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United Dairy Farmers Cooperative Association v. National Labor Relations Board

decided: October 30, 1980.



Before Adams, Van Dusen and Higginbotham, Circuit Judges.

Author: Higginbotham


In this case the National Labor Relations Board (the Board) found that the employer had committed numerous unfair labor practices before and after the certification election. In formulating remedies to rectify these patent violations by the employer, the Board declined to issue a bargaining order because the member of the Board who supplied the critical third vote for the majority concluded that the Board lacked the power to do so in the absence of an election victory or card majority by the union. Thus, in reviewing its decision, we are presented with an issue commented on in dictum by the Supreme Court in NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S. Ct. 1918, 23 L. Ed. 2d 547, reh. den., 396 U.S. 869, 90 S. Ct. 35, 24 L. Ed. 2d 123 (1969), but not specifically reached: whether and under what circumstances the Board has the remedial authority to order an employer who has committed unfair labor practices to bargain with a union that has never won a certification election or secured a card majority. We affirm the Board's findings of various unfair labor practices by the employer, including the illegal dismissal of seven employees, the illegal threat of coercion, and the illegal distribution of a bonus during the election period. We also hold, however, that in remedying these and other unfair labor practices, the Board has the authority, despite the absence of a card majority and election victory, to issue a bargaining order in the circumstances of this case. We will therefore remand the case to the Board for it to determine whether it wishes in the exercise of its discretion to issue a bargaining order.



The facts of this case reveal a blatant and relentless effort by the employer, United Dairy Farmers Cooperative (United Dairy), to use unlawful means to block unionization attempts among its employees. We will review these efforts in some detail not because there is any reasonable doubt as to the illegality of United Dairy's actions, but because of the need to understand the nature of these violations when we consider the remedial authority of the Board in the circumstances of this case.

United Dairy is a cooperative established in 1965 by farmers in western Pennsylvania for the processing and retail sale of their milk. It operates a milk processing plant in Pittsburgh, and owns 49 retail stores to sell its products to the public. At the time this case arose it used three types of employees in its operations. One group of employees worked in the processing plant itself; a second group of about 30 drivers and their helpers-the group directly involved in the events of this case-transported the processed milk and dairy products in leased trucks to the retail stores; and a third group of employees operated the retail stores.

A review of the actions of United Dairy in this case must begin with a prior case involving United Dairy that came before the Board. In the winter of 1970-1971, the Amalgamated Meat Cutters and Butcher Workmen of North America (AFL-CIO) attempted to organize the sales clerks in the retail stores. As reported in the earlier case before the Board, the president of the United Dairy, Ernest Hayes, announced at a Christmas banquet of salesclerks that "(h) e would fire any girl who had signed a Union card.... he would franchise the stores if a Union got in, and (the clerks) would all be out of a job. He (also) said that he was going to subpoena the Union organizers, get their Union cards, and these girls would be fired." United Dairy Farmers Coop. Ass'n, 194 NLRB 1094, 1095, enforced, 465 F.2d 1401 (3d Cir. 1972). After Hayes followed through on his threat by firing the leading supporter of the union, the union brought a complaint to the Board. The Board held that United Dairy had illegally threatened to discharge union supporters and to franchise its stores, interrogated employees about their union activity, and discharged an employee because of her union activity, in violation of Sections 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. ยง 158(a)(1) & (3) (the Act). United Dairy was ordered to reinstate the employee and cease and desist from any further illegal statements. Nevertheless, the union drive among the clerks proved unsuccessful.*fn1

The events precipitating the present controversy arose in the fall of 1973 when a self-organizing drive was begun among the group of approximately 30 truck drivers and helpers employed by United Dairy to deliver the processed milk products to the retail stores.*fn2 On Friday, November 23rd, three days before the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America Milk and Ice Cream Salesmen, Drivers and Dairy Employees Local Union No. 205 (the Union) petitioned for an election, a truck driven by one of the strong Union supporters in this group, Bruce Bach, and his helper, Bernard Dhans, was in an accident. Two wheels fell off the rear axles. The truck had to be towed to the shop for what subsequently proved to be expensive repairs.

On Sunday, members of the board of directors of United Dairy held a meeting at which they decided that Bach should be fired. This was the first time that the directors had ever independently made the decision to fire an employee, the type of decision which had previously been made by Hayes alone. They did so in this case without ever speaking with Bach about the cause of the accident or waiting for an official report on the repairs. Bach was notified of his termination by telephone on Sunday. He subsequently filed a complaint with the Board charging that his dismissal was motivated by his support for the Union.

On Monday, the Union filed a petition for a certification election which was later set for January 8, 1974. The next day Hayes questioned employee Larry Thomas on whether he had signed a union card. Thomas lied and said no. Hayes then informed him that he knew the Union was organizing and warned, according to Thomas' later testimony, that "if it gets in, you know what will happen to the guys who does ... if the union does get in, he said that he would have to close down, or subcontract, or something like that."

At Christmas, United Dairy distributed, for the first time in its history, a cash bonus to all of its employees, with the largest bonuses going to the drivers and the plant employees. Drivers and plant employees who had worked for the company for over one year received one hundred dollars; those who had been employed from 30 days to one year received fifty dollars, while those who had been there for under 30 days received twenty-five dollars. The retail employees received smaller bonuses-fifty dollars for those who had worked over a year, and twenty-five dollars for those who had worked under a year.

After Christmas but still before the January 8, 1974 certification election, Hayes called driver Jerry Finley into his office and, according to Finley's testimony, informed him that "if the union goes in, the farmers (who operate United Dairy) would come down and smash some heads; the farmers would never let the union in; they would close the plant down first, and start another plant under a new name." He also warned that the Teamsters had caused other companies to go bankrupt. Finally, on the day before the election, Hayes called Thomas again and, according to Thomas's testimony, warned him that "if the union gets in, we will have to close up." He added that the company was counting on him.

The results of the election proved inconclusive. The vote was 10 to 9 in favor of the Union, but seven additional votes were challenged and, on January 23, the Union filed a representation complaint challenging the employer's conduct during the campaign.

While these claims were being investigated by the Board and the result was still in doubt, company officials interrogated several other employees regarding their union activities. Immediately after the election, Helen Zitney, a supervisor and secretary of United Dairy, brought employee Melvin Lerch into the office. Claiming to know that one of the last two ballots cast was for the Union, she asked Lerch which way he had voted. He answered that he had voted no, but that he had signed a Union card. She asked him whether he knew Larry Thomas was a Teamster. He responded that he didn't know. She then asked whether he had discussed the Union with anyone else. When he admitted he had discussed it with Bruce Bach, she replied that she was "disappointed" in him.

The other incidents following the election involved Craig Moore, a night foreman and supervisor. Several days after the election, he asked Larry Dhans whether his relative had made several statements in support of the Union. According to Dhans, Moore claimed that "(y)our damn brother and you (are) trying to get the Union in (United Dairy)," and warned that the "damn union will not get in because (United Dairy) had the election won before they even voted." Moore also questioned Theodore Fritsch, about a week after the election, about whether he had voted for the Union. If the Union got in, he threatened, "they would sell the plant, buy the Sealtest plant, and fire all the drivers who voted for the Union," adding that "they knew who voted for the Union." Finally, a few weeks after the election, Moore asked Finley why he had voted for the Union. When Finley challenged Moore's knowledge of his vote, he replied that "he knew the ten guys who voted for the Union." Rather than let the Union in, United Dairy would "close down the plant and open another plant under a different name."

Finally, on March 14th and 25th, while the outcome of the election was still in doubt, president Hayes announced at meetings of all the drivers that the company would henceforth transport milk to the retail stores by independent contractors. All current employees could bid for their "contracts," but those who refused to serve as independent contractors would be dismissed. Identical papers for seven corporations were drawn up by the company attorney, and one or more employees participated in each corporation. The six who refused the change in status were, as Hayes had warned, fired on March 31. Those who consented to the change, as it turned out, performed the same work as before; used the same trucks; leased these trucks from the company owned by United Dairy farmers from which United Dairy previously leased trucks; assumed no responsibility for the maintenance, gas or insurance for the trucks; and invested none of their own capital. The only significant change in operation was that drivers were now paid by the number of cases of dairy products they delivered, rather than the hours they worked. They also no longer received any fringe benefits, such as unemployment insurance, health insurance, or disability benefits.

With the new dismissals and the change in status, the Union amended its complaint to allege that United Dairy had also illegally dismissed the six employees and changed the status of the remaining drivers in an attempt to avoid unionization, in violation of Sections 8(a)(3) and (1). The Union's challenges to the firing of the employees, the election, and the employer's post-election conduct were then consolidated with the Bach complaint and heard by the Administrative Law Judge (ALJ).

In an opinion dated August 22, 1974, the ALJ found that the dismissals of Bach and of the six employees who refused to serve as "independent contractors," and the change in status of the drivers who continued with United Dairy, were motivated by the employer's anti-union animus and violated Sections 8(a)(3) and (1). United Dairy was also found, both before and after the election, to have coercively interrogated employees, illegally indicated knowledge of their votes, and threatened the closing down of the plant. As remedies for these violations, the ALJ recommended that United Dairy be ordered to (1) cease and desist from any further illegal dismissals or coercive statements; (2) reinstate Bach and the other six employees to their former or to substantially equivalent positions; (3) dissolve the paper corporations and contractual arrangements and to reestablish the prior employee system; (4) make whole all of the employees who remained with United Dairy or were discharged for any reduction in salary or fringe benefits that resulted from the illegal change in method of reimbursement; and (5) bargain in good faith with the Union. The ALJ also recommended that all of the seven contested ballots be counted.

The decision of the ALJ was appealed to the Board. On April 17, 1975, a three-member panel affirmed all of the ALJ's findings of unfair labor practices and adopted its recommendation on the disposition of the challenged ballots. United Dairy Farmers Coop. Ass'n, reprinted in App., at 126a. However, it deferred consideration of the challenges to the election and the appropriate remedy pending the counting of the disputed ballots, since it was possible that the Union had won the election. When these ballots were opened, and the valid votes counted, the Union was discovered to have lost the election, 14 to 12. Formulation of the appropriate remedy in light of the Union's loss was subsequently deferred for consideration by the full Board.

In its decision, which was delayed for over four years,*fn3 the Board declined to issue a bargaining order but instead imposed numerous remedial obligations on the employer, in addition to those recommended by the ALJ, so as to eliminate as much as practicable the effects of past unfair labor practices on any future election. The decision included a plurality opinion, joined by two members, and two other opinions, each concurring in part and dissenting in part.

A careful review of these three opinions reveals that the refusal by the Board to issue a bargaining order was technically based on the view expressed in the opinion of one member that the Board lacked such authority when the union did not win the certification election and also did not obtain a card majority. The two members whose plurality opinion became the basis of the Board's order recognized that the Board "may" have the authority under the Act to issue a bargaining order without a card majority, but judged that the facts of this case did not warrant the Board's adoption of such a coercive remedy. Accordingly, they ordered, in addition to the remedies recommended by the ALJ, the imposition of extraordinary election remedies for two years or until a Board certification. These remedies included a right by the Union to reasonable access to employer blackboards and to employees on the premises; a right by the Union to equal time to respond to any address by the employer regarding Union representation; the right to give a 30 minute address prior to any Board election; posting, mailing and public reading to the employees by the employer of the Board's notice; reprinting of the ...

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