Simpson Electric Co.

148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Simpson Electric Company, a Division of American Gauge and Machine Company and International Brotherhood of Electrical Workers, Local 117, AFL-CIO. Cases 13-CA-18343 and 13-RC- 14785 April 30, 1980 DECISION, ORDER, AND DIRECTION OF THIRD ELECTION BY CHAIRMAN FANNING AND MEMBERS PENELLO AND TRUESDALE On January 24, 1980, Administrative Law Judge Michael D. Stevenson issued the attached Decision in this proceeding. Thereafter, Respondent filed ex- ceptions and a supporting brief, and the General Counsel filed a brief in answer to Respondent's ex- ceptions and in support of the Administrative Law Judge's Decision. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings,' and conclusions 2 of the Administrative Law Judge and to adopt his recommended Order.3 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- The Administrative Law Judge inadvertently stated that the unfair labor practice charge in Case 13-CA-18343 had been filed on January 8, 1978. The record, however, reveals that the charge was filed on January 3, 1979, and amended on January 8, 1979. 2 The Administrative Law Judge erroneously referred to Respondent's supervisor. Glen Olafson, as the "factory manager of the Elgin facility who personally handed magazines to employees." The record reveals, however, that Olafson was supervisor over only one department in that facility and that he distributed copies of the publication "Meter Reader" to employees within his own department. This finding, however, in no way affects our decision to adopt the Administrative Law Judge's con- clusion that Respondent violated Sec. 8(aXI) of the Act and also engaged in objectionable conduct sufficient to warrant setting aside the election held on December 21, 1978. In adopting the Administrative Law Judge's findings, we find it unnec- essary to rely on his interpretation of statements made by Respondent in a document received in evidence and entitled "A Comprehensive Benefits Program," which summarized Respondent's existing benefits and which was distributed to employees on October 6, 1978. Additionally, we find it unnecessary to rely on his statement that Respondent "could have de- layed its raises for all plants until the critical period at Elgin had ended" (see sec. III, B, 3 of his Decision). The Administrative Law Judge found that a bargaining order was not warranted in this case, noting that the General Counsel did not seek one. No exceptions were taken to that finding. Furthermore, no evidence was presented with regard to the Union's having obtained a card majority and thus the issue was not fully litigated. Under these circumstances we shall not provide for such a remedy but rather shall order that a new election be held. 3 Nothing in our Decision and Order herein shall be construed as re- quiring Respondent to rescind the wage increases and other benefits, the granting of which, we find, violated the Act. 249 NLRB No. 24 lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondent, Simpson Elec- tric Company, a Division of American Gauge and Machine Company, Elgin, Illinois, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. It is further ordered that the election held on December 21, 1978, in Case 13-RC-14785 be, and it hereby is, set aside and that a new election be conducted as directed below. [Direction of Third Election and Excelsior foot- note omitted from publication.] DECISION STATEMENT OF THE CASE MICHAEL D. STEVENSON, Administrative Law Judge: This case was heard before me at Chicago, Illinois, on June 25 and 26, 1979,1 pursuant to a complaint issued by the Regional Director for the National Labor Relations Board for Region 13 on March 9, 1979. In addition, on March 15, 1979, the Regional Director ordered consoli- dated certain issues arising from a representation election in Case 13-RC-14785. The complaint, based on a charge filed on January 8, 1978, by Local 117, International Brotherhood of Electrical Workers, AFL-CIO (herein called the Union), alleges that Simpson Electric Compa- ny, a Division of American Gage and Machine Company (herein called Respondent), has engaged in certain viola- tions of Section 8(a)(1) of the National Labor Relations Act, as amended. The Union's representation petition was filed on June 24, 1978, and sought a representation election among cer- tain of Respondent's hourly rated employees. An election was held pursuant to a Regional Director's decision on October 26, 1978. Objections to conduct affecting the outcome of the election were filed by Respondent and pursuant to a Supplemental Decision on Objections and Direction of Election, dated November 21, 1978, a rerun election was held on December 21, 1978. The tally of ballots served on the parties immediately following the election showed that, of approximately 280 eligible voters, 245 cast ballots, of which none were void, 82 were cast for the Union, 147 were cast against the Union, and 16 ballots were challenged. The challenged ballots were not sufficient in number to affect the results of the election. On December 26, 1978, the Union filed timely objections to conduct affecting the results of the election. In the objections, the Union alleged, inter alia, that, in the critical period before the rerun election,2 Re- ' All dates herein refer to 1978 unless otherwise indicated. 2 In Goodyear Tire and Rubber Company, 138 NLRB 453 (1962), the Board defined the critical period before an election as the interval from the date of the filing of the petition to the time of the election. Conduct occurring during the period found to have interfered with the employees' freedom of choice at the polls may be grounds for setting aside the elec- tion. SIMPSON ELECTRIC COMPANY 149 spondent promised unit employees increases in wages and improvements in fringe benefits.3 Issues 1. Whether Respondent violated Section 8(a)(i) of the Act as alleged by granting to its employees raises in wages, and improvements in fringe benefits for the pur- pose of affecting the outcome of the election. 2. Whether for the reasons stated in item I above, an objection to the conduct of the election held in Case 13- RC-14785 has merit to warrant setting aside the election results. 3. All parties were given full opportunity to partici- pate, to introduce relevant evidence, to examine and cross-examine witnesses, to argue orally, and to file briefs. Briefs, which have been carefully considered, were filed on behalf of General Counsel and Respondent. Upon the entire record in the case, and from my ob- servation of the witnesses and their demeanor, I make the following: FINDINGS OF FACT I. RESPONDENT'S BUSINESS Respondent admits that it is an Illinois corporation en- gaged in the manufacture, design, and sale of electric meters and testing equipment; it has a place of business located in Elgin, Illinois. It further admits that during the past year, in the course and conduct of its business, it has purchased and received goods and materials valued in excess of $50,000 from suppliers outside Illinois. Accord- ingly, it admits, and I find, that it is an employer en- gaged in commerce and in a business affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Respondent admits, and I find, that International Brotherhood of Electrical Workers, Local 117, AFL- CIO, is a labor organization within the meaning of Sec- tion 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Facts Respondent, Simpson Electric, is a division of Ameri- can Gage and Machine Company, Inc., 80 percent of which is owned by Katy Industries. Respondent main- tains facilities in Illinois, California, and Wisconsin. Of these, only the facility located at Elgin, Illinois, was the subject of an organizing drive by the Union. Two elec- tions have already been held as a result of that organiz- ing drive and a third is sought. The instant case involves a dispute between the parties with regard to an increase in wage and benefits in the period before the second election, while Respondent's objections to the first elec- tion were pending. To begin, a list of pertinent events and dates will be helpful: A second objection to the election has, with the approval of the Re- gional Director, been withdrawn. 1. June 6-Respondent first became aware of Union's organizing at Elgin. 2. June 14-Union filed its petition requesting an elec- tion. 3. September 14-Regional Director issued his deci- sion on the unit determination 4 and Direction of Elec- tion. 4. October 26-First election is held and won by the Union. 5. November 2-Respondent filed its objections to the conduct of the election.5 6. November 17-Respondent filed an unfair labor practice charge against the Union for misrepresentation during the preceding election campaign and Respondent further requested a 90-day cooling-off period before the next election.s 7. November 17-Respondent announced its wage and benefit improvements to its employees at all its facilities. These increases were effective December 4, while a 7- percent salary range increase was effective January 1, 1979. 8. November 21-Regional Director issued a report on Respondent's objections to the election setting aside the first election. 9. November 29-Regional Director notified Respond- ent that he would refuse to issue a complaint in the Company's unfair labor practice charge against the Union filed on November 17. 10. November 30-Regional Director issued a notice of second election setting December 21 as the date for the second election. 11. December 20-Respondent distributed copies of "Meter Reader," a house publication, to its employees. This publication reiterated the wage and salary benefits formally announced on November 17; in addition, it con- tained the first written notification of a 7-percent in- crease in salary ranges effective January 1, 1979; finally, the publication also contained the first written notice of improvements in health insurance coverage, the addition- al cost for which was paid by the Company. 12. December 21-Second election is held and won by Respondent. The increases announced on November 17 consisted of 25-cent-per-hour wage adjustment granted to all employ- ees effective December 4. In addition, hourly rate ranges were adjusted upwards by 25 cents per hour7 and salary ranges were adjusted upwards by 7 percent effective Jan- uary 1, 1979. To these wage and salary increases were added group insurance benefit improvements such as an 4 On September 22, Respondent filed a request for review of this deci- sion alleging the unit of hourly and salaried workers was inappropriate. On November 22, this appeal was denied. I These objections, which were found to be valid by the Regional Di- rector, alleged that, shortly before the election, the Union distributed leaflets to Respondent's Elgin employees saying that Respondent had been found guilty of certain unfair labor practices. Said statements were untrue. I The parties stipulated that, based on a telephone call from General Counsel to Respondent's attorney, Respondent had knowledge prior to November 17 that the Regional Attorney intended to sustain Respond- ent's objections to the first election. They could not agree on the date of this prior notice. I This increase was not applicable to technicians and tool-and-die per- sonnel which were given different salary ranges. SIMPSON ELECTRIC COMPANY 149. 150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD increase in major medical claim coverage per incident from $20,000 to $50,000, coverage from first day of birth under major medical provisions and other improvements in health care insurance benefits. Prior to the December 4 effective date of increased coverage, the last increase in health insurance benefits occurred in 1974. At that time, Respondent shared with its employees the additional pre- mium cost. For the increase at issue in this case, Re- spondent paid the entire additional premium cost. The wage and benefit increases and improvements were announced to employees in a three-step process: First, the word-of-mouth method; an outline of the in- creases was distributed to managers and supervisors about I week before the November 17 formal announce- ment date. (G.C. Exh. 2.) Top management explained the increases to middle management which in turn held group meetings with respective subordinate employees for the purpose of explaining these wage and benefit in- creases. While not completely clear, these group meet- ings were apparently held about I or 2 days before No- vember 17. The second method of announcing benefits to employ- ees was the posting of a formal notice on November 17, in and around Respondent's facilities, reflecting, in spe- cific, the increase in wages and, in general, the increase in salary ranges. The notice reads as follows: SIMPSON ELECTRIC COMPANY NOTICE WAGE ADJUSTMENTS November 17, 1978 Simpson Management is pleased to announce that a $0.25 per hour wage adjustment will be granted to all hourly employees effective Monday, December 4, 1978. Hourly rate ranges will also be adjusted up- wards by $0.25 per hour. At the same time, salary ranges will be adjusted upward. Your supervisor will have any information you will need to know about the program. We share with each of you the greatest confidence in the future of our company,-a confidence based upon the knowledge that our people will respond to the challenge for the increased productivity and in- creased sales that will permit us to remain competi- tive and thereby maintain Simpson's hard-won ac- ceptance in the marketplace. /s/ Gerald N. Goldberger President GNG:vp The third and final method of announcing benefits to employees was the distribution on December 20 of the Meter Reader, referred to in the listing of pertinent dates above. This magazine is published two times a year, in July and in December. The usual method of distributing the Meter Reader in the past had been to drop off bun- dles of the publication around the plant so that employ- ees could take one off the stack if they desired. On De- cember 20, Glen Olafson, factory manager of the Elgin facility, personally handed the magazines to employees. B. Discussion and Analysis The announcement or granting of wage and benefit in- creases during an election campaign, given with the in- tention of inducing employees to reject the Union, is un- lawful since the employees will read this as a demonstra- tion of employer economic power held in reserve which can just as readily be used for reprisals. N.L.R.B. v. Ex- change Parts Company, 375 U.S. 405 (1964). General Counsel may rely on the presumption of unlawfulness after having shown that wage and benefit increases were made during the critical period before an election. In this case, the formal announcement of wage increases on No- vember 17 was preceded by formal announcements from supervisors to employees at group meetings. Then writ- ten announcements of other increases in salary ranges and health insurance benefit improvements followed on December 20. The election was December 21. I find that the increases occurred within the critical period. As the court stated in N.L.R.B. v. Styletek, Division of Pandel-Bradford. Inc., 520 F.2d 275, 281 (Ist Cir. 1975): ". .. whatever the parameters of the sensitive pre- (and post-) election periods, this period is obviously well within them." The court in Styletek states at 280 that even postelection benefits, while there is the possibility of a rerun election, have been regarded as prima facie in- terference. 8 In this case, a finding of a prima facie case is further supported by two additional factors. First, Respondent increased its health insurance benefits in the manner de- scribed in "The Facts" and paid the entire additional premium. The last increase in insurance benefits occurred in 1974 when Respondent shared the increased premium cost. In defending this increase in benefits, Respondent first argues that the planning for these benefits occurred prior to the critical period. I agree. The record shows that Warren Funst, general counsel for Katy Industries, had begun the planning for the improvements as far back as April 1978. The record also shows that the insurance carrier did not receive final authority to implement the insurance benefits until December 4. Thus, the timing be- comes of great importance. In Hineline's Meat Plant, Inc., 193 NLRB 867 (1971), the employer announced to em- ployees 11 days before the election a new profit-sharing plan. The planning for the profit sharing had begun 4 days before the Union's petition had been filed. The Board found a violation because they believed the timing of the announcement of the plan was calculated and de- signed to influence the employees in their choice of a bargaining representative in the election.9 Thus, "Prede- termination alone is not determinative, the timing of the announcement must also be considered." N.L.R.B. v. 8 See also Luxuray of yew York, Division of Beaunit Corporation v. N.L.R.B., 447, F.2d 112, 118-120 (2d Cir. 1971); N.L.R.B. v. Gruber's Super Marke,. Inc., 501 F.2d 697, 702-703 (7th Cir. 1974), enfg. 201 NL.RB 612 (1973); Triangle Plastics, Inc., 166 NLRB 768 (1967); Ralph Printing & Lithographing Co., 158 NLRB 1353 (1966); Mercury Industries, Inc., 242 NLRB No. 24 (1979). But see N.L.R.B. v. Ambox. Incorporated, 357 F.2d 138, 141 (5th Cir. 1966). 9 See also N.L.R.B. v. Rich's of Plymouth, Inc., 578 F.2d 880, 883 (Ist Cir. 1978). SIMPSON ELECTRIC COMPANY 151 Arrow Elastic Corporation, 573 F.2d 702, 706 (st Cir. 1978). To the extent that Respondent seeks to link the timing of its health insurance benefits improvements to the timing of its wage increases, I have already found the latter presumptively unlawful. Therefore, any alleged historical policy of linking both increases together must fail as a defense here. Another aspect of this issue concerns a letter from Re- spondent to its employees dated October 6, containing Respondent's arguments why its employees should vote against the Union. Respondent included with this letter a separate two-page document summarizing existing com- pany benefits. This document reads in part: Simpson Electric A Comprehensive Benefits Program Note: These are your benefits which Simpson pro- vides. They are reviewed frequently to keep them updated. Under NLRB restrictions, we cannot proceed with further review at this time. Emphasis supplied. Jt. Exh. 22] A fair interpretation of this statement is that Respondent would increase benefits but for NLRB restrictions and that said increases would come when the election was over. Then, Respondent increased benefits before the second election. Not only did this act convey to employ- ees that support for the Union would be futile, as argued by the General Counsel, but, also, it conveyed to the em- ployees that Respondent's power was sufficient even to overcome "NLRB restrictions." The Company never ex- plained to employees why "NLRB restrictions" did not apply to the period before the second election. The infer- ence was that only the employer could affect their bene- fits, a classis example of a "fist inside the velvet glove." N.L.R.B. v. Exchange Parts Co., supra at 409. I further agree with General Counsel that the fact that Respondent's actions may have been undertaken as a result of legal advice is no defense to a course of con- duct which is otherwise illegal. ° Finally, I note the fact that Respondent paid the entire cost of the increased premium. In 1974, the date of the last increase in health insurance benefits, Respondent shared the cost with the employees. Respondent states in his belief, "Only once in the last ten years has Simpson passed along insurance cost increases to employees; this was in 1974." Unfortunately, the record does not tell how many times in the last 10 years health insurance benefits were increased prior to the 1974 increase. In the absence of this evidence, I consider the fact that Re- spondent paid the entire cost of increased premiums in December, still another factor which supports the find- ing of a prima facie case. In finding that General Counsel has a prima facie case, I have relied on the totality of the evidence as discussed above, including a final factor which I discuss next. The manner of Respondent's announcement of benefits, in the context of this case, is convincing evidence of an unlaw- ful intent to influence the second election. As described 1o The Great Atlantic and Pacific Tea Co.. Inc. 166 NLRB 27 (1967). in "The Facts," Respondent used three methods, word of mouth, posted notices, and publication in the Meter Reader to announce benefits. The use of three modes of announcing the wage and benefit increases, together with the sequence of an- nouncement, was a departure from past practices. Usual- ly one of these methods was used to announce wage and benefit increases and occassionally two methods were used, but never all three. Furthermore, the Meter Reader was never used before to announce wage increases. Moreover, the manner of distribution of the Meter Reader on December 20 can only be described as ex- traordinary. In the past, the magazine had been placed in bundles in and around the plant for employees to take as they wished. One day before the election the factory manager himself was passing out these magazines to em- ployees!' This, of course, conveyed the impression to employees that Respondent had good news for them to read before the election. Whether they had heard or read the news before became irrelevant. Respondent argues that the manner of announcement of benefit is a nonissue. I disagree and find that the manner of distribution is highly probative and consistent with other evidence sup- porting the presumption of unlawfulness. Accordingly, it becomes necessary to examine the defenses tendered by Respondent to the extent not yet discussed to see wheth- er they are sufficient to rebut the presumption. Respond- ent contends that its actions in this case are justified by past practice and business necessity. A full discussion of these defenses follows. I. The alleged past practice of wage increases every II months Respondent first of all argues that, in announcing the wage and salary increases at issue, it was merely follow- ing past practice of wage increases every I I months. Be- ginning with the current wage increases, I note Respond- ent's recent history of increases: Effective Date (1) 12/4/78 Description (a) General Wage increase .25 per hour for all hourly employees at all Respondent's facilities (b) Wage range increase .25 per hour for each job classification (c) Exempt and nonexempt salary range increases (7 percent, and effective 1/1/ 79 II Respondent has not presented evidence to show that, at its other plants where there was no union election pending, its factory manager personally distributed copies of the Meter Reader to employees. Accord- ingly, I must conclude that this method was used only at the Elgin facili- ty. SIMPSON ELECTRIC COMPANY 151 152 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (2) 1/1/78 Wage range increase Affected only those hourly rated employees who were below the new grade minimum. They received wage adjustment to the new minimum grade (3) 2/28/77 General wage increase 5 percent for all employees (4) 4/5/76 Salary increment bracket extended from 24 months to 60 months (5) 11/17/75 General wage increase 5 percent for all employees in anticipation of minimum wage change effective 1/1/ 76 (6) 7/16-12/31/73 General wage increase .06 per hour effective 7/16/73 and .06 per hour effective 12/31/73 (Chicago, Eligin, Aurora, and Escondido employees only; Wisconsin employees received two raises of .05 per hour) (7) 7/12/71 .06 per hour effective 7/12/ 71 and .06 per hour effective 1/3/72 (Chicago, Elgin, and Aurora employees only; Wisconsin employees received two raises of .05 per hour) (8) 7/28/68 .06 per hour effective 7/28/ 69 and .06 per hour effective 1/5/70 (Chicago, Elgin, and Aurora employees only; Wisconsin employees received two raises of .04 per hour) The above does not indicate to me any convincing pat- tern of wage increases at 11-month intervals sufficient to be a valid defense to the wage increases announced during the critical period at issue here. Over the years covered, there are major differences between what has occurred in the past and what is at issue here. These differences include amount and type of increase, reason for increase, and location of affected em- ployees. Moreover, the intervals for wage increases, par- ticularly in the earlier part of the relevant period, does not show an I -month pattern. In J. C. Penney Co., Inc. v. N.L.R.B., 384 F.2d 479, 484-485 (10th Cir. 1967), a case similar to the instant case, the court affirmed the Board's rejection of a defense based on a historical prac- tice of wage increases every 12 to 15 months with a typi- cal interval being 14 months. The Board had held that, with a decision in the representation case iminent and the possibility of an election soon thereafter, a matter of rea- sonable expectation, it was difficult to understand why the employer felt impelled to grant the wage increase at the time it did. The increases in Penny, as here, could have been withheld until after the election and still been within the customary span of time. The court affirmed the Board's finding of an 8(a)(1) violation. It is true, as General Counsel argues, that Respondent has never given an increase of the type and coverage as that in issue here. 2 Therefore, Respondent's evidence is even weaker than that which the Board and later the court rejected in Penny. 2. The alleged past practices of anticipating increases in employees' social security withholding taxes and in the federal minimum wage Somewhat related to Respondent's first defense, yet deserving of special consideration is Respondent's al- leged defense of anticipating increases in social security withholding taxes and Federal minimum wage rates. Both were increased effective January , 1979. While none of the salaried individuals within the bargaining unit were below the new Federal minimum wage, they were nevertheless subject to the same increased social se- curity taxes as the hourly rated employees. However, the salaried employees in the bargaining unit received no salary increase prior to January 1, 1979. While the record does not contain a detailed list of past increases in Federal social security withholding taxes so that these can be compared to Respondent's salary increases de- tailed above, it does appear that in 1972 the rate of with- holding was 5.2 percent on the first $9,000 of earnings while in 1973 the rate was 5.85 percent on the first $10,000 of earnings. The wage increases for the period of increase were effective 7-16-73 and 12-31-73. Thus, there does not appear to be the same coincidence as is present here between an increase in the withholding tax and increase in wages. Turning next to Respondent's history of wage in- creases with respect to anticipating an increase in the Federal minimum wage, the evidence is somewhat stronger, yet still not persuasive. In the past, beginning in 1969, when Respondent anticipated a raise in the Federal minimum wage, it documented a perceived need for a salary increase in anticipation of the raise. Thus, the record shows that on June 11, 1967 (Resp. Exh. 1), on June 21, 1971 (Resp. Exh. 2), and on September 20, 1975 (Jt. Exh. 3), Respondent discussed in detail why it thought that a wage increase before an increase in the Federal minimum wage was necessary. No such docu- mentation is present in this case. Moreover, there was no convincing evidence to show that employees expected any increase in wages prior to the January 1, 1979, in- crease in the Federal minimum wage. 13 To support its contention here, Respondent cites the case of International Union of Electrical, Radio and Ma- chine Workers, AFL-CIO, Local 806 [SNC Manufacturing Co., Inc.] v. N.L.R.B., 434 F.2d 473 (D.C. Cir. 1970). Re- spondent argues that this case approves the concept that a company may legitimately increase wages in anticipa- tion of an increase in the Federal minimum wage, even during a union election campaign. However, this case does not apply here. In affirming the Board's holding that certain wage increases granted to employees near 2 See Arthur Fulmer of Mississippi, Inc., 212 NLRB 732 (1974). '3 N.L.R.B. v. Rich'v of Plymouth, Inc.. supra at 884. SIMPSON ELECTRIC COMPANY 153 the time of the election did not violate the Act, the court, in Local 806, found it significant that the payment period in question was the fourth step in a 5-year plan and that, 2 days prior to the wage increase, the company informed the union of its plan to increase and the union did not object. Neither of these factors is present in the instant case. Moreover, other factors involving improve- ments in health insurance benefits and the method of an- nouncing all the wage and benefit increases, all detailed above, make Local 806 and Respondent's defense inappli- cable here. 3. Other alleged defenses Respondent raises several other defenses to its presum- ably unlawful wage increases. These can all be classified as business-necessity defenses. Respondent first argues that it had a problem with high turnover. The record shows Respondent's first concern about this problem on April 5, 1978.(G.C. Exh. 5) In the memo, Respondent's personnel director told Gerald Goldberger, Respondent's president, that Respondent's low wages were causing high turnover. In part, the memo reads, "There is noth- ing that is really surprising in the results [of the compen- sation survey]." Thus, when Respondent contends in its brief that "Simpson's 1978 turnover rate was so high that it could fairly be classified as disastrous," one is inclined to be unimpressed since wages could have been raised back in April when the problem was first identified and some 2 months before Respondent became aware of the Union's interest in organizing the Elgin plant. This de- fense has little probative value for raising wages and benefits at the time in question. If anything, the fact that Respondent waited until it did supports rather than re- futes the presumption of unlawful increases. 14 Respondent also raises the argument of compulsion based on the premise that because it granted wage and benefit increases at its 10 facilities nationwide, where two-thirds of Respondent's hourly workers are em- ployed, it was forced to give the same increases to the remaining one-third of Respondent's workers at Elgin. None of the other eight facilities was the object of a union organizing campaign. In support of its contention, Respondent cites Essex International, Inc., 216 NLRB 575 (1975), and other cases. In Essex, the employer made its announcement at the same time and in the same manner as it had in the previous 8 years, irrespective of the existence of a union campaign. This central fact is not present in the instant case. Respondent's other cases may be similarly distinguished. The mere fact that Re- spondent elected to increase the wages and benefits at its other facilities in California and Wisconsin at the same time it increased benefits at the Elgin plant does not render lawful what would otherwise be unlawful. It is true that Respondent could not have increased wages and benefits at the other plants, but not at Elgin. Howev- er, it could have delayed its raises for all plants until the critical period at Elgin had ended. This possibility is not discussed by Respondent in its brief. As the court stated in N.L.R.B. v. Styletek, supra, 520 F.2d at 280 (Ist Cir. 1975): '4 Frito-Lav. Inc. v. N L.RB., 585 F 2d 62. h6 (3d Cir 1978). Justifying the timing is different from merely justi- fying the benefits generally. Wage increases and as- sociated benefits may well be warranted for business reasons; still the Board is under no duty to permit them to be husbanded until right before an election and sprung on the employees in a manner calculated to influence the employees' choice. 5 Respondent also contends that it showed good faith by asking for a 60- to 90-day cooling-off period which, if granted, would have sufficiently dissipated the effect of the unlawful increases. This argument has three flaws: First, it would have permitted Respondent to benefit from its own misconduct by delaying the election for the time requested. Second, Respondent would have addi- tional time to attempt to convince its employees to vote against the Union. Finally, Respondent's employees would have their right to vote in a speedy election de- feated for reasons over which they had no control and for which they were not responsible. Respondent cites no case in support of its argument here and I find that the defense is not valid. I reject Respondent's defenses, which I have consid- ered both individually and in toto, and I find that it has not rebutted the presumption of unlawfulness raised by the General Counsel's prima facie case. I further find that Respondent has violated Section 8(a)(l) of the Act as the increases were reasonably calculated to, and did, inter- fere with the employees in the exercise of their freedom of choice in selecting or rejecting the Union as their col- lective-bargaining representative. C. The Objection to the Election I have found, supra, that, on December 4, Respondent unlawfully gave the unit employees increases in wages and benefits to undermine the Union's organizational campaign. This conduct was sufficient to have interfered with the election and to warrant setting the election aside. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, found to constitute unfair labor practices occur- ring in connection with the operations of Respondent de- scribed in section I, above, have a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor dis- putes burdening and obstructing commerce and the free flow thereof. CONCLUSIONS OF LAW I. Simpson Electric Company, a Division of America Gage and Machine Company, Inc., is an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. International Brotherhood of Electrical Workers, Local 117, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. ""See also N.LR. B. . Arrow Elalic (orp. 573 F 2d 702 SIMPSON ELECTRIC COMPANY 153 154 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. By granting wage and benefit increases to its em- ployees to undermine the Union's organizational cam- paign, Respondent has interfered with, restrained, and coerced its employees in the exercise of their rights guar- anteed in Section 7 of the Act and has engaged in unfair labor practices in violation of Section 8(a)(1) of the Act. 4. The Union's objection has been sustained by the evi- dence and Respondent has thereby interfered with and il- legally affected the results of the Board election held on December 21, 1978. 5. The aforesaid unfair labor practice affects commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in an unfair labor practice within the meaning of Section 8(a)(l) of the Act, I shall recommend that it cease and desist therefrom and take certain affirmative action to ef- fectuate the policies of the Act. Further, having found that the Union's objection to the election was sustained by the evidence, I shall rec- ommend that the election held on December 21, 1978, be set aside and a new election be ordered by the Regional Director as soon as feasible. 16 Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER' 7 The Respondent, Simpson Electric Company, a Divi- sion of American Gage and Machine Company, Inc., Elgin, Illinois, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Granting wage and benefit increases to its employ- ees to undermine the Union's organizational campaign. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of their rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act: (a) Post at its Elgin, Illinois, facility copies of the at- tached notice marked "Appendix." 18 Copies of said notice, on forms provided by the Regional Director for Region 13, after being duly signed by Respondent's au- 8 The General Counsel does not seek a bargaining order in this case. Given the complete history of this case, I am in agreement and therefore will not recommend such. A' In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Sec. 102.48 o the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. IH In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." thorized representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not al- tered, defaced, or covered by any other material. (b) Notify the Regional Director for Region 12, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. IT IS FURTHER RECOMMENDED that in Case 13-RC- 14785 the Board issue an Order sustaining Petitioner Union's objection to employer conduct affecting the stat- utory election held therein under the Act on December 21, 1978, to the extent occurring between November 2 (the date of the filing of objections to the first election) and December 21, 1978 (the date of election), therein and found to have constituted an unfair labor practice in Case 13-CA-18343 setting aside said election and its out- come; and directing that a third election be held as soon as feasible, under the supervision of and at such time as the Board's Regional Director for Region 13 deems that circumstances permit free choice of bargaining repre- sentative. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An agency of the United States Government After a hearing at which all sides had an opportunity to present evidence and state their positions, the National Labor Relations Board found that we have violated the National Labor Relations Act, as amended, and has or- dered us to post this notice. WE WILL NOT grant wage and/or benefit in- creases to our employees to undermine a union's or- ganizational campaign. WE WILL NOT in any like or related manner in- terfere with, restrain, or coerce our employees in the exercise of their rights guaranteed them by Sec- tion 7 of the Act. The election held on December 21, 1978, by the Na- tional Labor Relations Board has been set aside and its results voided because of our unlawful conduct affecting the outcome of that election, as found by the Board, during the period preceeding that election. In due time, another election will be held, and you will be notified of the date, time, and place. SIMPSON ELECTRIC COMPANY, A DIVISION OF AMERICAN GAGE AND MACHINE COM- PANY, INC.