noted
that "some employees who were open union supporters contributed to
the circulation of this rumor, but the evidence[did] not support a find-
ing that these employees were agents of the union during this cam-
paign." Accordingly, the hearing officer concluded that the conduct
was not "attributable to either the petitioner or the Employer and there
is no finding that the rumor was either true or false." But the officer
found it undisputed that "a rumor alleging that a company official cal-
led employees `niggers' would upset any social[ly] conscious individ-
ual." He continued, "The word `nigger' is demoralizing, degrading,
and naturally offensive." The officer concluded, however, that the
rumor did not "aggravate the situation to the point of rendering a free
election impossible." He accordingly recommended overruling Flam-
beau Airmold's objection.

On appeal to the NLRB, the Board adopted the factual findings of
the hearing officer and agreed with his recommendation. In doing so,
the Board applied the following standard in upholding the election:

                    10
          We also agree with the hearing officer that the employees'
          circulation of the rumor did not, under the circumstances,
          create an atmosphere of fear and coercion such that a free
          and fair election was not possible. . . . The evidence pre-
          sented by the Employer of the employees' pre-election-day
          circulation of the rumor here does not rise to the level of a
          "sustained appeal to racial prejudice." . . . Moreover, the
          rumored remark, and the circulation of the rumor on the day
          of the election did not so inflame and taint the atmosphere
          in which the election was held that a reasoned basis for
          choice was an impossibility.

(Emphasis added).

II

Flambeau Airmold contends on appeal that the Board failed to take
a proper account of the facts by employing the wrong legal standard
for determining whether the representation election was accurate in
determining the desires of the employees. It does not challenge the
hearing officer's factual findings, but only the application of those
findings to the law.

In upholding the election, the Board applied a standard which
required it to find that the third-party conduct rose to the level of a
"sustained appeal to racial prejudice" which so "inflamed and tainted"
the atmosphere before the election that any "reasoned basis for choice
was an impossibility," or which so created "an atmosphere of fear and
coercion such that a free and fair election was not possible." In apply-
ing this standard, the Board did not consider the factors that it had
applied over the years when determining the validity of elections.
These factors include (1) the closeness of the vote, (2) the timing of
the misconduct in relationship to the election, (3) the extent to which
the knowledge of the misconduct was disseminated among eligible
voters, (4) the seriousness of the misconduct, and (5) the degree of
persistence of the misconduct in the minds of the eligible voters. See,
e.g., Phillips Chrysler Plymouth, Inc., 304 NLRB 16, 16 (1991).

When reviewing a Board decision to uphold a certification election,
we reverse only if the Board has abused its discretion. See Case

                    11
Farms of North Carolina, Inc. v. NLRB, 128 F.3d 841, 844 (4th Cir.
1997); Industrial Acoustics Co. v. NLRB, 912 F.2d 717, 719 (4th Cir.
1990). The Board, however, is bound to follow the law as set forth
by the relevant court of appeals, see Industrial Turnaround Corp. v.
NLRB, 115 F.3d 248, 254 (4th Cir. 1997), and we review the legal
conclusions of the Board and its hearing officers de novo. See NLRB
v. C.W.I. of Maryland, Inc., 127 F.3d 319, 330 (4th Cir. 1997). In
short, where the Board has made a legal error, we are required to cor-
rect it. See Virginia Concrete Co. v. NLRB, 75 F.3d 974, 980 (4th Cir.
1996).

The Board's stated goal in regulating the conduct of representation
elections is to "provide a laboratory in which an experiment may be
conducted, under conditions as nearly ideal as possible, to determine
the uninhibited desires of the employees." Case Farms, 128 F.3d at
844 (citation omitted). The Board has also recognized that such labo-
ratory conditions are made impossible by electoral propaganda,
appeals, or arguments which are intended solely"to inflame the racial
feelings of voters in the election." Sewell Manufacturing Co., 138
NLRB 66, 71 (1962). Indeed, it is self-evident that racial appeals,
whether in union campaigns or in broader contexts, pollute the atmo-
sphere necessary for a free and rational election because, when unre-
lated to an election campaign issue, they can only have the effect of
inflaming passions and distorting the sober, informed exercise of the
franchise. See NLRB v. Schapiro & Whitehouse, Inc., 356 F.2d 675,
679 (4th Cir. 1966) (vacating a representation election because the
union's "call upon racial pride or prejudice in the contest could `have
no purpose except to inflame the racial feelings of the voters in the
election'"); see also Schneider Mills, Inc. v. NLRB, 390 F.2d 375,
379-80 (4th Cir. 1968) (invalidating an election in which union litera-
ture compared the company's president to Hitler).

The facts of Schapiro & Whitehouse demonstrate the breadth of the
Sewell doctrine and our application of it. In that case, the NLRB certi-
fied a representation election, but we denied enforcement because of
relatively mild racial appeals contained in two leaflets distributed by
the union during the election campaign. One leaflet stated that "the
people at Cambridge didn't get scared nor did they give up because
their friends were arrested." Id. at 678. This reference to Cambridge,
we noted, "was an allusion to recent racial strife there." Id. at 679.

                    12
The second leaflet contained a newspaper article describing how a
black member of the Maryland House of Delegates had criticized
other black leaders for demonstrating for "social rights" while over-
looking "the real Negro problem of unfair employment practices." Id.
In overruling the NLRB, we stated:

          This type of propaganda is deplorable. . . . Equality of race
          in privilege or economic opportunity was not presently an
          issue. That a majority of the employees were Negroes did
          not make it so. For the union to call upon racial pride or
          prejudice in the contest could "have no purpose except to
          inflame the racial feelings of voters in the election."

Id. (quoting Sewell, 138 NLRB at 71).

Accordingly, both the Board in Sewell and this court in Schapiro
& Whitehouse have concluded that when a party to a representation
election wins the election based on its appeal to racial prejudice on
matters unrelated to election issues, the election must be set aside. As
the Board admonished in Sewell and we adopted in Schapiro &
Whitehouse,

          The Board does not intend to tolerate as "electoral propa-
          ganda" appeals or arguments which can have no purpose
          except to inflame the racial feelings of voters in the election.

356 F.2d at 679 (quoting Sewell, 138 NLRB at 71).

In this case, however, the Board found no evidence that either of
the parties had engaged in race-based misconduct. Neither Flambeau
Airmold nor the Union initiated the rumor, although supporters on
both sides apparently spread it. But the Board observed, this is an
inadequate basis to attribute the conduct to either Flambeau Airmold
or the Union. When we cannot attribute race-based misconduct, in
this case the initiation of a pernicious rumor, to a party but only to
a third party, we apply a higher standard for setting aside an election.
As we explained in NLRB v. Herbert Halperin Distributing Corp.,
because "third parties are not subject to the deterrent of having an
election set aside and third-party statements do not have the institu-

                     13
tional force of statements made by the employer or the union," "[l]ess
weight is accorded the comments and conduct of third parties than to
those of the employer or union." 826 F.2d 287, 290 (4th Cir. 1987)
(citation omitted). Moreover, in the absence of a heightened thresh-
old, third parties or even parties themselves might be tempted to
create anonymous incidents in attempts to set aside an election. See
Bush Hog, Inc. v. NLRB, 420 F.2d 1266, 1269 (5th Cir. 1969).
Although the more relaxed Sewell standard for setting aside elections
bars parties from making inflammatory race-based appeals by deny-
ing them the benefit of an election victory, it could, if applied to third-
party conduct, lead to an endless cycle of elections because interested
employees could repeatedly undermine elections by spreading inflam-
matory, race-based rumors. Because it would be impossible to know
which side a third party favored, secretly pro-company employees
could spread inflammatory rumors favorable to the union, thus invali-
dating the union's anticipated victory, and vice versa.

Even though we have not yet specifically addressed the issue of
race-based appeals introduced by third parties during representation
election campaigns, the majority holds that the standard we applied
in Halperin -- that an election need not be set aside unless "an atmo-
sphere of fear and coercion rendered free choice impossible" --
applies to this case because in Halperin racial conduct "played some
part." This application of Halperin is fundamentally in error. Halperin
did not turn on the existence of racially inflammatory conduct. It rec-
ognized that conduct is not classified as racially inflammatory simply
because race is mentioned. Rather, our precedent makes amply clear
that conduct is racially inflammatory only if there is an appeal to the
racial prejudice of the workers or an accusation that management or
the union is bigoted. See Case Farms, 128 F.3d at 846. Thus, when
a union has appealed to workers' racial prejudice or has compared a
manager to Hitler, we have set aside elections, see Schapiro &
Whitehouse, 356 F.2d 675; Schneider Mills , 390 F.2d 375, but when
there was "no appeal to racial prejudice, and[no] accus[ation] of big-
otry," although there was much mention of ethnicity, we have
declined to set aside an election, Case Farms , 128 F.3d at 846.

The conduct at issue in Halperin was clearly conduct that was not
racially inflammatory. While the majority states that Halperin
involved "appeals to racial fears" or to "racial prejudice," those

                     14
phrases appear in the Halperin opinion only with regard to what the
employer in that case alleged. See Halperin, 826 F.2d at 288, 289,
290. We rejected those characterizations, noting that the comments
"constitute[d] little more than isolated remarks and name-calling
among co-workers." Id. at 292. They were made by a couple of
employees about their co-employees and did not charge management
or the union with racial prejudice. Even a cursory look at the three
racial comments that were at issue show that they did not appeal to
racial prejudice or accuse management of bigotry. One black
employee allegedly stated that "the white guys should get together
and help the black guys because you'll lose your jobs by not signing
union cards." Id. at 289. Another black employee allegedly told a
white employee, "Boy, you white sons-of-bitches, you are all the
same, you're scared to take a stand," and was overheard saying "those
Goddamn white boys -- they're gonna vote no [on the union], they
won't support the blacks." Id.

These comments were obviously not designed to appeal to any-
one's racial prejudice or to accuse anyone of bigotry. If anything, they
demonstrated the speakers' own anti-white prejudice, and this demon-
stration would clearly not have appealed to any prejudice of the white
listeners. As we concluded in Halperin, these remarks "were not
directed at the owners and do not reflect an attempt to win the elec-
tion by creating animosity along religious or racial lines." Id. at 293
n.2. Moreover, the remarks did not "represent a deliberate attempt by
the union to divert the employees from legitimate issues by insinuat-
ing an irrelevant appeal to race." Id. at 293. We did imply, however,
that if there had been an appeal to racial prejudice, the standard in
NLRB v. Katz, 701 F.2d 703 (7th Cir. 1983), would be applicable. Id.
at 292. That case, as I discuss below, sets a much lower threshold for
overturning a representation election than was applied to the alleged
coercion actually considered in Halperin.

The facts in this case are materially different from those in
Halperin. The misconduct in this case -- a false accusation, circu-
lated on the eve of the representation election, that a manager referred
to the employees as a "bunch of niggers" -- was most clearly an accu-
sation of racial bigotry. It was directed at management; it was an
attempt to win the election by creating animosity along racial lines;
and it was an attempt "to divert the employer from legitimate issues

                    15
by insinuating an irrelevant appeal to race." Moreover, the rumor was
inflammatory, as the hearing officer found. Thus, this case can only
be analyzed as one which involves the type of race-based inflamma-
tory conduct that this court and the NLRB have long deplored and
have consistently found justifies setting aside elections.

While we have not specifically addressed the standard to apply to
racially inflammatory conduct when it is introduced into an election
campaign by third parties, other circuits have. For instance, in NLRB
v. Katz, the Seventh Circuit adopted a low threshold for setting aside
the elections when they were tainted by third-party racial influence.
The court held that a new election would have to be ordered when
third-party, racially "inflammatory remarks could have impaired the
employees' freedom of choice in the subsequent election." Katz, 701
F.2d at 705, 707 (emphasis added and citation omitted) (finding a
prima facie case for overturning an election in which a priest, who
was not a union agent, stated that workers should vote for the union
because the company's owners were Jewish and "Jewish people are
rich and we are poor and killing ourselves for them"). Similarly, the
Eleventh Circuit has adopted a standard giving little tolerance to
racially inflammatory conduct. In M&M Supermarkets, Inc. v. NLRB,
818 F.2d 1567 (11th Cir. 1987), the court held that third-party racial
remarks will warrant setting aside an election "if the acts disrupted the
voting procedure or destroyed the atmosphere necessary to the exer-
cise of free choice in the representation election." Id. at 1572 (empha-
sis added). The court in M&M invalidated an election in which an
employee stated, "Us Blacks were out in the cotton fields while they,
the damn Jews, took their money from the poor hardworking people."
Id. at 1569.

Keeping in mind the Board's goal of conducting representation
elections which accurately report the "uninhibited desires of the
employees," Case Farms, 128 F.3d at 844, I would nevertheless con-
clude that the Seventh Circuit standard, which authorizes setting aside
an election when an inflammatory remark "could impair" an employ-
ee's freedom of choice, Katz, 701 F.2d at 707, might be too broad and
would require invalidation of virtually every election in which third-
party race-based conduct is present. Any inflammatory comment
"could impair" the exercise of free choice. To accept this standard,
which would essentially extend the "zero tolerance" of Sewell to

                     16
third-party conduct, would fail to take into account the reasons that
we have already recognized for imposing a higher standard when
third-party conduct is involved. Indeed, the Seventh Circuit itself may
be withdrawing from the low threshold of its Katz holding. Recently
in Clearwater Transport, Inc. v. NLRB, 133 F.3d 1004 (7th Cir.
1998), the court, while purporting to apply Katz , seemed to impose
a higher standard. The court ruled against an employer's challenge to
a representation election because the employer "did not provide any
evidence that [an employee's] remark [calling the employer's owner
a "Jewish son of a bitch"] had an effect on the election." Id. at 1011
(emphasis added). Thus, in Clearwater, the Seventh Circuit seemed
to require that a party challenging a representation election show that
a third-party race-based remark actually had an effect on the election
rather than, as Katz held, that the remark could have had an effect on
voter free choice.

The Eleventh Circuit standard, requiring only that the atmosphere
for free choice be destroyed, also fails sufficiently to take into account
arguments made by both the Board and the Union in this case. For
instance, if the court were too willing to strike down elections based
upon third-party conduct, a company or union that expected to lose
an election could start an inflammatory rumor detrimental to itself,
disguising the rumor as third-party conduct, and then use the rumor
to challenge the election.

For these reasons, I believe that it would be more consistent with
the Board's standards for conducting elections to adopt a two-prong
approach which, while maintaining a low threshold when racial preju-
dice is involved, would, to a degree, shift emphasis to a greater con-
sideration of the actual prejudice caused by third-party race-based
inflammatory conduct. Accordingly, I would require a new represen-
tation election based on third-party race-based inflammatory conduct
when (1) the conduct was of the type that would pollute the atmo-
sphere necessary for the exercise of free choice, and (2) the overall
circumstances suggest that, more likely than not, the conduct altered
the outcome of the election. This standard is proportional to the one
that we adopted when evaluating non-inflammatory conduct by a
party:

          To succeed [in setting aside an election], it must be shown
          by specific evidence that (1) the alleged acts did in fact

                     17
          occur, and (2) such acts sufficiently inhibited the free choice
          of employees so as to affect materially the results of the
          election.

NLRB v. Coca-Cola Bottling Co., 132 F.3d 1001, 1003-04 (4th Cir.
1997) (citation and internal quotation marks omitted). My two prong
approach for third-party, race-based inflammatory conduct also draws
on both the Eleventh Circuit's standard that the conduct have "de-
stroyed the atmosphere necessary to the exercise of free choice" and
the Seventh Circuit's now apparent requirement that the conduct have
had an effect on the outcome of the election. Moreover, it would fill
the open gap in our jurisprudence for racially inflammatory conduct
by a third party.

Thus, where there is racially inflammatory conduct by a party and
that party wins the representation election, the Sewell doctrine would
be invoked and the election overturned. Where there is alleged mis-
conduct of a different type by a party and that party wins the repre-
sentation election, the Coca-Cola Bottling standard applies, and the
election would be overturned if the other party demonstrates that the
misconduct "affect[ed] materially the results of the election." 132
F.3d at 1004. Where there is third-party misconduct in the form of
threats and intimidation, the election would be set aside if the conduct
was "sufficiently substantial in nature to create a general environment
of fear and reprisal such as to render a free choice of representation
impossible." Methodist Home, 596 F.2d at 1183; see also Halperin,
826 F.2d at 290. And where, as here, there is third-party misconduct
that is inflammatory race-based, the election would be set aside if (1)
the conduct was of the type that would pollute the atmosphere neces-
sary for the exercise of free choice, and (2) the overall circumstances
suggest that the conduct more likely than not affected the outcome of
the election.

III

With this standard, I now turn to the facts of this case to determine
whether the race-based rumor initiated by a third party at Flambeau
Airmold's Roanoke Rapids' plant was of the type that would pollute
the atmosphere necessary for the exercise of free choice and whether

                    18
it, more likely than not, altered the outcome of the May 2, 1996 repre-
sentation election.

I begin with the undisputed facts that provide the backdrop for this
representation election. The unit of employees being polled was two-
thirds African-American and the Union's campaign was cognizant of
this racial make up, aiming its message at African-Americans. Man-
agement was referred to as the "masters," and their allegedly under-
paid employees were said to be "slaving" for the masters. The general
manager of the plant, who was white, was referred to as "`Good Ole'
Bill Budzien," and African-American heroes were drawn on to urge
the Union cause. Civil rights leader Jesse Jackson sent a letter to the
employees urging their support for the Union, and the words and
actions of Martin Luther King, Jr. and Malcolm X were recounted to
employees. While no explicit appeals for racial voting were made, the
overall effect of the Union's efforts was to make the campaign
racially sensitive, suggesting that a black employee would be voting
consistently with African-American causes by voting in favor of the
Union.

It was against this backdrop that the rumor about white manage-
ment calling the employees at the plant "a bunch of niggers" circu-
lated throughout the plant one day before the election. By all
accounts, including the hearing officer's factual findings, this rumor
was widespread and generated much emotion among the employees.
Racial prejudice was at this last, important moment explicitly
appealed to. Such a rumor could only have the tendency to divide
management from its employees and to unite employees, particularly
African-Americans, in collective action against their employer.

Management was at a loss as to how to react in order to neutralize
the rumor's effect, and its means for retrieving reason were limited.
It was bound by an NLRB rule which prohibits employers and unions
"from making election speeches on company time to mass assemblies
of employees within 24 hours before the scheduled time for conduct-
ing an election." Peerless Plywood Co., 107 NLRB 427, 429 (1953);
see also Kalin Construction Co., 321 NLRB 649, 651 (1996) (reiterat-
ing and extending the Peerless Plywood rule). Similarly, the employ-
ees, some of whom testified that they believed the rumor, had no way
of evaluating the rumor for truthfulness. If the rumor had been a con-

                    19
clusory opinion -- for example, that "the general manager is a racist"
-- then it might have been possible for employees to apply their
knowledge of the manager and evaluate whether they agreed or dis-
agreed with the assertion. But when the rumor made an assertion of
historical fact -- that the general manager or another manager
described the employees as "niggers" -- it was impossible for an
employee to evaluate whether such a statement was made absent inde-
pendent knowledge of the facts. In this case, no employee had inde-
pendent knowledge of what the managers had said in their meeting.
The hearing officer found that while some employees believed the
rumor to be false, others believed it to be true.

Applying the first prong of the standard at hand-- whether this
conduct was of the type that would pollute the atmosphere necessary
for the exercise of free choice -- compels a different conclusion from
that reached by the Board under its standard requiring that free choice
be impossible. In the context of this election campaign in which racial
issues were important to all parties, an eleventh-hour rumor that a
white manager during a management meeting had referred to employ-
ees as "niggers" could have no other effect than polluting the atmo-
sphere necessary for the exercise of free choice.

Under the second prong of the standard, a probability of prejudice
must also be demonstrated: it must appear more likely than not that
the conduct altered the outcome of the election. In making this deter-
mination, we should consider a number of factors relevant to the con-
duct including (1) the closeness of the vote, (2) the timing of the
conduct in relationship to the election, (3) the extent to which knowl-
edge of the conduct was disseminated among the eligible voters, (4)
the seriousness of the misconduct at issue, and (5) the degree of the
persistence of the conduct in the minds of eligible voters. See Phillips
Chrysler Plymouth, Inc., 304 NLRB 16, 16 (1991).

The Union won the election by a vote of 96 to 94. One changed
vote would have tied the election vote at 95 to 95, giving Flambeau
Airmold a victory and altering the election's outcome. It is inconceiv-
able that from among 190 persons voting, not one was moved by so
pernicious a rumor circulated in so racially sensitive an atmosphere.
Even though the hearing officer did not permit evidence of the
rumor's effect on the votes of individuals, denying Flambeau Airmold

                    20
its effort to present such evidence, there nevertheless was evidence in
the record that at least one employee did change her vote in favor of
the Union because of the rumor. Shirley High, an African-American
who had indicated that she was voting against the Union, told a fellow
employee after hearing the rumor that she was going to vote for the
Union; "that was it [the last straw] for her."

The vote in this election was extremely close; racial feelings and
cohesion were closely tied to campaign issues; the rumor that circu-
lated was a wicked, racial slur drawing on the most emotional appel-
lation that could divide a majority white management from a majority
black workforce; it was circulated close to the time of the election --
one day before; and it was widely circulated. Thus, the application of
the relevant factors that have been identified compels the conclusion
that third-party conduct more likely than not altered the election's
outcome.

Unlike most other external influences during a representation elec-
tion, racially inflammatory conduct both blinds and distorts through
substantially heightened emotions, destroying the process by stripping
away the sober, informed exercise of the franchise. This is especially
true given the racial history in the United States, and particularly
North Carolina.

Up until today, this court has been unwilling to sanction racially
inflammatory conduct in union representation elections. Today, the
court abandons that policy and rewards such conduct. More unfortu-
nately, the majority's opinion encourages if not licenses, employees
in future elections -- both those favoring unionization and those
favoring management -- to engage in appeals to racial prejudice and
accusations of bigotry.

Because the representation election at the Flambeau Airmold plant
on May 2, 1996, was fatally tainted, I would conclude that the Board
may not rely on it to compel Flambeau Airmold to bargain with the
Union so elected. Accordingly, I would deny enforcement of the
Board's application in this case.

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