                    United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                   ___________

                                Nos. 97-2988/3217
                                  ___________
Sioux City Foundry Company,              *
                                         *
            Petitioner,                  * On Petition for Review of an Order of
                                         * The National Labor Relations Board.
   v.                                    *
                                         *
National Labor Relations Board,          *
                                         *
            Respondent.                  *
                                         *

                                   ___________

                           Submitted: February 9, 1998
                               Filed: September 3, 1998
                                 ___________

Before RICHARD S. ARNOLD,1 Chief Judge, HANSEN, Circuit Judge, and
      LIMBAUGH,2 District Judge.
                               ___________

HANSEN, Circuit Judge.




        1
       The Honorable Richard S. Arnold stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on April 17,
1998. He has been succeeded by the Honorable Pasco M. Bowman, II.
        2
       The Honorable Stephen N. Limbaugh, United States District Judge for the
Eastern District of Missouri, sitting by designation.
       The Sioux City Foundry Company (the Company) petitions for review of the
National Labor Relations Board’s (NLRB) order ruling that it had committed various
violations of section 8 of the National Labor Relations Act (the Act), see 29 U.S.C. §
158 (1994), and requiring that it recognize and, on request, bargain with the
International Association of Machinists and Aerospace Workers, AFL-CIO, Local
Lodge No. 1426 (IAM). The NLRB has filed a cross petition for enforcement of the
order. This case arises from events surrounding the affiliation of an independent union
representing employees of the Company with the IAM and the Company’s subsequent
refusal to bargain with the IAM. The Company makes numerous claims on appeal,
including that the affiliation was improper, that its actions were lawful under the Act,
and that some of the unfair labor practices charges were time-barred. We deny the
Company’s petition for review and grant enforcement of the NLRB’s order.

                        I. Factual and Procedural Background

        The Company operates two plants, one in Sioux City, Iowa (Plant 1), and
another in South Sioux City, Nebraska (Plant 2). At Plant 1, the Company conducts
structural steel fabrication, contract steel manufacturing, and rebar operations. The
Company manufactures cast iron products at Plant 2. In 1994, the Company had
approximately 135 total employees—75 at Plant 1 and 60 at Plant 2. Employees at both
plants were represented by the United Molders Union until 1986, when they then began
being represented by the Sioux City Foundry Company Shop Committee (the Shop
Committee), an independent union. The Company and Shop Committee negotiated a
number of collective bargaining contracts covering employees at each plant. Employees
at each plant elected their own Shop Committee representatives to deal with the
Company regarding day-to-day matters.

      During 1994 some employees began seeking more effective union representation.
On October 6, 1994, six employees met with three officials of the IAM concerning the
possibility of affiliating with the IAM. These employees agreed that the Shop


                                          -2-
Committee should consider affiliating with the IAM. The Shop Committee then
scheduled an affiliation meeting and vote for Sunday, October 30, 1994.

       Ronald Clingenpeel, the Shop Committee president, asked the Company for the
names and addresses of all the bargaining unit employees. Andrew Galinsky, the
Company’s president and chief executive officer, replied that it was not the Company’s
policy to provide this information and that the Shop Committee officers would have to
obtain this information on their own. Thus, Shop Committee officials informed Plant
2 workers of the affiliation meeting and vote orally and by posting notices at the plant.
At an October 17 all-employee meeting, Company president Galinsky explained his
opposition to the proposed affiliation with the IAM. Subsequently, employees and IAM
officials hand-distributed about 60 notices of the affiliation meeting and vote outside
Plant 1 on two different occasions. Apparently, some notices were also handed out at
Plant 2, although the extent of this hand billing is unclear from the record.

       On October 28, 1994, Company president Galinsky approached Clingenpeel at
work and told him that if arbitration was the employees’ main concern underlying their
desire to affiliate with the IAM, he would amend the existing collective bargaining
contract to state that the Company would pay the costs of grievance arbitration. He also
warned Clingenpeel that if the Shop Committee affiliated with the IAM, he would cease
personally negotiating the collective bargaining contracts and instead use a third party.

        The affiliation meeting and vote took place as scheduled on October 30, 1994,
with 24 employees attending, only two of whom worked at Plant 1. IAM officials at the
meeting informed the employees in attendance about the specific consequences of an
affiliation with the IAM, including that the IAM had an international constitution that
would bind the affiliation, and that bylaws existed for the IAM and local lodge.
However, neither the constitution nor bylaws were provided for the employees to review
at the meeting. An affiliation agreement, which had been prepared before the



                                          -3-
meeting, was read to the employees. The IAM officials also answered employee
questions.

        Shortly before 4:00 p.m. the IAM officials left the meeting, and following a brief
discussion, the employees decided to proceed with the affiliation vote. Secret ballot
voting then commenced. The polls remained open until 5:00 p.m., as the notices
concerning the affiliation meeting had specified, although the only votes cast were by
the 24 employees already in attendance. The vote was 22 to 2 in favor of affiliation.
The IAM officials then returned to the meeting and two IAM representatives and three
Shop Committee officers signed the affiliation agreement. No Shop Committee
representatives from Plant 1 signed the agreement because none had attended the
affiliation meeting. The IAM sent a letter to one Plant 2 employee congratulating the
employees on the affiliation, and he posted the letter on the bulletin board at Plant 2.
No employees protested the Shop Committee’s affiliation with the IAM. The IAM later
demanded that the Company recognize it as the employees’ exclusive bargaining
representative, but the Company refused.

         In October 1995, Galinsky assumed ownership of Continental Rebar
(Continental), a firm previously owned by his wife. Continental conducts rebar
operations at Plant 1. Although Continental’s employees work at Plant 1, they use a
separate entrance to the plant, have minimal contact with the Company’s employees
and, during the relevant time period, had their own independent union, the Continental
Committee, representing them.

      On October 31, 1995, Galinsky met with the president of the Shop Committee
and a member of the Continental Committee. Galinsky told them that he wanted them
to merge the two committees so that he could negotiate one contract with both the
Continental and Company employees. He gave the two employees proposed letters
signed by him and addressed to their respective committees requesting that negotiations
for a new contract begin at a later date than those specified in the existing collective


                                           -4-
bargaining contracts. He also gave each a separate document stating that the two
committees agreed to merge and that the merged shop committee would appear as an
alternative on any ballot used for voting on union representation. Both employees
signed the letters and merger document, although the Company’s employees never
voted on the merger.

      In December 1995, the Company had three negotiating sessions with the merged
shop committee. On December 21, 1995, the parties reached an agreement and
executed a new collective bargaining contract for a term of January 1, 1996, to
December 31, 1998. Several employees from both Plant 1 and Plant 2, as well as
employees of Continental, signed the contract as representatives of the merged shop
committee. The Company did not contact the IAM concerning the merger of the two
committees or the negotiation and execution of the new collective bargaining contract.

        IAM filed an unfair labor practices charge with the NLRB on December 13,
1994, which was amended on January 31, 1995, alleging violations of the Act arising
from the Company’s refusal to recognize the affiliation with the IAM and Galinsky’s
offer to pay arbitration costs. The IAM filed a second unfair labor practices charge with
the NLRB on November 8, 1995, which was amended on January 17, 1996, alleging
violations of the Act arising from the merger of committees and the Company’s
negotiation and execution of a collective bargaining contract with the merged shop
committee.

      The first unfair labor practices charge, filed on December 13, 1994, was initially
dismissed by the Regional Director of the NLRB on March 16, 1995. This dismissal
was appealed by the IAM to the General Counsel. That appeal was still pending when
the second unfair labor practice charge was filed by the IAM on November 8, 1995.
In a letter dated January 22, 1996, the Regional Director partially revoked his dismissal
as to some allegations in the first charge. Nine days later, the NLRB issued an order
consolidating the first and second charges into one case.


                                          -5-
       The consolidated case was heard by an Administrative Law Judge (ALJ). After
considering the facts outlined above, the ALJ denied the Company’s motion to dismiss
allegations in the first charge, ruling that they were not time-barred. The ALJ further
ruled that: (1) the affiliation of the Shop Committee and the IAM was proper; (2) the
Company unlawfully refused to recognize the IAM as the bargaining agent of the
employees; (3) the Company unlawfully initiated the merger of the two shop
committees; (4) the Company unlawfully recognized, bargained with, and executed a
collective bargaining contract with the merged shop committee; and (5) the Company
made unlawful promises to pay for arbitration costs prior to the affiliation vote. The
ALJ entered an order requiring the Company to recognize and, on request, to bargain
with the IAM. The Company appealed and on June 24, 1997, the NLRB affirmed the
ALJ’s findings, ruling, and order.3 The Company petitions for review, and the NLRB
cross petitions for enforcement of the order.

                                      II. Analysis

        The Company makes four arguments for reversal of the NLRB’s order. It claims
the NLRB erred in: (1) denying its motion to dismiss the allegations in the first unfair
labor practice charge as time barred; (2) concluding that the affiliation of the Shop
Committee with the IAM was proper; (3) ruling that the Company violated the Act by
initiating the merger of the two shop committees; and (4) ruling that the Company
violated the Act by making promises to pay arbitration costs prior to the affiliation vote.

       In reviewing the NLRB’s order, we give “great deference” to the NLRB’s
affirmation of the ALJ’s findings. Pace Indus., Inc. v. NLRB, 118 F.3d 585, 590 (8th
Cir. 1997) (internal quotation omitted), cert. denied, 118 S. Ct. 1299 (1998). We will
enforce the NLRB’s order if the NLRB has “correctly applied the law and its factual



      3
        The NLRB did make a minor modification to the ALJ’s order that is not relevant
to this petition for review.

                                           -6-
findings are supported by substantial evidence on the record as a whole, even if we
might have reached a different decision had the matter been before us de novo.” Id.
(internal quotation omitted).

                              A. The Motion to Dismiss

       The Company first claims that its motion to dismiss should have been granted
because the allegations made in the first unfair labor practices charge were time-barred
under section 10(b) of the Act, 29 U.S.C. § 160(b). The Company concedes that the
second unfair labor practices charge was timely. Section 10(b) of the Act provides
“[t]hat no complaint shall issue based upon any unfair labor practice occurring more
than six months prior to the filing of the charge with the Board . . . .” 29 U.S.C. §
160(b). The Company argues that the NLRB violated this section when it considered
allegations from the first charge that had been reinstated by the Regional Director more
than six months after the allegations had occurred, citing Ducane Heating Corp., 273
N.L.R.B. 1389 (1985), enforced per mem., 785 F.2d 304 (4th Cir. 1986), and enforced
sub nom. International Union of Elec. Workers, 785 F.2d 305 (4th Cir. 1986). We
disagree.

       In Ducane Heating, the Regional Director dismissed a charge and no appeal was
filed. The Regional Director then sua sponte reinstated the dismissed charge more than
nine months after it had been filed. The NLRB stated that when a charge is dismissed
and such dismissal is not appealed, “the charge has been disposed of and, in effect,
ceases to exist.” Ducane Heating, 273 N.L.R.B. at 1391. Thus, absent fraudulent
concealment or some other basis for equitably tolling the six month period, the NLRB
ruled that the disposed charge cannot be reinstated more than six months after the
allegations occurred. Id.

      The Ducane Heating rule does not apply here. In this case, the IAM had
appealed the dismissal of the first charge to the General Counsel and this appeal was


                                          -7-
pending when the Regional Director reinstated some of the allegations from the charge.
Unlike in Ducane Heating, the charge had not been finally resolved because of the
pending appeal. See Redd-I, Inc., 290 N.L.R.B. 1115, 1118 (1988) (“When there is a
pending timely charge on file, however, [the charged party] has no right to assume his
liability is extinguished . . . .”). The General Counsel could have reinstated the
allegations from the first charge on appeal, and we see no reason why the NLRB cannot
delegate this authority to allow the Regional Director, sua sponte, to reinstate those
same allegations.

      We also reject the Company’s argument that because rules in the NLRB’s
casehandling manual are inconsistent with the ALJ’s reinstatement of these allegations
we must reverse the NLRB’s denial of the Company’s motion to dismiss. The
casehandling manual is not binding on this court or the NLRB. See Children’s Nat'l
Med. Ctr., 322 N.L.R.B. 205, 205 n.1 (1996). The NLRB did not err in denying the
Company’s motion to dismiss.

                                    B. The Affiliation

        Section 8(a)(5) of the Act makes it unlawful for an employer “to refuse to bargain
collectively with the representatives of his employees,” subject only to exceptions not
applicable in this case. 29 U.S.C. § 158(a)(5). Section 7 and 8(a)(1) of the Act make
it unlawful for an employer “to interfere with . . . employees in the exercise of the rights
guaranteed” under the Act, including the right “to bargain collectively through
representatives of their own choosing.” 29 U.S.C. §§ 157, 158(a)(1). Because the
NLRB found that the affiliation between the Shop Committee and the IAM was proper,
it ruled that the Company violated the Act by refusing to recognize and to bargain with
the IAM, and it ordered the Company to recognize and, on request, to bargain with the
IAM.




                                            -8-
       The Company argues that the affiliation between the Shop Committee and the
IAM was improper and therefore that it did not violate the Act by negotiating and
executing the new collective bargaining contract with the merged shop committees
rather than the IAM. When a union affiliates with another union it raises the issue of
whether there is a “question of representation,” which occurs when “it is unclear
whether a majority of employees continue to support the reorganized union.” NLRB
v. Financial Inst. Employees, 475 U.S. 192, 202 (1986) (SeaFirst) (internal quotations
omitted); Minn-Dak Farmers Co-op. v. NLRB, 32 F.3d 390, 393 (8th Cir. 1994). When
a union desires to affiliate with another union an election is required and the NLRB
makes two central findings to determine if the affiliation election was proper: (1)
whether the affiliation election was conducted with adequate due process safeguards;
and (2) whether there is “substantial continuity” between the pre- and post-affiliation
unions. SeaFirst, 475 U.S. at 198-99; May Dep’t Stores Co. v. NLRB, 897 F.2d 221,
225-26 & n.6 (7th Cir.), cert. denied, 498 U.S. 895 (1990).

       In this case, the NLRB found that due process safeguards were met and there was
substantial continuity between the Shop Committee and the IAM. The Company attacks
both of these findings. The NLRB’s findings are “entitled to deference if supported by
substantial evidence on the record as a whole.” Minn-Dak, 32 F.3d at 393. In
reviewing these findings, we are cognizant of the Supreme Court’s observation in
SeaFirst that “allow[ing] employers to rely on employees’ rights in refusing to bargain
with” a newly affiliated union “is not conducive to industrial peace.” 475 U.S. at 209
(internal quotation and alteration omitted).

                                   1. Due Process

        We first address the Company’s argument that the affiliation election lacked
minimal due process safeguards. The Company claims that the notice of the affiliation
election was inadequate. Minimal standards of due process require that notice of the
affiliation election be given to the union members. SeaFirst, 475 U.S. at 199. The


                                         -9-
employer has the burden of proving that due process was not satisfied. Sullivan Bros.
Printers, Inc. v. NLRB, 99 F.3d 1217, 1222 (1st Cir. 1996).

        The record shows that a notice of the affiliation meeting and election was
continuously posted on the Plant 2 bulletin board for 23 days prior to the election—from
October 7 until the vote on October 30. A second notice was posted at Plant 2 a week
prior to the election. It was certainly reasonable for the NLRB to find that all the
employees at Plant 2 had notice of the affiliation election. Also, at the all-employee
meeting 13 days prior to the affiliation vote, Company president Galinsky expressed
opposition to the Shop Committee affiliating with another union. Further, the record
shows that about 60 notices were distributed to employees outside of Plant 1 during
shift changes on October 24 and 27. (Jt. App. at 173, 244.) The evidence shows that
some employees refused the notices, and there is nothing in the record to suggest that
any of the handbillers refused to give notices to any employees. A reasonable inference
may be drawn from this hand billing, as well as from Galinsky’s comments at the all-
employee meeting, that the vast majority of employees at Plant 1 also had notice of the
meeting. Although the notice of the affiliation election provided to the employees in this
case was less than ideal, our review of the record as a whole convinces us that the
NLRB’s finding that the notice of the affiliation election satisfied minimal due process
standards is supported by substantial evidence.4

      The Company also claims that there was an inadequate opportunity for the
employees to discuss the proposed affiliation prior to voting. Minimal standards of due
process require that “an adequate opportunity for members to discuss the [affiliation]


      4
         Although it does not affect our analysis, we note that Clingenpeel asked the
Company for the addresses of all the employees more than three weeks before the
affiliation vote and his request was denied. It appears that all employees would have
received mailed notice of the election if the Company had simply provided the
addresses, thus eliminating the need for the Company to argue that the union denied the
employees their rights to notice of the affiliation vote.

                                          -10-
election” be provided and that “reasonable precautions to maintain ballot secrecy” be
taken. SeaFirst, 475 U.S. at 199. The Company concedes that ballot secrecy was
maintained.

        After reviewing the record as a whole, we are satisfied that the NLRB’s finding
that the employees were provided an adequate opportunity to discuss the proposed
affiliation is supported by substantial evidence. The record shows that the proposed
affiliation agreement was read verbatim to the employees at the affiliation meeting prior
to the vote. The employees were told that the current collective bargaining contract
would remain in force until its expiration. The employees were also informed that they
would elect their own negotiating committee and have full control over negotiations and
that the IAM would only intervene and provide assistance if the negotiators requested
such help. The IAM officials explained to the employees that the IAM had a
constitution and that the local and district lodges had bylaws, all of which would be
binding on the members. Although the Company relies heavily on the fact that the
IAM’s constitution and local and district lodge bylaws were not provided for employee
inspection at the meeting, that does not require us to overturn the NLRB’s finding that
sufficient opportunity to discuss the proposed affiliation was provided. The IAM
officials explained the $20 per month dues, the right not to join and to pay this as a
service fee, and the right not to pay the dues or fees and the IAM would still be required
by law to represent the employees. All employee questions were also answered at the
meeting. Finally, we deem it significant that no employee has objected to either the
procedures used to discuss the affiliation or to the affiliation itself.

                               2. Substantial Continuity

      We next address the Company’s argument that the affiliation lacks substantial
continuity. There is a lack of substantial continuity between the pre- and post-affiliation
organizations if there are changes “sufficiently dramatic to alter the union’s identity”
such that it raises a question of representation. SeaFirst, 475 U.S. at 206. In


                                          -11-
making this determination, the NLRB and this court consider the totality of the situation,
including such relevant factors as: “comparison of the membership and leadership
before and after the affiliation; the effect on membership rights and duties; and the effect
of affiliation on the procedures for contract negotiations, administration and grievance
processing.” Minn-Dak, 32 F.3d 395. The employer has the burden of proving that the
affiliation lacks substantial continuity. Id.

        Our review leads us to conclude that the NLRB’s finding that substantial
continuity existed after the affiliation is supported by substantial evidence in the record
as a whole. Although the IAM’s local lodge alone has between 600 and 800 members,
far more members than were in the independent Shop Committee prior to the affiliation,
the evidence supports the NLRB’s finding that the employees have retained control over
much of the union’s operation. An increase in the number of members alone cannot
prove a lack of substantial continuity. See May Dep’t Stores, 897 F.2d at 229 n. 9. The
record shows that the employees held an election shortly after the affiliation and three
officials were retained and one was replaced. These leaders were elected by the
employees themselves without any outside involvement. Further, the employees
retained the right to elect their own negotiating teams for collective bargaining. The
IAM would only assist if requested by the negotiating team. The employees also
retained the right to decide whether to accept contract proposals. Regarding grievances,
the testimony before the ALJ was that the local employees’ leaders would have control
over whether to take a particular grievance to arbitration and IAM officials would only
become involved in the process if requested. The employees also continued to have the
right to choose whether or not to pay dues because both Plant 1 and Plant 2 are in
“right-to-work” states and, therefore, no employees could be forced to pay dues or fees
to the IAM. This evidence provides adequate support for the ALJ’s finding that the
employees had significant control over negotiation, grievances, and leadership, both
before and after affiliation, sufficient to show substantial continuity.




                                           -12-
                         C. Merger of the Shop Committees

       Section 8(a)(2) of the Act prohibits employers from interfering with “the
formation or administration of any labor organization.” 29 U.S.C. § 158(a)(2). Sections
7 and 8(a)(1) of the Act prohibit an employer from interfering with “employees in the
exercise of their rights guaranteed” under the Act, including the right “to bargain
collectively through representatives of their own choosing.” 29 U.S.C. §§ 157,
158(a)(1). The NLRB ruled that the Company violated these sections by initiating the
merger of the Shop Committee and the Continental Committee, and by negotiating and
entering into a collective bargaining contract with the merged shop committee. The
Company argues that the NLRB’s ruling is erroneous because the Continental
Committee has never been a separate bargaining unit, and therefore the Company did
not violate the Act when it merged the two committees. We reject this argument
because the NLRB’s finding that the Continental Committee was a separate bargaining
unit when it merged with the Shop Committee is supported by substantial evidence on
the record as a whole.

      Before Company president Galinsky acquired Continental from his wife,
Continental employees had been represented by their own shop committee, the
Continental Committee. The Continental employees had their own collective bargaining
contract with Continental, separate from the Company’s employees. There is no
evidence to show that after Galinsky acquired Continental there were any changes that
would destroy the identity or viability of the Continental Committee as a separate
bargaining unit. The merger agreement itself, drafted by the Company, calls for the
merger of “the shop committees of both [the Company] and Continental.” (Jt. App.
at 301.) Further, the admitted purpose of the merger was to allow bargaining for one
contract instead of two. It is clear that the Company itself viewed the Continental
Committee as a separate bargaining unit. The NLRB’s finding that the Continental
employees were represented by a bargaining unit separate from the bargaining unit



                                         -13-
representing the Company’s employees is supported by substantial evidence on the
record as a whole.

                           D. Offer to Pay Arbitration Costs

       An employer violates § 8(a)(1) of the Act by offering employees benefits
conditioned on their selection or rejection of a bargaining representative. NLRB v.
Spotlight Co., 462 F.2d 18, 20 (8th Cir. 1972). The NLRB ruled that the Company
violated § 8(a)(1) of the Act when, shortly before the affiliation election in October
1994, Company president Galinsky offered to pay the Shop Committee’s arbitration
costs. The NLRB found that Galinsky offered to pay these arbitration costs in an
attempt to influence the employees to vote against affiliating with the IAM. The
Company argues that this finding is “factually inaccurate” because Galinsky was
“simply reiterating an offer which he had made to [Shop Committee] representatives on
previous occasions.” (Appellant’s Br. at 32.) We disagree.

       The record shows that in October 1994, shortly before the affiliation election,
Galinsky told Clingenpeel that if arbitration was the employees’ main concern
underlying their desire to affiliate with the IAM, he would amend the existing collective
bargaining contract to state that the Company would pay the costs of grievance
arbitration. He also warned Clingenpeel that if the Shop Committee affiliated with the
IAM, he would cease personally negotiating the collective bargaining contracts and
instead use a third party. We agree with the ALJ that these latter comments conveyed
a “natural meaning” that negotiations would become more difficult if the Shop
Committee affiliated with the IAM. (Jt. App. at 57.) The ALJ also considered the fact
that Galinsky had made promises to pay arbitration costs in the past, but found that the
promises in October 1995 were meant to influence the affiliation election. Our review
of the record as a whole convinces us that substantial evidence supports the NLRB’s
finding that Galinsky’s promises to pay arbitration costs were meant to influence the



                                         -14-
affiliation election in violation of the employees' statutory right to determine their
bargaining representative without employer interference.

                                   III. Conclusion

       We have considered and rejected all of the Company’s arguments in its petition
for review. Accordingly, we deny the petition for review and grant the NLRB’s cross
petition for enforcement of the order.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT




                                        -15-
