     05-6026-ag
     International Union et al v. NLRB

 1                        UNITED STATES COURT OF APPEALS
 2
 3                             FOR THE SECOND CIRCUIT
 4
 5                                   -------------
 6
 7                               August Term, 2007
 8
 9   (Argued: December 20, 2007                      Decided: March 20, 2008)
10
11                             Docket No. 05-6026-ag
12
13   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X
14
15   INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE, AND
16   AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, AFL-CIO,
17
18                     Petitioner,
19
20               - against -
21
22   NATIONAL LABOR RELATIONS BOARD,
23
24                     Respondent.
25
26   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X
27
28   Before:     MINER and RAGGI, Circuit Judges, and
29               RAKOFF, District Judge.
30
31        Petitioner International Union, United Automobile,
32   Aerospace, and Agricultural Implement Workers of America, AFL-CIO
33   petitions for review of those parts of a decision of the National
34   Labor Relations Board that found that Stanadyne Automobile
35   Corporation did not commit unfair labor practices in the period
36   before a representation election by (1) orally issuing a rule
37   that purported to prohibit “harassment” of co-workers, (2)
38   suggesting possible plant closures and other negative
39   consequences of unionization in speeches directed at employees,

           *
           The Honorable Jed S. Rakoff, United States District Judge
     for the Southern District of New York, sitting by designation.

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 1   and (3) announcing improved employee pension benefits shortly
 2   before the election. We hold that it was unreasonable for the
 3   Board to find that Stanadyne’s no-harassment rule did not, in
 4   context, have a chilling effect on rights protected by Section 7
 5   of the National Labor Relations Act, 29 U.S.C. § 157, but we hold
 6   that in all other respects the Board’s decision was reasonable
 7   and supported by substantial evidence. Petition granted in part,
 8   denied in part, and remanded.
 9
10                       THOMAS W. MEIKLEJOHN, Livingston, Adler,
11                            Pulda, Meiklejohn & Kelly, P.C.,
12                            Hartford, Conn., for Petitioner.
13
14                       HEATHER S. BEARD (Ronald Meisburg, General
15                            Counsel, John E. Higgins, Jr., Deputy
16                            General Counsel, John H. Ferguson,
17                            Associate General Counsel, Aileen A.
18                            Armstrong, Deputy Associate General
19                            Counsel, Fred B. Jacob, Supervisory
20                            Attorney, William M. Bernstein, Senior
21                            Attorney,           ), National Labor
22                            Relations Board, Washington, D.C., for
23                            Respondent.

24   RAKOFF, District Judge.

25        Petitioner International Union, United Automobile,

26   Aerospace, and Agricultural Implement Workers of America, AFL-CIO

27   (“the Union”) petitions for review of those parts of a decision

28   of the National Labor Relations Board (“NLRB” or the “Board”)

29   that found that Stanadyne Automobile Corporation (“Stanadyne” or

30   the “Employer”) did not commit unfair labor practices in the

31   period immediately preceding a representation election.

32        Stanadyne is an automobile parts manufacturer.   In January

33   2000, the Union began an organizing drive among the employees

34   working at Stanadyne’s plant in Windsor, Connecticut.   On May 15,

                                    -2-
1    2000, the Union filed a petition with the NLRB seeking a

2    representation election, and the Board scheduled the election for

3    June 29, 2000.

4         Before the Union filed the election petition, Stanadyne had

5    no rule prohibiting employees from talking during working hours

6    about any topic they chose.    However, after the petition was

7    filed on May 15, 2000, Stanadyne supervisors informed employees

8    that they were not allowed to discuss the Union or solicit Union

9    support during working hours.    Some employees were informed that

10   discussing the Union during company time could result in the

11   Employer disciplining or firing them.    These actions, as the

12   Board subsequently found, were clear violations of rights

13   protected by Section 7 of the National Labor Relations Act

14   (“NLRA” or the “Act”), 29 U.S.C. ¶ 157.    Stanadyne has not

15   appealed that determination.

16        On June 6, 2000, the President and Chief Executive Officer

17   of Stanadyne, William Gurley, delivered a prepared speech to

18   groups of employees at the Windsor plant, in which he promulgated

19   a rule against “harassment.”    Specifically, Gurley stated:

20             [I]t has come to my attention that some Union
21             supporters, not all, but some, are harassing fellow
22             employees. You can disagree with the Company position;
23             you can be for the Union. You can be for anything you
24             want to, but no one should be harassed. Harassment of
25             any type is not tolerated by this Company and will be
26             dealt with.

                                      -3-
1         On June 21, 2000, or little more than a week before the

2    election, Stanadyne again held meetings to address groups of

3    employees.   At each meeting, Gurley and Stanadyne managers Art

4    Caruso and Ron Binkus gave prepared remarks.   Gurley stated that

5    the law only required that Stanadyne negotiate with the Union,

6    and continued:

 7             However, if after negotiating we were not willing to
 8             accept the Union’s proposals or the Union were not
 9             willing to accept the Company’s proposals, then the
10             Union only has two options that I know of: (1) It can
11             accept the Company’s offer, or (2) It can call you out
12             on strike in order to try to get Stanadyne to agree to
13             its proposals.
14
15        Following Gurley’s remarks, Caruso discussed potential

16   negative ramifications of a strike, such as loss of pay, loss of

17   health insurance, ineligibility for unemployment compensation,

18   inability to pay bills, and permanent loss of jobs.      On the issue

19   of the likelihood of strikes, Caruso said that “research shows

20   they happen often, but to the extent they happen even once, one

21   is too many.   Although strikes are not inevitable, everyone knows

22   that where unions exist, strikes occur.”   Caruso also

23   characterized the Union’s local affiliate as “strike happy.”

24        Binkus then spoke, describing his experiences with unions at

25   other plants, including an oral strike vote at a union meeting

26   where he had felt so intimidated that he abandoned his planned

27   “no” vote.   Binkus further described “intimidation, sabotage, and

                                     -4-
1    violence” that regularly occurred in unionized facilities each

2    time a collective-bargaining agreement was about to expire.      He

3    also described a confrontation at a Stanadyne plant where a guard

4    died after being struck in the head during an altercation with

5    pro-union employees.   Binkus concluded his remarks by stating

6    that “violence, threats, intimidation, and a death ... happened

7    at UAW locations” and exhorting the employees to keep themselves

8    out of “a violent environment” by “vot[ing] ‘no’.”

9         Finally, Gurley spoke again at the conclusion of the

10   meetings, saying “union members also have means to threaten and

11   coerce fellow members.   Please be careful of the path you take,

12   you may not like where it ends.”   Gurley then unveiled an

13   eight-foot by twelve-foot, two-sided poster, each side of which

14   displayed seven photographs of dilapidated buildings and vacant

15   lots.   The top of the poster read: “These are just a few examples

16   of plants where the UAW used to represent employees.”    Across

17   each photo was the word “CLOSED” in large red block letters.

18   Across the bottom of the poster were the question “Is This What

19   the UAW Calls Job Security?” and the phrase “VOTE NO!”    Copies of

20   the poster were displayed throughout the plant during the week

21   before the election.

22        Sometime between the promulgation of the no-harassment rule

23   on June 6 and the meetings with employees on June 21, Stanadyne

                                     -5-
1    posted a notice in the Windsor plant announcing a change in the

2    formula for pension benefit calculations that would increase the

3    benefit from $19 per month per year of service to $21, effective

4    July 1, 2000.   According to Stanadyne, this increase was the

5    result of its regular program for increasing benefits, under

6    which Stanadyne’s Compensation and Benefits manager, Richard

7    Lurie, twice yearly reviewed benefits offered by other comparable

8    employers and submitted a recommendation to management based on

9    his review.   If Stanadyne then decided to make changes to its

10   employee benefits, it typically did so on the January 1 or July 1

11   following the recommendation, announcing the changes one to two

12   weeks before the effective date.

13        On June 29, 2000, the Union lost the election at the Windsor

14   facility.   Based on the above facts, an Administrative Law Judge

15   (“ALJ”) found that the Employer had violated the NLRA when it

16   prohibited discussing the Union or soliciting support for the

17   Union during working hours.   The ALJ further found that Gurley’s

18   June 6 no-harassment statement was a threat of reprisal for

19   protected activity in violation of the NLRA, and that the set of

20   speeches given on June 21 (including presentation of the poster)

21   involved threats of plant closure and job loss that also violated

22   the NLRA.   Finally, the ALJ found that the announcement of

23   increased pension benefits violated the Act because its purpose

                                     -6-
1    was to dissuade employees from voting for the Union.

2         The NLRB affirmed the ALJ’s finding that Stanadyne violated

3    the NLRA by prohibiting discussions or solicitations regarding

4    unionization during working hours, but otherwise reversed the

5    ALJ’s findings.   The Union seeks review by this Court of the

6    NLRB’s determinations regarding the June 6 promulgation of the

7    purported no-harassment rule, the June 21 speeches, and the mid-

8    June announcement of the increase in pension benefits.

9         As the outset, we note that our review of the Board’s

10   decision is highly deferential.    Specifically, we review the

11   NLRB’s factual findings to determine “whether they are supported

12   by ‘substantial evidence’ in light of the record as a whole,”

13   Elec. Contractors, Inc. v. NLRB, 245 F.3d 109, 116 (2d Cir. 2001)

14   (quoting 29 U.S.C. § 160(e) & (f)), and we review the Board’s

15   legal conclusions “to ensure that they have a ‘reasonable basis

16   in law,’” id. (quoting AT&T v. NLRB, 67 F.3d 446, 451 (2d Cir.

17   1995)).   Furthermore, we “‘defer to the Board’s decision when

18   there appears to be more than one reasonable resolution and the

19   Board has adopted one of these.’”       Id. (quoting Sheridan Manor

20   Nursing Home, Inc. v. NLRB, 225 F.3d 248, 252 (2d Cir. 2000)).

21        In view of this deference, we cannot say that the Board’s

22   application of law to fact was unreasonable with respect to

23   either the June 21, 2000, speeches or the mid-June announcement

                                       -7-
1    of the increase in benefits.    An employer is not so cabined by

2    the prohibition against interfering with a union election that it

3    cannot express its views about unionization “so long as the

4    communications do not contain a ‘threat of reprisal or force or

5    promise of benefit.’”    NLRB v. Gissel Packing Co., 395 U.S. 575,

6    618 (1969) (quoting 29 U.S.C. § 158(c)).    The Board found that

7    the June 21 speeches (including the poster) did not constitute

8    threats and that, if predictions were made, they were “carefully

9    phrased on the basis of objective fact to convey [Stanadyne’s]

10   belief as to demonstrably probable consequences beyond [its]

11   control.”   Id.   While it might not have been unreasonable to find

12   to the contrary (as the ALJ did), we cannot say that the Board’s

13   reading of the June 21 speeches was unreasonable.

14        As to the mid-June announcement of the increase in pension

15   benefits, even though there is a presumption that an increase in

16   benefits or the announcement of such an increase between the

17   filing of a petition for an election and the election itself is

18   motivated by a desire to interfere with “employee freedom of

19   choice,” Baltimore Catering Co., 148 N.L.R.B. 970, 973 (1964), in

20   this case the Board determined that Stanadyne had overcome the

21   presumption and did not, in fact, act for the purpose of

22   influencing the election.    Given the company’s undisputed prior

23   history of announcing changes in benefits in or around mid-June,

                                      -8-
1    we cannot say that the Board’s factual determination was not

2    supported by substantial evidence or that it was unreasonable.

3         We cannot agree, however, that the Board acted reasonably in

4    concluding that the purported no-harassment rule was not a

5    violation of the NLRA.   An employer may not promulgate a rule

6    which has a chilling effect on the right to organize or join a

7    union.   See 29 U.S.C. § 158(a)(1); Dist. Lodge 91, Int’l Ass’n of

8    Machinists v. NLRB, 814 F.2d 876, 879-80 (2d Cir. 1987).    Even if

9    a rule does not explicitly restrict protected activity, the Board

10   has determined that the rule will constitute a violation if: “(1)

11   employees would reasonably construe the language to prohibit

12   [protected] activity; (2) the rule was promulgated in response to

13   union activity; or (3) the rule has been applied to restrict the

14   exercise of [protected] rights.”    Martin Luther Mem’l Home, Inc.,

15   343 N.L.R.B. 646, 647 (2004).

16        Whether or not Gurley’s professed reason for the no-

17   harassment rule -- “it has come to my attention that some Union

18   supporters, not all, but some, are harassing fellow employees” --

19   is by itself sufficient to demonstrate an NLRA violation, it was

20   certainly unreasonable for the Board to find that “employees

21   would [not] reasonably construe [the no-harassment rule] to

22   prohibit [protected] activity.”    Id.   Here, as elsewhere, context

23   is everything.   When Gurley announced the no-harassment rule on

                                       -9-
1    June 6, Stanadyne had already promulgated an illegal rule,

2    conveyed by its supervisors to the employees, that the employees

3    were not allowed to discuss unionization or solicit co-workers on

4    that issue during working hours.   Against that background, no

5    reasonable employee could fail to infer that the rule against

6    “harassment,” which Gurley did not define and which, for example,

7    can amount to no more than persistent annoyance, see Merriam

8    Webster’s Collegiate Dictionary 529 (10th ed. 1997), was intended

9    to discourage protected election activity.

10        The Board’s reliance on Gurley’s knowledge of unprotected

11   activity, such as vandalism, graffiti, and a battery, is

12   irrelevant; for what counts, under the first prong of Martin

13   Luther, is the knowledge and understanding of a reasonable

14   employee.   Gurley nowhere made express reference to these

15   incidents in his speech, and no evidence was presented to the

16   Board to show that the employees generally would have known of

17   these specific incidents and understood that Gurley was referring

18   to these specific incidents.    Nor is there anything in the record

19   to suggest that, even if a reasonable employee had known and

20   understood that Gurley might have been referring to unprotected

21   activity, the employee would have considered the no-harassment

22   rule limited to such conduct.

23        Accordingly, we grant the Union’s petition for review in

                                     -10-
1   part and vacate the NLRB’s determination as to the lawfulness of

2   the no-harassment rule promulgated on June 6, 2000, and remand to

3   the NLRB for further proceedings consistent with this decision.




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