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Parties Involved:
National Labor Relations Board
Respondent
Schaeff Incorporated
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 10, 1997 Decided May 27, 1997

No. 96-1190

SCHAEFF INCORPORATED,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

Gerald M. Richardson argued the cause for the petitioner.

Angela M. Washington, Attorney, National Labor Relations Board, argued the cause for the respondent. Linda R. 

Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Frederick C. Havard,

Attorney, National Labor Relations Board, were on brief. 

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1 Schaeff Inc. is a subsidiary of Schaeff Machine Fabrik GMBH, a 

German company. Here, "Schaeff" refers only to the U.S. subsidiary. 

2Except as otherwise noted, all relevant events occurred in 1994. 

David A. Seid, Attorney, National Labor Relations Board, 

entered an appearance.

Before: SILBERMAN, WILLIAMS and HENDERSON, Circuit 

Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: Schaeff Inc. 

(Schaeff) petitions for review of an order of the National 

Labor Relations Board (Board) concluding that it fired Tom 

Massey (Massey), Darren McCleary (McCleary) and Richard 

Pedersen (Pedersen) because of their organizing activities. 

Specifically, Schaeff argues that it decided to terminate them 

before learning of their protected activity and therefore antiunion animus played no role in its decision. Schaeff argues in 

the alternative that it established its affirmative defense that 

its financial condition made Massey's, McCleary's and Pedersen's firings inevitable. Although some evidence supports 

Schaeff's position, there is sufficient evidentiary support for 

the Board's findings. As to Schaeff's affirmative defense, 

Schaeff did not establish that Massey's position was eliminated for financial reasons or that Massey, McCleary and Pedersen were unsuitable for transfer to other positions within the 

company. Accordingly, we deny Schaeff's petition for review.

I. BACKGROUND

Schaeff manufactures forklifts in Sioux City, Iowa.1 Until 

October 1994, Massey, McCleary and Pedersen worked at 

Schaeff.2 Massey was a material handler in the welding 

section and McCleary and Pedersen worked in the final 

assembly section. In early August, after he was transferred 

to the night shift and his pay was decreased, Massey contacted labor activist Richard Sturgeon about unionizing Schaeff 

employees. Massey subsequently spoke with a number of 

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3Avitan and Mrs. Avitan are married. 

4Section 158(a)(1) makes it an unfair labor practice "to interfere 

with, restrain, or coerce employees in the exercise of" their rights to 

organize and section 158(a)(3) makes it an unfair labor practice "by 

fellow Schaeff employees about Sturgeon and his organization, Workers Have Rights Too. Pedersen was among those 

employees and Pedersen also spoke to other employees about 

meeting with Sturgeon. On September 14, Isaac Avitan, 

Schaeff's general manager, sent a letter to all employees 

alerting them that a small group of pro-union employees had 

been advocating "alter[ing] employee relations with their 

employer." JA 521.

On October 8, Massey, McCleary and Pedersen met with 

Sturgeon, who gave them literature on labor matters including workers' compensation. On October 11 or 12, Pedersen 

met with Sherrie Avitan (Mrs. Avitan),3 Schaeff's human 

resources manager, and gave her a copy of one of the 

booklets he had received from Sturgeon. Massey was fired 

on October 12 and McCleary and Pedersen were fired the 

following day. Schaeff also fired three other employees on 

October 12 and 13.

During this period, Schaeff was struggling to overcome 

financial difficulties. It had suffered substantial losses and 

Avitan was seeking ways to improve its efficiency. According 

to Schaeff, its decisions to reduce from three to one the 

number of material handlers in the welding section and to 

eliminate the final assembly section and transfer its duties to 

other parts of the plant were compelled by the need to 

improve productivity and reduce costs and were put into 

motion well before Massey's, McCleary's and Pedersen's protected activities took place. The timing and significance of 

Schaeff's streamlining decisions were contested before the 

administrative law judge (ALJ) and the Board.

On January, 19, 1995, the Board's General Counsel filed a 

complaint on behalf of Massey, McCleary and Pedersen alleging that they had been terminated in violation of 29 U.S.C. 

§ 158(a)(1) and (3).4 On August 15, 1995, the ALJ issued a 

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decision finding that Schaeff had terminated Massey, 

McCleary and Pedersen in violation of section 158(a)(1) and 

(3) and a recommended order directing Schaeff, inter alia, to 

rehire them in their former positions. JA 37-52. Schaeff 

filed exceptions to the ALJ's decision and order and, on May 

16, 1996, the Board issued a decision adopting the ALJ's 

rulings, findings and conclusions and an order substantially 

adopting the ALJ's order, except that it ordered that Schaeff 

could place Massey, McCleary and Pedersen in positions 

equivalent to their former positions. JA 36-37.

II. DISCUSSION

Schaeff primarily challenges the Board's factual findings 

regarding the circumstances of Massey's, McCleary's and 

Pedersen's firings. We reject the Board's factual findings 

only if they are not supported by substantial evidence in the 

record as a whole. See Universal Camera Corp. v. NLRB,

340 U.S. 474, 487-88 (1951); Pennsylvania State Educ. 

Ass'n-NEA v. NLRB, 79 F.3d 139, 148 (D.C. Cir. 1996). In 

conducting our analysis, we consider not only the evidence 

supporting the Board's decision but also "whatever in the 

record fairly detracts from its weight." Universal Camera 

Corp., 340 U.S. at 488; see also CitiSteel USA, Inc. v. NLRB,

53 F.3d 350, 354 (D.C. Cir. 1995). We accept the ALJ's 

credibility determinations that are adopted by the Board 

"unless they are patently unsupportable." NLRB v. Creative 

Food Design Ltd., 852 F.2d 1295, 1297 (D.C. Cir. 1988).

A. Knowledge of Protected Activity and Anti-Union Motivation

Schaeff argues that substantial evidence does not support 

the Board's determination that Schaeff knew about and was 

motivated by the three employees' protected organizing activities when it fired them. It is an unfair labor practice for an 

employer "to interfere with, restrain, or coerce employees in 

discrimination in regard to hire or tenure of employment or any 

term or condition of employment to encourage or discourage membership in any labor organization." 

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5Schaeff and the Board dispute the impact of the United States 

Supreme Court's decision in Office of Workers' Compensation v. 

Greenwich Collieries, 512 U.S. 267 (1994), on the test the Board 

enunciated in Wright Line, 251 N.L.R.B. 1083 (1980), enforced, 662 

F.2d 899 (1st Cir. 1981), cert. denied, 455 U.S. 989 (1982). The 

Wright Line test requires the General Counsel to demonstrate that 

anti-union animus was a motivating factor in an employer's decision 

to take adverse action against an employee. Wright Line, 251 

N.L.R.B. at 1089. Once the General Counsel does so, the employer 

may establish as an affirmative defense that the adverse action 

would have occurred for legitimate reasons even in the absence of 

the employee's protected activities. Id. Schaeff claims that, unlike 

the Supreme Court's earlier interpretation of Wright Line, Greenwich Collieries places the burden of persuasion on the General 

Counsel at all times. Pet'r Br. 22-23. The Board, meanwhile, 

claims that Greenwich Collieries reaffirms the Wright Line test. 

Resp't Br. 16-17 n.2. Both are correct. Greenwich Collieries does 

hold that the ultimate burden of persuasion remains with the 

General Counsel. Greenwich Collieries, 512 U.S. at 276-78. It 

thus overrules the portion of NLRB v. Transportation Management Corp., 462 U.S. 393, 401-04 & n.7 (1983), holding that the 

General Counsel has only the burden of going forward with evidence of discrimination and does not retain the burden of persuasion throughout the proceeding. But the Court added that, once 

the General Counsel establishes that anti-union animus was a 

motivating factor, the employer bears the burden of establishing 

any affirmative defense such as the inevitability of termination. 

Greenwich Collieries, 512 U.S. at 278. The practical effect of 

Greenwich Collieries thus may be no more than the abandonment of 

the term "prima facie case" to describe the General Counsel's 

burden. See Southwest Merchandising Corp., 53 F.3d at 1339-40 & 

n.8 ("[I]n the wake of Greenwich Collieries, it will no longer be 

appropriate to term the General Counsel's burden that of mounting 

a prima facie case."). 

the exercise of" their rights, inter alia, to organize or "by 

discrimination in regard to hire or tenure of employment or 

any term or condition of employment to encourage or discourage membership in any labor organization." 29 U.S.C. 

§ 158(a)(1), (3). To establish a violation, the General Counsel 

had to prove that the three employees' organizing activities 

were a motivating factor in Schaeff's decision to fire them.5

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6 According to Pedersen, however, Massey first talked to him 

about meeting with Sturgeon after the September 14 letter. JA 

161. 

7 October 8, 1994, was a Saturday. 

Southwest Merchandising Corp. v. NLRB, 53 F.3d 1334, 

1339-40 (D.C. Cir. 1995).

Schaeff asserts that no evidence supports the finding that 

Schaeff management knew about Massey's, McCleary's and 

Pedersen's organizing activities. But Avitan's September 14 

letter about the "small but vocal group" of pro-union advocates strongly suggests that he and other Schaeff managers 

knew about whatever organizing activities were then underway. Massey easily could be described as a pro-union advocate by September 14: he had talked with Sturgeon as early 

as the beginning of August (shortly after being transferred to 

the night shift), JA 126, 171, and had talked with other 

employees about Workers Have Rights Too in the several 

weeks before October 12, JA 172-73. Some evidence suggests that Pedersen also had at least discussed organizing 

before September 14: according to Massey, Massey first told 

Pedersen about Sturgeon in August.6JA 183-84. Pedersen 

thus might also have come to Schaeff's attention as a member 

of the "small but vocal group." As to McCleary, however, 

there is no evidence that he knew anything about Sturgeon or 

Workers Have Rights Too before the September 14 letter. 

By McCleary's undisputed account, Massey first told him 

about Workers Have Rights Too during the period October 

3-6. JA 87-88, 113-14. In sum, the September 14 letter 

indicates that Schaeff management knew some organizing 

effort was afoot and supports a finding that management was 

aware of Massey's and perhaps Pedersen's pro-union activities.

The Board next contends that management learned of 

Sturgeon's October 8 meeting with Massey, McCleary and 

Pedersen no later than very shortly after that meeting and in 

any event before they were fired on October 12 and 13.7

Massey testified that he spoke with several other employees 

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8 Schaeff argues that the Board is not entitled to take advantage 

of the "small plant doctrine," under which management may be 

charged with constructive knowledge of organizing activities in 

workplaces with fewer than 100 employees. See, e.g., Howard 

Press, Inc., 265 N.L.R.B. 1389 (1982), pet. denied, 729 F.2d 172 (2d 

Cir. 1989). But the Board did not rely on the small plant doctrine. 

The ALJ identified evidence of management's knowledge of the 

October 8 meeting; for example, he pointed to the wide-spread 

dissemination of information about the meeting among employees, 

the testimony of mid-level managers Mike Hofer and Brian Rawlings that they had heard about the meeting beforehand and Avitan's 

frequent visits to the production floor. JA 50. 

9Although the evidence ties Massey and Pedersen to the October 

8 meeting more conclusively than it does McCleary, it nevertheless 

is reasonable to infer that, if management knew generally about the 

October 8 meeting, it would also know McCleary had attended. 

ward. JA 183-84. Pedersen testified that he and Massey 

informed twenty to thirty other employees about the meeting 

before it occurred and that he spoke with "[m]ost of" 

Schaeff's employees thereafter. JA 134, 150-51. Thus, there 

is evidence that many, if not most, of Schaeff's employees 

knew of the October 8 meeting either beforehand or soon 

thereafter. Particularly given Avitan's acknowledged practice of mingling with the employees in the plant, JA 410-11, 

there is adequate support for an inference that management 

also knew about the October 8 meeting before or immediately 

after it occurred.8In addition, Pedersen met with Mrs. 

Avitan on October 11 or 12, gave her a copy of one of the 

booklets Sturgeon had handed out at the October 8 meeting 

and told her Sturgeon's name and telephone number were 

written in the booklet. JA 134-35, 212, 247-48. Sufficient 

evidence supports the finding that Schaeff management knew 

about the October 8 meeting involving Sturgeon, Massey, 

McCleary and Pedersen before the three were fired on 

October 12 and 13.9

Knowledge by itself is not sufficient, however; an unfair 

labor practice occurs only when the employer's knowledge of 

its employees' pro-union activities is a motivating factor in its 

decision to fire them. See Southwest Merchandising, 53 F.3d 

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at 1339. Schaeff contests the motivation element as well. 

The ALJ, however, identified a number of factors suggesting 

that Massey's, McCleary's and Pedersen's firings were motivated by Schaeff's anti-union animus. Specifically, the ALJ 

pointed to the facts that all three employees who met with 

Sturgeon were fired; that those three were half of the total 

number fired on October 12 and 13; that Massey, McCleary 

and Pedersen were fired within days of meeting with Sturgeon and almost immediately after Pedersen met with Mrs. 

Avitan and gave her a copy of one of Sturgeon's booklets; 

and that the firings occurred abruptly in the middle of a 

workweek. JA 51.

But Schaeff asserts that its decision to fire Massey, 

McCleary and Pedersen preceded their meeting with Sturgeon "by several days at least." Pet'r Br. 26. The ALJ, 

however, did not credit the testimony of those members of 

management who claimed that they had no knowledge of 

Massey's, McCleary's and Pedersen's organizing activities 

until after they were fired and that Schaeff planned to fire 

Massey, McCleary and Pedersen before they met with Sturgeon. JA 36 n.1. In particular, the ALJ observed that 

Thomas Winner, Schaeff's operations manager, contradicted 

Avitan's claim that Schaeff decided to eliminate Massey's, 

McCleary's and Pedersen's positions in response to a poor 

financial report Schaeff received in mid-August. JA 49. The 

ALJ also noted that Mrs. Avitan's testimony that over a week 

passed between the decision to fire Massey, McCleary and 

Pedersen and their actual firing was improbable. JA 49. 

Schaeff offers no persuasive reason to upset the ALJ's credibility determinations. See Exxel/Atmos, Inc. v. NLRB, 28 

F.3d 1243, 1246 (D.C. Cir. 1994) (court accepts ALJ's credibility determinations unless "patently unsupportable"); NLRB 

v. Creative Food Design Ltd., 852 F.2d 1295, 1297 (D.C. Cir. 

1988) (same). Furthermore, even if Schaeff planned to fire 

Massey, McCleary and Pedersen before October 8, Massey 

and Pedersen both stated that they spoke with other employees about the meeting before it occurred. In addition, Massey (and perhaps Pedersen as well) began talking to other 

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10In fact, he may not have been officially hired until September 

15. JA 505. 

ber. Assuming arguendo that Schaeff made its firing decision before the October 8 meeting, it nevertheless is reasonable to infer that Schaeff also knew about the organizing 

effort by the time it made the decision.

Notwithstanding the contrary evidence advanced by 

Schaeff, substantial evidence supports the Board's determinations that Schaeff knew about Massey's, McCleary's and 

Pedersen's organizing activities and that anti-union animus 

motivated, at least in part, their firings.

B. Inevitability of Termination

Schaeff argues that, even if its management knew about 

the three employees' protected activities and that knowledge 

played a role in their firings, they would have been fired 

anyway for economic reasons. A company's financial situation or other nondiscriminatory motive may justify otherwise 

improper firings, see, e.g., Robinson Furniture, Inc., 286 

N.L.R.B. 1076, 1079-80 (1987), but the company bears the 

burden of proving that the nondiscriminatory motive was in 

fact the cause of the firings. Southwest Merchandising 

Corp., 53 F.3d at 1340.

Schaeff contends that Massey was caught up in its initiative 

to increase efficiency in the welding department by eliminating material handler jobs. In support of its position, it 

observes that one of the two other material handler jobs also 

was eliminated. There are, however, at least two problems 

with Schaeff's position. First, the one material handler who 

was retained had just been hired on September 12.10 JA 330. 

The decision to fill the position at a time of purported belttightening casts doubt on Schaeff's claim that Massey's firing 

was merely part of a general decision to reduce the number of 

material handlers in the welding section. Second, the material handler (Dyke) whose position was eliminated before Massey's was moved to another job. If Massey had been the 

least effective material handler, presumably his job would 

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11Schaeff also argues that it had no legal duty to find other jobs 

for Massey, McCleary and Pedersen. Pet'r Br. 36-37. Assuming 

arguendo Schaeff is correct, Schaeff's decision not to move Massey, 

McCleary and Pedersen to other positions within the company 

nevertheless is relevant to the extent that it demonstrates they 

were treated differently from other similarly situated employees. 

If Massey, McCleary and Pedersen were qualified for other positions, that they were fired when other employees were merely 

transferred supports an inference that Schaeff's financial situation 

was not the only reason for their firings. 

have been eliminated first. That his position was eliminated 

second suggests Massey was at least as competent as Dyke. 

Thus, the fact that Dyke received another job within the 

company while Massey did not further supports the finding 

that Massey's firing was not simply a matter of efficiency. 

Accordingly, the Board was justified in rejecting Schaeff's 

affirmative defense as to Massey.

Schaeff argues that its financial difficulties also led it to 

eliminate its final assembly operation and that Pedersen and 

McCleary were fired as a result of that decision. The Board 

does not contest that elimination of the final assembly operation was financially motivated. Instead, it argues that Pedersen and McCleary were qualified for other positions within 

the company and that the fact that they were not transferred 

to new jobs along with others whose jobs were eliminated 

undermines Schaeff's claim that their firing was efficiencybased. Schaeff identifies a number of reasons for its position 

that Pedersen and McCleary were not qualified for other 

positions. Specifically, it points to Pedersen's physical condition and resulting weight-lifting restrictions and his lack of 

hydraulic, tooling and mechanical experience and to 

McCleary's apparent slowness and general lack of skills. But 

contrary to Schaeff's assertions, the evidence of Pedersen's 

and McCleary's unsuitability for other positions is not uncontested. The Board observes that Schaeff thought enough of 

Pedersen's abilities to send him to classes in supervision, JA 

126; that Pedersen did have hydraulic and drilling experience, JA 125, 130; and that McCleary had quality assurance, 

assembly and drilling experience, JA 82.11 While Schaeff 

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12 As the General Counsel's case was weakest with regard to 

Schaeff's knowledge of McCleary's pro-union activities, so Schaeff's 

affirmative defense is strongest as to McCleary. McCleary appears 

to have had the fewest qualifications of the three and had received 

at least one written warning about sub-standard performance. JA 

584-86. Nevertheless, the Board has identified sufficient evidence 

that McCleary was qualified for other positions within the company. 

presented evidence upon which a different fact-finder might 

have determined that Pedersen and McCleary were destined 

to lose their jobs regardless of their organizing activities, 

sufficient evidence supports the Board's contrary conclusion.12

Because substantial evidence supports the Board's determination that Massey's, McCleary's and Pedersen's organizing 

activities were known to Schaeff and were a motivating factor 

in their firings and because Schaeff did not carry its burden 

of persuasion on the economic inevitability defense, we deny 

Schaeff's petition for review and grant the Board's crossapplication for enforcement.

So ordered.

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