Blankenship And Associates, Inc.

BLANKENSHIP & ASSOCIATES Blankenship and Associates, Inc. and Rayford T. Blankenship and Sheboygan Graphic Communi. cations Union Local 556, Subordinate to the Graphic Communication International Union and Diamond Printing Company Employee Committee. Case 30-CA-9265 July 29, 1988 DECISION AND ORDER BY MEMBERS JOHANSEN , BABSON, AND CRACRAFT On August 13, 1987, Administrative Law Judge Marvin Roth issued the attached decision. The General Counsel filed exceptions and a supporting brief and the Respondents filed 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 brief and has decided to affirm the judge's rulings, findings, and conclusions only to the extent consistent with this Decision and Order.' 1. The judge concluded, inter alia, that the Re- spondents violated Section 8(a)(1) of the Act by counseling the Employer, Diamond Printing Com- pany (not a respondent herein), to remove Walter Hake as personnel/labor relations director, in re- sponse to employee complaints about him and in order to influence the outcome of the upcoming election by discouraging support for the Union. We disagree with the judge. The facts, as set forth more fully by the judge, are essentially as follows. On March 21 , 1986,2 the Union filed a petition with the Board to represent the Employer's full-time production and mainte- nance employees for purposes of collective bar- gaining. On April 4, the Employer contractually engaged the services of Respondent Blankenship and Associates, Inc., as the Employer's "represent- ative in such NLRB case and any concurrent, sub- sequent or related cases, if any." The representa- tion election was scheduled for May 16. On April 7, the Respondents conducted a meet- ing with the employees. The employees com- plained about the allegedly harsh manner in which Walter Hake, the Employer's chief executive offi- ' We agree with the judge's finding that the preparation of the answer to the complaint in this proceeding is not an unfair labor practice. We therefore find it unnecessary to the disposition of this case to determine whether the crime or fraud exception to the attorney-client privilege ap- plies here. See, however, Patrick Cudahy, Inc., 288 NLRB 968 (1988), in which we rejected the position taken by the Board in NLRB v. Harvey, 349 F.2d 900 (4th Cir. 1965), that a violation of the NLRA constitutes a crime or fraud for purposes of the crime or fraud exception to the attor- ney-client privilege. Y All dates are 1986, unless otherwise indicated. 557 cer, conducted personnel and employee relations matters. Thereafter, Respondent Blankenship in- formed the Employer's president, Randall Hake (Walter Hake's son) that the employees did not want Walter Hake to continue to manage personnel and labor relations matters. Blankenship told Ran- dall that he felt that "some changes should be made in that area." Randall asked Blankenship to put his recommendations in writing to Randall. Blankenship agreed to do so. In the meantime, on April 15, four of the Em- ployer's supervisors signed and gave to Randall, for his review, a letter addressed to Walter stating, inter alia, that: [W]e the supervisory personnel along with the recommendation of the Labor Consultant, feel that a change must be made in personnel handling for the benefit of the company and its employees. In our opinion, all personnel matters such as: pay raises, vacation time, disciplinary matters, etc. should be turned over to Randall Hake. Two days later, on April 17, the Respondents sent Randall a letter containing recommendations regarding their April 7 meeting with the employ- ees. The letter, signed by Respondent Blankenship, stated, in pertinent part: I strongly suggest you take your Dad out of the day-to-day labor relations management. ... In fact, you should take your Dad's place if possible. I am very hesitant about suggesting such, but I feel that we can't win the union election without such. Thereafter, Randall discussed with Walter the possibility that the former would replace the latter in managing the Employer's personnel and employ- ee relations matters; Walter agreed to relinquish his responsibilities. On April 23, Randall posted a notice to all employees advising them that he had assumed authority and responsibility for all person- nel matters. The judge preliminarily found that in removing Walter Hake from his position as personnel/- employee relations manager in response to employ- ee complaints about his performance, the Employer acted unlawfully by granting the employees a change in their working conditions. Thus, the judge found that employees could reasonably per- ceive Walter Hake's removal as a benefit or re- sponse to their expressed grievances or to their rea- sons for seeking unionization, given for the purpose of discouraging employee support for the Union. The judge then found that the Respondents violat- 290 NLRB No. 71 558 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ed the Act by counseling the Employer to engage in this unlawful conduct. In so finding, the judge relied on the Board's de- cision in Resistance Technology, 280 NLRB 1004 (1986), in which the Board found that an employ- er's instruction to a supervisor to commit an unfair labor practice is an unfair labor practice when the instruction is carried out or the employees other- wise become aware that the instruction was given.3 Analogizing to Resistance Technology, the judge found that the Respondents' advice to the Employ- er to commit the unfair labor practice of removing Walter Hake as personnel/employee relations man- ager was an unfair labor practice because the Em- ployer followed that advice and removed Walter Hake.4 According to the judge: If an employer can be held accountable for its instructions or even suggestions to its supervi- sory personnel which result in the commission of unfair labor practices, than it would seem only proper that a professional counselor should be held responsible for its advice which has the same unlawful effect. Contrary to the judge, we find Resistance Tech- nology and Walker's to be inapposite. In those cases the principals (the employers) were held liable for the unlawful acts of their agents (the supervisors or the buyers). This is in keeping with fundamental precepts of the law of agency. 5 However, unlike in Resistance Technology and Walker's, the judge here found that the agents (the Respondents) violated the Act because the principal (the Employer) vio- lated the Act on the agents' advice. In this regard, we find that the judge has improperly held the Re- spondents, as the Employer's agents, responsible for the unlawful act of the Employer, as princi- pal-a notion that is clearly foreign to agency prin- ciples. Accordingly, we shall dismiss this allegation of the complaint.6 2. The judge also concluded that the Respond- ents violated Section 8(a)(1) and (2) of the Act by formulating, and counseling the Employer to im- plement, a plan to establish an employee committee ® The Board majority in Resistance Technology also found that such an instruction to a supervisor is not an unfair labor practice when the in- isis not carried out and the employees do not otherwise become aware that the instruction was given . Chairman (then-Member) Stephens and Member Babson found it unnecessary to decide this issue because, in Resistance Technology, the instructions were executed and disclosed. 4 In finding a violation of the Act in the instant circumstances, the judge also cited Walker's, 159 NLRB 1159, 1175, 1179 (1966), as a case in which the Board found the employer violated the Act by suggesting to buyer employees (nonsupervisory , unit personnel who were viewed by other employees as management ) that they interrogate employees about their union sentiments. s Restatement 2d, Agency, § 212 and comment a ( 1957). See St. Francis Hospital, 263 NLRB 834, 847-850 (1982), affd. 729 F.2d 844 (D.C. Cir. 1984). to negotiate and develop with the Employer a new set of work rules. We do not agree with the judge in this regard. Initially we find that, as noted above, the Respondents as the Employer 's agents cannot be held liable for the acts of the Employer even if it was found that the Respondents had for- mulated and then counseled the Employer to im- plement a plan to establish an employee committee. Thus, we find no violation on that basis. However, on review of the record, we note additionally that we do not agree with the judge's factual conclu- sions with regard to this allegation. Thus, contrary to the judge's express and implicit factual finding that the Respondents formulated and counseled the Employer to implement such a plan , the record es- tablishes that it was the Employer's president, Ran- dall Hake, who formulated and implemented this plan, without the advice or substantive foreknowl- edge of the Respondents. The record establishes, and the judge found, that the Respondents advised Hake to update the Em- ployer's work rules. Indeed, the Respondents pro- vided Hake with four or five different proposed sets of new work rules. Butt according to Hake himself, he asked the Respondents in mid-May, "Can I go ahead and proceed with my plan to set up a committee that we could develop a new set of work rules." There is no evidence that Hake had ever before mentioned such an employee commit- tee to the Respondents. Hake testified that he was told in reply by the Respondents "that I have to run the business." The next day, according to Hake, in response to his above conversation with the Respondents "and my own plan to revise the work rules and make changes in the work force," he held a meeting of all employees, at which he told them that he would like to proceed with for- mulating a committee and establishing a new set of work rules. Towards that end, Hake instructed the employees to elect two people to meet with Hake and the plant superintendent to revamp the existing work rules. Employees Kenneth Martin and Marjo- rie Grinnell were elected as the employee repre- sentatives. Hake testified that his only consultation with the Respondents about this employee committee before he actually implemented this plan was to the extent that, on the day before he actually implemented this plan, "when I laid it out to [them, the Re- spondents told me] that I should go ahead and I should run the business the way I saw fit." Hake testified that when he asked the Respondents whether he could form such an employee commit- tee to develop new work rules , the Respondents did not advise him to form, to assist in forming, or BLANKENSHIP & ASSOCIATES to even meet with such a committee, but simply advised Hake to run his own business. The testimony of employee committee member Marjorie Grinnell is consistent with the testimony of Randall Hake that it was he, and not the Re- spondents, who formulated and implemented the plan to form an employee committee to develop new work rules. Thus, according to Grinnell, when she herself earlier asked the Respondents in April if the employees could form a committee , the Re- spondents simply advised Grinnell to contact the National Labor Relations Board for guidance on that subject . In Grinnell's testimonial account of Hake's subsequent mid-May announcement of the formation of an employee committee , Hake made no mention of the Respondents , but instead simply told the assembled employees that (in Grinnell's words) [W]e had to get together and try to come up with a plan to keep the business going and therefore, he [i.e. Hake] thought it would be a good idea if we would elect . . . two repre- sentatives, employee representatives, to sit down with him and [the plant manager] and draw up a policy . . . that we would have work rules and vacation provisions in it, and such. In light of the above facts and in the absence of any record evidence to the contrary , we find that the preponderance of the evidence establishes that the Employer's president, Randall Hake, acting on his own initiative and without the advice or sub- stantive foreknowledge of the Respondents, formu- lated and implemented the plan to form an employ- ee committee to develop new work rules . Thus, we find that the factual predicate for the judge's unfair labor practice finding in this context-that the Re- spondents formulated and advised Hake to imple- ment such a plan-is not supported by, and indeed is contradicted by, the record . Accordingly, we shall dismiss this allegation.' ORDER The complaint is dismissed. 7 To the extent, if any, that the judge's unfair labor practice finding in this context may have been premised on the alleged failure of the Re- spondents affirmatively to instruct Hake not to proceed with his plan to form such an employee committee, we find that the judge based such a rationale on the same factual predicate that we have found not to be sup- ported by the record , i.e., that the Respondents themselves had initially formulated and advised Hake to implement such a plan. (See the final par. of sec. III,E, of the judge's decision). As indicated, the record fails to establish that the Respondent's had anything more than the barest and briefest foreknowledge that Hake planned to form an employee commit- tee to develop new work rules 559 MEMBER JOHANSEN , dissenting in part. I agree with the majority's dismissal of the com- plaint except as to the actions of Respondent Blan- kenship in counseling Diamond Printing to remove Walter Hake as personnel/labor relations director in order to discourage support of the Union; coun- seling that was heeded and acted on by Diamond. I agree with the judge for the reasons he gave that by counseling the Employer to commit unfair labor practices, Blankenship, as the Employer's labor consultant, violated Section 8(a)(1) of the Act. In doing so, I hold Blankenship accountable for his own action, not that of the Employer.I Further, although I agree with the majority that Blankenship did not violate the Act by counseling the Employer to implement a plan to establish an employee committee to negotiate with the Employ- er, I do so because the facts do not support the finding of a violation, not because Blankenship was an agent of the Employer and thus could not vio- late the Act in his own right. i The statute defines the term "employer" to include an "agent " Statu- tory prohibitions against "employer" conduct, thus, also run against the "agent" of an employer Dennis M. Selby, Esq., for the General Counsel. Joseph W. Weigel, Esq., of Milwaukee, Wisconsin, for the Respondent. Rayford T. Blankenship, of Greenwood, Indiana, pro se. Robert G. Robinson, of Menasha, Wisconsin , for the Charging Party. DECISION STATEMENT OF THE CASE MARVIN ROTH, Administrative Law Judge. This case was heard at Milwaukee, Wisconsin, on 31 March and I and 2 April 1987. The charge was filed on 30 June 1986 by Sheboygan Graphic Communications Union Local 556, Subordinate to the Graphic Communication Interna- tional Union (the Union).' the complaint, which issued on 3 December and was amended at the hearing, alleges that Blankenship and Associates, Inc. and Rayford T. Blankenship (Associates and Blankenship, respectively, and collectively Respondents), violated Section 8(a)(1) and (2) of the National Labor Relations Act.2 The gra- vamen of the complaint is that Respondent allegedly counseled Diamond Printing Co., Inc. (Diamond) in the commission of unfair labor practices that were subse- quently settled informally by the Company, and alleged- ly engaged in unfair labor practices involving the Com- pany's employees; specifically, soliciting grievances, i All dates refer to 1986 unless otherwise indicated. 2 By letter dated 27 April 1987, the General Counsel indicated that it would not proceed on certain other allegations of the complaint (pars. 10(b) and (c)). The General Counsel's request in its brief (fn. 1) to with- draw pars. 12 and 15 of the complaint, which were based on pars. 10(b) and (c), is granted 560 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD promising benefits, advising employees that they could obtain such benefits without a union , and suggesting that employees could negotiate a collective-bargaining agree- ment with the Company. Respondents, by their answer, denied commission of the alleged unfair labor practices. All parties were afforded full opportunity to partici- pate, to present relevant evidence , to argue orally, and to file briefs. 3 The General Counsel and Blankenship each filed briefs. On the entire record in this case,4 and from my observation of the demeanor of the witnesses and having considered the briefs submitted by the parties, I make the following FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENTS AND THE EMPLOYER INVOLVED Diamond, a Wisconsin corporation, is engaged in the commercial printing of business forms and envelopes at its Sheboygan, Wisconsin plant . In the operation of its business, Diamond annually purchases goods and materi- als valued in excess of $50,000 directly from suppliers lo- cated outside of Wisconsin, and annually ships goods valued in excess of $50,000 directly to customers located outside of Wisconsin. In their answer to the complaint, Respondents pleaded no knowledge about these matters. However, in the representation proceeding involved in this case, Blankenship on behalf of Diamond stipulated the commerce facts. I find that Diamond is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. Associates, a corporation with its principal office and place of business in Greenwood, Indiana, is engaged in the business of labor consultants, principally representing management in labor relations matters. In the operation of its business, Associates has an annual gross revenue in excess of $250,000, and annually performs services valued in excess of $50,000 for employers located in States other than Indiana, many, if not all, of whom are in interstate commerce. It is undisputed that at all times material, Blankenship has been and is chief executive of- ficer and the majority stockholder of Associates. In their answer, Respondents assert that they "were employed as agents of [Diamond] for the limited purpose of assisting [Diamond] in Case No. 30-RC-4566" (the representation proceeding). The General Counsel also contends (Br. 9-10) that Respondents acted as the agents of Diamond. Because the present case involves an em- ployer engaged in commerce (Diamond) it is immaterial whether Associates meets any standard for assertion of Board jurisdiction . See, e.g., St. Mary's Infant Home, 258 NLRB 1024, 1031 (1981), enfd. in pertinent part 690 F.2d 1062, 1070 (4th Cir. 1982); and Chalk Metal Co., 197 NLRB 1133 (1972), in which the Board asserted its juris- diction over a labor relations consultant without making 9 On 31 March 1987 the Board denied Blankenship 's motion for special permission to appeal from the Regional Director's order denying Blan- kenship's motion for a further continuance and adjournment of the hear- ing (the Regional Director having granted Respondents' prior request for a continuance of 7 weeks ). On 31 March 1987, 1 denied Blankenship's re- newed motion for a further continuance. 4 Transcript corrections are noted and corrected specific findings concerning the commerce of the con- sultant. This is not a case involving the labor relations of Associates vis-a-vis its own employees. In the absence of such situations, jurisdiction may be based on the com- merce of any affected person or persons, e.g., in cases in- volving alleged union unfair labor practices, on the com- merce of any affected or involved employer or employ- ers. The General Counsel suggests (Br. 7), that jurisdic- tion may be asserted over labor relations consultants under the same standard applicable to law firms. In fact, the Board has asserted jurisdiction over a consulting firm, using the same standards generally applicable to nonretail business. St. Francis Hospital, 263 NLRB 834, 839 (1982), affd. 729 F.2d 844, 851 (D.C. Cir. 1984). In any event, regardless of which standard is used , this case meets both the statutory and the Board 's self-imposed tests for jurisdiction. I find that Associates is an employ- er engaged in commerce within the meaning of Section 2(6) and (7) of the Act, that Blankenship is an agent of Associates within the meaning of Section 2(2) and (13) of the Act, that Associates and Blankenship were at times material, at least arguably agents of Diamond, and there- fore that it would effectuate the policies of the Act for the Board to assert its jurisdiction in this case. II. THE LABOR ORGANIZATION INVOLVED It is undisputed that the Union is a labor organization within the meaning of Section 2(5) of the Act. I shall re- serve to the merits of this case the question whether Dia- mond Printing Company Employee Committee (some- times employee committee) was at times material a labor organization within the meaning of the Act. Ill. THE ALLEGED UNFAIR LABOR PRACTICES A. The Facts Diamond is a family-owned and operated business. As of March 1986, Walter Hake was chief executive officer, chairman of the board , and minority stockholder. His son, Randall Hake, was president and majority stock- holder. Walter was responsible for personnel relations. The Company had about 17 plant employees. On 21 March the Union filed a petition for a Board-conducted election among the Company 's production and mainte- nance employees (Case 30-RC-4566). The Hakes decid- ed to retain a labor relations firm . They received a solici- tation letter from Blankenship (who evidently kept him- self informed of representation petitions filed with the Board), and on 4 April, Diamond retained Associates as its representative in the representation case and any relat- ed litigation. Associates requested and the Regional Di- rector issued an order postponing the representation hearing from 8 to 10 April. On 11 April, Diamond, by Blankenship, and the Union executed a Stipulation for Certification upon Consent Election, which was subse- quently approved by the Regional Director. The election was scheduled for 16 May. In the meantime, on 7 April, Blankenship, accompa- nied by his associate James Pierce , met with the Hakes to discuss their strategy in opposing the Union . Blanken- ship asked for and received permission to meet with the BLANKENSHIP & ASSOCIATES supervisory personnel and with the employees without the Hakes being present, in order to learn the situation and to determine the employees' attitudes and concerns. That afternoon Blankenship , accompanied by Pierce, conducted a meeting of the employees on company premises and time, to which the employees were sum- moned by their supervisors and for which they were paid. Pierce and employee Kenneth Martin , who were both presented as the General Counsel 's witnesses, testi- fied concerning the meeting.5 Their testimony was mutu- ally corroborative in part, but conflicted in certain im- portant respects. Both testified in sum that most but not all the meeting was tape recorded.6 They also testified, in sum, that Blankenship presented an antiunion film enti- tled "Floyd." Martin testified in sum as follows : Blanken- ship identified himself as a labor consultant, and de- scribed how unions allegedly functioned. Employee Mar- jorie Grinnell asked Blankenship whether he was an at- torney. Blankenship said that he was a lawyer rather than an attorney, and explained the difference (Blanken- ship evidently is a law school graduate, but not admitted to any bar). Employer Donald Wield, the principal union adherent, made some comment, whereupon Blankenship retorted that he had heard of Wield, and then proceeded to change the subject. He asked the employees what their problems were, and they proceeded to air their gripes. Most of the complaints related to the allegedly arbitrary manner in which Walter Hake handled person- nel matters including harsh or unusual discipline , favorit- ism, and avoidance of responsibility for decisions. Some employees complained about the poor condition of the washrooms. Blankenship told the employees that they did not need a union , they could negotiate a contract di- rectly with the Employer and they would have the same safeguards under the Act as they would with a union. Martin left about 15 minutes before the meeting ended. (Blankenship told him he had to remain because he was s Respondent did not present any witnesses. Blankenship, the key figure in this case, did not testify . No adverse inference is warranted from either the failure of Blankenship to testify on behalf of Respondents or the General Counsel 's failure to call him as an adverse witness. O'Dovero Construction, 264 NLRB 751 in. 1 (1982). ' At the hearing, Respondents objected to any testimony concerning the substance of the meeting because the tapes constituted "the best evi- dence of what was said." There are several problems with this argument. Neither the tapes nor any transcriptions were offered in evidence or au- thenticated, except for a page of the approximately 50-page transcript of the 7 April meeting, which was offered in evidence by the General Counsel. That page, insofar as pertinent to the issues of this case , reflect- ed an employee complaint about Walter Hake, and a statement evidently made by Blankenship that : "The only thing that I can tell you is that I will honestly try to get some answers for you . I will tell you this, it would be illegal for me to stand here and tell you that we will adjust all your complaints. That would violate the law " The General Counsel took the position that the transcript of the 7 April meeting was generally unre- liable, and both Pierce and Martin indicated in their testimony that the tapes were incomplete. The Board has received tapes or transcriptions in evidence and has sometimes found them to be the "best evidence" of a meeting or conversation . However, there is no rule of evidence that re- quires their acceptance to the exclusion of oral testimony , even when the parties have stipulated about their accuracy (which is not the situation here). The "best evidence" rule relied on by Respondents stands for the proposition that the terms of a document must be proved by production of the document . 4 Wigmore, Evidence ¶ 1174 (Chadbourn rev. 1972). Here, the witnesses did not testify about contents of the transcription, i.e., the "document." Rather, they testified about the meeting itself. There- fore, the rule is inapplicable. 561 on worktime. Martin refused to remain, and walked out. No punitive action was taken against him.) Pierce testi- fied in sum as follows : Employee Wield accused Blan- kenship of practicing law without a license . He made other accusations during the meeting. Blankenship dis- cussed unions, using charts, and asserted in essence that unionization would deprive the employees of a voice in management, and that it was simple to get a union in but difficult to get it out . Blankenship asked the employees what their problems were. Wield said they did not get sufficient increases, were not treated properly, and that Walter Hake was a tyrant. Blankenship asked Wield if he confronted management. Wield answered that it did no good. Another employee complained about being de- prived of holiday pay for being late. One female employ- ee asked about whether they could start "an employee type union," whereupon Blankenship answered that "you people pay taxes and there is such a place as the Labor Board and you should bring your questions to their at- tention." He offered to get them the Board's telephone number. Pierce testified that, except as indicated above, Blankenship did not advise the employees about what they could do about their problems. I credit Pierce's testimony concerning the 7 April meeting, and I credit Martin's testimony only insofar as it is consistent with that of Pierce. I specifically do not credit Martin's testimony to the effect that Blankenship sugggested or advised that the employees could negoti- ate a contract directly with Diamond. In so doing, I find significant the testimony of Marjorie Grinnell. On her direct testimony, the General Counsel did not question Grinnell about the 7 April meeting. However, on cross- examination by Blankenship, Grinnell testified that at a meeting of employees addressed by Blankenship, she asked whether they could form an employee committee, that Blankenship referred her to the Board , and that Pierce gave her the Board's telephone number. The testi- mony in this case indicates that there were captive audi- ence meetings on 7 April and 2 and 12 May. Blankenship spoke only briefy at the 12 May meeting , without dis- cussing any substantive matters, and the evidence fails to indicate any such exchange between Grinnell and Blan- kenship at the 2 May meeting. In light of Pierce's testi- mony, it is evident that Grinnell was referring to the 7 April meeting. I find it unlikely that Blankenship would suggest formation of an employee committee to deal di- rectly with management, while at the same time telling an employee who made the same suggestion to ask the Board whether it was proper. Moreover, as will be dis- cussed, Blankenship did not talk to Diamond about an employee committee until after the 7 April meeting. It is unlikely that Blankenship would have made such a sug- gestion to the employees without first consulting with the Hakes. I find that Grinnell, not Blankenship, first raised the matter of an employee committee.? 7 Ordinarily I might be inclined to give greater weight to the testimo- ny of a current, disinterested employee than to that of an interested em- ployer or union representative. However, the present case presents a somewhat different situation. At the time of the present hearing, Martin was a member of the Union's negotiating committee, and his employer, Continued 562 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD After Blankenship and Pierce met with the employees (and also met separately with the supevisory personnel on 7 April), they met with Randall Hake to discuss their conclusions and recommendations. Blankenship advised Randall Hake that the employees could not work well with his father, and that Walter Hake should no longer handle personnel relations. Blankenship also advised that Diamond should update its work rules . Diamond had in effect a written five-page statement of "policies for full time plant employees," dated 6 July 1981 . This document covered, among other matters, employee benefits , absen- teeism, tardiness, and discipline. However, these policies were not uniformly followed by management, and in fact Walter Hake tended to handle such matters as discipline in an arbitrary manner . Blankenship offered to provide Diamond with sample work rules and a list of proposed work rules for Diamond . Randall Hake asked Blanken- ship to put his recommendations in letter form , and Blan- kenship agreed to do so. By letter dated 17 April, Blan- kenship told Randall Hake that, in light of the employ- ees' comments at the 7 April meeting, "I strongly sug- gest that you take your Dad out of the day-to-day labor relations management regarding the employees in the plant," and that "You should take your Dad's place if possible." Blankenship opined that "I feel that we can't win the union election without such." He also enclosed "a copy of the contract that you should consider adopt- ing after we rid you of the union problem ." Blankenship added : "From looking at what you have and listening to your employees, it is imperative that what you have in the way of policies, rules, wages, and hours be modified and brought up-to-date as quickly as possible." The en- closed "contract" copy actually purported to be an em- ployee policy pamphlet rather than a contract. Among a long list of offenses warranting disciplinary action, the pamphlet listed as "terminal offenses . . . advocating trouble between management and the employees" and "unauthorized entry on company property ." Randall Hake testified that Blankenship advised him to distribute copies of the pamphlet to the supervisors, "and leave them available in the plant for scrutiny if anybody so wished." However, Hake admittedly understood that the pamphlet "was a general outline of policies that were in- tended to be implemented at [Diamond ] once we had re- solved the Union issue." Hake also testified that James Pierce gave him several samples of policies that he might use. Pierce testified that he prepared three copies of the policy pamphlet for Randall Hake and told him not to use them until there was a decision on the election. To evaluate the testimony of Pierce and Hake, which in some respects appears inconsistent , it is necessary to first consider subsequent developments. By letter dated 15 April to Walter Hake, Diamond's supervisory personnel requested that he turn over re- sponsibility for personnel relations to his son . Randall Hake also confronted his father with Blankenship's letter. Diamond, is not a respondent in this proceeding Therefore, Martin was not testifying against the interests of his employer. Subsequent to the event involved in this case, Blankenship fired Pierce, and by the time of this hearing Pierce was engaged in the labor relations consulting business in competition with Blankenship Therefore , he had no evident reason to testify falsely to advance Blankenship's interests. At a family meeting, Walter Hake agreed to the transfer of authority. On 23 April Randall Hake posted a notice to the company personnel that effective as of that date he was assuming "authority and responsibility for all per- sonnel matters." On 22 April Walter Hake made a last- ditch effort to reassert his former authority by firing Donald Wield. However, Randall Hake immediately countermanded this action, and there was no further challenge to his authority.8 As indicated , there was a captive-audience meeting on 2 May. Blankenship conducted the meeting, and a film was shown . Employee Martin testified that Blankenship showed the employees the policy pamphlet (which he had sent to Hake) as a prototype of a contract that could possibly be drafted between the employees and Dia- mond. Martin testified that Blankenship had two copies with him, that he gave one to Marjorie Grinnell , that the employees requested more copies, and that the next day he found a copy on his worktable. However, in his in- vestigatory affidavit to the Board, Martin stated that Randall Hake (who was present at the 2 May meeting) showed the employees a copy of the policy pamphlet, said that it was patterned after something Blankenship gave him, that he would make additional copies to be circulated among the employees, and that they should make notes of proposed changes . Grinnell testified that copies of the policy pamphlet were distributed at the 12 May meeting. After some equivocation, Grinnell testified that she thought Blankenship distributed copies of the pamphlet . However, on cross-examination, she testified that Randall Hake distributed copies of the pamphlet. In her investigatory affidavit , Grinnel stated that Hake "had a copy of an `employee policy pamphlet"' which he said Associates prepared as a guideline and that Hake would have copies made for everybody . I do not credit the tes- timony of Martin and Grinnell that Blankenship distrib- uted copies of the policy pamphlet . For reasons that will be discussed, I find that Hake distributed copies at a meeting of employees on or shortly after 14 May, at which Blankenship was not present. Randall Hake was not present at the 7 April and 2 May meetings. However, he was scheduled to address the employees at the 12 May meeting, and Pierce pre- pared a speech for his use. Pierce's draft was about 1-1/2 typewritten pages. I have found nothing unlawful in this draft, nor does the General Counsel contend that it con- tains any unlawful statements . The draft contains no ex- press or implied threats of reprisal or promises of benefit. However, Hake, acting on his own and without consult- ing Blankenship or Pierce , decided to use Pierce's draft only as a starting point for his own speech . Hake struck out much of Pierce's draft, decided to paraphrase other portions, and added his own handwritten draft.9 Hake a From this point on , "Hake" refers to Randall Hake, unless the con- text indicates otherwise. 9 Hake testified in detail concerning his revisions and the resulting speech, which he delivered, and his testimony was corroborated by Pierce. I do not credit employee Martin 's uncorroborated testimony to the effect that Hake delivered both Pierces draft and his own in their entirety. This appears to be another illustration of Martin's general unre- liability as a witness BLANKENSHIP & ASSOCIATES did not show his draft to Blankenship or Pierce and they did not ask to see it, although Hake told them that he had altered Pierce's text. The resulting speech was con- siderably different from that drafted by Pierce . Blanken- ship, Pierce, and the Company's supervisory personnel were present at the 12 May meeting . Hake testified that he told Blankenship and Pierce that if he said anything "that was blatantly illegal," they should interrupt and stop him. Marjorie Grinnell testified that Hake told the employees that Blankenship was there to stop him if he said anything wrong (Hake's text did not contain any such comment). After restating Diamond's opposition to unionization and reminding the employees of their present benefits, Hake stated that as a result of "this situ- ation . . . all people involved become aware that it was time for my Dad to surrender the reins as it pertains to labor relations," and that "things are not going to revert back once the union issue is resolved." Hake told the em- ployees to "direct all concerns about wages, vacations, etc. to your supervisor and they in turn , if need be, will consult me." Hake then declared that: "As soon as this week's election has been conducted . . . hopefully as I see it for the best-no union-we will start to develop a contract and work rules that we can live by ! This should be in place by July 1, 1986." At this point, Hake's text indicates "show sample." However, neither Hake nor Pierce testified that Hake distributed copies of the sample policy pamphlet at this meeting. Hake concluded by exhorting the employees to give him a chance, and specifically to give him 1 year "to make the changes without having to pay the costs of belonging to a union." After Hake delivered his prepared remarks and called for questions, employee Wield challenged Blankenship's credibility. Hake explained that he retained Blankenship because he needed a labor relations consultant , and Blan- kenship admonished Wield not to slander him. Blanken- ship did not interrupt Hake during his speech. Hake testi- fied that after the meeting Blankenship told him that the speech was fine, that "there were gray areas in there which could present some problems," but that "what is done is done." Pierce testified that after the meeting Blankenship asked him if he noticed "that Randy broke the law." Pierce answered he did not, whereupon Blan- kenship responded that Hake "in effect promised the people that he was going to make some improvements," adding that he hoped no one else caught it. Neither Blankenship nor Pierce told Hake that he said anything unlawful. However, Pierce stated in his investigatory af- fidavit that Blankenship previously advised Hake "not to make any outright promises to employees," and Hake ad- mitted that Blankenship sent him written instructions to supervisors that indicated that they could not "make any promise of benefits in return for vote against a union." On 14 May, the Union filed an unfair labor practice charge (Case 30-CA-9216), alleging that Diamond was violating Section 8(a)(1), (3), and (5) of the Act, among other things, by making promises of benefits at captive- audience speeches in late April and on 2 and 12 May. The following day, the Board's Regional Director issued an order postponing the election indefinitely, pending in- vestigation of the charge. On learning that the election 563 would be put off, Hake telephoned Associates and spoke to Pierce. Hake asked whether Diamond could proceed with the plan to set up a committee to develop a new set of work rules. Pierce said he would check with Blanken- ship. Shortly thereafter, Pierce called back, stating that he had checked with Blankenship, who said to tell Hake that Hake had to "run the business." Pierce told Hake to go ahead and run the business as he saw fit, On or short- ly after 14 May, Hake summoned a meeting of the em- ployees. He told them that the election was called off be- cause the Union filed charges, but that he had to keep the business going, and wanted to proceed with forming a committee to prepare a new set of work rules. Hake instructed the employees to elect two representatives to meet with himself and Plant Superintendent Leon Risten- padt. Hake then left the meeting. The employees selected Grinnell and Martin as their representatives, and Hake was informed of their decision. I find that at this meeting Hake circulated copies of the sample policy pamphlet given to him by Blankenship. As indicated, Hake re- ferred to the sample at the 12 May meeting. The affida- vits of Grinnell and Martin indicate that Hake did not circulate copies when he first showed the pamphlet, but promised to make copies for distribution. It is unlikely that Hake would have made such distribution before checking with Associates about whether he could pro- ceed with the committee plan, as the distribution would have served no purpose except as a guide for negotia- tions. It is also unlikely that Hake would have singled out Grinnell and Martin to receive the pamphlets unless he learned that they would be the employee representa- tives. The employer-employee committee first met on 27 May. Hake told Grinnell and Martin that he had to have a set of work rules in place by 1 July, which was Dia- mond's biannual wage review date. He told them that Diamond's 1981 policy statement would be the basis for discussion. The joint committee met again on 29 May and 3 June. The committee met on work time for which the employees were paid. Grinnell acted as secretary. She made minutes, typed them, including matters on which they agreed, and circulated copies to the other three representatives. By 3 June, the joint committe had agreed on and reduced to writing a document entitled "Policies for Full-Time Plant Employees," to be effec- tive beginning 1 July 1986 for a period of 1 year. The document provided for annual meetings between man- agement and employee representatives Grinnell and Martin for the purpose of reviewing wages and other conditions of employment for the forthcoming year. The document spelled out terms and conditions of employ- ment concerning hospitalization plan, probationary em- ployment, discipline, layoff and termination and griev- ance procedure (including meetings between manage- ment and employee representatives), absence and tardi- ness, wages (including a schedule of wage increases), service credit, overtime, and vacations. Many of these provisions reflected changes in wages and other working conditions. The joint committee was scheduled to meet again on 5 June. However, as a result of intervening de- velopments; the meeting never took place. 564 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD After receiving the Union's initial unfair practice charge, Hake had second thoughts about retaining Asso- ciates. Hake expressed his concern to Pierce about the mounting cost of representation . Pierce offered an adjust- ment on rates, and suggested that Hake talk to Blanken- ship. However, following the 3 June employer-employee meeting, Grinnell and Martin told Hake that they ques- tioned the propriety of this procedure and suggested that he retain an attorney. Hake's corporate law firm referred him to Attorney Alfred Heon of the law firm of White and Hirschboeck. On 5 June, Diamond retained Heon to replace Associates. That same day the Union filed an amended charge, alleging that Diamond was violating Section 8(a)(2) of Act by "assisting and/or dominating in the formation of a labor organization." Heon immediate- ly advised Hake to discontinue the employee committee, which he did. On 30 June, the Union filed the present charge against Respondent . In mid-August, Diamond and the Union executed an informal Board settlement agree- ment in Case 30-CA-9216, which was approved by the Regional Director on 25 August. The settlement provid- ed, among other things, that Diamond has disestablished the employee committee and ceased negotiating with it, and will not give effect to the negotiated terms, except for the agreed-on wage increase. The settlement further provided that Diamond has discontinued the service of Blankenship as its labor relations consultant, and "will not rely upon, implement nor follow any advice he pre- viously gave us which is contrary to the pledge" con- tained in the settlement . The settlement agreement also provided that Diamond and the General Counsel "under- stand and agree" that the settlement resolves only the al- legations against Diamond in Case 30-CA-9216, that the General Counsel is not precluded from proceeding on any other charge against any other person or entity, in- cluding the charge in Case 30-CA-9265, that evidence in Case 30-CA-9216 may be used in such other proceed- ings, and that no other relief would be sought against Di- amond. On 31 October a Board election was conducted among Diamond's employees. The Union won, was certi- fied, and at the time of the present hearing, Diamond and the Union were negotiating a contract. B. The Attorney-Client Privilege Issue Daniel McCarthy, who was presented as a General Counsel witness, is an attorney who is admitted to prac- tice before the Supreme Court of Ohio and the United States Supreme Court. After leaving the United States Army, where he served as a JAGC officer, he was em- ployed by Associates as a "labor consultant." Blanken- ship told McCarthy that Associates' staff, including Blan- kenship himself, practiced before the Board in that ca- pacity and did not practice as attorneys. Associates did not itself conduct litigation before the courts in connec- tion with Board proceedings , but referred such litigation to an outside law firm . However, Blankenship sometimes used the terms "attorney" and "lawyer" in referring to himself and his associates. Thus, on one occasion, Blan- kenship told a client that "we are all attorneys." As indi- cated Blankenship told Diamond's employees that he was a lawyer rather than an attorney. On several occasions, McCarthy prepared complaints in civil litigation. How- ever, with one exception-a proceeding in a small claims court that was handled by McCarthy-these matters were referred to outside counsel for litigation. McCarthy was not involved in the Diamond represen- tation proceeding. However, in July, after the Union filed its charge against Respondents, Blankenship as- signed McCarthy to handle the case. McCarthy prepared and submitted a position statement to the Board's Re- gional Office and unsuccessfully attempted to negotiate a settlement of the case. After the complaint issued, McCarthy drafted the substance of a proposed answer and discussed the answer with Blankenship. At the present hearing, the General Counsel sought to question McCarthy about Blankenship's statements concerning the allegations of the complaint in these discussions.1 ° Re- spondents objected to the introduction of any testimony by McCarthy, invoking the attorney-client privilege, work product privilege , and trade secrets privilege. On consideraton of testimony by McCarthy and argument and citations presented by the parties , I indicated my view that the attorney-client privilege was applicable. However, in view of the importance of the question to the merits of the case, I permitted the Generl Counsel to proceed with his questioning , subject to my ultimate ruling in this decision . McCarthy testified in sum con- cerning his questions about each allegation of the com- plaint and Blankenship's responses. McCarthy asked these questions for the purpose of preparing the answer. Blankenship's responses varied in some respects both in substance and form from the answer filed by Respond- ents, which was prepared and signed by McCarthy. The answer did not consist simply of admissions, denials, and pleas of insufficient knowlege, but was qualified regard- ing the status of Associates and also contained an affirm- ative defense. McCarthy indicated in his investigatory af- fidavit that he and Blankenship discussed and agreed on language concerning the status of Associates . These facts indicate that McCarthy exercised professional discretion in preparing the answer . I indicated at the hearing that McCarthy's testimony tended to confirm my view that the attorney-client privilege was applicable. Having had further opportunity to consider and research the matter, I remain of that view. The attorney-client privilege extends to the relation- ship between a business entity and its house counsel. Swan Sales Corp. v. Jos Schlitz Brewing Co., 126 Wis. 2d 16 (1985). The privilege also extends to Board proceed- ings. NLRB Y. E. Bruce Harvey, 349 F.2d 900, 904 (4th Cir. 1965). It is not necessary to look much beyond the Harvey decision to ascertain the principles applicable to the present case. In Harvey, the court relied on an "oft quoted definition of the privilege" in U.S. V. United Shoe Machinery Corp., 89 F.Supp. 357, 358 (D. Mass. 1950), in which Judge Wyzanski stated that The privilege applies only if ( 1) the assert holder of the privilege is or sought to become a client; (2) the 10 At the time of the present hearing. MCarlhy was no longer em- ployed by Associates. He has engaged in consulting work in competition with Blankenship There was litigation between Blankenship and his former associates, including McCarthy. which was eventually settled BLANKENSHIP & ASSOCIATES person to whom the communication was made (a) is a member of the bar of a court , or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opin- ion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client. ..^. The court in Harvey also cited Wigmore's statement of the essentials of the privilege, namely : ( 1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection be waived . 8 Wigmore, Evidence §§2292 (McNaughton rev. 1961 ). However, the court made clear, as did Judge Wyzanski , that the privilege is not limited to the obtaining of "legal advice," in the strict sense of that term, but also to communications for the purpose of obtaining "legal services" or "assistance in some legal proceeding." The court further held that the "mere fact that a person who is not an attorney could have performed the same service is not a ground for requiring a lawyer to disclose communications with his client discovery proceedings ." In Harvey, an attorney refused to comply with a Board subpoena that required him to disclose the identity of a client for whom he had retained a private detective. Plainly this was a service that could have been performed by a nonlawyer . Never- theless, the court held that the privilege applied if the lawyer hired the detective as an incident to rendering a legal opinion , performing a legal service, or affording representation in legal proceedings, notwithstanding that the detective might have been retained to engage in un- lawful surveillance of union organizational activity. On remand, following a hearing, the district court held in sum that the privilege applied because the lawyer re- tained the detective in furtherance of his client's request for advice "as to what steps he could take in opposition to his plant being organized ." NLRB v. Harvey, 264 F.Supp. 770, 771 (W.D. Va. 1966). The instant case presents all the requisite elements for application of the attorney-client privilege. McCarthy was and is an attorney. Respondents were his clients, in that he was acting as their house counsel. Blankenship answered McCarthy's questions in confidence, for the purpose of enabling McCarthy to prepare an answer to a Board complaint, which is a legal function. Respondents timely invoked the privilege and have not waived the privilege. Nevertheless, the General Counsel argues (Br. 35-36) that the privilege is not here applicable because (1) "McCarthy was not performing legal services, but rather was acting as a scrivener for Blankenship in pre- paring the Answer," and (2) even if McCarthy was per- forming attorney work, "it was in aid of the commission of continuing unfair labor practices." Neither argument 565 has merit. The first argument disregards the fact that McCarthy was not simply directed to prepare an answer, but was assigned to handle the case . Pursuant to that as- signment, McCarthy prepared a position statement and attempted to negotiate a settlement . If McCarthy had not left Associates he probably would have represented Re- spondents at the present hearing. Here, as in Harvey, the service performed must be viewed in its overall context. Moreover, the preparation of an answer to a complaint is a legal service. It is not unusual for an attorney to work under the supervision of another person who (as in the case of house counsel ), may not even be a lawyer. it is also not unusual for attorneys to prepare "boiler ' plate" pleadings. In some legal specialties this is the usual pro- cedure. It is also not unusual for an attorney to submit pleadings to his client for approval. In some situations the attorney might be derelict in his responsibilities if he failed to do so. In the present case, the complaint was not against one of Respondents' clients, but was directed against Respondents. Therefore, it is not surprising that Blankenship would want the final say about what went into the answer. However, the presence of any or all of these factors does not negate the fact that preparation of an answer is a legal service." The General Counsel's second argument fails on two grounds. First, under Harvey, an unfair labor practice is neither a crime nor a tort for purposes of the attorney-client privilege (349 F.2d at 904). Second, the preparation of an answer in a Board proceeding is not an unfair labor practice or part of an unfair labor practice , even if the General Counsel thinks the answer is false . I would assume that in most cases in which the complaint alleges unfair labor prac- tices and the allegations are denied , that the General Counsel thinks the answer is false . Therefore, for the rea- sons discussed, I have not considered McCarthy's testi- mony concerning his conversations with Blankenship in deciding the merits of this case.' 2 C. Respondents' Procedural Arguments At the outset of this hearing, Respondents presented several motions for summary dismissal of the complaint. Although Respondents nominally offered various grounds for these motions, e.g., improper service , lack of " Underwater Storage v U.S. Rubber Co., 314 F.Supp 546 (D.C.D.C. 1970), cited by the General Counsel (Br 35), is not in point. That case involved the preparation and processing of a patent application, which the court did not regard as a legal function. 12 Regarding Respondents' remaining objections to McCarthy 's testi- mony, the work product privilege rises or falls with the attorney or client privilege because "the coverage and purposes of the attorney-client privi- lege are completely subsumed into the work product privilege ." Sealed Case, 676 F.2d 793, 812 (D.C Cir. 1982) Therefore, as the attorney- client privilege is here applicable, the work product privilege is also ap- plicable. If the attorney-client and work product privileges were not ap- plicable, then the trade secrets privilege would also not be applicable be- cause the information in question directly concerns the merits of this case, namely, whether Respondents engaged in or counseled unfair labor practices. Where, as here, the existence of the alleged offense can be proved only by investigating the methods of business of the person in- voking the privilege, "it might amount practically to a legal sanction of the wrong if the court conceded to the alleged wrongdoer the privilege of keeping his doings Secret from judicial investigation ." In that situation "no privilege at all should there be conceded . 8 Wigmore, Evidence § 2212 (McNaughton rev. 1961). 566 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD jurisdiction, failure to state a claim, mootness, and res ju- dicata, these motions were all based on Respondents' un- derlying argument that the General Counsel acted im- properly by approving a settlement between the Union and Diamond in Case 30-CA-9216 and proceeding sepa- rately against Respondents in the present case. Respond- ents' argument is without merit. The General Counsel has discretion to consolidate or sever proceedings on unfair labor practice charges, subject to review by the Board or courts of appeal , for abuse of that discretion or denial of due process. Packinghouse Workers (Wilson & Co.), 89 NLRB 310 (1950); Board's Rules and Regula- tions, Section 102.33; Royal Typewriter Co. v. NLRB, 533 F.2d 1030, 1043-1044 (8th Cir. 1976); Teamsters Local 728 (Overnite Transportation) v. NLRB, 332 F.2d 693, 696-697 (5th Cir. 1964), cert. denied 379 U.S. 913 ( 1964); NLRB v. Hotel & Restaurant Employees (Crown Cafete- ria), 301 F.2d 149, 155-156 (9th Cir. 1962); Typographical Union (New York Printers), 87 NLRB 1418, 1424-1425 (1949); Webb Tractor & Equipment Co., 181 NLRB 230 fn. 2 (1970). In the present case, the General Counsel had valid reasons for proceeding separately against Respond- ents. The General Counsel, the Union, and Diamond were able to agree on the terms of a Board settlement, but the General Counsel and Respondents were not able to do so. The situation at Diamond involved a pending representation proceeding . As Respondents no longer represented Diamond , it was possible, through an infor- mal settlement with Diamond, to proceed promptly with an election and thereby resolve the immediate problem and enable the employees to express their free choice, while reserving the General Counsel 's claim for prospec- tive relief against Respondents to separate litigation. The Diamond case involved substantially conventional issues, including (as Blankenship himself observed), clear viola- tions of the Act, whereas the case against Respondents involved (as the General Counsel concedes) a substantial and unresolved question of law. Compare Crown Cafete- ria, supra, 301 F.2d at 155 ; Overnite Transportation, 332 F.2d at 696. Respondents were not prejudiced by this procedure. The General Counsel presented Randall Hake and the two employee members of the joint committee as witnesses, and Respondents could have presented any of Diamond's witnesses, and Respondents could have pre- sented any of Diamond's personnel as their own wit- nesses in this proceeding, but they declined to avail themselves of this opportunity . Respondents were afford- ed full opportunity to litigate the alleged unfair labor practices at Diamond. Therefore, Respondents have failed to demonstrate that they were prejudiced by the action of the General Counsel in proceeding separately against them. Compare Royal Typewriter, supra; New York Printers Assn., supra; Webb Tractor, supra, 181 NLRB at 235. A Board settlement does not preclude liti- gation of matters "specifically reserved from the settle- ment agreement by the mutual understanding of the par- ties," nor does it preclude presentation of evidence in further or other proceedings where such right is pre- served in the terms of the settlement agreement. Cam- bridge Taxi Co., 260 NLRB 931 (1982); Park-Ohio Indus- tries, 283 NLRB 583 (1987); Air Express International Corp., 245 NLRB 478, 483 (1979), enfd. in pertinent part 659 F.2d 610 (5th Cir. 1981). Here, the Diamond settle- ment expressly reserved both the right of the General Counsel to proceed separately against Respondents and the right to present evidence in the Diamond case in such separate proceeding. Moreover, Diamond is not an indispensible party in this proceeding . Respondents may be found to have committed unfair labor practices and an appropriate remedial order may issue, either on the basis of Associates' status as an employer under the Act, or on the basis of their status as agents of an employer within the meaning of Section 2(2) of the Act. St. Francis Feder- ation of Nurses v. NLRB, 729 F.2d 844, 857 (D.C. Cir. 1984); St. Mary's Infant Home, supra. t s Therefore, Re- spondents' motions for dismissal, insofar as they were not denied at the hearing , are denied. D. Alleged Direct Commission of Unfair Labor Practices by Respondents The complaint alleges in essence that at the captive-au- dience meetings on 7 April and 2 and 12 May, Blanken- ship violated Section 8(a)(1) of the Act by (a) soliciting employee grievances, (b) promising benefits if the Union were unsuccessful in obtaining recognition as their repre- sentative, (c) advising the employees that they could ac- complish the same improvements in wages, hours, and working conditions without a union, and (d) suggesting that the employees could negotiate a collective-bargain- ing agreement with Diamond with the full protection af- forded by the Act. t a For the reasons discussed in the "Facts" section of this decision, I find that the credible evidence fails to indicate that Blankenship engaged in any such conduct at the 2 and 12 May meetings , and that Blankenship did not engage in the conduct alleged in paragraphs 11(c) and (d) at the 7 April meeting. The credited evidence also fails to demonstrate that Blanken- ship made any express promises of benefits. The evidence does demonstrate that Blankenship solicited employee grievances. Indeed that was the principal purpose of the 7 April meeting. Therefore, under the applicable princi- ples of law, the question presented is whether by solicit- ing employee grievances, Blankenship impliedly prom- ised benefits or redress of grievances if the employees re- jected union representation. The General Counsel argues (Br. 17), that : "Solicitation of grievances is a violation of Section 8(a)(1) of the Act." This is not an accurate state- 13 Blankenship's reliance on Loss Y. Blankenship, 673 F.2d 942 (7th Cir. 1982), is misplaced. That case was a class action against Blankenship brought (insofar as pertinent) under Sec 301 (a) of the Act. The court held that Sec 301(a) of the Act authorizes suits for violation of collec- tive-bargaining contracts only against parties to the contract . As Blanken- ship functioned as a labor relations consultant to the signatory employer in that case (Mark Twain Marine Industries), he was not amenable to suit under Section 301 (a) However, the Board's authority under the Act is not so limited The courts are not in agreement on this narrow interpreta- tion of Sec. 301(a). See Painting Contractors Y. Painters & Decorators, 707 F.2d 1067, 1071 (9th Cir. 1983 ), cert. denied 460 U .S. 927 ( 1983). 14 The complaint is technically defective in that it contains no conclu- sory allegations with respect to these allegations (contained in par. II of the complaint). Rather, the conclusory paragraphs are all addressed to other allegations that Respondents counseled Diamond in the commission of unfair labor practices. However, the matters pleaded in par. I I were fully litigated, and it is evident that the General Counsel was contending that Respondents thereby violated the Act . I have considered the allega- tions accordingly. BLANKENSHIP & ASSOCIATES ment of the law. In Uarco, Inc., 216 NLRB 1 (1974), the Board held as follows: the solicitation of grievances at preelection meetings carries with it an inference that an employer is im- plicitly promising to correct those inequities it dis- covers as a result of its inquiries. Thus, the Board has found unlawful interference with employee rights by an employer's solicitation of grievances during an organizational campaign although the em- ployer merely stated it would look into or review the problem but did not commit itself to specific corrective action: the Board reasoned that employ- ees would tend to anticipate improved conditions of employment which might make union representa- tion unnecessary. However, it is not the solicitation of grievances itself that is coercive and violative of Section 8(a)(1), but the promise to correct griev- ances or a concurrent interrogation or polling about union sympathies that is unlawful; the solicitation of grievances merely raises an inference that the em- ployer is making such a promise, which inference is rebuttable by the employer. See also Ace Hardware Corp., 271 NLRB 1174 (1984). It is of course unlawful for an employer to expressly or impliedly promise or grant benefits to its employees to discourage support for a union, regardless of whether such conduct occurs in the context of a solication of ben- efits. NLRB v. Exchange Parts Co., 375 U.S. 405, 409-410 (1964). Applying the foregoing principles to the facts of the present case, I find that the credible evidence rebuts any inference of promises of benefits or redress of grievances. As the employees were well aware, Blankenship was an outside consultant who would have no authority to make promises without the approval of Diamond's manage- ment. In fact Blankenship had no such authority. Blan- kenship was authorized solely to ascertain the employees' attitudes and concerns, and then report back to Hake about what course of action should be taken. Blanken- ship never said or suggested to the employees that he had any greater authority and discouraged any such in- ference at several points during the 7 April meeting. The one page of transcript, which the General Counsel of- fered in evidence, indicates that Blankenship told the em- ployees that it would be illegal for him to say that "we will adjust all your complaints." As the General Counsel points out, such statements do not operate to legalize the solicitation if other evidence indicates that the employer is expressly or impliedly promising benefits or redress of grievances. However, Blankenship's other remarks were consistent with this statement. When employee Wield said that it did no good to confront management with their problems, Blankenship did not express disagree- ment. When employees Grinnell asked whether they could form an employee committee, Blankenship referred her to the Board's Regional Office. Such responses are inconsistent with a promise of benefits. Blankenship never expressed sympathy with or concern about the em- ployees' problems, and did not even promise to look into these problems. He did suggest that the employees con- 567 front management with their grievances. However, such statements, even when made to management directly, do not, standing alone, warrant an inference of or promise that any grievance would be remedied . Cherokee Culvert Ca, 262 NLRB 917 fn. 2 (1982). See also Radio Broad- casting Co., 277 NLRB 1112 (1985), affd. sub nom Team- sters Local 115 v. NLRB, 802 F.2d 448 (T) (3d Cir. 1986), in which the Board held that a remark by the employer's president that a wage increase was a good idea but that he could not promise anything , coupled with an unusual grant of wage increases about 4 months later , was insuffi- cient to warrant an inference of a promise to increase wages, and that the president's statements that he would "look into" increased health coverage, coupled with the grant of additional health benefits about 4 months later, was insufficient to warrant an inference of a promise of such benefits. Therefore, I find that Blankenship did not promise benefits if the employees rejected unionization, and I am recommending that the allegations of para- graph 11 of the complaint be dismissed. E. Alleged Counseling of Unfair Labor Practices by Respondents The complaint contains several allegations that Re- spondents violated Section 8(a)(1) by reason of unfair labor practices committed by Diamond that were "coun- seled" by Blankenship. I shall first address the allegation pertaining to the replacement of Walter Hake by Randall Hake, as this squarely presents a situation in which Blan- kenship expressly advised Diamond to engage in unlaw- ful conduct. The compaint alleges in sum that at the 12 May captive-audience meeting, Randall Hake unlawfully stated that he was taking over Diamond's labor relations from his father, and that having counseled such state- ment Respondents, together with Diamond, were respon- sible for this unfair labor practice . In fact, Randall Hake announced by notice posted to the employees on 23 April that he was assuming authority and responsibility for all personnel matters , and thereafter confirmed and elaborated on this announcement in his 12 May speech. The evidence is uncontroverted that Blankenship learned at the 7 April meeting that Walter Hake's arbitrary and capricious handling of personnel matters was a principle source of employee discontent, that Blankenship advised Randall Hake to replace his father in order to improve the Company's chances of winning the pending election, and that Randall Hake, acting on Blankenship's advice, informed the employees that he was replacing his father in handling personnel matters . By announcing and imple- menting this decision, Randall Hake granted the employ- ees a change in their working conditions that they could reasonably perceive as a benefit or response to their ex- pressed grievances or their reasons for seeking unioniza- tion, for the purpose of discouraging employee support for the Union. Hake made this clear in his 12 May speech. Diamond thereby violated Section 8(a)(1) of the Act. See Eagle Material Handling, 224 NLRB 1529, 1533 (1976), enfd. 558 F.2d 160 (3d Cir. 1977) (employer vio- lated Sec. 8(a)(1) by discharging an unpopular supervisor in response to employee complaints); Ann Lee Sportswear, 220 NLRB 982, 993 (1975), enfd. 543 F.2d 739, 742-743 568 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD (10th Cir. 1976) (employer violated Sec. 8(a)(1) by forc- ing the resignation of a supervisor concerning whom the employees had expressed dissatisfaction, for the calulated purpose of influencing the outcome of election); Watkins Furniture Co., 160 NLRB 188, 192 (1966) (employer vio- lated Sec. 8(a)(1) by promising employees that it would ameliorate their grievances by lessening their contact with a sales manager). Compare: Grove Valve & Regulator Co., 262 NLRB 285, 299 (1982) (employer lawfully re- placed its industrial relations manager because evidence fails to establish a relationship between employees' ex- pressed grievances and his replacement). As the General Counsel correctly states (Br. 5), the Board has never decided whether an attorney or labor relations consultant violates the Act by advising a client employer or labor organization to commit unfair labor practices. St. Francis Hospital, supra, 263 NLRB at 850.15 However, analogous lines of case authority tend to indicate that they should be held responsible under the Act for the consequences of such advice. First, an em- ployer violates the Act by instructing its supervisors to engage in unfair labor practice conduct, where the in- structions were carried out or disclosed to the employ- ees. Resistance Technology, 280 NLRB 1004 (1986).16 In Walker's, 159 NLRB 1159, 1175, 1179 (1966), the Board held that the employer violated Section 8(a)(1) by sug- gesting to its buyers (nonsupervisory personnel who were generally looked on as part of management) that they question employees about attitude toward unioniza- tion. In the present case, Respondents were not part of Diamond's managerial hierarchy. Blankenship had only limited authority over Diamond's employees, e.g., to ex- ercise such authority as was necessary to conduct the captive audience meetings. However, Respondents, having been retained by Diamond for the express pur- pose of acting as Diamond's "representative" in the rep- resentation proceeding, was the agent of Diamond at least for the purpose of advising Diamond about its course of action in that proceeding, and Diamond relied on that advice when it unlawfully announced and carried out its decision to replace Walter Hake as the person in charge of personnel matters. If an employer can be held accountable for its instructions or even suggestions to its supervisory personnel that result in the commission of unfair labor practices, then it would seem only proper that a professional counselor should be held responsible for its advice that has the same unlawful effect. As indi- cated, labor relations consultants and attorneys have been held responsible for their commission of unfair 'S Blankenship's brief (p 21) contains a misleading quotation from Si Francis Hospital, which, taken out of context , falsely suggests that the Board held that a labor relations consultant cannot be held responsible for advising a client to violate the Act Blankenship failed to quote the prefatory and key sentence, namely : "There is no evidence that [the con- sultant] advised its client to violate the Act " The Board went on to hold that "in these circumstances," the consultant should not be held responsi- ble for unfair labor practices committed by the employer's supervisory personnel, over whom it had no control 16 Resistance Technology overruled Cannon Electric Ca, 151 NLRB 1465, 1468 ( 1965), insofar as Cannon held that the instructions would be unlawful even if not earned out or disclosed to the employees . However, Resistance made clear that the instructions would be unlawful if either condition were present. labor practices, whether the Board found that they acted as agents of an employer or as employers within the meaning of the Act in their own right . See Chalk Metal Co., supra; West Coast Casket Co., 192 NLRB 624 (1971), enfd. in pertinent part 469 F.2d 871 (9th Cir. 1972); Guild Industries Mfg. Corp., 133 NLRB 1719 (1961), 135 NLRB 971 (1962), enfd. as modified 321 F.2d 108 (5th Cir. 1963); St Mary's Infant Home, supra. Labor relations consultants are not immune from the proscriptions of the Act. Similarly, employers have been held responsible under the Act for the activities of other outside persons or groups, such as local civic or development organiza- tions, as well as the outside persons or groups them- selves, where employees may reasonably conclude that "the business leaders inveighing against the Union were serving in effect as organs of communication from man- agement," even though the employer might not be liable under the "strict rules of agency." Cagle's Inc. v. NLRB, 588 F.2d 943, 947-948 (5th Cir. 1979), and cases cited therein." Therefore, Respondents shared responsibility for Diamond's announcement and implementation of its decision to replace Walter Hake and Respondents violat- ed Section 8(a)(1) of the Act by such actions. The next question concerns Respondents' alleged re- sponsibility for Randall Hake's captive audience speech of 12 May. As Blankenship acknowledged to Pierce, the speech was plainly unlawful. Hake made express and im- plied promises of benefit and redress of grievances in order to discourage employee support for the Union. However, he did so on his own initiative , without con- sulting Respondents. James Pierce prepared a text for Hake which did not contain any unlawful statements, but Hake simply used the text as a starting point, and went on to make his own remarks . Hake did not ask Blanken- ship to review his proposed speech . Hake did ask Blan- kenship to stop him if he said anything "blatantly ille- gal." However, I do not believe that a labor relations consultant or an attorney can be held responsible for unfair labor practices by failing to demand that his client submit all campaign speeches and literature to him for prior approval, or by failing to publicly embarrass or hu- miliate his client by informing his employees that their employer has violated the law. St. Francis Hospital, supra, 263 NLRB at 849, plainly stands for the principle that a consultant, by undertaking to advise an employer in that capacity, does not thereby assume responsibility for unfair labor practices committed by the employer or its supervisors without or against the advice of the con- sultant. Analogous law in the field of malpractice also in- dicates that a consultant or attorney should not be held responsible in these circumstances. Compare: M & S Building Supplies v. Keiler, 738 F.2d 467 (D.C. Cir. 1984), in which the court held, in sum, that an attorney who improperly advised his client to set up an alter ego oper- ation in order to avoid coverage of the employer's ware- housemen under a multiemployer collective-bargaining agreement, was not liable for the employer's losses as the ' ° Blankenship asserts ( Br. 19) that the Act imposes a "clear state man- date to apply the ordinary law of agency to the question of employer and union responsibility." The assertion is erroneous. See Sec. 2(13) of the Act BLANKENSHIP & ASSOCIATES result of a subsequent unfair labor practice proceeding, where the losses were actually caused by the employer's unilateral decision to use the alter ego operation as a means of avoiding contract coverage for its truckdriver employees. Even if Blankenship had stood up and public- ly stated that Hake was unlawfully making promises to the employees, such action would not have neutralized Hake's unlawful speech. See Faribo Turkeys, 140 NLRB 1397 (1963). Therefore, I find that Respondents did not unlawfully counsel Diamond regarding the 12 May speech. The remaining allegations of the complaint (par. 10(g) through (j)) concern Diamond's course of conduct in forming and dealing with the employee committee, and Respondents' alleged role in counseling such conduct. Respondents' actions in this regard fall between the out- right and unequivocal advice given that Randall Hake replace his father, and the alleged acquiescence by si- lence in connection with Hake's 12 May speech. As found, after Blankenship first met with the employees, he met with Hake and advised that Diamond update its work rules. At Hake's request, Blankenship put his rec- ommendations in letter form. Blankenship also gave Hake a sample "contract." However, Hake understood that unlike Blankenship's recommendation that he re- place his father, these changes would not be negotiated or implemented until the representation question was re- solved. Blankenship stated in his 17 April letter that Hake should consider adopting the proposed "contract ... after we rid you of the union problems." Pierce told Hake not to use the sample policies until there was a de- cision on the election. Hake anticipated that the election would take place on 16 May, and that if the Union were defeated, this would allow sufficient time for him to meet with an employee committee and negotiate a new set of work rules that would cover wages and other con- ditions of employment prior to 1 July, Diamond' s annual wage review date. When Hake learned that the election would be postponed because of the pending unfair labor practice charges, he telephoned Associates for advice, specifically asking whether Diamond could proceed with the plan to set up a committee to develop a new set of work rules. Blankenship, through Pierce, told Hake to go ahead and run the business as he saw fit. At this time, Blankenship was still Diamond's labor relations consult- ant. Hake could reasonably interpret Blankenship's state- ment as indicating that Diamond could lawfully proceed with the plan, which Blankenship had initially formulat- ed and counseled. Hake acted on Blankenship's advice by implementing the plan. Blankenship may well have felt that as a result of Hake's speech, the damage was al- ready done. However, even Hake told the employees that the plan would be implemented after the election. Not only did Blankenship fail to advise Hake that he was embarking on an unlawful course of conduct, but he af- firmatively indicated that Hake could lawfully proceed with their plan. Therefore, I find that Respondents coun- seled Diamond's course of conduct beginning with the meeting on or about 14 May, and thereby became re- sponsible with Diamond for that conduct. The employee committee was a labor organization within the meaning of the Act. By establishing, dominating, assisting, and 569 supporting the employee committee, including dealing with the committee concerning wages and other terms and conditions of employment , Diamond violated Sec- tion 8(a)(1) and (2) of the Act. Jet Spray Corp., 271 NLRB 127, 129 (1984); Texas Bus Lines, 277 NLRB 626 (1985); Hunter Douglas, Inc., 277 NLRB 1179 (1985), enfd. 804 F.2d 808 (3d Cir. 1986); see also NLRB v. Cabot Carbon Ca, 360 U.S. 203, 211 (1959); Lawson Ca v. NLRB, 735 F.2d 471 (6th Cir. 1985). Therefore, by counseling such conduct, Respondents became responsi- ble for such conduct, and consequently violated Section 8(a)(1) and (2) of the Act. CONCLUSIONS OF LAW 1. Associates and Diamond are employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Blankenship is an agent of Associates, and Associ- ates and Blankenship were at times material agents of Di- amond within the meaning of Section 2(2) and (13) of the Act. 3. The Union is a labor organization within the mean- ing of Section 2(5) of the Act, and employee committee was at times material a labor organization within the meaning of Section 2(5) of the Act. 4. By counseling Diamond to announce and implement benefits and redress of grievances to its employees in order to discourage support for the Union, Respondents have violated Section 8(a)(1) of the Act. 5. By counseling Diamond to establish, dominate, assist, and support employee committee, Respondents have violated Section 8(a)(1) and (2) of the Act. 6. Respondents have not engaged in any other unfair labor practices alleged in the complaint. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. THE REMEDY Having found that Respondents have committed viola- tions of Section 8(a)(1) and (2) of the Act, I shall recom- mend that they be required to cease and desist therefrom and from like or related conduct, to post appropriate no- tices, and to furnish and give appropriate notices to Dia- mond. Because Diamond is not a named Respondent in this proceeding, I cannot require Diamond to post such notices. The General Counsel requests that I recommend a broad remedial order that would require Respondents to cease and desist from engaging in any manner in un- lawful conduct as an agent of Diamond or any other em- ployer. I am sympathetic to the General Counsel's re- quest, but Board policy precludes such an order. See West Coast Casket Ca , supra at fn. 1; Chalk Metal Ca, supra, 197 NLRB at 1133. In Chalk Metal, the Board re- stated its policy in unequivocal language , namely, "that a broad remedial order is appropriate whenever a proclivi- ty to violate the Act is established, either by the facts within a particular case, or by prior Board decisions against the respondent at bar based upon similar unlawful conduct in the past." (Emphasis added.) Here, as with re- spect to Selvin in West Coast Casket, there have been de- 570 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD cisions in which Blankenship, acting as consultant for a respondent employer, has been found to have committed unfair labor practices, but neither Associates nor Blan- kenship was named as a party respondent in any of the cases. Therefore, Blankenship's prior record cannot be used as the basis for a broad order. The facts of the present case also cannot be used as the basis for a broad order. As indicated, I have found that Respondents vio- lated the Act by counseling, but not directly engaging in, unfair labor practices. The Board has never held that an attorney or labor relations consultant violates the Act by counseling unfair labor practices . Therefore, as the viola- tions here found present a novel question of law, it cannot be said that Respondents , by such conduct, dem- onstrated a proclivity to violate the Act. In the present case, Diamond terminated Respondents' services , subse- quently recognized the Union , and it is highly unlikely that Diamond will ever again retain Respondents. In this context, a narrow order can serve little practical purpose except as a warning to Respondents . However, the precedents indicate that the Board prefers to move cau- tiously in this area. Because I am recommending a narrow order, there are no special circumstances that would warrant a visitatorial clause. [Recommended Order omitted from publication.]