UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MONTGOMERY WARD & COMPANY,
INCORPORATED,
Petitioner,

v.

NATIONAL LABOR RELATIONS BOARD,
Respondent,                                                              No. 95-2654

and

WAREHOUSE UNION, LOCAL 730, A/W
INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, AFL-CIO,
Intervenor.

NATIONAL LABOR RELATIONS BOARD,
Petitioner,

v.
                                                                 No. 95-2669
MONTGOMERY WARD & COMPANY,
INCORPORATED,
Respondent.

On Petition for Review and Cross-Application for
Enforcement of an Order of the National Labor Relations Board.
(5-CA-22686)

Argued: June 7, 1996

Decided: September 20, 1996

Before MURNAGHAN and NIEMEYER, Circuit Judges, and
CURRIE, United States District Judge for the District of South
Carolina, sitting by designation.
Order enforced by unpublished per curiam.

_________________________________________________________________

COUNSEL

ARGUED: Marshall Bruce Babson, OGLETREE, DEAKINS,
NASH, SMOAK & STEWART, Washington, D.C., for Montgomery
Ward. Christopher Warren Young, NATIONAL LABOR RELA-
TIONS BOARD, Washington, D.C., for NLRB. Elizabeth Jane Head,
BEINS, AXELROD, OSBORNE, MOONEY & GREEN, P.C., Wash-
ington, D.C., for Intervenor. ON BRIEF: Erin E. Powell,
OGLETREE, DEAKINS, NASH, SMOAK & STEWART, Washing-
ton, D.C., for Montgomery Ward. Frederick L. Feinstein, General
Counsel, Linda Sher, Associate General Counsel, Aileen A. Arm-
strong, Deputy Associate General Counsel, Frederick C. Havard,
Supervisory Attorney, NATIONAL LABOR RELATIONS BOARD,
Washington, D.C., for NLRB. John R. Mooney, BEINS, AXELROD,
OSBORNE, MOONEY & GREEN, P.C., Washington, D.C., for
Intervenor.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Montgomery Ward & Company, Inc., has petitioned for review of
a decision and order issued against it by the National Labor Relations
Board ("Board") on April 19, 1995. Reversing the administrative law
judge ("ALJ") who originally heard the case, the Board found that
Montgomery Ward violated sections 8(a)(1) and (a)(3) of the National
Labor Relations Act ("Act"), 29 U.S.C. §§ 158(a)(1) and (3). Mont-
gomery Ward has contended that the Board's finding of unlawful ter-
mination is not supported by substantial evidence in the record as a
whole and that its finding of unlawful statements is improper because

                    2
it is not consistent with the allegations contained in the complaint.
The Board has cross-petitioned for enforcement of the order. We
hereby enforce the order.

I.

Montgomery Ward operates warehouse storage and distribution
facilities nationwide to supply merchandise to its retail stores. In Jan-
uary 1992, Montgomery Ward consolidated its mid-Atlantic distribu-
tion operation by closing two distribution centers and opening a new
facility in Brandywine, Maryland. In April 1992, Warehouse Employ-
ees Local Union No. 730, (the "Union"), which had conducted an
unsuccessful organizational campaign at the Brandywine facility,
filed a charge against Montgomery Ward before the Board. Subse-
quently, the Board's General Counsel issued a complaint, alleging
that the company (1) violated sections 8(a)(1) and (3) by discharging
two employees solely because of their union activity; and (2) violated
section 8(a)(1) by making statements that implied that it would be
futile for employees to choose union representation. 1 An ALJ held a
two-day hearing in which Montgomery Ward denied making unlawful
statements and having knowledge of the discharged employees' union
involvement. The company maintained that it fired the two employees
because of their poor job performance.

During the relevant time period, approximately 235 employees
worked at the Brandywine center, filling between 1,500 and 3,000
orders for shipment to retail stores each day. About 16 employees
worked as "order fillers." In that capacity, they used "picking tickets"
to identify, locate and collect merchandise for shipment. They affixed
the tickets to the designated merchandise and then sent it out to the
loading docks. At the docks, other employees worked as "loaders,"
_________________________________________________________________
1 Section 8(a)(1) makes it an unfair labor practice for an employer "to
interfere with, restrain, or coerce employees in the exercise" of their
rights to self-organization and to form, join or assist labor organizations
as guaranteed in Section 7 of the Act. 29 U.S.C.§ 158(a)(1).

Section 8(a)(3) prohibits discrimination "in regard to hire or tenure of
employment or any term or condition of employment to encourage or
discourage membership in any labor organization." 29 U.S.C.
§ 158(a)(3).

                     3
placing the designated items on to trucks after scanning their bar
codes for inventory purposes.

Montgomery Ward hired both Dennis Guss and Paul Groenwoldt
in February 1992. Guss worked as an order filler, while Groenwoldt
worked as a loader. In early January 1992, before the Brandywine
facility was fully operational, the Union began an organizational cam-
paign with leafletting in the parking lot and the distribution of autho-
rization cards to employees.

Regarding the company's anti-union statements, the record indi-
cates that at the end of February, Montgomery Ward officials held a
meeting with all Brandywine employees.2 At the meeting, company
Vice-President Thomas Cato apparently spoke about"third-party rep-
resentation." There was testimony before the ALJ that Cato told
employees that he anticipated a fruitful working relationship without
such interference and that "we don't need no third-party or organiza-
tion come in here over my dead body."

Company officials met again with Brandywine employees in mid-
March to address the benefits and drawbacks of union representation.
In a series of smaller meetings, Cato apparently compared the
employee benefits at Brandywine to those at the company's unionized
Baltimore facility in an effort to show that the union could not guar-
antee higher wages and discussed the Union's organizing drive. There
was testimony before the ALJ that Guss requested additional informa-
tion about "union benefits," but Cato could not provide any. There
was also testimony that Cato told employees at one of the gatherings
that "if he had anything to do with keeping the union out, he would,"
and that "there would be blood on the floor before the Union came
in." The record further shows that the company issued a memorandum
to Brandywine employees on March 20, explaining that the Union
was attempting to organize and urging employees not to sign union
authorization cards.
_________________________________________________________________
2 Among those officials present at the meeting were: Thomas Cato, the
vice president of Logistics and Product Services; James Schmitt, the
manager of the Brandywine facility and East Coast distribution centers;
and Michael Cardamone, the operations manager at the Brandywine
facility.

                    4
As to Guss and Groenwoldt's union activity, there was testimony
that, at Guss's suggestion, the two men and one other Montgomery
Ward employee attended the Union's first and only organizational
meeting on April 13. While there, they signed authorization cards and
agreed to distribute cards to other employees. They apparently asked
the Union not to notify Montgomery Ward that they were on its orga-
nizing committee because they did not want the company to know of
their activities.

Testimony showed that during the next three days, Guss and
Groenwoldt solicited union support from other Brandywine employ-
ees. Guss discussed the Union with 18 to 20 employees in the cafete-
ria at lunchtime and in the parking lot after work and distributed a
handful of authorization cards. Groenwoldt apparently talked to six or
seven employees about the Union and asked them to sign authoriza-
tion cards, but passed out no cards. There was testimony that the two
men came to believe that management was watching them more
closely than usual, and so informed the Union that they wanted to
"chill a little while." Company management testified that they knew
nothing about the union involvement of Guss and Groenwoldt.

The evidence relating to the discharges of Guss and Groenwoldt
showed that the facility's operations manager, Michael Cardamone,
fired both employees within minutes of each other on April 17 --
only three days after the organizational meeting. There was conflict-
ing testimony regarding the job performance of each man.

Guss testified that he received no criticism before April 16.
Although he apparently misplaced a picking ticket three weeks ear-
lier, supervisors never disciplined him or complained. Instead, Guss
said he was regularly summoned to work overtime and once asked to
monitor another employee. His "group leader" testified, however, that
she had spoken with Guss and complained to her superiors about his
attitude, failure to stack merchandise properly, propensity to lose
picking tickets and low productivity. Supervisors discussed these crit-
icisms with Guss on April 16. The following morning, Guss again
misplaced two picking tickets and was fired without warning at the
end of his shift. Guss testified that his immediate boss, Todd Lennox,
admitted to him that the firing was "bullshit" ordered by upper man-
agement.

                    5
Similarly, there was evidence that Groenwoldt received his first
reprimand for failing to follow proper procedure when scanning mer-
chandise on April 15. At that time, supervisors merely reminded him
of the proper method. While Groenwoldt admitted that he did not
always use the proper method, testimony indicated that he was not the
only employee to do so. Another employee seen improperly scanning
during the same week received a warning about what consequences
he would suffer for repeating the mistake. Like Guss, Groenwoldt was
fired without warning at the end of his shift. His discharge notice
indicated that he had been observed improperly scanning on April 15
and 17.

The ALJ ruled that the General Counsel had failed to establish a
prima facie case of unlawful discrimination in the termination of Guss
and Groenwoldt. Although he found that Guss and Groenwoldt
engaged in union activity and that Montgomery Ward demonstrated
strong anti-union animus and discriminated against Guss and Groen-
woldt shortly after their union activity, the ALJ recommended dis-
missing the unlawful discharge allegations nonetheless because he
found no evidence that Montgomery Ward knew of the two employ-
ees' union activity. The ALJ also found that although Cato made
unlawful anti-union statements, those statements were not encom-
passed in the allegations of the complaint. Thus, the ALJ recom-
mended dismissing all charges against Montgomery Ward.

A panel of the Board overturned the ALJ. The panel inferred
employer knowledge of the participation of Guss and Groenwoldt in
the union campaign and determined that the company violated sec-
tions 8(a)(3) and (a)(1) by discharging the two men for engaging in
protected activities. The Board also concluded that Montgomery
Ward violated section 8(a)(1) with two statements Cato made to
employees implying that it would be futile for them to select union
representation. The Board ordered Montgomery Ward to cease and
desist from the unfair labor practices found and to reinstate and make
whole the discharged employees.

II.

Montgomery Ward has challenged the Board's conclusion that the
discharges constituted violations of sections 8(a)(1) and (3) of the Act

                    6
as well as its determination that two employer statements violated
section 8(a)(1) by implying the futility of selecting union representa-
tion.

In general, our standard of review is one of deference. We may not
disturb the Board's findings and conclusions if they are supported by
substantial evidence taken from the record as a whole. 29 U.S.C.
§ 160(e); Universal Camera Corp. v. NLRB , 340 U.S. 474, 487-91
(1951); FPC Holdings, Inc. v. NLRB, 64 F.3d 935, 942 (4th Cir.
1995). We "may not displace the Board's choice between two fairly
conflicting views even though [we] would justifiably have made a dif-
ferent choice had the matter been before [us] de novo," Universal
Camera Corp., 340 U.S. at 488; accord NLRB v. Frigid Storage, Inc.,
934 F.2d 506, 509 (4th Cir. 1991).

We note that the Board is not precluded from drawing inferences
or legal conclusions that are contrary to those of the ALJ. See
American Thread Co. v. NLRB, 631 F.2d 316, 320 (4th Cir. 1980).
The substantial evidence standard of review is applicable to the
Board's inferences from facts because "[t]he Board, not the ALJ, is
ultimately vested with the responsibility for determining whether an
unfair labor practice has been committed." Id.; see also Frigid
Storage, 934 F.2d at 509.

A

Termination in retaliation for union activity, including attempts to
organize a union, violates both sections 8(a)(1) and (a)(3) of the Act.
NLRB v. Transportation Management Corp., 462 U.S. 393, 397-98
(1983); FPC Holdings, 64 F.3d at 941; NLRB v. Nueva Eng'g Inc.,
761 F.2d 961, 969 (4th Cir. 1985). The Board applies a basic, burden-
shifting formula for determining when a discharge is unlawful.3 See
Transportation Management Corp., 462 U.S. at 400-04 (affirming the
Board's "Wright Line test"). Under that approach, the General Coun-
sel must first establish a prima facie case, showing by a preponder-
ance of the evidence that anti-union animus motivated the employer's
_________________________________________________________________
3 The Board's formula was first articulated in Wright Line, 251 NLRB
1083 (1980), enf'd, 662 F.2d 899 (1st Cir. 1981), cert. denied, 455 U.S.
989 (1982).

                    7
decision to terminate an employee. The burden then shifts to the
employer to prove affirmatively that it would have taken the same
action even in the absence of union involvement by the employee.
FPC Holdings, 64 F.3d at 942 (citations omitted); accord
Transportation Management Corp., 462 U.S. at 401-02. If the Board
determines, however, that the employer's asserted reasons are pretex-
tual -- i.e., that they did not exist or were not relied upon -- then the
employer has failed to meet its burden. See Nueva Eng'g, 761 F.2d
at 968-69. A violation occurs only when "there is a basis in the record
for a finding that the employee would not have been discharged . . .
except for the fact of his union activity." NLRB v. Kiawah Island Co.,
650 F.2d 485, 490 (4th Cir. 1981) (citation omitted); see also Goldtex,
Inc. v. NLRB, 14 F.3d 1008, 1011 (4th Cir. 1994) ("Unwise and even
unfair decisions to discharge employees do not constitute unfair labor
practices unless they are carried out with the intent of discouraging
participation in union activities.").

We affirm the Board's findings and conclusions regarding the dis-
charges of Guss and Groenwoldt. Substantial evidence supports the
determination that Montgomery Ward would not have discharged the
two employees were it not for their participation in protected activity.

Montgomery Ward's attempts to challenge the Board's decision are
without merit. First, the company contends that the ALJ properly con-
cluded that the General Counsel failed to establish a prima facie case
of unlawful discharge for either Guss or Groenwoldt because it was
unable to show that the company knew of their union activities. Sec-
ond, Montgomery Ward maintains that it provided substantial evi-
dence that, in any event, it would have fired each employee for poor
performance.

To prove a prima facie case, "the General Counsel must show
(1) that the employee was engaged in protected activity, (2) that the
employer was aware of the activity, (3) that the activity was a sub-
stantial or motivating reason for the employer's action." FPC
Holdings, 64 F.3d at 942. When there is no direct proof, employer
knowledge may be shown by circumstantial evidence from which a
reasonable inference may be drawn. Id. at 943-44; Davis Supermar-
kets, Inc v. NLRB, 2 F.3d 1162, 1168 (D.C. Cir. 1993), cert. denied,
114 S. Ct. 1368 (1994); NLRB v. Wal-Mart Stores , 488 F.2d 114, 117

                    8
(8th Cir. 1973); see generally NLRB v. Link-Belt Co., 311 U.S. 584,
602 (1941). Such circumstances may include knowledge of general
union activity, demonstrated anti-union animus, suspicious timing and
nature of the discharge and disparate treatment of employees. See
Hunter Douglas, Inc. v. NLRB, 804 F.2d 808, 813-15 (3rd Cir. 1986),
cert. denied, 481 U.S. 1069 (1987); see also Abbey's Transp. Servs.
v. NLRB, 837 F.2d 575, 580 (2d Cir. 1988); Wal-Mart Stores, 488
F.2d at 117.

Montgomery Ward concedes that it had general knowledge of the
Union's organizing efforts at the Brandywine facility. Substantial evi-
dence supports the Board's inference that the company had specific
knowledge of Guss's and Groenwoldt's participation in those efforts.
Based on the openness of their campaigning at the facility, their posi-
tions as the only Brandywine employees to show significant interest
in unionization, the closeness of their firings to their union activity,
the abrupt nature of their discharges and the strong anti-union animus
displayed at the company's highest corporate levels, the Board's
inference that the company knew about the union activity of Guss and
Groenwoldt is reasonable. The Board relied only on evidence adduced
before the ALJ and did not overturn any of his credibility determina-
tions in concluding that a "confluence of circumstances" showed that
Montgomery Ward was aware of the employees' participation in the
unionization effort. Although there is some evidence to the contrary,
the evidence offered to show that Montgomery Ward management did
not know of the two employees' activities does not outweigh the cir-
cumstantial proof allowing the Board to infer that it did.

Similarly, we find that substantial evidence supports the Board's
finding that Montgomery Ward's proffered reasons for discharging
Guss and Groenwoldt were pretextual. Testimony before the ALJ
indicated that no one questioned Guss's work and production levels
until he began soliciting employees for the Union. He lost a picking
ticket three weeks before his termination, yet no supervisor repri-
manded him. At the time of his discharge, his immediate boss con-
ceded that the firing was "bullshit" ordered by higher company
officials. Finally, supervisors offered conflicting descriptions of com-
pany policy regarding lost picking tickets and provided no evidence
of prior discipline for the error.

                    9
Similarly, Groenwoldt was not disciplined or even reprimanded for
poor performance prior to his participation in the union campaign.
Although he admitted improperly scanning merchandise, he received
no warning before his termination, although other employees who
also used improper methods did. Finally, substantial evidence sup-
ports the Board's conclusion that the events surrounding Groen-
woldt's discharge were indicative of a set up. Testimony showed that
when Groenwoldt arrived at work on April 17, he was told to report
to Cardamone's office at the end of his shift, and when he did so, he
was fired for improperly scanning merchandise on April 15 and ear-
lier that same day.

In short, evidence before the ALJ showed that both men were
praised for their work before they participated in the union campaign,
and disciplined afterward. Neither received notice of poor perfor-
mance or a warning that termination was possible. Again, there is
some evidence of substandard performance on the part of each
employee. Yet that evidence fails to override the substantial support
for the Board's conclusion that Montgomery Ward would not have
fired either Guss or Groenwoldt if they had not engaged in union
activity. Accordingly, we must enforce that part of the order relating
to the unlawful discharges.

B

An employer's warnings to employees that unionization will be
futile or fruitless can amount to a violation of section 8(a)(1) as an
interference with an employee's right to self-organization. See, e.g.,
Standard-Coosa-Thatcher Carpet Yarn v. NLRB, 691 F.2d 1133, 1136
(4th Cir. 1982) (finding that comment made on union election day
that company's contract covering unionized employees was not bene-
ficial was unlawfully coercive), cert. denied , 460 U.S. 1083 (1983);
NLRB v. McCormick Concrete Co., 371 F.2d 149, 152 (4th Cir. 1967)
(holding that statement that "a union would do employees no good"
can be unlawfully coercive). Substantial evidence supports the
Board's finding that Vice President Cato made two statements --
those concerning unionization "over my dead body" and only after
"blood on the floor" -- which violated section 8(a)(1). However,
instead of contesting the Board's finding, Montgomery Ward claims
that the two statements were outside the allegations of the complaint.

                    10
The ALJ so found, but we agree with the Board's contrary conclu-
sion.

The complaint satisfies NLRB regulations requiring a clear and
concise description of the acts which are claimed to constitute unfair
labor practices. See 29 CFR § 102.15(b). Furthermore, the Board's
determination that Montgomery Ward engaged in unfair labor prac-
tices does not rest on facts outside or unrelated to the allegations in
the complaint. See NLRB v. Threads, Inc., 308 F.2d 1, 9 (4th Cir.
1962) ("Evidence without supporting allegations cannot serve as the
basis of a determination of an unfair labor practice."); see also
Clearwater Finishing Co. v. NLRB, 670 F.2d 464, 468 (4th Cir. 1982)
(applying Threads, and finding that Board improperly allowed non-
alleged facts to serve as evidence of a violation).

General Counsel alleges in the complaint that Montgomery Ward
violated section 8(a)(1) with statements Cato made to employees on
March 9, 1992. Without quoting any particular comment, the com-
plaint states that Cato told employees that: (1) Montgomery Ward
"would learn the identity of those who signed union authorization
cards;" (2) "strikes and violence would inevitably result from select-
ing a union as their representative;" and (3)"it would be futile for
them to select a union as their bargaining representative." While there
may be some discrepancy over the exact date Cato made each state-
ment, the fact remains that the allegations of the complaint do encom-
pass the two statements at issue. Furthermore, consideration of those
statements cannot be said to have deprived Montgomery Ward of due
process as the complaint provided sufficient notice of the acts alleged
to constitute unfair labor practices and the company received a full
and fair opportunity to litigate the matter. See Pergament United
Sales, Inc. v. NLRB, 920 F.2d 130, 134 (2d Cir. 1990) (due process
requires notice and meaningful opportunity to defend); see also NLRB
v. MacKay Radio & Tel. Co., 304 U.S. 333, 349-51 (1938). The state-
ments certainly did not call for a different defense than the one
mounted by the company. See FPC Holdings, 64 F.3d at 942.

Finally, both the ALJ and the Board found that the two statements
demonstrate anti-union animus, and we agree. Considering not only
the substance of the statements but the context in which they were
made, they are coercive and would have a tendency to intimidate

                    11
employees from engaging in union activity. See NLRB v. Gissel Pack-
ing Co., 395 U.S. 575, 617 (1969) (assessment of an employer's state-
ments "must take into account the economic dependence of the
employees on their employers, and the necessary tendency of the for-
mer, because of that relationship, to pick up intended implications of
the latter that might be more readily dismissed by a more disinterested
ear"); J.P. Stephens & Co. v. NLRB, 638 F.2d 676, 687 (4th Cir.
1980) ("an employer's speech must be viewed in the context of its
labor relations setting").

We see no reason, therefore, to disturb the Board's conclusion that
Montgomery Ward violated section 8(a)(1) with Cato's statements.

III.

In sum, we find that substantial evidence supports the Board's find-
ings of fact and conclusions of law. Accordingly, Montgomery
Ward's petition for review is hereby denied and the order is

ENFORCED.

                    12
