Robinson Furniture, Inc.

1076 ROBINSON FURNITURE Robinson Furniture, Inc. and Internaitonal Union, United Automobile, Aerospace and Agriculture Implement Workers of America (UAW). Cases 30-CA-9100, 30-CA-9100-2, and 30-CA-9346 24 November 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS STEPHENS AND CRACRAFT On 22 June 1987 Administrative Law Judge Irwin H. Socoloff issued the attached decision. The General Counsel filed exceptions and a supporting brief, and the Respondent filed a brief in opposition to the General Counsel's exceptions. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, I and conclusions and to adopt the recommended Order as modified. 1. The complaint alleges, because of the union organizational campaign begun in January 19862 and of which the Respondent learned during the first week of February, the Respondent instituted a written reprimand procedure. The Respondent put into evidence what it considered to be a represent- ative selection of written warnings to employees dated prior to the organizing campaign. On that basis the judge dismissed the 8(a)(3) allegation, ap- parently accepting the Respondent's contention that the policy was not new and that written warn- ings had constituted a method of discipline before the advent of the union activities of its employees. The judge also therefore dismissed the "derivative" allegation as to enforcement of the new policy based on a written warning to employee Roshelle Cutcher issued on 6 March 1986.3 We disagree with the judge's dismissal with re- spect to the institution of the written warning system. The record shows that the Respondent's employee handbook, effective since July 1979, con- tains, in the section entitled "Work Rules and Dis- ciplinary Procedure," a progressive disciplinary i The General Counsel has excepted to some of the judge's credibility findings The Board's established policy is not to overrule an administra- tive law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for re- versing the findings 2 All dates are in 1986 unless otherwise indicated 3 The Respondent admitted that Cutcher had been given written disci- pline on that date but denied that it was pursuant to any policy instituted in 1986 The General Counsel has not excepted to this dismissal Howev- er, see our discussion below and the amended remedy section of this De- cision and Order system calling essentially for a written warning only after "verbal [i.e., oral] warnings" for two prior offenses.4 The final step of the system calls for termination for any offense subsequent to the one for which the written warning was issued. For the reasons set forth below we shall find an 8(a)(3) and (1) violation based on the Respondent's change in its disciplinary policy, instituted because of its employees' union activities, from its handbook policy to one that eliminated the "verbal warning" steps. Respondent's vice president, Gary Randall, testi- fied that after the Company learned of the Union's organizational effort he consulted with Respond- ent's attorney in February. The attorney recom- mended increased documentation with respect, inter alia, to employee discipline. Employee Patri- cia LaPalme testified, without contradiction, that on 6 March Supervisor Joe Stiers informed all em- ployees in his department that, effective immediate- ly, management would implement a "new proce- dure" with respect to disciplinary warnings such that "anything, including verbal [sic] warnings would be in writing." Thus, the record shows that the Respondent, after learning of its employees' union activities during the first week in February, deviated from its past practice beginning on 6 March by eliminating or skipping the "verbal warning" steps and issuing written warnings for offenses that previously were not yet subject to them.' The Respondent's consul- tation with its attorney that resulted in the change occurred in the context of its 8(a)(1) and (3) viola- tion in disciplining employee James Hart on 6 and 10 February. The Respondent has not shown by objective evidence, such as productivity data, that the change was motivated by considerations unre- lated to the efforts of some of its employees to or- ganize. While there is no evidence that the Re- spondent changed its standards for determining what type of offense would be serious enough to warrant a warning, clearly the Respondent did at 4 With respect to 4 of the 24 rules in the handbook, 2 of them called for two written warnings following a "verbal warning" for a first offense and 2 rules (fighting and reporting for work under the influence of alco- hol or drugs) called for termination for the first offense It was pursuant to the Respondent's reliance on a rule in this handbook section, and its disparate enforcement, that the judge found 8(a)(1) and (3) violations with respect to discipline of employee James Hart for his solicitation on behalf of the Union The violations did not turn on any departure from the progressivity of the handbook system There were no exceptions to these findings 5 With respect to the six written warnings in evidence that predate the union organizing effort, our examination of the documents convinces us, with the exception of one entitled "First Parking Warning," they are not inconsistent with the handbook policy and in fact we presume them to be in accord with it-that is, the written warnings were for third offenses and followed two prior oral warnings We note there is no additional contextual evidence to suggest otherwise 286 NLRB No. 100 ROBINSON FURNITURE least change its method of communicating disci- pline to its employees. We infer that the change was in retaliation against union activities and we find that the Respondent thereby violated Section 8(a)(3) and (1) of the Act. International Business Systems, 247 NLRB 678 (1980); Keller Mfg. Co., 237 NLRB 712 (1978); and Electri-Flex Co., 228 NLRB 847 (1977). Support for this finding can be found in an anal- ysis of the warning letter sent to employee Ro- shelle Cutcher on 6 March-the clay the new policy was announced to employees . The letter stated that "this Written Reprisal" constituted dis- ciplinary action because of (1) "negligence in per- forming job duties" and (2) for "lack of respect for the Company's product" and "insubordinate con- duct." The letter reveals, however, that Cutcher had already received one "verbal warning " for the same incident involving negligence and had not yet received even one warning as to the insubordina- tion charge. This letter is probative evidence that the Respondent immediately implemented the newly announced policy calling for all warnings to be written. 6 2. We agree with the judge's recommended dis- missal of the 8(a)(3) allegation with respect to the elimination of the temporary second shift on 10 February . The judge concluded that despite the "suspicious" timing of its action-on the Monday of the week following the Respondent 's learning of the union organizing campaign-the Respondent, as credibly explained by Robinson , acted entirely for lawful reasons . The judge in large part reached this conclusion based on his analysis of the Re- spondent's financial situation . For the reasons set forth below , however, the judge erred in his own after-the-fact financial evaluation of the result of the Respondent's action and we will modify his ra- tionale accordingly. The judge found that , unlike previous years the Respondent had maintained its second shift beyond December and continued it into 1986 because of a backlog of orders. Robinson, however, testified that by 10 February he had learned from the Com- pany's accountant, Pete Asplund, that the business had sustained a loss for January exceeding $50,000. Based on that figure and certain information in the financial statement of 31 December 1985 covering the first three quarters of the Respondent 's fiscal year, Asplund had recommended in his letter of 7 February a decrease in labor costs as the only way to return to profitable operations . Robinson knew generally from the 31 December 1985 financial 6 In the absence of an exception to the judge 's dismissal of the com- plaint allegation concerning the Cutcher discipline we do not find a sepa- rate 8(a)(3) violation as to enforcement of the violative new policy 1077 statement that labor costs as a percentage of sales were higher so far in the current fiscal year than they had been for the corresponding period the previous year.? Based on that knowledge, the in- formation and recommendation in Asplund's letter, and for other reasons,8 Robinson, on 10 February, instructed Randall to eliminate the second shift im- mediately. The General Counsel contended before the judge and again in her exceptions that the Respondent's fiscal yearend statement of 31 March 1986 reveals that, despite the layoff of the second-shift employ- ees during the fourth quarter, production labor costs as a percentage of sales actually increased for the January through March period. The General Counsel essentially argues that this constitutes evi- dence that the Respondent's asserted reason for the elimination of the second shift-reduction of the labor cost to sales ratio-was pretextual. The judge accepted the General Counsel's characterization of the full fiscal year data as a "fact." In order to meet the General Counsel's argument, then, the judge, after correctly finding that the layoff was not accompanied by increased labor costs attributa- ble either to overtime for the first shift or to an augmented first shift, was driven to speculate that the reason for the "increase" in the.labor cost to sales ratio following the layoff must be attributable to a decline in sales for the fourth quarter. The problem with this analysis is that it is found- ed on a serious mistake in the 31 March 1986 finan- cial statement, one on which the General Counsel mistakenly relied in propounding the theory that the Respondent in fact failed to achieve its stated goal of reducing labor costs as a percentage of sales for both the January-March quarter and for the entire fiscal year. In the "Supplementary Data" section of the yearend statement the accountant en- tered "net sales" for the year ending 31 March 1986 as $6,402,519. Inexplicably, this figure not only understates "net product sales," entered in the main section of the report, by $86,653 but, most critically, fails to include "other sales"9 of $421,948. Thus, the "net sales" figure underlying the critical calculation as to labor cost percentage was understated in the "Supplementary Data" sec- 7 The 31 December 1985 financial statement shows that production labor costs as a percentage of total sales (product sales plus other sales such as lumber , wood chips, etc) was 3 25 percentage points higher than for the corresponding 9-month period in the previous fiscal year (i e , 28 91 percent, instead of 25 66 percent) Similarly, production labor costs as a percentage of production (total sales plus inventory) was up 3 22 per- cent 8 The fudge credited Robinson on his other reasons for eliminating the second shift-relative productivity between the second shift and the per- manent first shift and an impending reduction in logs coming into the plant 9 See fn 7, above 1078 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD tion of the report by more than $500,000. This anomaly thus destroys the validity of the General Counsel's comparisons to both the first 9 months of the fiscal year and the entire 1984-1985 fiscal year. 10 On an examination of the relevant comparative percentages using the correct total net sales figure for 1985-1986 a different and much clearer picture emerges. We now see, after the fact, that the Re- spondent's financial stategy worked precisely as in- tended. Production labor costs for the full year (taking account of the layoff of the second shift during the fourth quarter), as a percentage of total net sales-the statistic relied on by the Respondent in making its 10 February 1986 decision-were ac- tually down almost 1 percentage point compared with the 9-month figure of 28.91 percent. More dramatically, calculating the labor cost/sales per- centage for just the fourth quarter we find that it is almost 3 percentage points lower than the 9-month figure and more than 2 percentage points lower than the fourth quarter of 1984-1985. It is impor- tant to note, in retrospect, that the sharp decrease in labor costs instituted midway through the fourth quarter led to the decreases in the relevant labor cost/sales percentages during a time when, con- trary to the judge's misplaced speculation, the Re- spondent experienced increased sales." Given what Robinson knew about his labor cost problems on 10 February, we find that the record supports the judge's finding that Robinson's deci- sion to eliminate the second shift was a lawful busi- ness judgment, based on his accountant's advice to reduce labor costs, and was untainted by any motive to discriminate. Moreover, that finding has further support in the evidence supplied by the fi- nancial statement with respect to what the elimina- tion of the shift achieved. To be sure, evidence that a business strategy has been effective in achieving a professed nondiscriminatory goal does not neces- sarily prove that the strategy would have been fol- lowed even in the absence of union activity, just as 10 At all relevant comparative points in both the 31 December 1985 and the 31 March 1986 financial statements, "other sales" are included within "net sales " 11 Our examination of the 1985-1986 financial statement shows that total net sales for the year was approximately 17 percent higher than for the previous year and, in particular, fourth quarter sales were approxi- mately 56 percent higher than for the previous January-March period Thus, comparing 1985-1986 with the previous year, while the increase in labor costs (26 percent) far outpaced the increase in sales (17 percent), the disparity would have been even greater had the second shift been continued As for the 1985- 1986 fourth quarter compared with the corre- sponding period the previous year, the Respondent was able to reduce the labor cost/sales percentage by holding the increase in labor costs (44 percent) below the increase in sales (56 percent). Similarly, by comparing the entire 1985-1986 fiscal year with the first 9 months of that year, we see that elimination of the secord shift enabled the Respondent to hold the increase in labor costs (34 percent) below the increase in sales (38 percent) and thus reduce the corresponding labor cost/sales percentage evidence that the goal was not achieved would not necessarily prove that the strategy was chosen for discriminatory reasons. But our interpretation of the financial statement strengthens the case for our conclusion that the Respondent's professed motive for eliminating the shift was not a pretext for retali- ating against union organizing . 12 Elimination of the shift produced the result that the Respondent said it was seeking-a lower labor cost/sales percent- age-and we agree with the judge that that goal, and not a desire to punish employees for engaging in union organizing, underlay the decision to elimi- nate the second shift. AMENDED CONCLUSIONS OF LAW Substitute the following for Conclusion of Law 5 and renumber the subsequent Conclusion of Law. "5. By changing its disciplinary policy because of the union activities of its employees, Respondent has engaged in an unfair labor practice within the meaning of Section 8(a)(3) and (1) of the Act." AMENDED REMEDY Having found that the Respondent has engaged in unfair labor practices in violation of Section 8(a)(3) and (1), we shall order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act.13 With respect to the unfair labor practice involv- ing the retaliatory change in the disciplinary system, we shall order the expunction of all written warnings issued by the Respondent pursuant to the change on and after 6 March 1986. The Respond- ent, however, is entitled to show in the compliance stage of this proceeding that any such written warnings would have been imposed under the pro- gressive disciplinary system as set out in the 1979 employee handbook, thus exempting these warn- ings from the expunction order. Ro-Lab Rubber Co., 279 NLRB 386 (1986). ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified below and orders that the Re- spondent, Robinson Furniture, Inc.; Wilson, Michi- gan, its officers, agents, successors, and assigns, 19 Member Cracraft finds it unnecessary to decide which interpretation of the fiscal yearend statement of 31 March 1986 is correct because under either the judge's interpretation or her colleagues' approach, she would find no violation 13 As part of the remedy the General Counsel seeks an order that will include a visitatorial clause authorizing the Board , for compliance pur- poses to obtain discovery from the Respondent under the Federal Rules of Civil Procedure under the supervision of the United States court of appeals enforcing the order We have concluded that under the circum- stances of this case such a clause is not warranted ROBINSON FURNITURE shall take the action set forth in the Order as modi- fied. 1. Insert the following as paragraph 1(c) and re- letter the subsequent paragraph. "(c) Changing its disciplinary policy because of the union activities of its employees." 2. Substitute the following for paragraph 2(b). "(b) Remove from its records and destroy all ref- erence to the written warning given to employee James Hart on 11 February 1986 and all written warnings to its employees issued on and after 6 March 1986 pursuant to the change in its discipli- nary policy. Notify each of the affected employees that this has been done and that their respective disciplines will not be used against them in any way." 3. Substitute the attached notice for that of the administrative law judge. 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 has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT maintain and enforce an unlawful- ly broad no-solicitation and no-distribution rule or disparately enforce any such rule. WE WILL NOT interrogate employees about their union activities and sympathies. WE WILL NOT change our disciplinary policy be- cause of our employees' union activities. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL rescind our unlawfully broad no-solici- tation and no-distribution rule. WE WILL remove from our records and destroy all reference to the written warning given to James Hart on 11 February 1986 and all written warnings to our employees issued on and after 6 March 1986 pursuant to the change in our disciplinary policy. WE WILL notify each of them that this has been done and that their respective disciplines will not be used against them in any Way. ROBINSON FURNITURE, INC. Paul Bosanac, Esq., for the General Counsel. Barton M Peck, Esq., of Milwaukee, Wisconsin, for the Respondent. DECISION STATEMENT OF THE CASE 1079 IRWIN H. SOCOLOFF, Administrative Law Judge. On charges filed on 10 February, 28 March, 2 April, and 6 October 1986, by International Union, United Automo- bile, Aerospace and Agricultural Implement Workers of America (UAW) (the Union), against Robinson Furni- ture, Inc. (the Respondent), the General Counsel of the National Labor Relations Board, by the Regional Direc- tor for Region 30, issued a complaint dated 15 May 1986, thereafter amended, alleging violations by Respondent of Section 8(a)(3) and (1) and Section 2(6) and (7) of the National Labor Relations Act (the Act). Respondent, by its answer, denied the commission of any unfair labor practices. Pursuant to notice , trial was ht#d before me in Escana- ba, Michigan, on 28 and 29 October 1986, at which the General Counsel and the Respondent were represented by counsel and were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to in- troduce evidence. Thereafter, the parties filed briefs which have been duly considered. On the entire record' in this case, and from my obser- vations of the witnesses, I make the following FINDINGS OF FACT 1. JURISDICTION Respondent, a Michigan corporation, is engaged at its Wilson, Michigan facility in the manufacture of wood furniture. Annually, Respondent, in the course and con- duct of its business operations, sells and ships goods and products valued in excess of $50,000 directly to points located outside the State of Michigan. I find that Re- spondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. LABOR ORGANIZATION The Union is a labor organization within the meaning of Section 2(5) of the Act. III. UNFAIR LABOR PRACTICES A. Background Respondent's plant operations encompass six depart- ments, including the saw mill (department 1) where logs are stripped and cut into crude lumber, the rough mill (department 2) where the crude lumber is cut into speci- fied lengths, the finishing mill (department 3) where the lumber is processed into finished stock for subsequent as- sembly, the assembly department (department 4), the fin- ishing department (department 5), and the shipping de- partment (department 6) Operations are normally con- ducted on a single shift. However, during the peak sales season, 1 July to 15 December, Respondent frequently employs a temporary second shift of employees to work I G C Exh 2 and R Exh 6 are received in evidence 1080 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD in department 1 and, to some extent, in departments 2 and 3, the preassembly aspects of its operations. The Union began an organizational drive among Re- spondent's employees in January 1986, at a time when a temporary second shift was operational. On 4 February, Earl Robinson, Respondent's president, learned of this matter as an employee visited his home and told him that union authorization cards were being distributed. On 6 February, Robinson received a letter from the Union stating that the production and maintenance employees were in fact engaged in an organizational effort. Ulti- mately, on 19 August 1986, the Board conducted a repre- sentation election, which was lost by the Union by a vote of 90 to 82. Objections to conduct affecting the re- sults of the election were not filed and the results were certified. In the instant case, the General Counsel contends, and Respondent denies, that Respondent violated Section 8(a)(3) of the Act when, on 10 February 1986, it elimi- nated the temporary second shift and laid off some 30 employees who worked on that shift. The General Coun- sel further asserts that Respondent violated Section 8(a)(3) when, on 21 March, it temporarily laid off first- shift saw mill employees Norman LaPalme and Robert Destrampe. Also at issue is whether Respondent engaged in certain other violations of the Act. B. Facts2 and Conclusions 1. The no-solicitation and no-distribution rule Respondent's employee handbook, effective 1 July 1979, contains a section entitled "Work Rules and Disci- plinary Procedure," which prohibits certain conduct, in- cluding the following: Distributing written or printed matter of any de- scription during working time unless authorized by Management. 2) verbal warning, 1) written warn- ing, termination. There is record evidence that the rule, as applied, pro- hibits union solicitation in working areas during nonwork time. Indeed, Respondent concedes as much. According- ly, I find and conclude that Respondent violated Section 8(a)(1) of the Act by maintaining and enforcing an un- lawfully broad no-solicitation and no-distribution rule.3 Respondent further concedes, as the record evidence shows, that it enforced the rule with respect to union so- licitations while permitting its employees to engage in worktime solicitations relating to other matters. I find and conclude that, by disparately enforcing its no- solici- tation and no-distribution rule, Respondent further vio- lated Section 8(a)(1) of the Act. On 11 February 1986 Respondent issued a written warning letter to employee James Hart because Hart had engaged in union solicita- tion activities on 6 and 10 February. The 6 February so- licitation occurred on worktime and the 10 February so- 2 The factfindmgs contained herein are based on a composite of the documentary and testimonial evidence introduced at trial Where neces- sary, in order to resolve significant testimonial conflict, credibility resolu- tions have been set forth, infra S Our Way, Inc, 268 NLRB 394 (1983) licitation took place on nonworktime. As the warning letter was issued pursuant to an overly broad and dispar- ately enforced rule, its issuance was in violation of Sec- tion 8(a)(3) and (1) of the Act. 2. Changes in the work rules The complaint alleges that Respondent, in response to the organizational activities of its employees, made changes in its attendance rules and incentive pay system and instituted a written reprimand procedure. The record is devoid of evidence showing any changes in the incen- tive pay system and, accordingly, that allegation must be dismissed. The claim that Respondent instituted a written reprimand procedure in February 1986 is belied by the record evidence showing that Respondent issued written warning notices prior to the advent of the Union. There- fore, that allegation must also be dismissed. Likewise, the derivative allegation, that Respondent violated the Act by issuing a written reprimand to employee Roschelle Cutcher on 6 March 1986, must be dismissed. With respect to the attendance rules, the record evi- dence shows that Respondent has had a longstanding policy of requiring employees to call the plant within the first half hour of their absence from work and to state the reason for the absence. Either at that time, or when the employee returned to work, the office clerk recorded the reason for the absence on a piece of paper. A return- ing employee retrieved his timecard at the office, from the clerk, and then punched in and reported for duty. As a result of the so-called change in policy, instituted in March 1986, employees returning from an absence were required to sign the paper containing the reason for the absence at the time that they retrieved their timecards. This trivial alteration of the existing attendance rule cannot serve as the basis for an unfair labor practice finding. 3. Threats and unlawful surveillance Respondent held two meetings with its employees late in February 1986, at which times the subject of organiza- tion was addressed. The complaint alleges that, at those meetings, President Earl Robinson threatened to close the plant if the employees opted for representation and, further, warned that Respondent did not have to cooper- ate with the Union if it were selected by the employees as their bargaining representative. As the record contains no evidence whatsoever in support of these allegations, they must be dismissed. Likewise, there is an entire ab- sence of evidence to support the allegation that Respond- ent's officials engaged in surveillance of employees' union activities and, therefore, that allegation, too, must be dismissed. 4. Interrogations by Supervisor Rick Moulds4 Employee Norman LaPalme testified that in March 1986, his supervisor, Rick Moulds, approached him and 4 It is undisputed that Moulds , at all times material, was a supervisor within the meaning of Sec 2(11) of the Act ROBINSON FURNITURE asked if LaPalme had signed a union authorization card. LaPalme said no. Moulds then asked if the employee "would" sign a card and LaPalme answered , "Yes, I probably would." LaPalme was not an open and de- clared union supporter and, during the organizational drive, his only activity was to attend union meetings. Moulds did not testify in this proceeding . Based on La- Palme's uncontradicted testimony , I find that Respondent violated Section 8(a)(1) of the Act by interrogating that employee about his union activities and sympathies. Employee Robert Destrampe testified that in January 1986 he overheard Supervisor Moulds ask employee Morin if he knew which employees had signed union au- thorization cards. Destrampe further testified that , sever- al weeks later, he overheard Moulds ask the same ques- tion of employee Lake. In both instances, Destrampe concededly did not overhear the entire conversation. Morin, Lake, and Moulds did not testify . As Destrampe did not participate in these conversations , and as he could testify only about fragments of the conversations, I am unwilling to base unfair labor practice findings on his testimony. 5. The layoffs of LaPalme and Destrampe On 21 March 1986 Respondent's vice president of op- erations, Gary Randall, met with Saw Mill Supervisor Moulds and the three least senior employees working in the saw mill-LaPalme, Destrampe, and Glen Gregory. Randall informed LaPalme and Destrampe that they would be temporarily laid off, effective immediately, due to Respondent's excess inventory and a reduction in the number of logs coming into the plant as a result of county road restrictions on the transportation of lumber, effective 18 March 1986. LaPalme was recalled to work on 16 April and Destrampe was recalled on 21 April. At the time of the layoffs, Respondent was aware of LaPalme's prounion sympathies, such as they were. This knowledge was gained when Moulds unlawfully interro- gated that employee, as described, above. Presumably, it was also aware that Destrampe supported the Union as that employee, for a 2-week period preceding the layoffs, wore a union button at work. It is undisputed that Respondent's policy is to make se- lections of employees for layoff based on seniority and ability. At the time of the 21 March layoffs, LaPalme and Destrampe had been employed for 1 year or less and, among the then 16 saw mill employees, they were senior to employee Gregory only. Gregory, however, possessed a special skill. As a result of his education and training, he worked as a lumber grader. Randall testified that the other employees in the saw mill, who were cross-trained and able to perform more than one func- tion, had as much ability as LaPaline and Destrampe and were senior to them. For the period of the temporary layoffs, the number of working employees in the mill was reduced from 16 to 14, and the specific functions of the 2 laid-off employees were performed by senior saw mill employees. There is simply a lack of evidence showing that La- Palme and Destrampe were laid off as a result of the minimal prounion sympathies that they had demonstrat- ed. They were selected for layoff in conformity with es- 1081 tablished policy and the record contains no evidence whatsoever to warrant the inference that Respondent de- cided on a temporary layoff for reasons other than the ones it advanced. I find and conclude that the temporary layoffs of LaPalme and Destrampe were not for reasons proscribed by the Act. 6. Randall's interrogation of LaPalme and Destrampe The Union filed charges with the Board, protesting the layoffs of LaPalme and Destrampe, on 2 April 1986. La- Palme testified that on 13 May, Randall met with him in the presence of Moulds and Gregory. According to La- Palme, Randall asked if LaPalme remembered what was said on the day of the layoff. LaPalme set forth his recollection and, then, Randall accused him of having gone to the Union and filed charges. LaPalme stated that he had not gone to the Union but, rather, to the National Labor Relations Board. Randall said that the Union claimed that LaPalme had told it that he, LaPalme, had been laid off because of union activities. LaPalme re- plied, saying he had not told the Union any such thing. Destrampe testified that on the same day Randall also met with him, in the presence of Moulds and Gregory. According to Destrampe, Randall asked him, "Did you go to the Union Board and file a complaint with refer- ence to the reason you were laid off?" Destrampe pro- tested, stating that Randall was violating his rights, but he admitted to Randall that he, Destrampe, had contact- ed the Union. Randall said that he had received a com- plaint and he asked Destrampe if it was clear that the layoff was for lack of work Destrampe did not agree. Randall testified that in each conversation he told the employee that he had been notified "that we laid you off because of union activities." Randall then asked, "Did I ever say anything about union activities, that that is why you are being laid off?" Both employees said no. Randall further testified that he did not ask the employees if they had contacted the Union or filed charges with the Board. LaPalme and Destrampe exhibited much surer recol- lections of the foregoing conversations than did Randall. On that basis, I credit their versions of the 13 May con- versations and find that the conversations occurred sub- stantially as they testified. Respondent concedes that, viewed as investigative interviews, the questioning of LaPalme and Destrampe was not accompanied by the required safeguards, as set forth in Johnnie's Poultry Co., 146 NLRB 770 (1964). In any event, the interrogations went beyond legitimate in- vestigation, into the area of whether the employees had contacted the Union or the Board, and were coercive in nature. I find that by its interrogations of LaPalme and Destrampe on 13 May 1986, Respondent violated Section 8(a)(1) of the Act. 7. Elimination of the second shift As noted, Respondent became aware of its employees' organizational efforts on 4 February 1986, when it was so advised by an employee. That information was con- firmed on 6 February, by letter from the Union. On 10 February, Respondent eliminated its temporary second 1082 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD shift. Some 30 employees were laid off, while 5 others were reassigned . Relying almost exclusively on the timing of this action, the General Counsel contends that the 10 February layoff of the second-shift employees was in violation of Section 8(a)(3) of the Act. I disagree. While Respondent, as previously indicated, normally operates with a single shift of permanent employees, it has frequently employed a temporary second shift of workers in departments 1, 2, and 3, the preassembly as- pects of its operations, during the July to mid-December peak sales period. Historically, and without regard to whether a second shift is in existence, all the departments on the first shift have operated on an overtime basis. In 1985, Respondent utilized a temporary second shift, be- ginning in July. Unlike previous years, when that shift was eliminated before the end of the year, the temporary shift of workers was continued into 1986 because of an abundance of orders. It was not until 10 February that Respondent's president, Earl Robinson, decided to elimi- nate it. During the first part of every month, Respondent's ac- countant, Pete Asplund, a certified public accountant and a member of an independent accounting firm, routinely prepares a profit-and-loss statement of operations for the previous month. After preparing the January 1986 state- ment, Asplund, on 7 February, advised Robinson that Respondent's theretofore profitable business had sus- tained a loss in January in excess of $50,000. Asplund ad- vised Robinson that rising production labor costs, as a percentage of sales, was the problem and that a decrease in labor costs was necessary in order to return Respond- ent to a profit situation. Asplund credibly testified that, at the time he made his recommendations, he was un- aware of the organizational drive. After Robinson received Asplund's recommendations, he decided to reduce labor costs by eliminating the tem- porary second shift. He testified that his action in that regard was based, in part, on the high labor costs as a percentage of sales and, in part, on other factors, namely, that Respondent then had a high inventory level; that the temporary second shift of workers were not as produc- tive as the permanent first-shift workers; that county road restrictions on the transportation of lumber were imminent and would cause a reduction in the number of logs coming into the plant. Robinson further testified that, at the time of the 10 February elimination of the temporary second shift, he was without knowledge of any union activities on the part of the employees who worked on that shift. Indeed, the record is devoid of evi- dence that any second-shift employees engaged in union activities. The General Counsel points to the fact that Respond- ent's financial statements show that, following elimina- tion of the second shift, its production labor costs as a percentage of sales continued to rise for the quarter ending 31 March 1986. According to the General Coun- sel, that fact "clearly suggests Respondent's layoff was accompanied by increased labor costs attributed to ex- panded hours" for the first-shift employees. However, this contention is not sustained by the record evidence showing the dollar cost of overtime hours worked by the first-shift employees. Nor did Respondent increase the size of its first-shift employee complement. A more likely explanation of why elimination of the second shift did not reduce the cost of labor as a percentage of sales is that Respondent suffered a decline in sales for the quar- ter ending 31 March 1986. Despite the suspicious timing of its action, Respondent, through Robinson's testimony, has presented a credible explanation of its 10 February decision, to eliminate the second shift, and that explanation convinces me that it acted for lawful reasons. I find and conclude that Re- spondent, for financial reasons, would have eliminated the second shift on 10 February 1986, even in the ab- sence of the organizational activities of its employees. I therefore conclude that the allegation that Respondent violated Section 8(a)(3) of the Act in that regard must be dismissed. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES ON COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with its operations de- scribed in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor dis- putes burdening and obstructing commerce and the free flow of commerce. THE REMEDY Having found that Respondent has engaged in certain unfair labor practice conduct in violation of Section 8(a)(1) of the Act, I shall recommend that it be ordered to cease and desist therefrom and to take certain affirma- tive action designed to effectuate the policies of the Act. CONCLUSIONS OF LAW 1. Respondent Robinson Furniture, Inc. is an employer engaged in commerce, and in operations affecting com- merce, within the meaning of Section 2(2), (6), and (7) of the Act. 2. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) is a labor organization within the meaning of Section 2(5) of the Act. 3. By maintaining and enforcing an unlawfully broad no-solicitation and no-distribution rule, and by disparate- ly enforcing said rule, Respondent has engaged in unfair labor practice conduct within the meaning of Section 8(a)(3) and (1) of the Act. 4. By interrogating employees about their union activi- ties and sympathies, Respondent has engaged in unfair labor practice conduct within the meaning of Section 8(a)(1) of the Act. 5. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed5 5 If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations, the findings , conclusions, and recommended Continued ROBINSON FURNITURE ORDER The Respondent, Robinson Furniture, Inc., Wilson, Michigan, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Maintaining and enforcing an unlawfully broad no- solicitation and no-distribution rule or disparately enforc- ing any such rule. (b) Interrogating employees about their union activities and sympathies. (c) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Rescind its unlawfully broad no-solicitation and no- distribution rule. (b) Rescind the 11 February 1986 warning letter issued to James Hart and remove from its files any reference to Order shall, as provided in Sec 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses 1083 same. Notify the employee that this has been done and that the reprimand will not be used against him in any way. (c) Post at its Wilson, Michigan facility, copies of the attached notice marked "Appendix."6 Copies of the notice, on forms provided by the Regional Director for Region 6, after being signed by the Respondent's author- ized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecu- tive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. 6 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al 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."