Cumberland Wood and Chair Corp.

312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Cumberland Wood and Chair Corp . and Teamsters Local Union 651, affiliated with International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, Petitioner. Case 9-RC-10208 June 10, 1974 DECISION AND CERTIFICATION OF REPRESENTATIVE BY MEMBERS FANNING, JENKINS, AND KENNEDY Pursuant to a Stipulation for Certification Upon Consent Election executed by the parties, and approved by the Acting Regional Director for Region 9 of the National Labor Relations Board on July 27, 1973, an election by secret ballot was conducted in the above-entitled proceeding on August 24, 1973, under the direction and supervision of said Acting Regional Director. Upon the conclusion of the election, a tally of ballots was furnished the parties which shows that there were approximately 180 eligible voters and that 179 ballots were cast, of which 89 were for the Petitioner, 87 were against the Petitioner, 2 were challenged, and I was void. The challenged ballots are sufficient in number to affect the results of the election. On August 31, 1973, the Employer filed timely objections to conduct affecting the results of the election. The Acting Regional Director conducted an investigation of the issues raised by the challenged ballots and objections and, on November 7, 1973, issued and duly served on the parties his Report on Election. In his report, the Acting Regional Director recommended, in accordance with the stipulation of the parties, that the challenge to the ballot of Gary Lynn be sustained, and that no disposition be made of the challenge to the ballot of Harold Lovins as it could not affect the results of the election. He also recommended that the Employer's objections be overruled and the Petitioner certified. Thereafter, the Employer filed timely exceptions to the Acting Regional Director's findings and recommendations with respect to Objections 1 through 6, inclusive, and 8, and a brief in support of its exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the I The Employer's exceptions, in our opinion, raise no material or substantial issues of fact or law which warrant reversal of the Acting Regional Director's findings or recommendations, or which require a hearing. In the absence of exceptions, we adopt pro forma the Acting Regional Director's recommendations with respect to the challenged ballots and his recommendation that the Employer's Objections 7 and 9 be overruled. We conclude, contrary to our dissenting colleague, that the Petitioner has not engaged in a material misrepresentation with respect to the Employer's National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. Upon the entire record in this case, the Board finds: 1. The Employer is engaged in commerce within the meaning of the Act, and it will effectuate the purposes of the Act to assert jurisdiction herein. 2. The Petitioner is a labor organization claiming to represent certain employees of the Employer. 3. A question affecting commerce exists concern- ing the representation of employees of the Employer within the meaning of Section 9(c)(1) and Section 2(6) and (7) of the Act. 4. The parties stipulated, and we find, that the following employees constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All production and maintenance employees and truck drivers at Plants Nos. 1 and 2 located on North Highway 27, Somerset, Kentucky, but excluding all office clerical employees, technical employees, professional employees, guards and supervisors as defined in the Act. 5. The Board has considered the Acting Regional Director's report and the Employer's exceptions thereto, and hereby adopts the Acting Regional Director's findings and recommendations.' Accordingly, as the tally shows that the Petitioner has received a majority of the valid votes cast, we shall certify the Petitioner as the collective-bargain- ing representative of the employees in the appropri- ate unit. CERTIFICATION OF REPRESENTATIVE It is hereby certified that a majority of the valid votes has been cast for Teamsters Local Union 651, affiliated with International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America, and that said labor organization is the exclusive representative of the employees in the unit found appropriate, within the meaning of Section 9(a) of the National Labor Relations Act, as amended. MEMBER KENNEDY, dissenting: My colleagues conclude that Petitioner's election eve misrepresentation overstating the Employer's profits. To constitute a "misrepresentation," a statement must refer to a matter concerning which the person making the statement has, or can reasonably be perceived to have , knowledge. The Petitioner here clearly had no knowledge of the Employer's profits nor did it imply such knowledge. Rather, it simply gave its estimate of the profits on the basis of a formula or assumptions which it set forth, and which the employees could evaluate for themselves if they chose. In our opinion , the mere fact that the formula or assumptions proved to be erroneous does not make the estimate based thereon a "misrepresentation." 211 NLRB No. 55 CUMBERLAND WOOD & CHAIR CORP. 313 profits by 557 percent does not constitute a substan- tial misrepresentation within the meaning of the Board's Hollywood Ceramics rule.2 I cannot agree. Accordingly, I would sot the election aside.3 The election herein vas conducted on August 24, 1973. Petitioner acquired a two-vote majority-89 to 87. Nine days before the election, questions pertain- ing to the Employer's profitability and profit-sharing contributions were raised at a union meeting. Petitioner's business agent, Ken Silvers, assured the employees that he would examine "Standard & Poor's" and "Moody's" financial references in order to ascertain the Company's economic position. Thereafter, by letter dated August 22, 1973-2 days before the election-Silvers told the employees that their wages were "poor," their fringe benefits "terrible," they did not have any job security, and the Company feared unionization because unionized employees would "find out about the profits and demand their share for their work." Silvers then wrote: If a Company has a profit sharing plan base [sic] on 10% going into it and if they put $48,000 into the plan in a year, this means that they made $480,000 profit, almost 1/2 million dollars. Silvers repeated these figures the day before the election during a union meeting when he stated: Anyone making half a million dollars is not your friend . . . . Cumberland Wood and Chair has a profit plan and they put 10 per cent of its profit into it. Last year $48,000 went into the plan, and that is 10 per cent of $480,000-their profit. The Acting Regional Director determined that "the utterances were incorrect." Indeed they were. During fiscal year 1972, the Employer's corporate net profits were not $480,000-but $73,000-and contributions to the profit-sharing plan constituted not 10 percent of its net profits-but 71 percent.4 In my view, the election cannot stand in the face of such eleventh-hour distortions. Silver's misrepresen- tations obviously constituted a substantial departure from the truth. The Employer's assertion that it was precluded from making an effective reply because it was completely unaware of the misrepresentations prior to the election is not disputed. Finally, a company's profitability and the extent to which 2 Hollywood Ceramics Company, Inc., 140 NLRB 221, 224. 3 See also my dissenting opinion in LaCrescent Constant Care Nursing Center, Inc., 208 NLRB No. 9. 4 Nor were these misrepresentations isolated apparently . The Employer has supported its other objections by sworn employee affidavits, alleging, inter alia, that Petitioner ( I) at one point stated that the Employer's profits were $800,000, (2) claimed to have negotiated contracts at two neighboring plants providing for average wage rates in excess of $3 per hour when in actuality the averages were $2 and $2.25, and (3) claimed to have finalized a third agreement which , when implemented , would provide employees with employees share in that profitability are obviously matters of great significance to the employees. Thus, any misrepresentation with regard to these matters may reasonably be expected to have a significant impact on the election.5 Accordingly, it is evident that all of the factors set forth by the Board in Hollywood Ceramics, supra, for determining when campaign misrepresentations justify setting the elec- tion aside are present and operative here. In finding Silver's remarks not objectionable, my colleagues apparently rely upon the Acting Regional Director's conclusions that they (1) were mere conjecture, (2) were based upon employee-supplied statistics, and (3) were capable of evaluation by the employees. I cannot accept these conclusions. While the word "if" does precede the otherwise declaratory statements regarding the Employer's profitability and profit-sharing contributions appear- ing in the August 22 letter, this hardly renders the statements mere conjecture as far as the employees are concerned. Petitioner's reference was to this Employer-indeed, the entire letter was devoted to allegations that the employees were being "short- changed," and the Employer opposed unionization for fear that it would be compelled to disclose its profits. Furthermore, when Silvers repeated the remarks during the union meeting on the day before the election, they were not couched in hypothetical terms. Nor does the fact that Petitioner may have relied in :part upon information initially supplied by certain employees during an August 15 union meeting make the remarks any less objectionable. As mentioned earlier, Silvers noted the statistics given by the employees and stated that he would personally examine certain leading financial services in order to ascertain the Employer's true financial position. Silvers then utilized the same statistics a week later in his letter and speech, which served to verify their original authenticity in the minds of the employees. 'Moreover, I question the wisdom of any policy which would permit a party to avoid responsibility for the! accuracy of its campaign propaganda merely by asserting that it was relying upon the representations of others. It is farfetched to believe that the truckdrivers and production and maintenance employees in the unit were sufficiently sophisticated with regard to corpo- raises in excess of $ 1 per hour, when the initial raises were actually limited to 35 cents per hour. Since these affidavits constitute evidence which, prima facie, would warrant setting aside the election , the Employer's objections raise substantial and material factual issues which the Board must resolve through a hearing. E.g., N.L. R.B. v. Overland Hauling, Inc., 461 F.2d 944, 946-947 (C.A. 5, 1972). 5 N.L.R.B. v. G. K. Turner Associates, 457 F.2d 484, 488 (C.A. 9, 1972). The court refused to find an 8(a)(5) violation because a union agent allegedly told an employee that the employer had made $500,000 the previous year, information which he said came from stock market reports. 314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD rate procedures, accounting practices, etc., to be able to effectively weigh and evaluate Petitioner's statis- tics.6 Add to this the fact that the statistics were presented in the form of a mathematical formula by a union official who had earlier promised to research the Employer's finances, and one can only conclude that Silver's remarks assumed a high degree of authenticity upon which the employees could reason- ably be expected to rely. The test to be applied is not "whether the speaker in fact had special knowledge, but whether listeners would believe that he had." 7 In my judgment, this case fits squarely within the Hollywood Ceramics rule. There was clearly a serious misrepresentation at a time when there was no opportunity for rebuttal. I would set the election aside. 9 See The Halsey W Taylor Company, 147 NLRB 16, 19. 1 N. L. R. B. v. A. G. Pollard Co., 393 F.2d 239 (C A. 1, 1968).