FILED: May 28, 1998

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 96-2803

(11-CA-16215)

MEDECO SECURITY LOCKS, INCORPORATED,

Petitioner,

versus

NATIONAL LABOR RELATIONS BOARD,

Respondent.

No. 97-1116

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

versus

MEDECO SECURITY LOCKS, INCORPORATED,

Respondent.

ORDER

The court amends its opinion filed April 29, 1998, as follows:
-2-

On page 23, first full paragraph, lines 6-8, the sentence beginning "We therefore remand" and ending "violations of § 8(a)(1)"

is deleted.

The disposition on pages 2 and 23 is edited to read "Enforcement granted in part and denied in part."

The petitioner, Medeco Security Locks, Inc., is given seven

days from the entry of this order to submit any further objection

to the Board’s proposed judgment.

Entered at the direction of Judge Michael with the concurrence

of Chief Judge Wilkinson.

For the Court,

Clerk
PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MEDECO SECURITY LOCKS,

INCORPORATED,

Petitioner,

No. 96-2803

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

v.

No. 97-1116

MEDECO SECURITY LOCKS,

INCORPORATED,

Respondent.

On Petition for Review and Cross-application

for Enforcement of an Order

of the National Labor Relations Board.

(11-CA-16215)

Argued: October 29, 1997

Decided: April 29, 1998

Before WILKINSON, Chief Judge, and RUSSELL* and

MICHAEL, Circuit Judges.

_________________________________________________________________

*Judge Russell participated in the decision of this case but died before

the opinion was issued. The opinion is filed by a quorum of the panel

pursuant to 28 U.S.C. § 46(d).
Enforcement granted in part and denied in part by published opinion. Judge Michael wrote the opinion, in which Chief

Judge Wilkinson joined.

_________________________________________________________________

COUNSEL

ARGUED: Clinton Stephen Morse, FLIPPIN, DENSMORE,

MORSE, RUTHERFORD & JESSEE, Roanoke, Virginia, for Petitioner. Richard A. Cohen, NATIONAL LABOR RELATIONS

BOARD, Washington, D.C., for Respondent. ON BRIEF: Todd A.

Leeson, FLIPPIN, DENSMORE, MORSE, RUTHERFORD & JESSEE, Roanoke, Virginia, for Petitioner. Frederick L. Feinstein, General Counsel, Linda Sher, Associate General Counsel, Aileen A.

Armstrong, Deputy Associate General Counsel, NATIONAL LABOR

RELATIONS BOARD, Washington, D.C., for Respondent.

_________________________________________________________________

OPINION

MICHAEL, Circuit Judge:

Medeco Security Locks, Inc. petitions this court to review a decision and order of the National Labor Relations Board, and the Board

cross-petitions for enforcement of its order. The Board's decision

affirmed the administrative law judge's ruling that Medeco had (1)

violated § 8(a)(1) of the National Labor Relations Act by prohibiting

employees from discussing certain employment matters and (2) twice

violated § 8(a)(1) and § 8(a)(3), first by transferring William C. Folden to a second-shift position and second by subsequently firing Folden. We conclude that there were three independent violations of

§ 8(a)(1). On the other hand, we believe there was a lack of substantial evidence to support the Board's determination that anti-union animus motivated the personnel decisions affecting Folden. Accordingly,

we grant the Board's cross-petition for enforcement as to § 8(a)(1) but

deny enforcement as to § 8(a)(3).

I.

Medeco operates a Salem, Virginia, plant where it manufactures

and distributes precision locks. In 1993 the International Union of

 2
Electronic, Electrical, Salaried, Machine, and Furniture Workers,

AFL-CIO (the "Union") attempted to unionize the employees at

Medeco. The Union collected enough union cards to bring about an

election, but on March 22, 1993, a majority of Medeco's employees

voted against unionization.

After this election Medeco made several company wide changes

aimed at providing its employees an alternative to unionization.

Medeco's new employee handbook explained in May 1993 that "[w]e

are a non-union company and we want to stay that way. We feel our

union-free status is a benefit to [our employees] . . . [and] we intend

to oppose unionization by every proper and legal means and by the

equitable treatment of all individuals." Medeco began initiatives to

emphasize team building, employee participation, and an open-door

complaint policy to address employee concerns. It also hired Dennis

Taggert in August 1993 as a new vice-president of human relations

and promoted Diane Ward, a rank-and-file employee, to the position

of human relations manager in November 1993. Ward's office was

located in the center of the production floor to make her readily accessible to employees who wished to discuss or mention concerns about

employment.

The next year, in January of 1994, the Union began another campaign to unionize Medeco. As expected, the company responded by

mounting an aggressive anti-unionization campaign. Medeco held a

series of meetings with its employees, showed anti-union films that

depicted union violence, posted various signs opposing unionization,

and instructed its managers to ask employees not to sign union cards.

This time, perhaps because of the company's effort, the Union was

not able to obtain enough cards to petition for an election.1

In 1994 Medeco employees William C. Folden and Louis Rickman

were subject to several adverse employment actions. Folden was ulti-

_________________________________________________________________

1 After the events relevant to this case, the Union collected enough signatures to petition for an election in 1995. However, a majority of Medeco's employees again voted against unionization on May 15, 1995.

Medeco represents that no unfair labor practice charges were filed

against it with respect to either the 1993 or 1995 election. Brief in Support of Petition for Review at 26 n.15.

 3
mately fired in late May, and Rickman quit in November. Medeco's

treatment of these employees and the company's alleged anti-union

motivations are the subject of this proceeding.

A.

William C. Folden began working for Medeco in 1976 and

remained with the company until he was terminated on May 27, 1994.

During the 1993 organizing effort, Folden was a highly visible and

active union supporter. He attended union meetings, served as a union

representative in observing the election, and was one of the more outspoken advocates of unionization. Folden admits that he wore a prounion cap and was not shy about his union support. Once Medeco

began to change its policies after the 1993 campaign, however, Folden told his supervisor, Steve Bullock, that he was not interested in

any more organizational activity with the union. Specifically, when

the 1994 union drive was about to begin, Folden told Bullock that he

(Folden) was "very positive about the change that was going on" at

Medeco and that he "didn't feel the need for[the union] any more."

In addition, human relations manager Ward testified that Folden told

her that he had been active in the 1993 union effort "but that this year

[1994] he wasn't, he didn't want any part of it." Folden did not have

a clear recollection of this conversation.

Folden nevertheless had some participation in the 1994 union campaign. When compared to his role in the 1993 campaign, however, his

involvement in 1994 was minimal. Folden first testified that he "[j]ust

attended the meeting[s]." He later added that he "received some

signed [union] cards" in Medeco's parking lot, but any part he played

in taking cards appears to have been quite minimal. He acknowledged

that these acts constituted the "extent of [his] involvement" in 1994.

By early 1994 Folden was serving, as a representative from the

Quality Control Department, on a "cross-functional team" organized

by Medeco. The team was composed of a cross-section of employees

who met weekly with management to discuss topics of concern and

interest to employees. During one of the team's meetings on February

4, 1994, the team's normal chairwoman (a manager) was absent and

Norma Doudy, a non-management employee in the accounting

department, stood in as her replacement. Doudy explained that she

 4
would be reporting to Medeco's president about the meeting. At one

point during the meeting, Doudy asked Folden how the union drive

was going and whether there were enough cards for a petition. Thereafter, Folden went to Bullock and told him that he (Folden) "didn't

think [a team meeting] was the proper time or place to discuss those

topics." Bullock agreed and said that he would advise Doudy that her

questions about the union drive were inappropriate. During this conversation Bullock asked why employees wanted a union. In a brief

response, Folden told him that there were several reasons, including

favoritism and the lack of fair treatment.

Bullock had joined Medeco in August 1993 as manager of the

Quality Control (QC) Department. His management style reflected

Medeco's "Team Concept" and its commitment to employee participation. Bullock soon established three skill levels for the quality

inspectors in the QC Department, with level III being the most

skilled. The job descriptions associated with each skill level were

developed with input from the QC employees, and in January 1994

the employees were allowed to choose their own skill level based on

their own assessment of their capabilities. Of the ten QC inspectors,

Folden and two others rated themselves at level III, while the rest

selected level II.

Bullock also required that all QC employees pass a Geometric

Dimension and Tolerance (GD&T) exam, which would test their ability to interpret engineering drawings. To prepare them for the GD&T

test, Bullock provided books and access to instructional videos that

the employees could use on their own time. Because Bullock felt that

"it would be difficult for the group to complete[the test] without

some instruction," he also taught a series of classes on the exam over

several weeks and made himself available to answer questions. Folden attended these classes but illness caused him to miss the last two

sessions, in which course materials were reviewed in preparation for

the exam. Folden took the test on April 7, 1994, and scored a 68.5

percent.

Because Bullock had promised that the team as a whole would participate in making decisions, he told them before the test that they

would decide the passing grade. Once the QC inspectors knew their

scores, they held a meeting and voted to make 70 percent the passing

 5
score. Folden's score of 68.5 was the lowest in the group, and he was

the only one who did not pass.

At this point the testimony diverges. Folden claims Bullock told

him that he (Bullock) would schedule another GD&T exam in the

next few weeks, while Bullock claims that he told Folden to retake

the exam within the next five days. It is undisputed, however, that on

April 20 Bullock met with Folden to discuss the retaking of the exam.

In this meeting Bullock had Folden sign a memorandum that restated

Bullock's version of their previous discussions on the subject. Additionally, the memorandum stated that Folden was to retake the GD&T

exam by April 23 and score at least 80 percent in order to maintain

his level III classification. Regardless of how well Folden might do,

the memo provided that he would "be the lowest qualified in the

level III classification" because of his "need to retake [the exam] and

[the] additional time allowed." Finally the memo included the following "confidentiality statement":

This conversation between Steve Bullock . . . and Billy Folden . . . in regards to Billy's performance . . . and the corrective action that must take place no later than April 23, 1994

is strictly confidential. Any sharing of this information with

any other member(s) of Team Medeco will be interpreted as

disruptive in nature and result in termination . . ..

Bullock would testify later that the purpose of this confidentiality

statement was to avoid any perception of favoritism that might be

drawn from the extra time Folden was given to take the test. After the

April 20 meeting with Bullock, Folden prepared to retake the exam

with the help of Mike Furrow, a fellow level III inspector, who

shared his notes and answered Folden's questions. When Folden

retook the GD&T exam, he increased his score to 86 percent.

The GD&T, however, was only one of two tests taken by the Quality Control group. In 1993 and continuing though 1994, Medeco

strongly emphasized a training program known as Quality Skills 1

(QS-1). QS-1 was a largely voluntary program through which Medeco

sought to improve the skills of its employees in various subject areas

important to the company's business.2 Because the company wanted

_________________________________________________________________

2 Although the program was voluntary for most employees, the QC

inspectors were required to take QS-1 training.

 6
a high degree of employee participation, Medeco offered a twentyfive-cent hourly wage premium as an incentive to certain employees

who completed QS-1 training. Despite this incentive many employees

still were hesitant to participate and take the QS-1 diagnostic tests. To

encourage more employees to volunteer for the training, Medeco

attempted to address employee concerns by emphasizing that only the

wage premium was tied to the QS-1 exams, that no one could "fail"

the QS-1 program, and that the company would not base its assessment of an employee's qualifications on QS-1 test performance.

Confusion surrounding these two exams, QS-1 and GD&T, eventually led to Folden's termination. The final chain of events began soon

after Folden retook his GD&T test on April 23, 1994.

As a consequence of a reorganization of the QC group's shift structure, a position on the second (evening) shift was left vacant when

one employee transferred out of the group in April of 1994. In order

to deal with this vacancy, Bullock first asked for a volunteer to fill

the position but no one stepped forward. He then recommended that

the inspectors on the first shift take turns rotating through the second

shift so that everyone (both level II and III inspectors) would share

equally in the burden of working evening hours. Consistent with his

"team" approach to management, Bullock had the group vote on his

proposal. Although the first vote adopted the rotation plan, a second

vote was taken because one employee changed his mind and another

was not present for the first vote. After the second vote rejected the

plan, Medeco posted a job notice for the second-shift position on

April 29, 1994. This notice described job requirements that were consistent with the skills of a level III inspector.

When no one responded to the notice, Bullock told Folden that

because he (Folden) was the least qualified of the level III inspectors,

the Medeco handbook required that he be transferred from the first to

the second shift. Folden testified that when he objected to the secondshift assignment, Bullock told him that QS-1 and GD&T scores determined the assignment and that Folden's scores on both tests made

him the least qualified inspector. Bullock denied this, claiming that

the GD&T scores alone made Folden the least qualified, as reflected

by the April 20 memorandum. Mike Furrow, another level III inspector, claims that he approached Bullock and registered a complaint,

 7
saying that it was unfair to transfer Folden because Folden's second

GD&T score was higher than his. Furrow testified that Bullock

responded by showing him a spreadsheet printout with test scores that

included QS-1 scores. Bullock denied showing him these sheets, but

the ALJ found Furrow's version to be credible. The ALJ thus found

that Bullock told Furrow that he based his decision to transfer Folden

on both the GD&T and QS-1 test scores.

On May 26, 1994, nine days after the transfer, Folden read an article in the company newsletter which said that an employee could not

be transferred to a new shift because of his QS-1 scores. This article

was a response to rumors that QS-1 scores were a factor in Folden's

transfer to the second shift. After reading the newsletter, Folden went

to two supervisors and told them that he thought the article was

wrong. These supervisors, in turn, informed Bullock of what Folden

had said.

The next day, Bullock called Folden into his office and questioned

him in the presence of Robert King, another Medeco supervisor. Bullock handed the April 20 memorandum to Folden and asked him if

there was something that he did not understand. The memo clearly

stated that Folden would be considered the least qualified level III

inspector because of his GD&T score and that the discussions at the

April 20 meeting would be kept confidential. Bullock claims that Folden gave no response, Folden claims that he was not allowed to

respond, and King claims that Folden repeatedly answered "I don't

know." Bullock then fired Folden. Bullock contends this action was

because Folden lied about the reason for his transfer, but both Folden

and King testified that Bullock said that Folden was fired for the "disruptive behavior" of telling others that he was transferred because of

his test scores. Folden tried to explain to Bullock as he was being

escorted out of the plant that there had been a misunderstanding, but

Bullock did not give him an opportunity to explain himself. The ALJ

and the Board found that Folden's termination and his prior transfer

to the second shift were both motivated by anti-union animus and that

the April 20 "confidentiality statement" illegally restricted rights protected by the National Labor Relations Act ("NLRA" or "Act").

B.

Louis Rickman worked for Medeco from 1985 until he quit his job

in November of 1994. In early October 1994 Rickman received a

 8
head injury in his ninth job-related accident in less than three years.

Because of this history of accidents, Rickman was suspended pending

a "fitness for duty exam," Medeco's term for a drug screening test.

Rickman ultimately tested negative for drug use. However, Rickman

was told orally by his supervisor and in a memorandum that he could

not discuss the drug test with other employees. Specifically, the memorandum prohibited him from having "discussions pertaining to [the]

fitness for duty exam with co workers as this would be disruptive to

our team concept and result in further disciplinary actions." When he

was told this by his supervisor, Rickman answered by saying that "the

plant was already aware that I was suspended [and that t]he rumor

was that I was suspended for use of cocaine and marijuana." Rickman

added that he "didn't appreciate being labeled as a drug user." The

ALJ and the Board later ruled that this restraint on Rickman's speech

violated the Act.

C.

On September 23, 1994, the Union initiated this case by filing

unfair labor practice charges with the National Labor Relations

Board. The General Counsel issued a complaint on October 24, which

was amended three times. After a hearing was held before an administrative law judge (ALJ) on March 16, 1995, the ALJ ruled that

Medeco had committed several violations of the National Labor Relations Act. The ALJ found (1) that Medeco violated§ 8(a)(1) of the

Act by restricting the communications of Folden and Rickman and (2)

that it violated both § 8(a)(1) and § 8(a)(3) because its transfer and

termination of Folden were motivated by anti-union animus. Medeco

appealed to the Board, which affirmed and adopted the ALJ's decision and order. See Medeco Sec. Locks, Inc., 319 N.L.R.B. 224 (1995)

(Medeco I). Medeco then petitioned this court for review, but we

remanded the case to the Board at its request. The Board then

remanded the case to the ALJ for specific credibility determinations.

After the ALJ filed a supplemental decision that failed to address the

substance of the Board's remand order, the Board again remanded the

case for the same purpose. See Medeco Sec. Locks, Inc., 322 N.L.R.B.

664, 664-67 (1996) (Medeco II) (supplemental decision). The ALJ

thereafter filed a second supplemental decision that the Board

affirmed. See id. at 664, 667-68 (second supplemental decision and

 9
affirmance). Medeco now petitions this court for review, and the

Board cross-petitions for enforcement.

II.

Section 8(a)(3) of the Act prohibits an employer from engaging 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." 29 U.S.C. § 158(a)(3). Generally, an

employer violates this section "only if its actions are motivated by

anti-union animus." Goldtex, Inc. v. NLRB, 14 F.3d 1008, 1011 (4th

Cir. 1994). Because substantial evidence does not support the Board's

finding that Folden's transfer to the second shift and his subsequent

termination were motivated by anti-union animus, we deny enforcement as to the finding of a § 8(a)(3) violation.

Because an employer's motives may often be a mix of legitimate

and discriminatory reasons, the Board established a procedure in

Wright Line, 251 N.L.R.B. 1083 (1980), enforced, 662 F.2d 899 (1st

Cir. 1981), to deal with such mixed-motive cases. See also NLRB v.

Transportation Management Corp., 462 U.S. 393, 401-02 (1983)

(approving Wright Line procedure), modified in part, Director, Office

of Workers' Compensation Programs v. Greenwich Collieries, 512

U.S. 267, 276-78 (1994). Under Wright Line the General Counsel first

bears the burden of making a prima facie case that the employer's

adverse employment decision was motivated in part by discriminatory

intent. See FPC Holdings, Inc. v. NLRB, 64 F.3d 935, 942 (4th Cir.

1995); Ultrasystems W. Constructors, Inc. v. NLRB, 18 F.3d 251, 257

(4th Cir. 1994). To establish a prima facie case, the General Counsel

must prove by a preponderance of the evidence:

(1) that the employee was engaged in protected activity, (2)

that the employer was aware of the activity, and (3) that the

activity was a substantial or motivating reason for the

employer's action. Motive may be demonstrated by circumstantial as well as direct evidence, and is a factual issue

"which the expertise of the Board is peculiarly suited to

determine."

FPC Holdings, 64 F.3d at 942 (citations omitted); see also NLRB v.

CWI, Inc., 127 F.3d 319, 330-32, 331 n.7, 332 n.8 (4th Cir. 1997)

 10
(standard of proof for prima facie case is preponderance of evidence

based on whole record). Of course, the absence of a legitimate basis

for an employer's action may form part of the proof of the General

Counsel's case, while the presence of legitimate reasons can work to

negate proof of anti-union animus. See CWI, 127 F.3d at 332 (quoting

Wright Line, 251 N.L.R.B. at 1088 n.12). Even if an employer's motivation is "combined with other legitimate nondiscriminatory

motives," however, a prima facie case is nevertheless established

when "anti-union animus was a [substantial or] motivating factor" in

the employment action. See Ultrasystems, 18 F.3d at 257.

Once a prima facie case has been made, the employer may still

escape liability by presenting the affirmative defense that the discriminatory motivation, though illicit, was harmless. See Transportation

Management, 462 U.S. at 401-02; Ultrasystems, 18 F.3d at 257. To

make this defense, the employer bears the burden of proving by a preponderance of the evidence that, even though discriminatory animus

was present, "the employer nonetheless would have taken the same

employment action for legitimate reasons." Ultrasystems, 18 F.3d at

257; see also Greenwich Collieries, 512 U.S. at 278 (employer has

burden of persuasion to sustain this affirmative defense);

Transportation Management, 462 U.S. at 402; FPC Holdings, 64 F.3d

at 942. If the Board finds that the proffered reason is pretextual, we

must affirm the Board if substantial evidence supports this factual

determination. See NLRB v. Grand Canyon Mining Co., 116 F.3d

1039, 1047 (4th Cir. 1997).

The scope of our inquiry in reviewing the Board is limited. We

must affirm the Board's interpretations of the NLRA if they are "rational and consistent with the Act." NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 787 (1990) (citation omitted); see also Fall

River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42 (1987);

Transportation Management, 462 U.S. at 402-03; NLRB v. J. Weingarten, Inc., 420 U.S. 251, 266-67 (1975). Similarly, we must affirm

the Board's factual findings if they are "supported by substantial evidence on the record considered as a whole." 29 U.S.C. § 160(e); see

also CWI, 127 F.3d at 326; Fieldcrest Cannon, Inc. v. NLRB, 97 F.3d

65, 69-70 (4th Cir. 1996). Substantial evidence is"such relevant evidence as a reasonable mind might accept as adequate to support a

conclusion," and if we find such evidence on the record, we must

 11
uphold the Board's decision "even though we might have reached a

different result had we heard the evidence in the first instance." Alpo

Petfoods, Inc. v. NLRB, 126 F.3d 246, 250 (4th Cir. 1997) (internal

quotation omitted); see also Grand Canyon, 116 F.3d at 1044.

In this case, the Board adopted the ALJ's finding that anti-union

animus motivated Medeco's decision to transfer and later terminate

Folden. Because motive is a question of fact, we review this finding

only to determine if it is supported by substantial evidence. See Alpo,

126 F.3d at 250 (quoting FPC Holdings, 64 F.3d at 942); Grand

Canyon, 116 F.3d at 1047. While motive may be proven with circumstantial evidence, "mere speculation as to the employer's real

motives" is insufficient and will not be upheld as substantial evidence.

Alpo, 126 F.3d at 250 (alteration and internal quotation omitted); see

also Carry Cos. v. NLRB, 30 F.3d 922, 928 (7th Cir. 1994) ("sheer

speculation" is not substantial evidence). The ALJ found that Medeco

knew of Folden's renewed union activities in 1994 because of Folden's prominent role in the 1993 campaign, his union participation in

1994, and Folden's discussion with Bullock after the February 4

meeting of the cross-functional team. See Medeco I, 319 N.L.R.B. at

228. The ALJ further found that Medeco's anti-union propaganda

exhibited anti union animus. Id. Because neither conclusion is supported by substantial evidence on the record, we hold that the General

Counsel failed to prove a prima facie case of discrimination under

§ 8(a)(3). We now discuss each of these findings in greater detail.

A.

In Goldtex, Inc. v. NLRB we emphasized that "the most basic element" of many § 8(a)(3) cases is a showing "that the employer was

. . . aware of the discharged employees' protected activities." 14 F.3d

1008, 1011, 1012-13 (4th Cir. 1994). The ALJ found that Medeco

knew of Folden's renewed union activities in the 1994 campaign and

relied on this finding to infer animus from the events surrounding his

transfer to the second shift and his eventual termination. See

Medeco I, 319 N.L.R.B. at 228. This finding is not supported by substantial evidence, however.

Folden's only open act of aid to the 1994 organizing drive was his

receipt of some union cards in the employee parking lot. There was

 12
no evidence that Medeco had any knowledge of this. Of course, if

Folden's organizational work or his expressions of support for the

union had been more apparent or more extensive, knowledge of his

protected activities could be imputed to Medeco. See NLRB v. Instrument Corp. of America, 714 F.2d 324, 329, 330 (4th Cir. 1983)

(knowledge of union activities may be "imputed to the company"

from circumstantial evidence). However, there is nothing more of

consequence here. Folden's testimony confirms that he played a

minor role in the 1994 campaign. Even though Folden was a visible

union supporter in 1993, he affirmatively disavowed any further interest in the union to management just before the 1994 campaign. It was

reasonable for Medeco to take Folden at his word, particularly in light

of the changes at the company and Folden's acknowledgment that

things were improving.

We also conclude that Folden's complaint to Bullock concerning

Norma Doudy's inquiry about the level of union support during the

cross-functional team meeting does not constitute substantial evidence that Medeco knew of Folden's union activity. We agree with

Medeco that this incident is similar to the one in Carry Cos. v. NLRB,

30 F.3d 922, 927 (7th Cir. 1994). There an employee-warehouseman

said in the presence of a supervisor that company drivers "`had

enough authorization cards signed to have an election for the Union,

and that the warehousemen should decide what they were going to

do.'" The court concluded that this comment "did not indicate [the

employee's] view of or participation in the union campaign, and any

conclusion to the contrary[ ] is sheer speculation" that did not amount

to substantial evidence. Id. at 928. Likewise, Folden's complaint did

not reveal either his support of or participation in union activity; it

merely reflected his concern that the union drive was not a proper

topic at the team meeting. When Folden was asked by Bullock why

employees wanted a union, Folden simply gave a brief, factual answer

without expressing his own opinion.

Moreover, the fact that Bullock asked Folden this question is itself

unremarkable. This is not a case where a supervisor approached an

employee out of the blue to ask about the reasons behind a unionization drive. In such a case where the employee was known to have supported the union in the past, a factfinder might properly infer that the

supervisor's decision to ask this specific employee about the union

 13
reflected management's knowledge of the employee's continued

union support. Here, however, Folden served on a Medeco committee

whose very function was to collect employee concerns and pass them

on to management. Moreover, Folden himself raised the union issue

(although in a neutral fashion) by bringing his complaint about Doudy

to Bullock. Together, these facts illustrate that Bullock's question

about why employees wanted a union, when viewed in context, is not

substantial evidence to support a finding that Medeco knew of Folden's union sympathies.

Folden's minimal role in the 1994 campaign, his clear expression

to management that he no longer was interested in the union, the neutral nature of his complaint about Doudy's question at the team meeting, and the benign nature of Bullock's question to Folden all lead us

to conclude that there is a lack of substantial evidence to support the

finding that Medeco was aware of Folden's union activity.

B.

We recognize that a company can violate § 8(a)(3) by disciplining

or firing employees who are not union sympathizers in an effort to

send an anti-union message or to otherwise discourage union membership. Nevertheless, some evidence of anti-union animus is essential for such a case, see Alpo, 126 F.3d 255-56 (citing cases), and that

evidence is not present here.

The ALJ relied on Medeco's anti-union propaganda campaign to

support his finding of "company animus against the Union."

Medeco I, 319 N.L.R.B. at 228. This finding cannot stand. "[A]n

employer's speech that does not threaten reprisal or force, or promise

a benefit, in relation to union activities is unqualifiedly privileged

under [§ 8(c) of] the Act." Alpo, 126 F.3d at 252; see also 29 U.S.C.

§ 158(c); Louisberg Sportswear Co. v. NLRB, 462 F.2d 380, 385-86

(4th Cir. 1972) (company propaganda campaign presenting truthful

but skewed perspective that portrayed unions "in a most unfavorable

light" was protected since it did not threaten reprisal or promise benefit); Corrie Corp. v. NLRB, 375 F.2d 149, 153 (4th Cir. 1967) (finding

employer's statement was not protected in light of other circumstances that made statement coercive). Section 8(c) plainly states that

the

 14
expressi[on] of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or

visual form, shall not constitute evidence of an unfair labor

practice . . . [unless it] contains [a] threat of reprisal or force

or promise of benefit.

29 U.S.C. § 158(c). Consequently, speech protected by that section

cannot be used by the General Counsel to establish an employer's

anti-union animus. See Alpo, 126 F.3d at 252. Otherwise "[a]n

employer's lawful anti-union speech [would] be chilled by the return

threat that the Board may use it as evidence of unlawful motivation."

Id. This impermissible result would completely undermine § 8(c) by

rendering its protection an empty promise.

Medeco's propaganda campaign clearly falls within the protection

of § 8(c) because there is no indication that the company's speech was

coercive or contained any implicit threats or promises of benefits.

Thus, evidence about the company's campaign cannot be used by the

General Counsel to prove anti-union animus.

In sum, there is no substantial evidence to support either the

Board's conclusion that Medeco knew of Folden's pro-union activities or its conclusion that Medeco exhibited anti-union animus more

generally. As a result, the General Counsel has failed to establish a

prima facie case, and the Board's ruling that Medeco violated

§ 8(a)(3) cannot be enforced.

III.

We now turn to the § 8(a)(1) violations, where substantial evidence

does support the Board's findings. The evidence clearly reveals that

Medeco committed three independent violations of § 8(a)(1) by prohibiting Folden and Rickman from discussing matters concerning the

conditions of their employment and by firing Folden for discussing

such matters.

Section 8(a)(1) of the National Labor Relations Act makes it an

unfair labor practice for an employer "to interfere with, restrain, or

coerce employees in the exercise of the rights guaranteed in" § 7 of

 15
the Act. 29 U.S.C. § 158(a)(1). If protected activity is implicated, the

well-settled test for § 8(a)(1) violations is whether, "under all the circumstances, the employer's conduct may reasonably tend to coerce or

intimidate employees." NLRB v. Grand Canyon Mining Co., 116 F.3d

1039, 1044 (4th Cir. 1997); see also Equitable Gas Co. v. NLRB, 966

F.2d 861, 866 (4th Cir. 1992). It matters "`not whether the [employer's] language or acts were coercive in actual fact.'" Equitable Gas,

966 F.2d at 866; see also Corrie Corp. v. NLRB, 375 F.2d 149, 153

(4th Cir. 1967). Our inquiry instead focuses on "`whether the conduct

in question had a reasonable tendency in the totality of circumstances

to intimidate.'" Equitable Gas, 966 F.2d at 866. This question of

"[w]hether particular conduct is coercive is a `question essentially for

the specialized experience of the NLRB,'" Grand Canyon, 116 F.2d

at 1044, and we grant considerable deference to its determinations.

Establishing the existence of coercive conduct, however, does not

end our analysis. We must balance the employee's protected right

against any substantial and legitimate business justification that the

employer may give for the infringement. "[I]t is only when the interference with § 7 rights outweighs the business justification for the

employer's action that § 8(a)(1) is violated." Textile Workers Union

of America v. Darlington Mfg. Co., 380 U.S. 263, 269 (1965); see

also Eastex, Inc. v. NLRB, 437 U.S. 556, 570-74 (1978) (balancing

interests); J.P. Stevens & Co. v. NLRB, 547 F.2d 792, 794 (4th Cir.

1976). This determination is also squarely within the expertise of the

Board. "`[I]t is the primary responsibility of the Board and not the

courts `to strike the proper balance between the asserted business justifications and the invasion of employee rights in light of the Act and

its policy."" Jeannette Corp. v. NLRB, 532 F.2d 916, 918 (3d Cir.

1976) (quoting NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378

(1967)). On review, we must affirm the Board's balancing if it is

rational and consistent with the Act. See Beth Israel Hosp. v. NLRB,

437 U.S. 483, 501 (1978); see also Charles D. Bonanno Linen Serv.,

Inc. v. NLRB, 454 U.S. 404, 409-10, 417 (1982).

Consequently, an independent violation of § 8(a)(1) exists when (1)

an employer's action can be reasonably viewed as tending to interfere

with, coerce, or deter (2) the exercise of protected activity, and (3) the

employer fails to justify the action with a substantial and legitimate

business reason that outweighs the employee's § 7 rights.

 16
A.

1.

To determine if Medeco violated § 8(a)(1) by prohibiting Folden

from talking to other employees about his test score performance and

its effect on his transfer, we must determine if the above three conditions are met. Because the confidentiality statement's sanction of termination clearly is coercive, we turn our focus to whether Medeco's

action implicates protected conduct.

An employer's coercive action affects protected rights whenever it

can have a deterrent effect on protected activity. See NLRB v. Vanguard Tours, Inc., 981 F.2d 62, 66-67 (2d Cir. 1992); Jeannette, 532

F.2d at 918. This is true even if an employee has yet to exercise a

right protected by the Act. The rationale for this rule is straightforward. Section 8(a)(1) reaches all acts by employers that "interfere

with, restrain, or coerce" their employees' exercise of protected

rights, see 29 U.S.C. § 158(a)(1), and this requires that the section

reach employer conduct even when employees have yet to engage in

protected activity. As we state above, the test is not whether the

employer's action was coercive in fact, but whether it reasonably

tends to coerce or deter the exercise of protected rights. We find that

Medeco's blanket prohibition against discussing the circumstances

surrounding Folden's transfer affected protected rights because it covered communications that would be protected by the Act.

The right of employees "to engage in . . . concerted activities for

the purpose of . . . mutual aid or protection" is established by § 7 the

National Labor Relations Act. See 29 U.S.C.§ 157. This protection

applies even to activities that do not involve unions or collective bargaining. Halstead Metal Prods. v. NLRB, 940 F.2d 66, 69 (1991).

Thus, any actions taken by employees that are both (1) concerted and

(2) performed for the purpose of mutual aid or protection are protected by the Act. See New River Indus. v. NLRB, 945 F.2d 1290,

1294 (4th Cir. 1991).

We have previously recognized that action by an individual is a

"concerted" action under the Act so long as it is "`intended to enlist

the support and assistance of other employees.'" Krispy Kreme

 17
Doughnut Corp. v. NLRB, 635 F.2d 304, 307-08, 307 n.6 (4th Cir.

1980) (following Mushroom Transp. Co. v. NLRB, 330 F.2d 683, 685

(3d Cir. 1964)); see also Blaw-Knox Foundry & Mill Machinery Inc.

v. NLRB, 646 F.2d 113, 115-116 (4th Cir. 1981). Folden's discussion

of the events surrounding his transfer certainly could be a central part

of any effort to enlist the support of his coworkers in addressing the

terms and conditions of their employment. It is clear in this case that

the possible impact of the GD&T and QS-1 test scores on an employee's qualifications was an issue of common concern to employees.

Employee discussions of these topics in the midst of a union campaign could clearly be protected activities that are concerted and performed for mutual aid and protection. Information about such issues

is the very fuel on which unionization campaigns are run, and to prevent the dissemination of first-hand accounts of a company's treatment and evaluation of its employees frustrates the rights that § 7

seeks to protect.3

Medeco's action in prohibiting such discussions is thus no different

than other blanket rules prohibiting the discussion of employment

conditions that have repeatedly been held to violate the Act. See, e.g.,

Handicabs, Inc. v. NLRB, 95 F.3d 681, 684-85 (8th Cir. 1996) (rule

prohibiting employees from discussing problems or complaints about

company with customers was invalid because it was not narrowly

drawn); Aroostook County Reg'l Ophthalmology Ctr. v. NLRB, 81

F.3d 209, 212 (D.C. Cir. 1996) (acknowledging that, "under the

NLRA, employees are generally free to discuss the terms and conditions of their employment"); Wilson Trophy Co. v. NLRB, 989 F.2d

1502, 1510-11 (8th Cir. 1993) (rule banning wage discussions during

working hours was invalid where its application to break times was

not justified by productivity or safety concerns); NLRB v. Vanguard

Tours, Inc., 981 F.2d 62, 66-67 (2d Cir. 1992) (rule prohibiting

employees from discussing issues such as hours, wages, and workplace conditions violated § 8(a)(1) "even absent evidence of [its]

enforcement"); Jeannette, 532 F.2d at 918 & n.2, 920 (rule prohibiting wage discussions violates § 8(a)(1) because wage discussions can

_________________________________________________________________

3 We need not decide whether Folden's actual conversations were protected by the Act. It is enough to conclude that the "confidentiality statement" affected discussions that could be protected by the Act. See

Jeannette, 532 F.2d at 918 & n.2, 920.

 18
be protected activity; declining to rule whether actual discussions

were protected); Waco, Inc., 273 N.L.R.B. 746, 747-48 (1984) (unenforced rule banning discussion of wages invalid when not justified by

"substantial and legitimate business reasons"); IBM Corp., 265

N.L.R.B. 638, 638 (1982) (finding policy that forbid discussion of

internal records of employee wages infringes on § 7 rights, but ruling

that policy was justified by confidentiality concerns). The danger

inherent to such rules, even when they are not enforced, is their

"likely chilling effect" on protected rights. See Vanguard Tours, 981

F.2d at 67. Because of its potential to deter protected activities, we

hold that Medeco's blanket prohibition against Folden's discussion of

the circumstances surrounding his transfer was coercive and implicates protected conduct.

Therefore, we address the third requirement of a§ 8(a)(1) violation

by balancing Medeco's business justification for this restriction

against its employees' § 7 rights. Bullock testified that "[t]he intent of

the confidentiality statement . . . was to ward off any perception of

favoritism that . . . could have been interpreted[from] giving [Folden]

additional time to take the exam." This reason, however, is not a substantial and legitimate business reason that would justify Medeco's

infringement on employee rights. Any perceived favoritism could

most easily be dispelled by fully disclosing the facts and the rationale

behind Bullock's decision. Given that Folden was ill and absent from

the last GD&T review classes, employees might easily conclude that

Bullock acted fairly in giving Folden another chance at the exam and

that no favoritism existed. On the other hand, if employees were to

find this treatment preferential, this type of information would be

essential to the very discussions about working conditions that the Act

protects. Suppressing this discussion by prohibiting employees from

sharing the facts surrounding the terms and conditions of their

employment cannot be justified here. We therefore conclude that the

confidentiality statement is coercive and implicates protected rights

that are not outweighed by a substantial and legitimate business justification. As such, we hold that it violates § 8(a)(1).

Medeco's assertion that it lacks anti-union animus does not affect

this determination. Unlike violations of § 8(a)(3), an employer's antiunion motivation is not a required element of § 8(a)(1). See StandardCoosa-Thacher Carpet Yarn Div., Inc. v. NLRB, 691 F.2d 1133, 1138

 19
& n.6 (4th Cir. 1982) (courts reviewing independent§ 8(a)(1) violations decide if employer's actions are coercive and do not inquire into

anti-union animus; this discriminatory intent is element of § 8(a)(3)

alone). The Board has long held that "interference, restraint, and coercion under Section 8(a)(1) of the Act does not turn on the employer's

motive," see American Freightways Co., 124 N.L.R.B. 146, 147

(1959), and the federal courts have reflected this position. See, e.g.,

Textile Workers Union of America v. Darlington Mfg. Co., 380 U.S.

263, 269 (1965) ("A violation of § 8(a)(1) alone . . . presupposes an

act which is unlawful even absent a discriminatory motive."); NLRB

v. Burnup & Sims, Inc., 379 U.S. 21, 22-24 (1964) (finding violation

of § 8(a)(1) "whatever the employer's motive"); Wyman-Gordon Co.

v. NLRB, 654 F.2d 134, 145 (1st Cir. 1981) (test is objective coerciveness; employer intent is not part of offense); Caterpillar Tractor Co.

v. NLRB, 638 F.2d 140, 141 (9th Cir. 1981) (no need to inquire into

motive if employer does not have legitimate business justification);

National Cash Register Co. v. NLRB, 466 F.2d 945, 962-63 (6th Cir.

1972) ("lack of unlawful motive is not a defense to a section 8(a)(1)

charge"); Crown Central Petroleum Corp. v. NLRB, 430 F.2d 724,

727-29 (5th Cir. 1970) (unlike § 8(a)(3),§ 8(a)(1) does not require

"unlawful motive"); Welch Scientific Co. v. NLRB, 340 F.2d 199, 203

(2d Cir. 1965) ("cases clearly demonstrate that it is the tendency of

an employer's conduct to interfere with the rights of his employees

protected by Section 8(a)(1), rather than his motives, that is controlling"). As the Supreme Court explained in Burnup, this rule that intent

is not a necessary element of § 8(a)(1) is

in conformity with the policy behind [that section]. Otherwise the protected activity would lose some of its immunity

. . . . A protected activity acquires a precarious status if

innocent employees can be discharged while engaging in it,

even though the employer acts in good faith. It is the tendency of those discharges to weaken or destroy the§ 8(a)(1)

right that is controlling.

379 U.S. at 23-24.4 Consequently, Medeco's claim that the evidence

_________________________________________________________________

4 While anti-union animus may come into play in analyzing whether

the employer's justification is legitimate, it is not an element of § 8(a)(1).

 20
fails to show discriminatory intent cannot save it from liability under

§ 8(a)(1).

2.

Because we hold that Medeco's "confidentiality statement" violates

§ 8(a)(1), it is also clear that Folden's termination for his breach of

this confidentiality also violates § 8(a)(1). Although Medeco claims

that Folden was terminated for lying and that he was not fired for discussing his transfer, the ALJ's factual findings fatally undermine this

argument. First, the ALJ found that Folden was telling the truth and

that Bullock had in fact told both Folden and Furrow that QS-1 and

GD&T scores were used in the transfer decision. See Medeco II, 322

N.L.R.B. at 664 & n.2, 667-68; Medeco I, 319 N.L.R.B. at 226. In

reaching this conclusion, the testimony of both Folden and Furrow

was credited, and we see no reason to question this credibility determination.

_________________________________________________________________

See National Cash Register, 466 F.2d at 963 ("the absence of improper

motive is relevant only to the extent it makes credible the asserted existence of legitimate business reasons for the employer's decision"). Similarly, cases recognizing that anti-union animus can transform an

otherwise legitimate act into a coercive act which violates § 8(a)(1) do

not change this conclusion. See, e.g., NLRB v. Exchange Parts Co., 375

U.S. 405, 409 (1964) (employer's provision of benefit to employees

made with "express purpose" of discouraging unionization violates

§ 8(a)(1)); Halstead Metal Prods. v. NLRB, 940 F.2d 66, 70-71 (4th Cir.

1991) ("retaliatory action motivated by an employee's participation in, or

instigation of, [protected] activity violates section 8(a)(1)").

We also note that cases sometimes fail to distinguish carefully between

independent § 8(a)(1) violations and derivative violations which require

motive. This confusion arises because a § 8(a)(3) violation necessarily

involves a "derivative violation of § 8(a)(1)." Metropolitan Edison Co. v.

NLRB, 460 U.S. 693, 698 n.4 (1983); see also New River Indus. v. NLRB,

945 F.2d 1290, 1295 n.3 (4th Cir. 1991); Microimage Display Div. of

Xidex Corp. v. NLRB, 924 F.2d 245, 250 (D.C. Cir. 1991) (violations of

§ 8(a)(2)-(5) yield derivative violations of § 8(a)(1)). Consequently,

cases which involve both § 8(a)(1) and (3) may blur the line between

these two offenses.

 21
The ALJ also found that when Bullock fired Folden, Bullock told

him that he had "violated the `confidentiality' statement and had been

disruptive." Medeco I, 319 N.L.R.B. at 227. This is corroborated not

only by Folden's testimony but also by that of Robert King, a plant

supervisor. King, who was present at the May 27, 1994, termination

meeting, testified that Bullock told Folden that Folden's discussions

with fellow employees about his transfer were "considered disruptive

behavior [constituting] grounds for dismissal and, therefore, he would

be dismissed effective immediately." Consequently, it is clear from

the record that Folden was fired not for "lying" but instead for his violation of the confidentiality agreement, which provided that "[a]ny

sharing of this information with any other [employees] will be interpreted as disruptive in nature and result in termination." Because the

memo's prohibition standing alone violates § 8(a)(1), § 8(a)(1) also

forbids firing Folden for violating this illegal prohibition.

B.

When Medeco forbade Lewis Rickman from discussing his

required drug test, this restriction had a reasonable tendency to deter

the exercise of protected rights for the same reason that the "confidentiality statement" did. Moreover, Medeco's justification that not discussing the incident would better protect Rickman's reputation clearly

falls short since Rickman himself wanted to dispel rumors that he was

suspended for cocaine and marijuana use. The best way to do this

would have been to reveal that Rickman passed the drug screen. This

is not a situation in which a company forbids an employee from discussing another's drug test without permission. That prohibition could

be a substantial and legitimate business reason based on concerns for

the tested employee's privacy. Cf. IBM Corp., 265 N.L.R.B. 638, 638

(1982) (policy that forbid discussion of internal records of employee

wages was justified by need to keep wages of company's employees

confidential; policy did not prevent discussion of employee's own

wages). Here, Rickman's reputation is a matter of personal concern

to him, and the company cannot legitimately prevent him from

attempting to air the facts in a manner that he believes will restore his

good name. Consequently, we affirm the Board's ruling that Medeco

restricted Rickman's speech in violation of § 8(a)(1).5

_________________________________________________________________

5 Medeco's claim that it was denied a fair hearing because the ALJ was

biased is without any merit. We find no evidence of bias on this record.

 22
IV.

Because substantial evidence does not support the Board's finding

of anti-union animus, we deny enforcement of the Board's order insofar as it relates to the transfer of Folden to the second shift. However,

we grant enforcement of the Board's order as to the violations of

§ 8(a)(1) that resulted from Medeco's restriction of employee communications and from the termination of William Folden. 

ENFORCEMENT GRANTED IN PART

AND DENIED IN PART

_________________________________________________________________

Similarly, Medeco's citation to prior cases over which the ALJ presided

is irrelevant to the issues raised in this proceeding. See Fieldcrest Cannon, Inc. v. NLRB, 97 F.3d 65, 69 (4th Cir. 1996) ("A decision-maker's

ruling deserves to rise or fall on the case at hand, not on the results in

other cases that have little bearing on the issues before us.").

 23