Hasbro Industries, Inc.

HASBRO INDUSTRIES, INC. Hasbro Industries, Inc. and Local 26-L, Graphic Arts International Union, AFL-CIO. Cases 1- CA-14134 and 1-CA-15803 January 14, 1981 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND TRUESDALE On August 22, 1980, Administrative Law Judge John C. Miller issued the attached Decision in this proceeding. Thereafter, Respondent and the Gener- al Counsel filed exceptions and supporting briefs,' and Respondent filed an answering brief to the General Counsel's exceptions. The Charging Party filed cross-exceptions and a brief supporting its cross-exceptions and answering Respondent's ex- ceptions. 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, find- ings,2 and conclusions of the Administrative Law Judge, as modified herein, and to adopt his recom- mended Order. The Administrative Law Judge found, and we agree, that the Union had secured a majority of au- thorization cards from unit employees prior to its demand for recognition on January 24, 1977. 3 We also agree with the Administrative Law Judge that Respondent's unlawful conduct warrants the issu- ance of a remedial bargaining order, but only for the following reasons. Respondent, having learned that a representation election among its printing employees was immi- nent, embarked upon a course of conduct purpose- fully designed to undermine the Union's majority status, one which did not end with the election. On Respondent's request for oral argument is hereby denied, as the record, exceptions, and briefs adequately present the issues and the posi- tions of the parties. 2 Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with respect to credi- bility unless the clear preponderance of all of the relevant evidence con- vinces us that the resolutions are incorrect. Standard Dry Wall Products Inc., 91 NLRB 544 (1950), enfd. 188 F2d 362 (3d Cir. 1951) We have carefully examined the record and find no basis for reversing his findings. In fn. 10 of his Decision, the Administrative Law Judge incorrectly found that Arthur Huard apparently declined recall on March 27, 1978. The record indicates that Huard accepted recall, but only worked for a short time thereafter In sec. B.,.l(a), of his Decision, the Administrative Law Judge inad- vertently referred to the time frame of the department manager's payroll review as on or about January 20, 1977, whereas the record indicates the date to be January 10 The error is hereby corrected. 3 All dates herein are in 1977. unless other\ise indicated November 28, 1 week after it received notice of the election, Respondent granted wage increases to 3 of the 15 unit employees. According to Respon- dent's records, two of these increases were granted prematurely, while the third was overdue. Shortly thereafter, on December 5 and 12, Respondent sent two letters to the homes of unit employees which, in effect, equated selection of the Union with the loss of existing benefits. On December 13, 3 days before the election, two of the Company's vice presidents, Hugh Maxwell and Peter Fornal, took employee Antonio Pasadas aside to question him concerning why he wanted the Union. The day before the election, Department Manager Sidney Feldman told employee Jean Beaucage that Re- spondent would never let another union in-they would farm out the work or, barring that, they would close down the printing department for a year and take a business loss and reopen after a year. On December 16, immediately following the election, Feldman informed employee Mark Stan- ley that they knew how he had voted, but they would not hold it against him because he was not among the three they were out to get. He also told employees Albino Enes, Antonio Pasadas, and Arthur Moreira they were lucky the Union did not win, since the department would have been closed if it had. On January 1, 1978, while objections to the election were pending, unit employees received annual wage increases far eclipsing those granted in previous years, and substantially higher than those granted to similarly situated hourly paid employees outside the unit. TheAdministrative Law Judge found that each of the foregoing acts violated Sec- tion 8(a)(1) of the Act. We agree. In the past, the Board has found that unlawfully granting substantial wage increases to a high per- centage of unit employees is sufficient, by itself, to render it unlikely that a fair and free election can be held.4 In the instant case, Respondent, as part of an overall design to thwart the free will of its 15 unit employees, not only granted substantial wage increases to the entire unit, but also made it clear to 4 employees that selecting the Union would mean closing the department; distributed letters to each employee's home advising that a union victo- ry would in essence be tantamount to the sacrifice of existing benefits; gave I employee the impres- sion that his union activities were under surveil- lance; and subjected another employee to interro- gation concerning his union sentiments. According- ly, under the principles set forth in N.L.R.B. v. Gissel Packing Co., Inc., 395 U.S. 575, 614-615 4 Idaho Candv Company, 218 NlRH 352 (1975). C & G Electric Inc., 180 NIRI 427 (1969) 254 NLRB No. 70 587 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (1969), we find it unlikely that traditional remedies would be effective in overcoming the lingering co- ercive effects of Respondent's actions on this rela- tively small unit, and, therefore, shall order Re- spondent to bargain with the Union. 5 ORDER Pursuant to Section 10(c)of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopt as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondent, Hasbro Indus- tries, Inc., Pawtucket, Rhode Island, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. 5 Flle Administrative l.aw Judge inadvertently omitted from his Deci- sion the date on which the bargaining obligation arose. Chairman Fan- ning and Member -Truesdale, consistent with their positions set forth in Frito-Lay, Inc., 232 NLRB 753 (1977), and Cas Walker's Cash Stores, Inc. 249 NLRB 316 (198(), respectively. date the bargaining obligation from January 24. 1977. the date the Union demanded recognition from Re- sponden. In accordance with Frading Port Inc., 219 NLRB 298 (1975), and the Kroger (Co.. 228 NLRKH 149 (1977), Member Penello would date the bar- gaining order from November 28, 1977, when Respondent embarked on its urnla fal course of cinduict DECISION STAITEMENI OF THE CASE JOHN C. MIll.ER, Administrative Law Judge: This proceeding which initially encompassed the complaint in Case -CA-14134 was heard before me in Pawtucket, Rhode Island, on September 11-14, 1978, and involved allegations of Section 8(a)(1), (3), and (5). By motion dated May 3, 1979, counsel for the General Counsel re- quested the proceedings be reopened and that the com- plaint I-CA-15803 be consolidated with the original complaint in Case -CA-14134 to avoid relitigation and unnecessary costs and delay. I granted the motion for re- opening and consolidation of the complaints and a fur- ther hearing was conducted on August 22, and 23, 1979. The parties had full opportunity to introduce testimo- nial and documentary evidence on the issues and have filed briefs thereon which have been fully considered. On the entire record in this consolidated proceeding, including my observation of the witnesses and their de- meanor, I make the following findings: FINDINGS OF FACT I. JURISDICTION Respondent is a corporation organized under the laws of the State of Rhode Island and maintains its principal office and place of business at 1027 Newport Avenue, Pawtucket, Rhode Island, and is in the manufacture, sale, and distribution of toys, printed material, and related products. Annually Respondent ships goods valued in excess of $50,000 from its plant to points located outside the State of Rhode Island. The complaint alleges, Re- spondent admits, and I find that the above admitted facts establish that Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. It is further alleged and admitted that Local 26-L, Graphic Arts International Union, AFL-CIO, hereafter the Union, is a labor organization within the meaning of Section 2(5) of the Act, and I so find. It. THE UNFAIR LABOR PRACTICE ALLEGATIONS A. Factual Background On January 24, 1977, the Union herein sent Respon- dent Company a letter advising that a majority of the employees in the printing section had designated the Union as their representative and requesting recognition. That same day the Union filed a representation petition with the Board, Case 1--RC-14976. On January 26, 1977, Respondent replied by letter advising that the Union's representation claim would have to await further Nation- al Labor Relations Board proceedings. A hearing was held on the Union's petition on certain dates in February and March 1977. On June 28, 1977, a Decision and Direction of Election was issued by the Regional Director finding a unit limited to the printing and lithographic section was appropriate, and an election was scheduled for July 28, 1977. The election was post- poned as the Board granted a company request for review and the Board, on November 21, 1977, issued its decision affirming the Regional Director, and the elec- tion was scheduled for December 16, 1977. The election was held and results disclosed seven ballots for the Union and eight against. The challenges to three votes were ultimately upheld. The Union also filed objections to the election which were sustained by the Regional Di- rector who then directed a second election. On February 16, 1978, the Union filed unfair labor practice charges and the second election was deferred pending disposition of those charges. A hearing was held on September 11-14, 1978, on this complaint and subse- quently, on March 17, 1979, new charges were filed by the Union alleging discriminatory layoffs on November 24, 1978. I granted a motion to consolidate these pro- ceedings, and a second hearing was held on August 22- 23, 1979. The Election Campaign: Subsequent to the filing of the petition for an election, the Respondent vigorously cam- paigned to persuade employees to reject the Union. The General Counsel's Exhibits 2(i) through (z) are letters distributed by Respondent to employees during Decem- ber 1-15, 1977, just prior to the election held on Decem- ber 16, 1977. In addition to the letters, Hugh Maxwell, vice president of operations, and Peter Fornal, vice president of industrial relations, had a series of morning meetings with employees in the proposed unit.' They ' After a hearing on the appropriate unit and an appeal to the Board, the following unit was found appropriate All lithographic pressmen, feeders, helpers, loaders, plate-makers, multilith operators and suppliers of stock to the lithographic operation By the time of the election such unit was doswn to 15 employees, as 3 employees who voted challenged ballots Continued 588 HASBRO INDUSTRIES. INC began initially as group meetings and later employees met individually with Maxwell and Fornal in the cafete- ria. To the extent group meetings continued, four em- ployees-Arthur Huard, Jean Beaucage, Mark Stanley, and William McHugh-were singled out as a separate group and met with Respondent's vice presidents. Ac- cording to Maxwell, these four employees showed little interest in what management had to say and were kept in a separate grouping. A number of employees, e.g., Albino Enes and Antonio Pasadas, were of Portugese de- scent and spoke and understood English to a limited extent. Except for an alleged inquiry of Pasadas by Re- spondent as to why he wanted a union, what occurred at the meetings themselves was not alleged as threatening or coercive. It is primarily the content of Respondent's letters to employees that is alleged as threatening or co- ercive. The Charging Party, however, contends that the massive deluge of antiunion literature should be consid- ered in conjunction with the meetings with Respondent's vice presidents, and Respondent's emphasis in such let- ters on such matters as possible strikes, lost wages, the replacement of strikers, and the risk of losing existing benefits. In such context it is urged that the letters to em- ployees are coercive and violative of Section 8(a)(1). It is undisputed that the Union secured signed union authorization cards from I I employees in the 18-person unit prior to their demand for recognition on January 24, 1977, and that in the subsequent election, held on De- cember 16, 1977, the Union secured 7 of the 15 votes ul- timately held to be valid. The thrust of the 8(a)(5) allega- tion, therefore, relates to alleged conduct which oc- curred prior to and after the election which the General Counsel and the Union contends not only affected the election but now makes a fair second election impossible. A review of the specific 8(a)(l), (3), and (4) allegations and the evidentiary support therefor are discussed in detail hereinafter. B. Complaint in Case 1-C.4-4134 Contains Allegations Involving Section 8(a)(1), (3), and (5) of the Act 1. The 8(a)(l) allegations a. Granting of pay increases2 The complaint alleged that employees Norman Goyette, Arthur Moreira, and Gary Tinley were granted pay raises on or about November 1977, with the object of persuading them not to vote for the Union. Joint Ex- hibit 4 establishes that all three were given raises on No- vember 28, 1977. It is also undisputed that on November 21, 1977, the Board issued its decision on review affirm- ing the Regional Director's Decision and Direction of Election, and the parties were so notified on November 21, 1977, or the following day. Thereafter, the election was scheduled for December 16, 1977. Thus of the 15 were found to have no reasonable expectation of reemployment as the result of a reduction in force. 2 The normal rule is that if the raises were scheduled or Awould normal- ly have been given. it is not a violation On the other hand, if the raises were given at other than scheduled times in order to influence emplos- ees' support of a union, it would be a violation of the Act The raises in question were discretionary raises employees ultimately found to be in the unit, 3 received raises on November 28, 1977. The timing of the raises alone raises questions about the motivation and requires further inquiry. Sidney Feldman, manager of the packaging and box- making department, testified that on or about January 20, 1977, he had reviewed a payroll list of employees (Resp. Exh. 20) and had noted on the list dates and amounts of projected raises from employees and particularly for Tinley and Moreira. Respondent's Exhibit 20 discloses, inter alia, the following: N. Goyette (changed Class C oper 4/11/77) (Max 5.00) (7/20-.20) (10/20-.20) (12/1-25) 5.40 G. Tinly ((transferred) 1/10/77) (now 3.45) (7/1 .20) (12/1-.25) 3.90 Joint Exhibit 4 (copies of the employment records for these individuals and others) discloses the actual pay raises. This exhibit did not show any raise given to Goyette on October 20 and Feldman had no explanation for the failure to grant a raise on October 20. He testified that, as the raises were given, he normally crossed off the raise in question on Respondent's Exhibit 20. Joint Exhibit 4 and Respondent's Exhibit 20 indicate that it was not unusual for employees to get two or more raises in a year. Joint Exhibit 4 disclosed the actual record of raises given in 1977: Norman Goyette-30¢ on 1/3/77; 20¢ on 7/18; and 25¢ on November 28, 1977 Arthur Moreira-25¢ on 1/3/77: 30C on 1./31/77; 25¢ on 8/1; and 25 on November 28, 1977 Gary Tinley-25C on 1/10; 20¢ on 7/1 1; and 35 on November 28, 1977 In attempting to determine what motivated the raises, it will be necessary to examine, inter alia, what percent- age of employees in the bargaining unit got the raise; what other employees in the packaging and box-making department received raises at the same time; and whether the employees in question received raises because of re- classification or for other reasons. Raises to 3 employees out of 15 obviously results in 20 percent of the employees in the bargaining unit receiving a raise just prior to the election. Feldman testified that there were approximately 45 employees in his packaging and box-making department. Joint Exhibit 5 discloses ap- proximately 40 employees in this department. known as department 222, while Respondent's Exhibit 20 indicates approximately 46 employees in this department. Accept- ing the figure of 45, the printing sectiotn or bargaining unit had 15 employees thus constituting one-third of the department. An examination of Joint Exhibit 5 discloses only one individual, Peck, out of 30 in the packaging de- partment who received a raise on November 28, 1977. or shortly thereafter, as contrasted to 3 of 15 in the bargain- 589 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ing unit.3 Thus in a grouping twice as large (30 as com- pared to 15) only one-third as many employees received raises. Sidney Feldman credibly testified that it was his prac- tice to accelerate raises where a senior employee was re- classified. Goyette was reclassified on April II, 1977, to pressman C, and Tinley was transferred into the printing section on January 10, 1977. Both were senior employ- ees. It should also be noted that Goyette was scheduled for a raise on November 20, 1977, but received it along with Tinley and Moreira on November 28, 1977. Further, Re- spondent's Exhibit 20 indicates Tinley and Moreira were scheduled for raises on December 1, 1977. As noted pre- viously, Feldman did not know why Goyette was not given a scheduled raise on October 20, 1977. I am persuaded that when Respondent was notified, on or about November 21, 1977, that the decision of the Re- gional Director was affirmed, and an election was immi- nent, it immediately took a look at the bargaining unit employees and elected to give raises to three employees. I do not doubt that at some point the three individuals would have received raises. I am finding that the timing of these raises was adjusted and prompted by the forth- coming election. By granting the raises on November 28, 1977, Respondent was attempting to influence the votes of the employees since the raises, granted approximately 3 weeks before the scheduled election, were at least known to the concerned employees (and perhaps reflect- ed in their paychecks received prior to the election al- though the record does not affirmatively establish that) prior to the election. In view of the factors discussed, I find it highly improbable that the raises would have been granted at the time and all at one time but for the sched- uling of the election. Accordingly, I find the granting of these raises was expressly timed to influence employees in the forthcoming election and was violative of Section 8(a)(1) of the Act. b. Interrogation about union activity on or about December 13, 1977 (complaint, par. 8(b)) Antonio Pasadas credibly testified 4 that on December 13, 1977, he attended a meeting with Maxwell and Fornal in Respondent's cafeteria and was asked by one of them why he wanted the Union. Such an inquiry is coercive because it requires disclosure of his union senti- ments and is violative of Section 8(a)(1), particularly in this context, when Pasadas was interrogated in a separate meeting with Respondent's vice presidents, Maxwell and Fornal. c. Threatened plant closure or subcontracting if the Union was selected (complaint, par. 8(c)) Jean Beaucage, a print shop employee, credibly testi- fied that on December 15, 1977, Manager Sidney Feld- a Since Feldman was the manager of the department, it would seem logical that he would review the entire department for projected raises at the same time unless he were prompted by a special reason to review only the bargaining unit 4To the extent Maxwell and Fornal denied asking such a question I do not credit them. Pasadas' recollection was clear and was supported by his written record of what occurred. man, stated that "they [Respondent] would never let an- other union in here . . . they would farm out the work or barring that, they would close down the printing de- partment for a year and take a business loss and reopen after a year." This conversation occurred the afternoon before the election. I do not credit Feldman's denial that he made such a statement. Beaucage also credibly testified that, in January 1978, Feldman stated that he "wasn't kidding . . . about clos- ing the plant down" and would deny making such state- ment if asked. Accordingly, I find that Feldman's com- ments on December 15, 1977, were coercive and viola- tive of Section 8(a)(1) of the Act.5 d. Impression of surveillance on or about December 16, 1977 (complaint, par. 8(d)) Mark Stanley, an employee of the printing department, credibly testified that on December 16, 1977, after the Christmas party, Sidney Feldman stated to the effect that "we know how you voted. They or I wouldn't hold that against you, and that there's three that I am out to get ... you know the three .... " Feldman testified simply that he told Stanley at the Christmas party that he knew "how you feel and I know you know how I feel but all this year you've conducted yourself as a gentleman and I respect you for it." I credit Stanley in this regard and find that Feldman did make the comment that Respon- dent knew how Stanley had voted and by so doing gave the impression of surveillance of his union activities and sentiments. e. High wage increases were given to employees in packaging and boxmaking in January 1978 to persuade them to vote against the Union (complaint, par. 8(e)) The General Counsel concedes that general wage in- creases were given by Respondent in January of each year. He contends, however, that the amount of the in- creases granted in January 1978, to employees in the packaging and box-making department and specifically to employees in the printing department where the Decem- ber 16, 1977, election was held, were much higher than usual and were designed to influence employees and erode support for the Union. In support of his contention, the General Counsel points out that the range of increases prior to 1978 were from 20 to 30 cents but that in 1978 the increases for all employees ranged from 20 to 80 cents, that the range of increases for employees in the packaging and box-making department was 50 to 80 cents, and that employees in the printing section where an election was held on Decem- ber 16, 1977, generally received 80-cent increases. ' At various points in the hearing Respondent's counsel objected to testimony involving conduct not alleged as violations in the complaints Upon representation by the General Counsel that such testimony was being presented as background, I permitted the testimony but advised the parties that such evidence would not be utiliczed to find violations not al- leged Inasmuch as the General Counsel did not move to amend the com- plaints and Respondent therefore did not seek to adduce evidence on such matters, the additional matters were not fully litigated and any find- ings of violation with respect hereto would be improper 590 HASBRO INDUSTRIES. INC. Respondent argues that the wage increases were prompted by the Employer's use of a wage survey, called the "Texas Instrument, Non-Exempt Wage Survey for 1977" (J. Exh. 2) and that Respondent, after identify- ing certain key jobs and group classifications into job families that were comparable to jobs at Hasbro's, would consider giving the wage increases or approximate wage increases granted under the survey. Peter Fornal, vice president of industrial relations, testified that he was the person responsible for recommending pay raises and the policies relating thereto. In making these recommenda- tions, he stated he relied on wage surveys and in particu- lar the Texas Instrument, Non-Exempt Survey, the Fed- eral minimum wage, the cost of living and its impact on employees, the profit picture at Hasbro, and other labor contract settlements that were applicable. Fornal ac- knowledged that the Texas Instrument wage survey was a significant factor in his own wage recommendations and that, even though there were no exactly comparable positions listed in the survey, he utilized jobs with skill levels roughly equal with jobs at Hasbro in determining recommended wage rates. A review of Joint Exhibit 5 and the briefs of the parties convinces me that unusually high wage raises were granted to employees in the bar- gaining unit as compared to raises granted employees in the packaging and box-making department and to other hourly employees in the plant. Of the 15 employees in the bargaining unit, 12 were recalled in January 1978 and 10 of the 12 recalled re- ceived wage increases of 80-cents an hour, with one re- ceiving a 70-cent increase and another receiving a 60- cent-an-hour increase.A The names of employees and their raises are listed hereafter. Beaucage, J.-$.80 Camara-. 80 DeSimas-. 80 Estrella-.80 Ferro-.80 Goyette-. 80 Morais--.80 Moreira--.80 Pasadas--.70 Tinley, G.-.80 Nainteau-.60 McHugh-.80 Other skilled employees, e.g., machinist B. Babota (p. D, other of Jt. Exh. 5) received only a 50-cent wage in- crease in January 1978; first-class electrician Roger Rus- sell (p. XX of exh.) received a 60-cent wage increase. There are other examples of skilled people who received less than an 80-cent wage increase in January 1978. I further note that Joint Exhibit 5 indicates that ap- proximately 12 other hourly people outside the bargain- ing unit received raises of 80 cents or more in January 1978. Of those 12 however, 6 were listed as reclassifica- tions (R). Of the 10 people in the bargaining unit who received 80-cent raises, 2 (DeSimas and Goyette) were deemed reclassified. Eliminating the job reclassifications, which in most instances would warrant larger increases than a general wage increase from the bargaining unit, would mean that 8 of 10 employees in the bargaining unit who were not reclassified received general raises of e Three other employees in the printing section, Enes. Stanley, and Huard, ho were not recalled in January 1978, allegedl for discrimina- tory reasons, were recalled in March. April, and May, 1978. Upon their return Huard received an 80-cent s"age increase, Stanley a 65-cent in- crease, and Enes a 60-cent increase 80 cents or more an hour. This compared to approxi- mately 6 employees out of over 400 persons outside the bargaining unit (again excluding reclassifications) who received 80 cents or more hourly increases. The disparity is startling. Statistically, the figures discussed above establish to my satisfication that employees in the bargaining unit were given higher raises than other hourly employees. Moreover, the raises were granted to both lower and higher waged employees in the bargaining unit. Based upon the above, and in view of Respondent's vigorous antiunion campaign, I am convinced that the higher raises were given to employees in the bargaining unit to demonstrate to the employees that a union was unneces- sary and to erode support for the Union and that such conduct was violative of Section 8(a)(l) of the Act.7 f. Section 8(f) of the complaint alleges, inter alia: that Respondent, in letters mailed to its employees in the period December 1-15, 1977, threatened its employees that selecting the Union as bargaining representative would be futile; that it would refuse to bargain in good faith; that it might bargain as to decrease employee bene- fits; that the only real result of the election would be a strike; and that employees would be harmed and a strike might cause a closing of the plant. The pertinent letters from Respondent, designated as the General Counsel's Exhibits 2(i) through (z) were dis- tributed to employees in the period from December 1 to 15, prior to the scheduled election on December 16, 1977. 8 Citing General Stencils, Inc., 195 NLRB 1109 (1972), the General Counsel contends that the basic theme of these letters emphasized the possible loss of job security and benefits, the possibility of a strike and per- manent replacement, and the possible closing of the plant if they voted in favor of the Union, and that such letters, therefore, violated Section 8(a)(l) of the Act. The Charging Party contends that the barrage of coer- cive literature in the days prior to the election should be considered in conjunction with the group meetings and individual sessions held with employees by management representatives, and that it constitutes a massive violation of Section 8(a)(1) and warrants the issuance of a bargain- ing order. Respondent contends that its campaign literature con- tained lawful expressions of its views and opinions re- garding the possible consequences of unionism and that such material is entitled to the free speech protections of Section 8(c) of the Act. Determining what campaign literature is coercive and violative of Section 8(a)(1) as contrasted to lawful ex- pressions of free speech is often a difficult task and the context in which they occurred may be determinative. I have carefully reviewed the campaign material and, out of some 18 exhibits, 4 warrant discussion as possible vio- lations of the Act.9 San Lorenzo Lumbre Company, 238 N RB 1421 (I978), he Saing, Bank Company. 207 NL.RB 269 at 272 (1973) G.C Exhs 2(a) through (h) were materials distributed around July 1977. and are barred from consideration as iolatlions h Sec 10(h) They wAere admitted as releant hackground material (G C E-xhs 211. kL). (I), and (m) 591 I)tCISI()NS ()OF NA [IONAL LABOR RELATIONS BOARD The General Counsel's Exhibit 2(i), a letter addressed to employees and dated December 5, 1977, discusses the scheduled representation election. Paragraph 3 of the ex- hibit states: Our concern goes much deeper than a formal policy or program because I truly believe we have taken a personal interest in you and your family. It is this personal concern which makes me write to you this week to discuss the real risks which you and your family may face if you make the wrong decision in the Labor Board election on December 16. You have worked hard to provide a home, security, and to meet the needs of your family. If the Union is successful, the possibility that you and your family may be harmed if there are negotiations causes me great concern. These dangers can have a real impact on your life, and include: I. Being forced to negotiate with the wages and benefits you now enjoy, and taking the risk that you may lose some of them. 2. The possibility that HASBRO will not reach an agreement with the union. 3. The possibility that you may be forced to go on strike, and receive no paycheck every Friday. Etcetera While I find nothing wrong in an employer's pointing out some of the negative aspects of selecting a union, the statement, "If the union is successful, the possibility that you and your family may be harmed if there are negotia- tions causes me great concern," [emphasis supplied] ap- pears to directly repudiate the collective-bargaining prin- ciples which underlie the Act. It is one thing to say there are no guarantees and that there may be minuses as well as pluses as a result of negotiations. However, this state- ment goes beyond that. I have reviewed this particular document in its entirety, and its entire tenor is devoted to pointing out the risks (loss of wages, strikes, replace- ment, and loss of benefits) if the Union is successful and there are negotiations. In light of my prior findings that Feldman did in fact threaten Beaucage on December 15, 1977, that, if the Union won, work in the printing section would be contracted out or that section would be closed, I find that the nuances of such document become more meaningful and, while the document might otherwise be deemed lawful, it is unlawful in this context. Another document warranting discussion is the Gener- al Counsel's Exhibit 2(k), dated December 12, 1977, and delivered to employees in the printing department that stressed the realities of collective bargaining, namely, that everything employees now enjoy-wages, all bene- fits, and working conditions-goes on the bargaining table and there are no guarantees. For purposes of dis- cussion paragraphs 3 and 4 of such document is set forth below: Before you vote, you should carefully consider all the benefits you presently enjoy as a HASBRO em- ployee. If the Graphic Arts Union gets in here, you risk losing: Fair Wages Medical Insurance Major Medical Coverage Group Surgical Medical Coverage Life Insurance Pension Plan Paid Vacations Paid Holidays Lunch Periods Call-in Pay Overtime Pay Jury Pay Credit Union Service Awards Break Periods Personal Leaves Paid Bereavement Leaves Bulletin Board Privileges Company Recreation Functions Job Posting System Employees Park Privileges Employee Cafeteria Privileges Personal Counseling with Personnel Dept. Christmas Bonus Blood Bank Educational Assistance Scholarship Program Employee Discounts How many of these existing benefits and privileges will the Graphic Arts Union agree to trade away or reduce in exchange for dues checkoff and a Union Security Clause? Personally, I think the risk is too great to take. It can be argued that the above-cited paragraphs and the document as a whole merely stress that bargaining is a two-sided affair and may result in the diminishment of certain existing benefits as well as the possibility of in- creased benefits. Conversely, it is also arguable that by listing every employee benefit and stressing the risk of losing such benefits if there are negotiations with the Union, the Company is directly or inferentially threaten- ing a loss of existing benefits. In the final analysis is the above document, considered in its entirety, lawful campaign material under Section 8(c) or does it reflect a threat of loss of benefits that would coerce employees in their decision to select a bar- gaining representative'? Its stress on the risk of losing existing benefits, particu- larly the statement that "If the Graphic Arts Union gets in here, you risk losing . . ." appears more than a propa- ganda pitch but a persistent theme of loss of benefits or reduction in benefits if the Union were selected. I con- clude that the document was carefully calculated to play on and exploit the fears of employees about losing exist- ing benefits and was intended to and did coerce employ- ees in the selection of their bargaining representative in this context. Another document (G.C. Exh. 2(1), dated December 14, 1977) points out what might result if a strike ensued, mentioning, for example, the lost wages, the loss of com- pany paid benefits, and possible permanent replacement. Upon review of the document I conlude that, while it does mention the consequences of a strike, I find that it does not exceed permissible campaigning and does not, in my view, amount to restraint or coercion of employ- ees. The General Counsel's Exhibit 2(m) is a six-page docu- ment giving information about the time and place of the 592 HASBRO INDUSTRIES, INC. representation election, including a copy of a sample ballot. Page three appears to be the only questionable part of the exhibit and that page contains the following: REMEMBER!! NO UNION can get you more than you can get for yourself. NO UNION can get for you more than the Com- pany is willing to give. NO UNION is worth your freedom to act for yourself. NO UNION can guarantee you a job-or higher wages-or better benefits. NO UNION got you the steady work, wages and other benefits you now have. NO UNION has to tell us we must treat our em- ployees fairly. We do that automatically. NO UNION is easy to get rid of-once you have one. NO UNION means NO loss of income or jobs through strikes. NO UNION wants to represent you for free. NO UNION will know how you voted. NO UNION-that's the best union. NO UNION-vote NO on December 16!! BE SURE TO VOTE The only questionable comment appears to be the ini- tial statement-namely, "NO UNION can get you more than you can get for yourself." The statement is stated in absolute terms and not in equivocal terminology. It can be argued that by this statement the Company has indicated that it would be futile for the employees to select a collective-bargaining representative, or, alternatively, that the Company had predetermined that it would be so inflexible in its bar- gaining positions as to amount to a refusal to bargain. On the other hand, the balance of the statements, e.g., "NO UNION-that's the best union" are relatively innocuous comments designed to persuade the employees to reject the Union. When viewed with the other comments, the statement does not appear coercive. Accordingly, I reject the contention that the General Counsel's Exhibit 2(m) is coercive either in part or considered as a whole. I have considered the arguments that the volume and content of the letters, when considered in conjunction with the interviews, be deemed coercive. However, the Company is entitled to campaign vigorously and sheer volume and intensity of the Company's campaign does not amount to a violation of the Act. Other than the in- terrogation of Pasadas, I do not find the utilization of meetings with Maxwell and Fornal in the cafeteria im- proper or coercive. Obviously, the Union has the option of campaigning just as vigorously for the right to repre- sent employees. In sum, I conclude that two of the documents (G.C. Exhs. 2(i) and (k)), went beyond lawful informational campaigning and, when considered in the context of the unlawful interrogation of Pasadas, and the threat ex- pressed by Feldman that the Company would either con- tract out the printing work or close down that section if the Union were selected, I find such material coercive and violative of Section 8(a)(l). g. Paragraph 8(g) of the complaint alleges that at a meeting with employees on or about February 24, 1978, Hugh Maxwell, vice president of operations, stated that the Union opposed the recently granted wage increases. It is undisputed that the General Counsel's Exhibit 8 is the text of a speech given by Maxwell to the printing de- partment and states in pertinent part: The most important thing that the union claims is unfair are the annual wage increase we gave you in January. The Union claims we should not have done it. We think differently. We believe strongly that granting those increases was right and very fair. Unfortunately, the union disagrees and would have liked us to give you nothing at all. We are going to discuss this matter with the Labor Board and hope we can convince them that we were right in giving the increases to you and there was nothing unfair about it. The General Counsel contends this is a clear misrepre- sentation and points to the charge filed by the Union which claimed that the wage increases were for the pur- pose of discouraging support for the Union and that, as a remedy therefor, the Union requested the increases placed in effect be maintained and that other increases promised be granted. It is clear, however, that the Union alleged that the raises granted in January 1978 were unfair labor practices and was merely urging that if the wage increases were found unfair, the remedy did not re- quire their recission. The statement, "Unfortunately the union disagrees and would have liked us to give you nothing at all," is arguable as being a misrepresentation in light of the Union's position that raises granted be maintained. Conversely, the Union, by charging that the raises given were unfair labor practices and then urging that, as a remedy, the raises be maintained was attempt- ing to have its cake and eat it too. Moreover, since the Union was claiming the wage increases were unfair labor practices, the practical effect was to discourage the granting of any wage increases. I find the incident susceptible of several interpretations and while Respondent may have overstated its case, it was a normal reaction to the filing of the Union's charges on the wage increases. As such, I find it an area of arguable contention and not a flagrant misrepresenta- tion and, therefore, conclude the speech and comments discussed were not violative of Section 8(a)(1) of the Act. 2. The 8(a)(3) allegations The complaint alleges that on January 22, 1978, Re- spondent violated the Act by discriminatorily failing to recall three employees-Albert Enes, Arthur Iluard, and Mark Stanley. All or practically all of Respondent's hourly employ- ees were laid off, as was the usual custom, on or about December 16, 1977. By January 22. 1978. all the laid-off printing section employees were recalled except for Enes, Htuard, and Stanley. 5093 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In support of the allegations, counsel for the General Counsel points out that Huard and Stanley's support for the Union was known by Respondent, that Huard acted as the union observer at the election held on December 16, 1977, that the report of projected impressions (print- ing) made by Feldman which was utilized by Respon- dent to support its economic layoff was the first time such report had been prepared for the printing depart- ment, and that there was an increase in the amount of work subcontracted in 1978 over 1977. In rebuttal, Respondent contends that the failure of these employees to be recalled was prompted by legiti- mate and substantial business reasons, namely, lack of work, and notes that Huard was in fact recalled on March 27, 1978, and Stanley and Enes were recalled on April 5 and May 9, respectively.10 Respondent states that, after a printing forecast was made for the 1978 toy line, it was concluded by Maxwell that only five presses would be operated and that oper- ations would be eliminated on a two-color paper press and a single-color paper press. The selection of Enes, Huard, and Stanley for layoff was based on the fact that they had the least seniority in their classifications. Re- spondent contends, and it is not disputed that they fol- lowed "company seniority within a specific classifica- tion" and that there was no practice of bumping employ- ees from one classification to another. Overtime in 1978 averaged 18 hours per week compared to 93 hours a week in 1977. Lastly, Respondent noted that there were no new employees hired nor transfers made into the printing section and points out that Jean Beaucage, a known union supporter, was recalled to work January 3, 1978. Respondent further asserts that subcontracting of printing work in 1978 was not substantially different from 1977. I have reviewed the respective contentions in light of the record and have concluded that the preponderance of the evidence does not establish that the failure to recall Enes, Huard, and Stanley was discriminatorily mo- tivated. First, all three were ultimately recalled to work. There is nothing in the record to establish that Respon- dent utilized a special method of selection to reach these three individuals but it did in fact utilize seniority in clas- sification for determining layoffs, a practice apparently utilized in the past. (See Resp. Exh. 12.) In addition, there is no evidence of other individuals being hired as replacements nor were other employees transferred in to operate the two machines. There is no contention that the machines in question were operated during the time these individuals were on layoff. Further, Respondent's Exhibit 15, a printing comparison for 1977 versus a 1978 forecast, Respondent's Exhibit 16, a memo to Ed Daisey from Hugh Maxwell, dated December 30, 1977, and Re- spondent's Exhibit 17, a January 1978 forecast of printing work (or impressions), and Respondent's Exhibit 18 are supportive of Respondent's contention that the failure to recall Enes, Huard, and Stanley was economically moti- vated. I also note that there were three individuals laid off in April 1977 from the printing section in a reduction in force that was not alleged to be discriminatory. 'O Huard apparently declined recall. In reaching such conclusion, I am aware of other fac- tors that tend to establish a discriminatory motive. Huard and Stanley were two individuals of four singled out for separate meetings with management presumably because of their union sympathies. There had not been a January forecast (Resp. Exh. 17) ever prepared before. Also, Huard had acted as election observer for the Union and Feldman, manager of the department, was aware of their union sympathies. While the above matters do raise sus- picions, I find them outweighed by the factors previous- ly mentioned. Accordingly, I shall dismiss this allegation. 3. The 8(a)(5) allegations The complaint (pars. 13-16) alleges that on or about January 24, 1977, a majority of employees in the printing section had designated the Union as bargaining represen- tative, that the Union had requested bargaining, and that since August 15, 1977, Respondent has refused to bargain and had engaged in conduct making the holding of a fair election impossible. Since the record establishes that the Union had achieved a card majority prior to the alleged unfair labor practices, and recognition was requested and denied, the only issue is whether the unfair labor practices found preclude a fair second election. If it does, under Gissel'l a bargaining order would be justified. 2 Briefly, I found that prior to the December 16, 1977, election Respondent: (a) Granted raises to three employees to influence their vote. (b) Coercively interrogated employee Antonio Pasa- das. (c) Threatened employee Jean Beaucage that printing work would be subcontracted or the printing section closed if the Union were selected. (d) Gave an impression of surveillance of employees' union activities by advising employee Stanley that they knew how he voted. (e) Circulated letters (G.C. Exhs. 2(i) and (k) which in this context resulted in coercing employees about re- duced benefits. After the election and while objections were still pend- ing, Respondent granted unusually high wage increases to employees in the bargaining unit. While the conduct found prior to the election might be classed as isolated, and arguably insufficient to preclude a fair second elec- tion, I am persuaded that the granting of unusually high wage increases after the first election effectively prevents the holding of a fair second election. Moreover, while the interrogation of Pasadas and comment to Stanley ap- peared to be isolated violations, the threat to close the printing section is a serious violation and, when consid- ered in conjunction with the high wage increase and i .VL.R.B. v (;issel Packing C'o. Inc., 395 U S 575 (1909) In view ,lf my subscquenlt findings that Albert Enes, Mark Stanley, and Arthur Moreira were not discrininatorily laid (lfl in N,,embcr 1978. as alleged in the complaint Case I CA -15801, such findings are not ;I factor in determining whether a (I lse/l hrgaillng order Is appropriate. Item (d) above also occurred ater he election. 594 HASBRO INDUSTRIES, INC. other 8(a)(l) conduct, warrants the issuance of a bargain- ing order. 3 While the Employer's initial refusal to recognize and bargain with the Union was lawful, its subsequent unfair labor practices, which I conclude would prevent a fair second election, were motivated by a desire to erode the Union's majority status and requires a finding that Re- spondent's refusal to bargain was violative of Section 8(a)(5) and (1) of the Act. C. Complaint in Case -CA-15803 An additional hearing was held on this complaint on August 22, 23, 1979, which was consolidated with Case l-CA-14134 for decision. This additional complaint as amended alleged that on or about November 24, 1978, Respondent laid off and refused to reinstate Albert Enes, Mark Stanley, and Arthur Moreira because of their assis- tance and support for the Union and because of their participation and testimony in a prior National Labor Relations Board hearing. The parties stipulated that the layoff dates of the indi- viduals concerned were as follows: Albert Enes-laid off December 16, 1977; recalled May 9, 1978; laid off November 24, 1978-not re- called Mark Stanley-laid off December 16, 1977; recalled April 5, 1978; laid off August 4, 1978; recalled September 25, 1978; laid off November 24, 1978- not recalled Arthur Moreira-laid off December 16, 1977; re- called January 3, 1978; laid off November 24, 1978-not recalled. As noted previously, only the layoffs of November 24, 1978, are in issue in this complaint. Respondent defends on the grounds that the layoffs were prompted by lack of work. It points to declining sales in 1978, changes in the toy product line which re- quired less printing overall, and increased requirements for outside printing. Respondent further claims that no new hires or transfers were made into the printing sec- tion, that the reductions were in accord with their usual seniority policy, and that there is no evidence of dis- criminatory motive. The General Counsel attacks Respondent's economic defense by noting that prior sales declines had not affect- ed employee manning in the printing section, that changes in the product line were a regular and not un- usual occurrence, and that the purported necessity for some increase in outside printing were all subterfuges to hide the real motivation for the layoffs. While determining the true motivation for layoffs is at times difficult, the factual context and all relevant factors must be considered. ':' n addilio, I credit Enes, I'asadas, and Moreir;a that Feldman told them on December I, 197q, Ihal hey acre lucky the lUniron did not ,.in because the printing sectionll would he closed This corrobor.tes eirlplo,- ee Beaucage's Itesimon regarding Fldman and estahhlishes hl the threat to subcontracl the s oirk or close Ihe secction was k \, r ha number of employees Layoffs are fairly common in the toy industry and this Company, as projected and actual sales may vary consid- erably depending on the competition and demand fac- tors. In the past, however, layoffs had been infrequent in the printing section. It is undisputed that no one was hired or transferred in to the printing section to replace those laid off. To the extent that Gary Tinley worked on the presses in 1979, 1 find that he filled in briefly and sporadically for rush orders or when someone was off sick and he did not regularly perform the work of the laid-off employees. Mark Stanley testified on September 13, 1978, that he was on layoff at that time. Subsequent to the hearing at which he testified, he was recalled on September 25, 1978, and again laid off on November 24, 1978. Thus, al- though it was later alleged that he was discriminatorily selected for layoff because of his union activities or be- cause of his testimony at the hearing, he was recalled to work 2 weeks later. With respect to subcontracting the printing work, Feldman testified at one point that Bill Daisey of production control made the determination of what printing work was to be contracted out.'4 In addi- tion, there has been no evidence that Respondent varied from its regular practice of laying off the least senior in- dividual in a classification. Thus, if a one-color paper op- erator were to be laid off, the one selected in that classi- fication was the one with the least company seniority. In sum, there is no evidence that the individuals laid off were replaced by new hires or transferees; Respon- dent did not vary from its normal seniority policy in se- lecting those for layoff; and Mark Stanley, who was on economic layoff on September 13, 1978, when he testi- fied, was recalled to work on September 25, 1978, de- spite subsequent allegations, inter alia, that his testimony prompted his later selection for layoff. There is no evi- dence that the subcontracting that was done was prompt- ed by other than normal managerial decisions and it is undisputed that there was a sales decline in 1978. have carefully considered whether Respondent purposefully contracted out printing work and then selected these in- dividuals for layoff because of their union support or their testimony and, finding insufficient evidence to sup- port these allegations, I recommend they be dismissed. 111. THE REMEDY In order to remedy the unfair labor practices found and to effectuate the purposes of the Act, the Respon- dent will be ordered to cease and desist its unlawful con- duct and to recognize and bargain with the Union as the bargaining representative of the employees in the print- ing section of the plant in the unit previously found ap- propriate by the Board. CONCIUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. " Appa;rcntlI Englc. ,ic prcsidelI of prchasinig, a3nd the product managers pla a nat.r rly i1 such decision, 595 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. Respondent through its representatives and agents did: (a) Unlawfully grant wage increases to three employ- ees to influence their vote in an election. (b) Unlawfully interrogate an employee about his union sentiments and beliefs. (c) Unlawfully threaten an employee that printing work would be contracted out or the printing section closed if the Union were selected. (d) Unlawfully gave an employee an impression of sur- veillance of his and other employees' union activities. (e) Unlawfully circulating letters which, when consid- ered with other conduct, constitutes a threat to reduce employees' benefits if the Union were selected. (f) Unlawfully grant high wage increases to employees in the bargaining unit with the purpose of eroding em- ployee support for the Union. The above-itemized conduct was violative of Section 8(a)(l) of the Act. 4. Respondent, by refusing to recognize and bargain with the Union, and thereafter engaging in unlawful con- duct designed to erode employee support for the Union, and thereby preventing the holding of a fair second elec- tion, has refused to bargain in violation of Section 8(a)(5) and (1) of the Act. 5. Except as specifically found above, Respondent did not otherwise engage in any other unfair labor practices. 6. The above unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. Upon the basis of the foregoing findings of fact and conclusions of law and upon the entire record herein and pursuant to Section 10(c) of the Act, I make the follow- ing recommended: ORDER' 5 The Respondent, Hasbro Industries, Inc., Pawtucket, Rhode Island, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Granting employees wage increases prior to an election to influence their vote. (b) Interrogating employees about their union senti- ments and beliefs. (c) Giving an employee an impression of surveillance of his and other employees union activities. (d) Threatening an employee that printing work would be contracted out or the printing section closed if the Union were selected. I 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 12.48 of the Rules and Regulations, be adopted by the Board and become its findings, conlclusions, and ()rder and all objectlions thereto shall be deemed waived for all purposes (e) Circulating letters which when considered with the above conduct constitute threats to reduce employee benefits if the Union were selected. (f) Granting high wage increases to employees in the bargaining unit to erode the employee support for the Union. (g) Refusing to bargain collectively with respect to wages, hours, and other terms and conditions of employ- ment with Local 26-L, Graphic Arts International Union, AFL-CIO, as the exclusive bargaining represen- tative of its employees in the following appropriate unit: All lithographic pressmen, feeders, helpers, loaders, plate-makers, multilith operators and suppliers of stock to the lithographic operation, employed by the Respondent at its Newport Avenue, Pawtucket, Rhode Island plant, but excluding all other employ- ees, employees represented by another labor organi- zation, office clerical employees, professional em- ployees, guards and supervisors as defined in Sec- tion 2(11) of the Act. (h) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the purposes of the Act: (a) Upon request, bargain with the above-named Union as the exclusive bargaining representative of the employ- ees in the unit described previously with respect to wages, hours, and other terms and conditions of employ- ment and, if an agreement is reached, embody such agreement in a signed contract. (b) Post at its place of business in Pawtucket, Rhode Island, copies of the attached notice marked "Appen- dix." t Copies of said notice, on forms provided by the Regional Director for Region 1, after being duly signed by an authorized representative of Respondent, are to be posted by Respondent immediately upon receipt thereof and be maintained by it for 60 consecutive days there- after, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said no- tices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 1, in writ- ing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. : In the event that this Order is cnforced by Judgment of a United States Court (of Appeals, the words in the notice reacing Posted by Order cI Ille National L.abor Relations Board" shall read "Posted Pursu- ant to a Judgmlent of the Untiled Slates Court of Appeals nlfi)rcilng an Order of the National l.abor Relations Bltiard" 596