Synalloy Corp.

38 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Blackman-Uhler Chemical Division-Synalloy Corpo- ration andInternational Molders & Allied Workers Union, AFL-CIO, CLC. Cases 11-CA-5800 and 11-RC-3936 March 24, 1975 ORDER DIRECTING HEARING BY MEMBERS FANNING, JENKINS, AND KENNEDY Pursuant to a Stipulation for Certification Upon Consent Election executed by the parties and approved by the Regional Director for Region 11 of the National Labor Relations Board, an election by secret ballot was conducted in the above-entitled proceeding on Septem- ber 12, 1974, under the direction and supervision of the Regional Director. Upon the conclusion of the election a tally of ballots was furnished the parties in accord- ance with the Board's Rules and Regulations. The tally of the ballots shows that there were approx- imately 120 eligible voters and that 113 ballots were cast, of which 53 were cast for and 49 were cast against the Petitioner, and 11 were challenged. The challenged ballots are sufficient in number to affect the results of the election. On September 18, 1974, the Employer filed timely objections to conduct affecting the results of the election. The Regional Director caused an inves- tigation of the challenges and objections to be made and thereafter, on November 7, 1974, issued and served on the parties his Report on Challenges and Objections, Direction and Order Consolidating Cases.' In his re- port the Regional Director recommended that the Em- ployer's objections be overruled and concluded that the issues relating to the challenged ballots could best be resolved by record testimony. He therefore directed that a hearing before an Administrative Law Judge be held to resolve the issues raised by the 11 challenges. The Employer filed timely exceptions to the Regional Director's report and a supporting brief. 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 duly considered the matter and is of the opinion that the exceptions raise no material or substantial issue warranting reversal of the Regional Director.' We have no quarrel with our dissenting colleague's t Five of the employees whose ballots were challenged, Ann Holcomb, Brenda Taylor, Cynthia Dodkin, Carolyn Pugh, and Vivian Coggins, are alleged as discriminatory dischargees in Case 11-CA-5800 which was con- sohdated with Case 1 1-RC-3936 by the Regional Director's report, direc- tion, and order of November 7, 1974 2 In the absence of specific exceptions thereto, the Board adopts, pro forma, the Regional Director's recommendation that allegations raised by Objections 2 and 3'be overruled statement that a union's material misrepresentation of an employer's profit may, in certain circumstances, constitute grounds for setting, a representation election aside. However, unlike our dissenting colleague, we are of the opinion that in the case at bar no material misre- presentation concerning the- Employer's profits oc- curred. Page 1 of the leaflet circulated to employees before the election herein contains a facsimile of an unaudited "Statement of Consolidated Earnings" for the Synalloy Corporation and notes that the "Company" ex- perienced record earnings for the period reported. Su- perimposed upon the Company's statement of earning is a notation "EARNINGS UP 250%." The source of the Company's statement of earnings is clearly identi- fied on the leaflet as the Synalloy Corporation's 6- month report to stockholders. The notation "more" with an arrow invites the reader to continue to the second page of the leaflet. There the leaflet asks, "Where's your share of the Blackman-Uhler profit bonanza?" and "what was your wage increase in the same year that Blackman-Uhler hit the profit jackpot?" Page 2 of the leaflet also invites the reader to "Compare the raise you received . . . to the over 250% increase in Company profits." (Emphasis supplied.) As noted, unlike our dissenting colleague, we find that the leaflet in question contains no material misre- presentation concerning Blackman-Uhler profits. Thus, the 250-percent figure identified on the second page as "Company" -profit is the same as the 250-per- cent profit attributed on the first page of the leaflet to Synalloy, the parent company of Blackman-Uhler. Concerning the profits of Blackman-Uhler referred to on page 2 of the leaflet, we note that the Petitioner used no specific figures nor any other specific information to show or to imply a knowledge on its, part of Blackman- Uhler's profits. The Petitioner merely mentioned a Blackman-Uhler profit "bonanza" or "jackpot," terms which we believe could easily be distinguished from the specific figures provided for Synalloy and in the context of the organizational campaign could also be evaluated by the employees through exercise of their common- sense and good judgment. ORDER Pursuant to Section 102.69(f) of the National Labor Relations Board's Rules and Regulations and State- ments of Procedure, Series 8, as amended, it is hereby ordered that a hearing be held for the purpose of receiv- ing evidence to resolve the issues raised by the chal- lenges to the ballots of Ann Holcomb, Brenda Taylor, Cynthia Dodkin, Carolyn Pugh, Vivian Coggins, Alex- ander Nichols, Jerry Crocker, Robert Walker, Floyd Morton, Raymond Roberts, and Debby Peeler and that 217 NLRB No. 7 BLACKMAN-UHLER CHEMICAL DIVISION-SYNALLOY such hearing may be consolidated with any hearing in Case 11-CA-5800 to be held before an Administrative Law Judge designated by the Chief, Division of Judges. In the event the -unfair labor practice proceeding is disposed of prior to the hearing, a Hearing Officer will be duly designated to hear the representation matter. IT IS FURTHER ORDERED that the Administrative Law Judge or the Hearing Officer designated for the pur- poses of conducting such hearing shall prepare and cause to be served on the parties a report containing resolutions of the credibility of witnesses, findings of fact, and recommendations to the Board as to the dis- position of such challenges. Within the time prescribed by the Board's Rules and Regulations either party may file with the Board in Washington, D.C., eight copies of exceptions thereto. Immediately upon the filing of such exceptions the party filing the same shall serve a copy thereof on the other party and shall file a copy with the Regional Director. If no exceptions are filed thereto, the Board will adopt the recommendations of the Administrative Law Judge or the Hearing Officer. IT IS FURTHER ORDERED that the above-entitled matter be, and it hereby is, remanded to the Regional Director for Region 11 for the purposes of arranging such hear- ing and that the said Regional Director be, and he hereby is, authorized to issue notice thereof. MEMBER KENNEDY, dissenting: Contrary to my colleagues, I believe that the Peti- tioner did make a material misrepresentation regarding the Employer's earnings. I therefore dissent from the overruling of Employer's Objection 1. On the morning of the election the Petitioner cir- culated a leaflet which had printing on both sides. The leaflet is attached hereto and marked "Appendix." On one side of the leaflet there appeared in very large black letters, "WHERE IS YOUR SHARE OF THE BLACKMAN-UHLER PROFIT BONANZA?" The leaflet continues in small type, "What was your wage increase in the same year that Blackman-Uhler hit the profit jackpot? Compare the raise you received (IF YOU EVEN GOT ONE!) to the over 250% increase in Company profits." Any reasonable person reading the above would un- derstand the message to indicate that Blackman- Uhler's profits increased 250 percent. However, there was no such profit bonanza for Blackman-Uhler and, quite to the contrary, there was a 52-percent decrease in profits for Blackman-Uhler during the relevant re- porting period. There can be no doubt, based on the foregoing information, that there has been a false and material misrepresentation of Blackman-Uhler's true profit picture. The majority adopts the conclusion of the Regional Director that there was no misrepresentation and rea- sons that the other side of the leaflet clarifies the matter 39 by indicating at the bottom that the source of the infor- mation was the "Synalloy Corporation Six-Month Re- port to Stockholders."3 (Blackman-Uhler is a division of Synalloy. Blackman-Uhler is the Employer in the instant matter-not Synalloy. Synalloy controls some 16 installations or entities. During the relevant period Synalloy's profits went up 250 percent, but Blackman- Uhler's profits went down 52 percent.) The other side of the leaflet identifies the source of the information as Synalloy Corporation, but it does not identify the actual profit figures listed on the other page as those of Synalloy. Thus, the consolidated earn- ings statement does not dispel the erroneous notion conveyed by the Petitioner that Blackman-Uhler had a profit bananza of 250 percent. There can be no doubt that misrepresentation of an employer's profits is a misrepresentation of a material issue. As stated by the Second Circuit in Henderson Trumbull Supply Corporation, 501 F.2d 1224, 1230 (1974), "a person apparently in a position to know the facts had misrepresented a material fact [profits] (i.e., the amount of money available for increase in em- ployees' wages and benefits) . . . ." Also, the Ninth Circuit has recognized the salient nature of company profits to an election campaign stating, "Misrepresen- tations about company profitability can be material, since the extent to which employees share equitably in the products of their labor may be of great interest to them." N. L. N.L.R.B. v. G. K. Turner Associates, 457 F. 2d 484 (C.A. 9, 1972). I have stated in my dissent in Cumberland Wood and Chair Corp., 211 NLRB 312 (1974), "a company's profitability and the extent to which employees share in the profitability are obvi- ously matters of great significance to the employees." Other Board and court decisions have recognized the materiality of company profits as an issue during an election. See, e.g., Tyler Pipe & Foundry Co. v. N..L.R.B., 406 F.2d 1272 (C.A. 5, 1969); The Halsey W Taylor Co., 147 NLRB 16 (1964). See also the Eighth Circuit's decision in LaCrescent Constant Care Center, Inc. v. N.L.R.B., 510 F.2d 1319 (C.A. 8, 1975), in which the court denied enforcement of the Board's decision reported at 211 NLRB 671 (1974). The court rejected the Board's conclusion that the employees could evaluate the union's misrepresentation as to the employer's profits. The court quoted a portion of my dissent in footnote 20 of its opinion. The quoted com- ments are equally applicable to the instant case. Since there has been a material misrepresentation on the morning of the election day, which was too late for any effective reply by the Employer, and a lack of 3 The majority chose to label this side of the leaflet "page 1." As pointed out above, the leaflet was simply one sheet of paper with printing on each side The leaflet bears no markings as "page 1" or "page 2," and there is no indication as to which side was handed to employees to read first 40 DECISIONS OF NATIONAL LABOR RELATIONS BOARD individual knowledge by the production and mainte- nance employees as a basis for proper evaluation, I would find merit in the Employer's abjection 1. Holly- wood Ceramics Co., 140 NLRB 221 (1962). After the determinative challenged ballots have been resolved, I would set aside -the election on the basis of Objection 1 if the revised tally of ballots reveals that the Union received a majority of the valid votes cast. If the revised tally of ballots discloses that the Union failed to achieve a majority, then I would certify the results of the election. April 22, 1975 ORDER AMENDING ORDER On March 24, 1975, an Order was issued by the Board in the instant case which, inter alia, directed that a hearing-be held for the purpose of receiving evidence to resolve the issues raised, by the challenges to the ballots of certain employees named in the said Order.' The Order was in conformance with the recommendation of the Regional Director Region" 11, who concluded that the issues relating to the chal- lenged ballots could best be resolved by record tes- 1 217 NLRB No. 7 2 This Order in no way affects the majority or minority opinion in the Order of March 24, 1975, as to the issue relating to Employer's Objec- tion 1. timony. No exceptions were filed to such recommenda- tion. Before the Order issued and because no exceptions had been filed as to the Regional Director's recommen- dation-as to the challenged ballots, a hearing concern- ing such challenged ballots was held before Adminis- trative Law Judge Frank H. Itkin on November 25, 26, and 27, 1974. Because of the fact that a hearing has already been held before a duly designated Administra- tive Law Judge to resolve issues relating to the said challenged ballots, the Board finds that the portion of its Order of March 24, 1975, which directs a hearing to resolve such issues, is moot. Accordingly, it is hereby amended to delete that portion of the Order which provides that the case be remanded to the Regional Director for Region 11 for the purpose of arranging a hearing to resolve issues relating to the said challenged ballots.2 ORDER It is hereby ordered that the Board's Order Directing Hearing in this case dated March 24, 1975, be, and it hereby is, amended to delete that portion of the Order directing a hearing to be held for the purpose of receiv- ing evidence to resolve the issues raised by the chal- lenges to the ballots of those employees named in the Order. By direction of the Board, George A. Leet, Associate Executive Secretary.