Essco Tools, Inc.

700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Easco Tools, Inc. and United Steelworkers of Amer- ica, AFL-CIO-CLC, Petitioner. Case 5-RC- 10931 March 26, 1980 DECISION AND DIRECTION OF SECOND ELECTION BY CHAIRMAN FANNING AND MEMBERS JENKINS AND PENELLO Pursuant to authority granted it by the National Labor Relations Board under Section 3(b) of the National Labor Relations Act, as amended, a three- member panel has considered the objections to an election' held on September 14, 1979, and the Re- gional Director's Report on Objections recom- mending disposition of same. The Board has re- viewed the record in light of the exceptions and briefs and has decided to adopt the Regional Di- rector's findings and recommendations, as modified herein. We agree that the election conducted in this case should be set aside. However, we believe further discussion of the issue involved here is necessary because the question of whether the Petitioner's payments to its election observers impaired the in- tegrity of the election is more complicated, and the answer less obvious, than the Regional Director's report suggests. Prior to the election, the Petitioner informed three eligible voters that if they served as election observers for the Union they would be paid $5 per hour for their regular 8-hour workday regardless of whether they decided to return to work after the election. Approximately I hour before the polls opened, the Petitioner gave two eligible voters $40 pay vouchers ($5 per hour for the regular 8-hour workday) in return for their agreement to act as election observers. Both employees' normal rate of pay was $4.25 per hour. The preelection confer- ence lasted approximately a half hour and the polls were open for I hour. One observer took the day off while the other observer worked his usual shift. In general, it is difficult to determine when pay- ments to election observers merely compensate the employees for serving as observers and when they amount to economic inducements to influence the employees' vote. A labor organization participating in a representation election is entitled to have ob- servers to represent its interest and to pay them. No implication of impropriety arises from the fact of payment alone. Furthermore, it is likely that an organization will select observers who are known ' The election was conducted pursuant to a Stipulation for Certifica- tion Upon Consent Election. The tally was 13 for, and 11 against, the Petitioner; there were no challenged or void ballots. 248 NLRB No. 105 adherents to its cause to assure loyal representation and that employees willing to act as union observ- ers already support the organization. Nevertheless, the opportunity to pay observers presents an op- portunity to "buy" ballot box support and, even in the absence of improper intent on the part of a labor organization, payment may, in certain cir- cumstances, instill in employees who accept the benefit a sense of obligation to vote for the organi- zation. Thus, the issue of whether payments to ob- servers adversely affect employees' freedom of choice in an election is a significant one. The Board considered the issue in Quick Shop Markets, Inc.,2 cited by the Regional Director, and declined to set aside an election on the basis of payments to union observers when it found the payments were not grossly disproportionate to the employees' usual pay rate or to the reasonable value of their work as observers. The Board, how- ever, did not set a precise test for determining whether payments are permissible or improper. Rather, it recognized that such a determination re- quires the exercise of judgment in specific situa- tions. While the Quick Shop decision presumes a comparison between the payments made to observ- ers and the wages they would have received if they had not served as observers, it formulates no mathematical method for deciding when payments are disproportionate and infringe upon the voting rights of employees. Clearly, it does not suggest that a mathematical ratio based on hourly pay, as applied by the Regional Director in this case, is de- terminative. The decision points out that an em- ployee serving as an observer is not performing his or her customary work duties and that there is no logical basis for requiring the same pay rate for the different services. The Regional Director, although attempting to follow Quick Shop, simply applied a mathematical ratio, thus misinterpreting the essence of that decision. Furthermore, he erroneously ex- cluded from his computation the time the observers spent in preelection conferences and post-election ballot counting and considered only the time they devoted to the actual balloting time. Turning to the facts in this case, it does not appear that the Petitioner expressly linked its pay- ments to the way the observers would vote, or that the Petitioner intended the payments to influence the vote. To the contrary, it appears that at the time the Petitioner first arranged to pay the observ- ers there was uncertainty whether the employees would be permitted to work a partial day on elec- tion day and whether they would lose wages by serving as observers. When the Employer decided later, before the election, to allow would-be ob- 2 200 NLRB 830 (1972) EASCO TOOLS, INC. 701 servers for the Petitioner to work a partial day, with full day's wages, the Petitioner obviously was faced with the prospect that if it changed the amounts it had promised it would seem to have "reneged" on an agreement. The Petitioner opted to stay with its original offer. But, as a result, one observer was able to take the election day off from work without loss of pay and the other observer more than doubled his wages that day. It is questionable whether, in these circumstances, the observers, sufficient in number to have affected the results of the election, could have voted independently, without a sense of obli- gation to vote for the Petitioner. The matter is not free from doubt. But precisely because of that, we believe the integrity of our election processes is better served by directing a new election in this case. [Direction of Second Election and Excelsior foot- note omitted from publication.]