Justia Federal District Court Opinions

These cases are before us upon the petitions of J. P. Stevens & Co., Inc. (hereinafter "Stevens" or "the Company"), and the Industrial Union Department, AFL-CIO, and Textile Workers Union of America, AFL-CIO (hereinafter "the Union"), to review an order of the National Labor Relations Board, and upon the Board's cross-application for enforcement of its order. The Board's "Decision and Order," dated June 5, 1970, is reported at 183 NLRB No. 5.

Stevens, a Delaware corporation engaged in the manufacture and distribution of textile products, owns and operates about 85 textile plants throughout the country. Within the Company's Synthetics Division is a group of six mills constituting the "Shelby group," including a plant in Shelby, North Carolina, known as the Cleveland Plant. The Board found that the Company violated Sec. 8(a) (1) of the National Labor Relations Act by announcing at the Cleveland Plant the establishment of an additional paid holiday two days before a scheduled Board election, in order to influence the outcome of the election. The Company also operates two hosiery manufacturing plants in Hickory, North Carolina, known as Longview Plant #1 and Longview Plant #2. The Board found that the Company violated Sec. 8(a) (1) and (3) of the Act at Longview Plant #1 by interrogating, threatening and coercing employees and by constructively discharging employee Geneva M. Beck because of her union activities. The Board's order, in addition to the usual posting of notices and reinstatement provisions, directed extraordinary relief, as hereinafter explained. We enforce the Board's order.

The Cleveland Plant Election

A representation election was scheduled to be conducted at the Cleveland Plant on Wednesday, May 28, 1969. On the preceding Monday, May 26, 1969, James Sheppard, General Manager of the Shelby group, gave three separate speeches to groups of employees assembled on each shift in the plant warehouse. Primarily, the content of each speech was the Company's opposition to the Union. During each speech he announced that, in keeping with the trend in the textile industry, there would be an "upward adjustment of wages," effective July 7, and that the Company was "incorporating an additional paid holiday." The selection of the day or date of the holiday to be added was not then announced. Similar announcements by posting notices were made at all 85 Stevens plants on May 26, but only at the Cleveland plant were the employees informed orally of the wage increase and additional holiday, in addition to the usual method of a written notice posted on bulletin boards.¹

The Board found that the timing of the announcement of the wage increase was controlled by an industry-wide wage movement since several days preceding Stevens' announcement other companies had made similar announcements, particularly Burlington Mills, a recognized pace setter in the textile industry. There was no evidence, however, as to what other companies were doing with respect to holiday benefits, and the Board concluded that the announcement of the additional paid holiday two days before the scheduled election at the Cleveland Plant violated Sec. 8(a) (1) of the Act.

In National Labor Relations Board v. Exchange Parts Co., 375 U.S. 405, 84 S.Ct. 457, 11 L.Ed.2d 435 (1964), the Supreme Court made clear its rationale in holding that it was an unfair labor practice for an employer to confer economic benefits on its employees for the purpose of inducing them to vote against a union. The Court stated:

"The danger inherent in well-timed increases in benefits is the suggestion of a fist inside the velvet glove. Employees are not likely to miss the inference that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged." 375 U.S. at 409, 84 S.Ct. at 460.

The issue in such cases is the Company's motive. N. L. R. B. v. Gotham Industries, Inc., 406 F.2d 1306 (1 Cir. 1969); see Owens-Corning Fiberglass Corp. v. N. L. R. B., 407 F.2d 1357 (4 Cir. 1969). The question is whether there is substantial evidence to support a finding that the employer's intent in granting the benefit or in timing the announcement of the granting of the benefit was to restrict its employees' freedom of choice by giving them cause to infer that the benefit might be withdrawn or future benefits withheld should they select a union to represent them. Section 8(a) (1) "prohibits not only intrusive threats and promises but also conduct immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect." Exchange Parts, supra, 375 U.S. at 409, 84 S.Ct. at 460.

The Company argues that it was only natural that it should announce the additional paid holiday at the same time as the wage increase. The Board answers that the Company could and should have postponed the announcement of the added holiday until after the election. Of significance here is the testimony of General Manager Sheppard as to why the Company proceeded with the announcement of a wage increase at the Cleveland Plant even though the election was proximate:

"Q. Would you state for the record why even though that election was scheduled, why you nevertheless went ahead and announced the improvements at this plant?

"A. We have always enjoyed the confidence and tried to merit the confidence of our people, and historically when a wage increase has been announced [by other companies in the textile industry], we have announced shortly thereafter. This announcement [of a wage increase on Friday, May 23, 1969, by Burlington Mills] was in the Charlotte Observer by Burlington. We knew that over the weekend our people would read it and they would be concerned about what action we would take.

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"Q. Mr. Sheppard, sir, when was it and how was it that you first learned that any mills had announced that they were going to give a wage increase in '69?