Midwest Steel Corp.

MIDWEST STEEL CORPORATION Midwest Steel Corporation and United Steelworkers of America, AFL-CIO-CLC. Cases 14-CA-8146 and 14-RC-7755 May 7, 1975 DECISION, ORDER, AND DIRECTION BY MEMBERS FANNING, KENNEDY, AND PENELLO On January 28, 1975, Administrative Law Judge Thomas A. Ricci issued the attached Decision in this proceeding. Thereafter, the General Counsel and the Respondent filed. exceptions and supporting briefs. ]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, findings, and conclusions' of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Re- lations Act, as amended, the National Labor Relations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that Respondent Midwest Steel Corporation, Granite City, Illinois, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. DIRECTION It is hereby directed that, as part of the investigation to ascertain a representative for the purposes of collec- tive bargaining with the Employer, the Regional Direc- tor for Region 14, pursuant to the Board's Rules and Regulations, within 10 days from the date of this Deci- sion, Order, and- Direction, shall open and count the ballots of Ricky Hotz and Charlles Townsend, and thereafter prepare and cause to be served on the parties a revised tally of ballots, including therein the count of said ballots, upon the basis of which the Regional Di- rector shall issue the appropriate certification. I Contrary to the Administrative Law Judge's finding in fn. 1, Ricky Hotz and Charles Townsend were laid off on September 20, 1974. As the record clearly shows October 2, 1974, was the date upon which Hotz, and Town- send drew their last paychecks DECISION STATEMENT OF THE CASE 837 THOMAS A. Ricci, Administrative Law Judge: A hearing in this consolidated proceeding was held on December 9, 1974, at St. Louis, Missouri. In Case 14-CA-8146 the complaint, on which testimony was received, was issued on November 7, 1974, against Midwest Steel Corporation, herein called the Respondent, and rests upon a charge filed on September 24, 1974, by United Steelworkers of America, AFL-CIO- CLC, herein called the Union. The principal issue of the complaint is whether the Respondent removed Charles Townsend and Ricky Hotz from its payroll in order to coerce them and other employees in violation of Section 8(a)(3) of the National Labor Relations Act, as amended. In Case 14-RC-7755, a Board-conducted election was held on Octo- ber 24, 1974, with the results of the balloting being inconclu- sive because Townsend and Hotz voted in the election but their votes were challenged by the Board agent. The only issues explored at the hearing as to this representation pro- ceeding are whether the two men were eligible to vote in the election. Briefs were received from all three parties. Upon the entire record and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Midwest Steel Corporation, a State of Illinois corporation, is engaged in the manufacture, sale, and distribution of fab- ricated steel and related products, and maintains a place of -business at Granite City, Illinois. During the year ending December 31, 1973, a representative period, it manufactured, sold, and distributed from this location products valued in excess of $50,000, of which an amount valued in excess of $50,000 was shipped to out-of-state points. I find that the Respondent is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED I find that United Steelworkers of America, AFL-CIO-CLC, is a labor organization within the meaning of Section 2(5) of the Act. III THE UNFAIR LABOR PRACTICES A. The Case in Support of the Complaint During the week ending September 20, 1974, the Respond- ent had about 14 rank-and-file employees at the plant in- volved in this case. During the lunch hour on Tuesday, Sep- tember 17, three of the men went to the Union's office to talk with Robert Means, its staff respresntative, where they also signed union cards. The three men were Alpha Rosenthal, Howard Hubbard, and James Hotz. The men in this plant regularly leave the premises during their lunch hour to eat. 2]17 NLRB No. 143 838 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Late that afternoon Means appeared at the plant gate and distributed union literature to just about all the employees-a Steel Workers organizational bulletin, a mem- bership application and authorization card, and a leaflet in- viting people to a meeting of the Respondent's employees at the union hall that same evening. There was a union meeting that night attended by some of the employees; there is also indication there may have been another union meeting that week, but the evidence on- that score is not very clear. On Thursday, September 19, Means telephoned Houston Varner, district manager and top man in charge of the plant. Means told Varner the Union represented a majority of the employees and he demanded recognition. Means also told Varner he intended to file a representation petition with the Board and would stand for no illegal conduct by the Com- pany against the employees in retaliation. Varner answered that he was not opposed to his employees joining a union, that he would think about the demand, and that as to misconduct of any kind he assured Means the Company would do noth- ing wrong at all. Means did file a petition that day (Case 14-RC-7755), a consent election agreement was signed by the parties on October 9, and the election was held on Octo- ber 24. Of 14 eligible employees, 6 voted for the Union, 6 against, and the ballots of Townsend and Ricky Hotz were challenged. The complaint alleges and the answer admits that "on or about September 20, 1974, Respondent laid off employees Ricky Hotz and Charles Townsend from their employment at the Granite City plant." Townsend did not appear at the hearing; other than the fact the Respondent admits he was "laid off" that week, or "about that week," this record is completely silent as to what was then said by anyone about his layoff or how it came about. Ricky Hotz worked on Wednesday, September 18, thinks he did not work the next day, Thursday, came in Friday morning, and, when at his mother's house for lunch at noon hour, telephoned the plant to say he was not coming for the afternoon. His testimony is that he told Richard Surwillo, the supervisor, he had an upset stomach, and that Surwillo told him-". . . never mind, I was laid off, that I didn't need to come back to work." With this, as Hotz continued to testify, he ate, took a shower, and immediately went to the Union's office. Hotz returned to the plant a number of times asking when would he be recalled and was told at least once "as soon as they get more work." The foregoing are the essential facts upon which the con- tention of illegal discharge-or layoff, however it be phrased-is based. The Company knew there was prounion movement afoot that week, two men were released without advance notice in the same week-ergo, the layoffs and the union activities are related and the union activities must be deemed the motivating factor in the Company's then decision to send these two men home. It is a circumstantial evidence case. Absent direct evidence of some sort tying the discharges to the union activity in some way, it must be an inference argument. Certainly, insofar as Townsend is concerned, an unfair labor practice finding must rest upon facts having nothing to do with him personally, for there not only is no evi- dence relating to his dismissal, but there is no indication whatever that he had anything to do with the Union. At the hearing the General Counsel was ambivalent when asked: (1) Did the Respondent simply discharge these two men because of their union activities? (2) Did it reduce the force with no economic justification in order that it could send home somebody-unioneer or not unioneer-and thereby intimidate the entire complement? (3) Did it, with true economic reason for cutting the payroll, deliberately select unioneers for hurt so as to utilize a perfectly normal business practice to achieve an illegal objective? The prosecu- tion's answers to these questions are unclear on the record. B. Section 8(a)(1) In any event, the complaint also alleges direct violations of Section 8(a)(1) of the Act-restraint and coercion of the em- ployees. Inasmuch as circumstantial evidence cases must be decided on the basis of all pertinent and related facts, the following evidence ought be set out now. When James Hotz, one of the three men who visited the union office during lunch hour on September 17, returned to the plant, his supervisor, Richard Surwillo, talked to him. Hotz was with his brother Ricky when the conversation took place. Ricky's testimony is that Surwillo told them ". . , we were horsing around and if we brung the union there we'd be the first ones out the gate." Ricky added he then told the foreman he, Ricky, knew "nothing about the Union." James Hotz' version is that he returned to the plant alone in his car at 5 minutes before the 1 o'clock starting time, when Surwillo said to him and his brother: ". . . we was goofing around too much and he said if we was trying to bring a union in here that me and my brother would be the first ones out the gate, and he said he don't want us goofing off the rest of the afternoon so he stuck us up in front of the office...... James also said Surwillo asked both employees were they involved in the union business and both answered "no." The foreman's story is different. Surwillo testified -that, when the Hotz brothers were not back from lunch on time, he asked others where they were and someone told him "they were at the union hall"; that when the two arrived at 1:15 together in the same car, he told them: ". . . I knew where they were and if they wanted to be at the union hall do it on their own time, not on company time,-or they can get out." This talk took place on Tuesday. A day or two later, but before the end of the week, there was another conversation touching upon this "threat of discharge"-as it is called in the complaint. Varner, the top manager, heard from somebody that the foreman had made a discharge threat and therefore called Surwillo and two employees, James Hotz and Alpha Rosenthal, together. With the four present, he asked each of the two employees had anyone threatened to fire them be- cause of union activities. Rosenthal answered no. Hortz first hesitated and then said Surwillo had in fact so threatened him. There is a direct conflict of testimony among the wit- nesses as to what was said at that point in the four-man conversation and, in the light of the rational probabilities of the circumstances at that moment, the testimony of the two employees must be believed. According to Rosenthal, when Hotz said Surwillo was the one who had threatened him with discharge, Varner turned to the foreman to ask was it true, Surwillo denied it, and then Hotz called him a liar. Hotz also testified that the manager asked Surwillo had he really threat- ened the employee, and when the foreman said no, he, Hotz, only shook his head and walked away. Varner testified that MIDWEST STEEL CORPORATION 839 he put the questions to the employees because he had told his underlings not to make threats, had heard it had happened, and wanted to "determine if that was indeed the case." Ac- cording to him, Hotz said yes, and nothing else happened. The foreman's testimony is incredible upon its face. As he would have it, Hotz quoted the foreman as saying "he would be fired if a union was brought in," and that nobody there- after uttered a word, he, Surwillo, standing absolutely mute For Varner to say he wanted to find out only because he wanted to find out was not a very convincing statement by him at the hearing . And for Surwillo to stand silent, in the face of his superior, when quoted so unequivocally by Hotz, if in truth he did not deny, would only indicate admission of the threat on his part. As to Varner, there is something else indicating he did not really care to dispel the effect of threats that may have been voiced . During the same week he asked another employee, Lonzo Ray, to go to the union meeting and "find out what was going on." "I asked him to let me know basiLcally what the results at the meeting had been. I was simply curious as to whether or not the men were in favor of union representation . ..." Ray did that and the next day told Varner only one thing of what had happened at the meeting-James Hotz' statement to the meeting that Surwillo had threatened to fire him and others if the union activities continued. I find that by Foreman Surwillo's statement to ricky and James that they would be the first men out the gate if they tried to bring in a union, and by Manager Varner's request to Ray that he attend the union meeting and then tell the manager about it, the Respondent violated Section 8(a)(1) of the Act. There is also testimony by employee Ray that, after telling Varner of the union meeting the night before, the manager said to him "he didn't care if we got a union in, but he wanted a good union . . . the blacks were good but the whites were even better, there was a few that he had to sort out before we got organized, had to layoff or something . I don't recall all what he said." Varner very clearly denied having made any statement he would lay off people before the plant could be organized. On this point I credit the manager. When he strayed, he admitted the fact-that he asked Rosenthal to spy on behalf of management. His story of the four-way conversa- tion with Surwillo and the two men is fairly consistent with that of Rosenthal and James Hotz. And the two men even recalled that in that talk, when there was mention of dis- charge threats voiced by somebody else, Varner told them "you ain't going to get into trouble or anything" (from James Hotz' testimony) or "it didn't make any difference to him if you had a union or not, but he just didn't want to be running to court over people saying that they heard they were going to be fired" (admission by Rosenthal). The manager's recol- lection was he told them in Surwillo's presence: ". . . that there was no way at all that any of their actions or discussions with regards to the union would be held against them with regards to their position in the company ." In contrast to all this, Ray's testimony of any threat by Varner was phrased in ambiguous language. In sum, it would appear that the facts said to support a finding of illegal motivation in the discharge of Townsend and Ricky Hotz are the following: (1) One of the two was released at the end of the very week when the union orgapiza- tion campaign flowered and the representation petition was filed! (2) The foreman told Ricky and his brother James-obliquely, it is true-they would be the first to leave the Company if union activities persisted . (3) The Respond- ent committed independent violations of Section 8(a)(1)-Manager Varner's request that Ray report on the union meeting and' Foreman Surwillo's threat of discharge. A -final contention urged in support of the complaint allegation-and this is more than an argument based on the- entire record than probative evidence offered by the prosecution-is that the Respondent has not affirmatively established that there was economic need to release any em- ployees at that time. I think this contention is equivalent to a fact in the light of the evidence. Varner, who selected the two men for dismissal, said he decided to reduce the staff for economic reasons. His sole statement as a witness given to prove the defense is no more than pure conclusionary general- ity; it was accompanied by no objective, documentary, for- mal, or record proof of any kind. His entire statement amounts to more than a defense claim.2 C. Further Relevant Facts,- Analysis and Conclusions I doubt the foregoing facts, even standing alone, would suffice to prove a prima facie case for a conclusion that both Ricky .Hotz and Townsend were discharged in violation of Section 8(a)(3) of the Act. But inference, or circumstantial evidence, cases, are not decided solely on consideration of those pertinent facts which give rise to a suspicion of wrong- doing, stronger or weaker as the suspicion may be in any given case. Absent direct evidence of illegal purpose, all the relevant facts must be appraised . On the basis of this entire record, I find the evidence insufficient to prove that these two men were released-laid off or discharged, no matter-for a purpose prohibited by the statute. 1. Varner said that , inasmuch as he had to release two men, he followed seniority. It is a fact he did so; as of that week Hotz and Townsend were the last two men hired. 2. Townsend was not shown to have had anything to do with the Union. In ordinary experience an employer aiming i As to Townsend, who did not testify, there are two references to his release in the record. Hotz said that on the telephone at noon on September 20 Foreman Surwillo told him he (Hotz) was laid off, and Townsend "would be laid off." It was stipulated that the company records show Townsend was released during the week ending October 2. 2 From Varner's testimony: I felt that our business had reached a peak in July I had taken over this office in July of the previous year It had been a very small office with only three or four yard employees and very little business We had become very aggressive in the market place , had attained a certain imminence in the market I felt that we had peaked with regards to our present growth rate at that particular time in July, given our cash flow problems, we could not grow too much further because we were forced to support our own growth, and cash flow of course became quite a problem, and August was a good deal off, the winter months were coming on which usually were slow months, because we deal with contractors and we can't bill much in the winter, and I also was afraid that the general market conditions in the steel industry were about to make a somewhat dramatic change that would adversely affect our particular situation in the yard. 840 DECISIONS OF NATIONAL LABOR RELATIONS BOARD at retaliation for union activity which he resents will select the known unioneers. 3. Three men are identified on this record as the prime movers towards the Union-James Hotz, Hubbard, and Ro- senthal. They are the ones who went to the Union in the first instance. Not one of them was touched by the Company. Whether the Company knew who exactly the unioneers were would have to be an inference-except, that is, with respect to James Hotz. Foreman Surwillo said he had been told James Hotz had been to a union office at noon on September 17. He said he thought both brothers were there, but both boys themselves testified only James went and that only James was in the car when it returned to the plant at 1 p.m.-early or late. If the selection for layoff were invidious-why was Ricky chosen instead of James? 4. When Union Agent Means called Varner on the phone on September 19, he warned the manager, without provoca- tion, there had better not be any unlawful discrimination in employment. Varner assured him there would not be any. Varner even assured the employees who might have been threatened with retaliation that no such thing would happen. If the case in support of the complaint can be nourished in part by Surwillo's statement that employees could suffer for the union activities, justice requires that the defense be cred- ited pro tanto with the top manager's later assurance to the employees that they would not be so punished. 5. The Respondent asserts, at least, it released these men because work was falling off, it needed less men. Whether the Company decided to decimate its own business in order to put a stop to unionism is one thing-perhaps so and perhaps not so. The General Counsel does make that contention by claiming the Respondent reduced the entire overtime work as an additional form of illegal discrimination against every- body. I do not think the record as a whole warrants that contention by the General Counsel.' But it is true-and there can be no question about this fact-that Respondent reduced its personnel by two that week and never thereafter hired anyone else. It is also true that total hours of work performed by the whole group declined. These last objective facts tend to support the affirmative defense of discharge for economic cause; certainly they weaken the suspicion other- wise arising. 6. On one of the several occasions when Hotz came to the plant to inquire when would there be enough work for his recall, he voiced his worry over being unable to keep up with child support payments and installments on his trailer. Manager Varner offered to help him with a loan, and he did so, advancing $100 to Hotz with the promise the man would pay it back $10 weekly from his earnings after he returned to work. This was hardly the frame of mind of a man whose 3 Great variances in the total number of employees and in the overall number of hours they work are a normal aspect of the Respondent's business at this location. For over a year before April 1974 there was practically no overtime work at all It then came like a flood and peaked during May, it started to fall off in the beginning of June. During the last 3 weeks before the events giving rise to this proceeding, it went from 120 to 49 hours a week and continued to decline thereafter The record as a whole simply does not support a finding that all this decline in work was deliberately engineered by the Respondent to combat the Union. As conceded in the General Counsel's brief- " Respondent's records of monthly sales and work crew composition demonstrate abundantly the total lack of correlation between the volume of sales and of work available in the yard." hidden purpose was to get a union-minded employee out of the plant. D. Case 14-RC-7755, The Challenges It will be recalled that Ricky Hotz was told more than once after his layoff in September that when work increased again he would be recalled. In a preelection conference, apparently held on October 9, a list of employees was in the hands of the participants, including Manager Varner and the Company's lawyer; on the list were both Hotz' and Townsend' s names. There was talk then of either man being ineligible to vote in the planned election. The Company then mailed its Excelsior list to the Union, and again the two laid-off men's names were placed on it as participants in the election. Their names were also on the eligibility list used at the election on October 24. A question concerning their right to vote was then voiced by the Board agent, whose position it was that because a charge of illegal dismissal had been filed on behalf of Hotz and Townsend their votes would have to be impounded, to be opened or not opened later depending upon whether 'the 8(a)(3) charges as' to each was proved meritorious. But Varner, who heard the Board agent, then said that "as far as he was concerned they were eligible." This from the uncon- tradicted testimony of Union Agent Means. There is no real explanation of why these two men were challenged. Ordinarily, when a man is discharged his name is not on the eligibility list furnished by the employer, and he ,votes, if at all,,only under challenge because his name is missing from the eligibility list In such a case, if an unfair labor practice charge has been filed on that man's behalf, it is the employer's position that the man simply has no em- ployee status, while the Union, or the Board agent, insists he was an employee because the discharge was illegal. There is no issue of reasonable expectancy of recall there. Where, instead, the employee's name appears on the, eligibility list furnished by the employer, if the man is not that day at work his eligibility turns not upon the true nature of any discrimi- nation in employment, but rather on his chances of returning to work. Here, not only were Townsend's and Hotz' names on the list, but the company agent present at the election took the position both men were eligible. This was insistence on their part that both did have a reasonable expectancy of recall. I do not understand why the Board agent challenged the men. In any event, in the light of the repeatedly expressed posi- tion of the company agent, during the very period immedi- ately preceding the election, that the two men were expected back and should vote, I find that they did, on October 24, have a reasonable expectancy of recall and that therefore their ballots should now be opened and counted If there were any doubt of their status that day, it is totally dispelled by the fact the manager "about a month" after the layoff of Septem- ber 20 (this means maybe 4 days before the balloting) loaned money to Ricky Hotz with the arrangement he would repay it out of his earnings when recalled. Manager Varner left the plant on November 1; he was then replaced by Joe Guilfoile, who is now manager. Called by the Company at the hearing, Guilfoile gave it as his opinion that as of October 24, a week before he came on the scene, neither Townsend nor Hotz had any reasonable chance of being MIDWEST STEEL CORPORATION restored to work. He spoke in general terms of learning, on his arrival, that the plant had been "grossly mismanaged," the men working with "no direct supervision," and "... your scrap market has taken a tremendous dive which now does not make this type of business, let's say, as attractive as it was back in June or July when your scrap market was at an all time; high." Guilfoile then conceded part of this retroactive appraisal was based upon study of old company records, which, however, he did not produce in support of his conclu- sionary testimony. I do not think his pure expression of opin- ion will do to offset the persuasive effect of the actions and statements of company agents contemporaneous with the events at issue. I find that at the time of the election on Octover 24, 1974, Ricky Hotz and Charles Townsend had a reasonable expec- tancy of recall to work and were therefore eligible to cast valid ballots in the voting. I shall accordingly recommend that their ballots be opened and counted. CONCLUSIONS OF LAW 1. By its supervisor's statement to employees that they would be discharged in retaliation for prounion activities, and by its manager's request to employees that they attend union meetings and report to management the activities of other employees there, the Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 2. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2(6) and (7) of the Act. 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: ORDER4 The Respondent, Midwest Steel Corporation, Granite City, Illinois, its officers , agents, successors, and assigns, shall: 1. Cease and desist from: (a) Threatening to discharge employees in retaliation for union activities, or requesting employees to attend union meetings and to report to management the activities of other employees there. (b) In any like or related manner interfering with , restrain- ing, or coercing employees in the exercise of the right to self organization, to form, join, or assist United Steelworkers of America, AFL-CIO-CLC, or any other labor organiza- tion, to bargain collectively through representatives of their own choosing, or to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities. 2. Take the following affirmative action necessary to effec- tuate the policies of the Act: 4 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 of 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 841 (a) Post at its place of business in Granite City, Illinois, copies of the attached notice marked "Appendix."5 Copies of said notice, on forms provided by the Regional Director for Region 14, after being duly signed by Respondent's represen- tatives, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicious places, including all places where notices to employees are customarily posted. Reason- able steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (b) Notify the Regional Director for Region 14, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. To the extent that the complaint alleges the unlawful dis- charge of Ricky Hotz and Charles Townsend, I hereby recommend that it be, and it hereby is, dismissed. Case 14-RC-7755 I hereby recommend that the Regional Director open and count the ballots of Ricky Hotz and Charles Townsend cast in the Board-conducted election held on October 24, 1974. 5 In the event that the Board's 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 Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board having found after a hearing that we violated the Federal law by coercing and restraining our employees in their union activities: WE WILL NOT threaten to discharge employees because of their union activities. WE WILL NOT request employees to attend union meet- ings and report to management the activities of other employees there. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to form, join, or assist United Steelworkers of America, AFL-CIO-CLC, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for purposes of col- lective bargaining or other mutual aid or protection, or to refrain from any and all such activities. MIDWEST STEEL CORPORATION