Hollywood Ceramics Co., Inc.

HOLLYWOOD CERAMICS COMPANY, INC . 221 The Board has considered the Regional Director's report and the exceptions thereto, and upon the entire record in this case makes the following findings : The Petitioner objected to the election upon the ground, inter alia, that various forms of propaganda distributed to employees during the critical period were similar in content and effect to "election propa- ganda" proscribed by the Board in its decision setting aside the first election referred to above. The Regional Director's investigation showed that immediately prior to the second election employees received copies of "Militant Truth," dated May 1962, which contained four pages of appeals and arguments against unionization based, in part, upon racial considera- tions. In addition, the employees received copies of local newspapers containing editorials and a letter from the Employer which stressed similar appeals and arguments against unionization. The Regional Director found that such propaganda did not impair the employees' freedom of choice in the election and recommended that objections based thereon be overruled. For the reasons stated below, we do not agree. In our opinion, the propaganda complained of is essentially the same type of appeal and argument upon which the Board set aside the first election. We find that the documents in question were intended to and did inflame the racial feelings and other prejudices of the voters on matters unrelated to election issues. As we noted in our prior De- cision setting aside the first election, such propaganda has no place in Board election campaigns since it creates an atmosphere which is not conducive to a sober and informed exercise of the franchise. Accord- ingly, we find that the conditions under which the election was held impeded a reasoned choice as to a bargaining representative and nulli- fied the election. We shall, therefore, set aside the election and direct that a third election be held. [The Board set aside the election held on August 24,1962.] [Text of Direction of Third Election omitted from publication.] Hollywood Ceramics Company, Inc. and United Brick and Clay Workers of America, AFL-CIO, Petitioner. Case No. 21-RC- 7362. December 20, 1962 DECISION AND DIRECTION OF SECOND ELECTION Pursuant to a stipulation for certification upon consent election an election by secret ballot was conducted by the Regional Director for the 140 NLRB No. 36. 222 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Twenty-first Region on September 15, 1961, among the employees in the unit described below. After the election the parties were furnished a tally of ballots which showed that of approximately 49 eligible voters, 48 votes were cast, of which 30 were for, and 16 were against, the Petitioner, and 2 ballots were challenged. The Employer filed timely objections to conduct affecting the results of the election. In accordance with the Board's Rules and Regulations, the Regional Director conducted an investigation and, on October 31, 1961, issued and duly served upon the parties his report on objections, in which he recommended that the objections be overruled, and that the Board is- sue a certification of representatives. The Employer filed timely ex- ceptions to the Regional Director's report and recommendations. Upon the entire record in this case, the Board finds : 1. The Employer is engaged in commerce within the meaning of the Act. 2. The Petitioner is a labor organization claiming to represent cer- tain employees of the Employer. 3. A question affecting commerce exists concerning the representa- tion of employees of the Employer within the meaning of Sections 9(c) (1) and 2(6) and (7) of the Act. 4. The parties stipulated, and we find, that the following employees of the Employer constitute a unit appropriate for the purposes of col- lectiv-e bargaining within the meaning of Section 9(b) of the Act: All production and maintenance employees employed at the Em- ployer's Los Angeles, California, plant, but excluding all office clerical employees, watchmen, guards, technical and professional employees, and supervisors as defined in the Act. 5. In its objections the Employer contends that the circular dis- tributed by the Petitioner to eligibles on the day before the election interfered with the freedom of choice of the employees. The Regional Director's investigation revealed that on the afternoon before the elec- tion the Petitioner distributed a handbill to eligibles printed in Eng- lish and Spanish containing, inter alia, a table which purported to compare wage rates of various job classifications at the above plant with "OTHER UNION CERAMIC PLANTS." This handbill was the last of a series of bulletins and letters issued by the parties, al- though a letter mailed by the Employer to the homes of its employees on September 13 presumably was not seen by most of the employees until September 14, the evening before the election. In the above hand- bill the described hourly rates for Employer's plants did not take into account an existing incentive payment plan, while the specified hourly rates at the "OTHER UNION CERAMIC PLANTS" did include at least a 30-percent incentive payment. The only mention of incentive payments was a sentence in English, at the end of the wage table, which read : "These rates are on Incentive System with an average employee HOLLYWOOD CERAMICS COMPANY, INC. 223 making 20 percent or more wages." The investigation further showed that the plants which were intended to be used as a basis for compari- son, but which were undisclosed in the handbill, were in the same general industry as the Employer but were not truly comparable as to the type of operations and degree of skill required for the jobs in- volved.' The above handbill also contained information as to fringe benefits at other plants, union dues, strike authorization, and an an- nouncement of a meeting to be held that evening. The Regional Di- rector found that the handbill in question could be recognized and evaluated by the employees as propaganda, and recommended that the objections be overruled. In its exceptions the Employer argues that the publication of false wage data immediately before the election should lead the Board to set aside the election under the Gummed Products rule z The rule of that case is not a fixed one; it is merely one test used by the Board in determining whether the integrity of an election has been so impaired that it must be set aside. The basic policy underlying this rule, as well as the other rules in this election field, is to assure the employees full and complete freedom of choice in selecting a bargain- ing representative.' The Board seeks to maintain, as closely as possi- ble, laboratory conditions for the exercise of this basic right of the em- ployees 4 One of the factors which may so disturb these conditions as to interfere with the expression of this free choice is gross misrepresenta- tion about some material issue in the election. It is obvious that where employees cast their ballots upon the basis of a material misrepresenta- tion, such vote cannot reflect their uninhibited desires, and they have not exercised the kind of choice envisaged by the Act. For this reason the Board has refused to certify election results where a party has misrepresented some material fact, within its special knowledge, so shortly before the election that the other party or parties do not have time to correct it, and the employees are not in a position to know the truth of the fact asserted. The Board has limited its intervention to cases of this type because an election by secret ballot, conducted under Government auspices, should not be lightly set aside, and because we realize that additional elections upset the plant routine and prevent stable labor-management relations. We are also aware that absolute precision of statement and complete honesty are not always attainable in an election campaign, nor are they expected by the employees.' Election campaigns are often i The Regional Director found, and no exception was taken thereto, that the other com- pany's "operations, equipment and organization so differ from Employer's that any com- parisons could be only rough approximations." 2 Gummed Products Company, 112 NLRB 1092. 3 This is contemplated by Section 1 of the Act. See also Peerless Plywood Company, 107 NLRB 427. • See General Shoe Corporation, 77 NLRB 124. 5 Celanese Corporation of America, 121 NLRB 303, 306. 224 DECISIONS OF NATIONAL LABOR RELATIONS BOARD hotly contested and feelings frequently run high. At such times a, party may, in its zeal, overstate its own virtues and the vices of the other without essentially impairing "laboratory conditions."" Ac- cordingly, in reaching its decision in cases where objections to elections have been filed alleging that one party misrepresented certain facts, the Board must balance the right of the employees to an untrammeled choice, and the right of the parties to wage a free and vigorous cam- paign with all the normal legitimate tools of electioneering. The formula used in striking this balance has been variously phrased.' Accordingly, we deem it appropriate to restate the rule for guidance of the parties. We believe that an election should be set aside only where there has been a misrepresentation or other similar campaign trickery, which involves a substantial departure from the truth, at a time which pre- vents the other party or parties from making an effective reply, so that the misrepresentation, whether deliberate or not," may reasonably be expected to have a significant impact on the election. However, the mere fact that a message is inartistically or vaguely worded and sub- ject to different interpretations will not suffice to establish such mis- representation as would lead us to set the election aside.' Such am- biguities, like extravagant promises, derogatory statements about the other party, and minor distortions of some facts, frequently occur in communication between persons. But even where a misrepresentation is shown to have been substantial, the Board may still refuse to set aside, the election if it finds upon consideration of all the circumstances that the statement would not be likely to have had a real impact on the election. For example, the misrepresentation might have occurred in connection with an unimportant matter so that it could only have had a de mimiinis effect. Or, it could have been so extreme as to put the employees on notice of its lack of truth under the particular cir- cumstances so that they could not reasonably have relied on the asser- tion. Or, the Board may find that the employees possessed independ- ent knowledge with which to evaluate the statements.to a Recognizing this, we have stated that exaggeration , inaccuracies , half-truths, and name calling, though not condoned, will not be grounds for setting aside elections. 7 See, for example , Gummed Products Company , supra ; Dartmouth Finishing Company, 120 NLRB 262, 266; and Celanese Corporation of America, supra, at 307. 8 To the extent that they are inconsistent with this decision, we hereby overrule those cases which suggest that the misrepresentation must have been deliberate. 9 We are not , of course , considering in this context statements which may be reason- ably construed to contain a threat of reprisal or force or promise of benefit . If the Board concludes that a statement carries such a threat or promise, it is not a defense that the message was equivocally phrased, and the election will be set aside See Dal-Tex Optical Company, Inc., 137 NLRB 1782 10 See , for example, Allis-Chalmers Manufacturing Company , 117 NLRB 744, 7418; Hook Drugs, Inc., 119 NLRB 1502 , 1505 In evaluating the probable impact of a party 's state- ment on the election , one factor which the Board will consider is whether the party making the statement possesses intimate knowledge of the subject matter so that the employees sought to be persuaded may be expected to attach added significance to its assertion. HOLLYWOOD CERAMICS COMPANY, INC . 225 We are satisfied that the Petitioner violated the standards we have set forth. The handbill in question concerned wage rates, a matter of utmost concern to the employees, and the timing of its distribution was such as to prevent any reply to the handbill. Therefore, any sub- stantial misrepresentation could well have significantly affected the election results. We conclude further the leaflet did convey a sub- stantially erroneous picture of the comparative wage situation. As a result of the Union's failure to include any incentive increment in the Employer's described rates, while including an arbitrary addi- tional amount 11 in quoting the purported hourly base rates for "OTHER UNION CERAMIC PLANTS," the Employer's rates were grossly understated and those for the compared plant were very much exaggerated. The omission of any identification of the plant being compared with the Employer's operation could only serve to induce the employees to lend credence to the Union's assertions. Had the name of the plant and the type of work performed been disclosed, the employees might have had some basis for evaluating the informa- tion. For, they then might have learned of the actual dissimilarity of the work and skills at the two plants compared. Our finding of misrepresentation is further supported by the Un- ion's statement, immediately following the table of compared rates, that "These rates are on Incentive System with an average employee making 20°Jo or more wages." This sentence is, at best, ambiguous, and lends itself to three possible interpretations, all of which are mis- leading. Thus, the statement could mean that : (1) both of the listed rates are base rates and at least 20 percent should be added to each to ascertain gross wages, but this would be misleading because the amounts set forth for the compared employer were not base rates and, in fact, contained an incentive increment; (2) both sets of figures are gross rates, including the incentive factor, but this would be untrue because the Employer's rates were not so augmented; and (3) the words "these rates" apply only to those listed for "OTHER UNION CERAMIC PLANTS" and they had been increased 12 by at least 20 percent, but this was false because the Petitioner acknowledged that it added 30 percent to the base rates for the compared plant, thus exaggerating the base rate by at least 10 percent. Thus, each of the possible constructions is equally objectionable because each is a sub- stantial departure from the truth. Furthermore, in our view, if the sentence discussed above was found to be properly explanatory and not itself misleading, the Petitioner's 11 Although as indicated above , the additional amount was said to be 30 percent, exami- nation of the base rates as set forth by the Regional Director reveals that in most in- stances the amount added exceeded 30 percent 12 Additionally, the words " these rates" may also be read as applying only to other plants and as meaning that the amounts set forth are base rates to which 20 percent is to he added This interpretation is essentially the same as alternative (1). 226 DECISIONS OF NATIONAL LABOR RELATIONS BOARD failure to duplicate it in Spanish was likely to have increased the possible impact of the misrepresentation. For, it was by virtue of this explanation that the apparent great difference between the rates might be evaluated. But it appears that approximately one-third of the employees were fluent in or could understand only Spanish. These employees received no explanation, because no translation was made of the explanatory sentence. Hence, these employees were very likely to have been confused and misled. Under all these circumstances, we find that the Petitioner exceeded the bounds of fair lawful electioneering and interfered with the free choice of the employees. Accordingly, we hereby overrule the deci- sion of the Regional Director and set aside the election, and we shall direct that a second election be conducted. [Text of Direction of Second Election omitted from publication.] MEMBERS RODGERS and LEEDOM, concurring : We concur in the result. Commerce Company d/b/a Lamar Hotel and Hotel & Restau- rant Employees & Bartenders International Union, AFL-CIO. Case No. 23-CA-1463. December 21, 1962 DECISION AND ORDER On October 30, 1962, Trial Examiner Reeves R. Hilton issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Intermedi- ate Report.' Thereafter, the Respondent filed exceptions to the In- termediate Report 2 and the General Counsel filed limited exceptions.' Pursuant to the provisions of Section 3 (b) of the Act, the Board has delegated its powers in connection with this case to a three-member panel [Chairman McCulloch and Members Leedom and Brown]. 'We hereby correct the following inadvertent errors in the Intermediate Report: In the section entitled " C. The refusal to bargain," the date of the first letter to the Re- spondent should be July 14, 1962, instead of July 12, and the date of the third letter should be July 24 instead of July 20. 2 As the record , including the exceptions , adequately presents the issues and the posi- tions of the parties, the Respondent's request for oral argument is hereby denied. 3 The General Counsel excepted to the apparently inadvertent omission from the Find- ings of Fact in the Intermediate Report of the following jurisdictional fact: "During this same period less than 75 % of its guests remained for a month or longer." Inasmuch as this was alleged in the complaint and admitted by the Respondent in its answer, the Intermediate Report is amended accordingly. 140 NLRB No. 32.