PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

UNION OF NEEDLETRADES,

INDUSTRIAL AND TEXTILE EMPLOYEES,

AFL-CIO, CLC,

No. 98-1137

Intervenor,

v.

FLAMBEAU AIRMOLD CORPORATION,

Respondent.

On Application for Enforcement of an Order

of the National Labor Relations Board.

(11-CA-17591)

Argued: October 26, 1998

Decided: May 26, 1999

Before WILKINS and NIEMEYER, Circuit Judges, and

BLAKE, United States District Judge for the

District of Maryland, sitting by designation.

_________________________________________________________________

Petition for enforcement granted by published opinion. Judge Blake

wrote the majority opinion, in which Judge Wilkins joined. Judge

Niemeyer wrote a dissenting opinion.

_________________________________________________________________

COUNSEL

ARGUED: David Arthur Fleischer, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Petitioner. John Raymond
Sapp, MICHAEL, BEST & FRIEDRICH, L.L.P., Milwaukee, Wisconsin, for Respondent. David Malcolm Prouty, UNITE, AFL-CIO,

CLC, New York, New York, for Intervenor. ON BRIEF: Frederick

L. Feinstein, Acting General Counsel, Linda Sher, Associate General

Counsel, Aileen A. Armstrong, Deputy Associate General Counsel,

NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for

Petitioner. Jonathan O. Levine, Mark E. Toth, MICHAEL, BEST &

FRIEDRICH, L.L.P., Milwaukee, Wisconsin, for Respondent. Jonathan R. Harkavy, PATTERSON, HARKAVY & LAWRENCE,

Greensboro, North Carolina, for Intervenor.

_________________________________________________________________

OPINION

BLAKE, District Judge:

This case is before the court on the application of the National

Labor Relations Board ("NLRB" or "Board") for enforcement of its

November 1997 order requiring Flambeau Airmold Corporation

("Flambeau") to bargain with the Union of Needletrades, Industrial,

and Textile Employees, AFL-CIO, CLC ("Union") as the exclusive

collective bargaining representative of the employees at Flambeau's

manufacturing facility located in Roanoke Rapids, North Carolina.

Flambeau contends that it need not bargain with the Union because

the certification election in which the Union prevailed was rendered

invalid by a racially inflammatory rumor that spread throughout the

plant the day before the election. Because we conclude that the

Board's decision to certify the Union was reasonable and supported

by substantial evidence, we enforce the Board's order.

I.

Flambeau operates a blow molding plastics plant in Roanoke Rapids, North Carolina. On March 22, 1996, the Union filed an election

petition with the NLRB seeking to represent "[a]ll production, maintenance, shipping and receiving employees" at the plant. A secret ballot election under the Board's supervision was held at the plant on

May 2, 1996. The Union won the election by 96 votes to 94 votes.

Flambeau filed timely objections to conduct affecting the results of

 2
the election. Pertinent to this proceeding, Flambeau contended that

the Union had "made objectionable racial appeals during the initial

pre-election period which interfered with the laboratory conditions

necessary for a free and fair election." A hearing was held on June 12-

13, 1996, before an NLRB Hearing Officer in order to resolve the

issues raised by Flambeau's objections.

The evidence developed at the hearing revealed that on May 1,

1996, the day before the election, a rumor began to circulate among

Flambeau's employees to the effect that during a supervisor's meeting

held that morning, one of the white managers had referred to employees as "niggers." Two-thirds of Flambeau's approximately 200

employees are African-American, and the Union campaign had

included what could be interpreted as appeals to racial solidarity.1 The

Hearing Officer found that the rumor had spread widely throughout

the plant prior to the election, but that neither the source of the rumor

nor its truth or falsity could be determined. The Hearing Officer further found that both pro-company and pro-Union employees, as well

as both white and black employees, had contributed to the rumor's

spread.

Flambeau's position is that this patently offensive rumor "made

racial hatred an issue in the election" and "so inflame[d] the racial

feelings" of the employees as to render the election fundamentally

unfair. The Hearing Officer below disagreed. Applying a third-party

conduct standard, the Hearing Officer concluded that, although the

rumor "would upset any social[ly] conscious individual," it had not

"destroyed the laboratory conditions necessary for a free and fair election" or "aggravate[d] the situation to the point of rendering a free

election impossible." Accordingly, he recommended that Flambeau's

objections to the election be overruled and that a certification of representative be issued. The Board adopted the Hearing Officer's findings and recommendations and certified the Union on April 8, 1997.

In its decision, the Board held that "the rumored remark, and the circulation of the rumor on the day of the election, did not so inflame

_________________________________________________________________

1 As the dissent acknowledges, however, up until May 1, 1996, there

was no evidence of any explicit racial appeals and no suggestion that the

employees could not have exercised an uninhibited free choice.

 3
and taint the atmosphere in which the election was held that a reasoned basis for choice was impossible."2

Thereafter, in order to obtain judicial review of the Board's decision, Flambeau refused to bargain with the Union. The Union

responded by filing an unfair labor practices charge against the company. On November 7, 1997, the NLRB issued a Decision and Order

finding that Flambeau's refusal to bargain with the Union violated

sections 8(a)(5) and (1) of the National Labor Relations Act, 29

U.S.C. §§ 158(a)(5), (1). Since Flambeau continues to refuse to bargain with the Union on the grounds that it was improperly certified,

the Board now seeks enforcement of its November 1997 order.

II.

The results of a Board-supervised representation election are presumptively valid. NLRB v. Columbia Cable T.V. Co., 856 F.2d 636,

638 (4th Cir. 1988). This presumption reflects Congress's decision to

"entrust[ ] the Board with a wide degree of discretion in establishing

the procedure and safeguards necessary to insure the fair and free

choice of bargaining representatives by employees." NLRB v. A.J.

Tower Co., 329 U.S. 324, 330 (1946). We may not substitute our

judgment for that of the Board, even if we would have made a different decision had the matter been before us de novo. So long as the

Board's decision is reasonable and based upon substantial evidence

in the record considered as a whole, it must be upheld. See 29 U.S.C.

§ 160(e); Universal Camera Corp. v. NLRB , 340 U.S. 474, 488

(1951).

"The Board's stated goal in regulating the conduct of representation elections is to `provide a laboratory in which an experiment may

be conducted, under conditions as nearly ideal as possible, to determine the uninhibited desires of the employees.'" Case Farms of North

Carolina, Inc. v. NLRB, 128 F.3d 841, 844 (4th Cir. 1997) (quoting

_________________________________________________________________

2 We believe the dissent is in error when it asserts that in reaching this

decision, the Board did not consider various factors that the Board traditionally has applied when determining the validity of representation elections, including the closeness of the vote and the timing of the

misconduct in relation to the election. See Joint Appendix, p. 382.

 4
General Shoe Corp., 77 N.L.R.B. 124, 127 (1948), enforced, 192 F.2d

504 (6th Cir. 1951)). Although the Board strives to maintain "laboratory conditions," a union election "by its nature is a heated affair,"

NLRB v. Herbert Halperin Distrib. Corp., 826 F.2d 287, 290 (4th Cir.

1987), and must be evaluated "in the light of realistic standards of

human conduct," Case Farms, 128 F.3d at 844 (citation omitted).

Where pre-election conduct is alleged to have invalidated a representation election, the party seeking to overturn the election, in this

case Flambeau, bears the heavy burden of proving by specific evidence not only that campaign improprieties occurred, but also that

they prevented a fair election. NLRB v. Hydrotherm, Inc., 824 F.2d

332, 334 (4th Cir. 1987). In evaluating such a challenge, less weight

will be afforded the comments and conduct of third parties than those

of the employer or union. Herbert Halperin, 826 F.2d at 290.3 In

Herbert Halperin, which involved alleged threats of violence and job

loss as well as "appeals to racial fears," we held that an election will

be set aside for third-party misconduct "only if`the election was held

in a general atmosphere of confusion, violence, and threats of violence, such as might reasonably be expected to generate anxiety and

fear of reprisal, to render impossible a rational uncoerced expression

of choice as to bargaining representative.'" Id. (quoting Methodist

Home v. NLRB, 596 F.2d 1173, 1183 (4th Cir. 1979)). This is an

objective test that does not require the Board or the court to examine

the individual thought processes of every employee who may have

been influenced by the alleged third-party misconduct.

In this case, the Board found that neither Flambeau nor the Union

was responsible for starting the unfortunate rumor at issue. Although

supporters of both sides contributed to its circulation around the plant,

this is an inadequate basis for attributing the rumor to either party.

_________________________________________________________________

3 Indeed, the dissent acknowledges the many valid reasons why it is

essential to impose a higher standard for setting aside an election where

third-party misconduct is involved, rather than conduct attributable to the

party who may be benefitted thereby. As explained in Herbert Halperin:

"The obvious reasons are that third parties are not subject to the deterrent

of having an election set aside, and third party statements do not have the

institutional force of statements made by the employer or the union." 826

F.2d at 290.

 5
The Board's decision to treat the rumor as third-party misconduct,

therefore, was reasonable and supported by substantial evidence. In

light of the test for third-party misconduct enunciated in Herbert

Halperin, supra, we agree with the Board that the rumor "did not so

inflame and taint the atmosphere in which the election was held that

a reasoned basis for choice was impossible." We acknowledge, as did

the Board, that the vote was close, and that there was indirect evidence that one employee's vote may have been affected by the rumor.

That is not sufficient, however, to invalidate the Board's conclusion,

based on all the evidence, that the rumor did not make a free and fair

election impossible.

Contrary to the dissent, we believe that the disposition of this case

is directly controlled by our decision in Herbert Halperin. In Herbert

Halperin, the company challenged the Board's decision to certify the

union following an election "in which racial appeals and animosities

allegedly played some part." Id. at 288. Among the third-party misconduct which occurred in that case were the comments "white sonsof-bitches" and "goddamn white boys" made by black pro-union

employees about pro-management white employees. Id. at 289. The

company argued that these and other similar comments warranted setting aside the election.4 This court disagreed. While we condemned

the employees' use of racial epithets, we nonetheless held that the

comments did not "suggest an atmosphere inflamed by racial tension"

or "reflect the combination of union involvement and racial, ethnic or

religious prejudice that requires an election to be overturned." Id. at

292-93. We think a similar conclusion is required under the circumstances of the present case.

Accordingly, we hold that the Board's decision to certify the Union

was reasonable and supported by substantial evidence in the record as

a whole. The Board's petition for enforcement of its November 1997

order is granted.

IT IS SO ORDERED

_________________________________________________________________

4 We cannot agree with the dissent that the comments made in Herbert

Halperin are any less an appeal to racial prejudice or an expression of

bigotry than the use of the offensive epithet in this case.

 6
NIEMEYER, Circuit Judge, dissenting:

The majority approves a representation election that was decided

by a single vote in a context where it is virtually certain that a pernicious, racially inflammatory rumor, which circulated the day before

the election, materially altered the outcome of the election. According

to the rumor, a member of management, which was predominantly

white, had, during a meeting on the day before the election, called the

employees, who were predominantly black, "a bunch of niggers." If

the facts of this case, which I describe in greater detail, below, do not

meet virtually any standard for setting aside representation elections,

I cannot conceive of any election that would be set aside because of

racially inflammatory conduct.

To affirm the election, the majority has squeezed the facts of this

case under the holding of a single, entirely inapposite case and has

ignored more than 35 years of more relevant precedent from this

court, from our sister circuits, and from published decisions of the

National Labor Relations Board. When applying all of the relevant

precedent, one can come to only one conclusion -- that the representation election in this case must be set aside.

Applying a standard derived from our precedent, as well as the precedent of other circuits and the National Labor Relations Board, I

conclude that the rumor in this case (1) represented the type of conduct that would inevitably pollute the election atmosphere necessary

for the exercise of choice and (2) undoubtedly altered the outcome of

election in this case. Accordingly, I would deny the Board's application for enforcement of its order.

I

At a representation election conducted by the National Labor Relations Board ("NLRB") at Flambeau Airmold's plant at Roanoke Rapids, North Carolina, on May 2, 1996, the employees voted in favor of

the Needletrades, Industrial and Textile Employees (the "Union"), 96

to 94. After the Board certified the Union as the exclusive collectivebargaining representative of the employees, Flambeau Airmold

refused to bargain with the Union, contending that the election was

not "free and fair." A Department of Labor hearing officer rejected

 7
Flambeau Airmold's objections to the election, and the Board, by

order dated April 8, 1997, affirmed the election and certified the

Union as the employees' exclusive collective-bargaining agent. When

Flambeau Airmold refused to bargain with the Union, the Board

issued an order dated November 7, 1997, finding that Flambeau Airmold committed an unfair labor practice by refusing to bargain, in

violation of §§ 8(a)(5) and (1) of the National Labor Relations Act,

29 U.S.C. §§ 158(a)(5), (1). 324 NLRB No. 162. On appeal to this

court, the record of the Board certification proceedings was made part

of the record in the unfair labor practice proceeding. See 29 U.S.C.

§ 159(d).

The facts of record are not disputed. The stipulated unit for the representation election at the Flambeau Airmold plant consisted of 200

employees, two-thirds of whom were African-American. The Union's

campaign leading up to the election was conscious of this racial

makeup. Union organizers maintained a record of each memberemployee's race and conducted a campaign that invoked both Christian and civil rights messages. Literature circulated on behalf of the

Union contained numerous citations to the Bible as well as references

to class struggle and the inequity between rich and poor, alluding to

management as masters and employees as workers who"slaved" for

the company. One circulated letter quoted the New Testament, "Masters, give unto your servants that which is just and equal; knowing

that ye also have a Master in heaven." Another letter stated, "Where

is the respect for the older workers that have slaved so hard for the

company and their customers." Union supporters circulated letters to

employees from the Reverend Jesse L. Jackson and from the Ministerial Alliance for Concerned Citizens. They also circulated letters

referring to Martin Luther King, Jr., Malcolm X, Abraham Lincoln,

and John F. Kennedy. One pro-Union leaflet referred to Flambeau

Airmold's general manager as "`Good Ole' Bill Budzien," and

another appeared to mock Flambeau Airmold by implying that it

wanted its employees to have the following "Qualifications: Weak

minds, Strong backs, Easily controlled, Dedicated to Bill Budzien,

Pro management, High School Diploma (optional)."

The Union also produced a campaign videotape which showed

statements by a number of Flambeau Airmold employees, all of

whom were African-American. It contained footage of African-

 8
American children and adults going to church, statements by three

African American ministers, including Jesse Jackson, who cited Martin Luther King and Jesus. It also showed statements by white workers at other plants that were unionized, talking about how their jobs

were better because of unionization. The video combined an appeal

to racial solidarity with appeals based on religion and implied promises that a union would improve wages and working conditions.

For the period before May 1, 1996, however, the record contains

no evidence of any explicit racial appeals and none of the parties suggests that the employees could not, up until then, have exercised an

uninhibited free choice.

On May 1, 1996, however, one day before the election, the circumstances changed. On that day, a rumor circulated at the plant that, at

a supervisors' meeting that morning, a white manager had referred to

the employees as "a bunch of niggers." The rumor, which circulated

quickly and widely, took on different forms. One employee testified

that she was told that plant employees "were almost called a bunch

of niggers." Another employee heard that the word"nigger" was used

in a supervisors' meeting. Another employee testified that a coworker told her that "he heard, in the supervisors' meeting that [a

manager] had said the N word." No one knows who started the rumor,

and no evidence was presented that there was any truth to the rumor.

Indeed, the meeting at which the racial slur was reputed to have been

used was attended by an African-American manager who testified

that no such remark was made.

By the time that the election occurred, virtually every employee

knew about the rumor. One pro-Union employee testified that she had

not heard of the rumor, but the hearing officer refused to credit that

testimony. Some of the employees believed the rumor to be true while

others believed it to be false. Plant management also learned of the

rumor, but made an apparently strategic decision not to "mess with

it."

At the hearing on Flambeau Airmold's objections to the election,

the hearing officer suppressed testimony as to how the rumor affected

employees' votes. During Flambeau Airmold's efforts to introduce

such evidence, he stated:

 9
Listen, I have directed the -- Mr. Beightol, the counsel for

the Employer, to not ask questions that would reveal[the

witness'] sentiments toward unionization, changing her

mind at any time or what she conveyed to anyone as it

relates to her feelings toward unionization. I do not see the

relevancy of that. We're interested in this rumor and this

rumor alone.

Notwithstanding the hearing officer's position on this type of evidence, testimony was received without objection from an employee

in the unit, Carolyn Banks, that at least one employee in the unit

changed her vote because of the rumor. Banks reported a conversation

she had with Shirley High in which High indicated that she changed

her vote because the rumor was "the last straw for her."

In his findings of fact, the hearing officer did not refer to the testimony of Carolyn Banks, which provided evidence that Shirley High

changed her vote. But otherwise he summarized fully the testimony

of the witnesses and concluded that the "material facts" were not in

dispute. He found that "an unidentified individual" caused the rumor

to circulate on May 1 after the supervisors' meeting ended at 10:00

a.m. He found that no evidence established the origin of the rumor but

that it nonetheless was "widely disseminated in the plant." He noted

that "some employees who were open union supporters contributed to

the circulation of this rumor, but the evidence[did] not support a finding that these employees were agents of the union during this campaign." Accordingly, the hearing officer concluded that the conduct

was not "attributable to either the petitioner or the Employer and there

is no finding that the rumor was either true or false." But the officer

found it undisputed that "a rumor alleging that a company official called employees `niggers' would upset any social[ly] conscious individual." He continued, "The word `nigger' is demoralizing, degrading,

and naturally offensive." The officer concluded, however, that the

rumor did not "aggravate the situation to the point of rendering a free

election impossible." He accordingly recommended overruling Flambeau Airmold's objection.

On appeal to the NLRB, the Board adopted the factual findings of

the hearing officer and agreed with his recommendation. In doing so,

the Board applied the following standard in upholding the election:

 10
We also agree with the hearing officer that the employees'

circulation of the rumor did not, under the circumstances,

create an atmosphere of fear and coercion such that a free

and fair election was not possible. . . . The evidence presented by the Employer of the employees' pre-election-day

circulation of the rumor here does not rise to the level of a

"sustained appeal to racial prejudice." . . . Moreover, the

rumored remark, and the circulation of the rumor on the day

of the election did not so inflame and taint the atmosphere

in which the election was held that a reasoned basis for

choice was an impossibility.

(Emphasis added).

II

Flambeau Airmold contends on appeal that the Board failed to take

a proper account of the facts by employing the wrong legal standard

for determining whether the representation election was accurate in

determining the desires of the employees. It does not challenge the

hearing officer's factual findings, but only the application of those

findings to the law.

In upholding the election, the Board applied a standard which

required it to find that the third-party conduct rose to the level of a

"sustained appeal to racial prejudice" which so "inflamed and tainted"

the atmosphere before the election that any "reasoned basis for choice

was an impossibility," or which so created "an atmosphere of fear and

coercion such that a free and fair election was not possible." In applying this standard, the Board did not consider the factors that it had

applied over the years when determining the validity of elections.

These factors include (1) the closeness of the vote, (2) the timing of

the misconduct in relationship to the election, (3) the extent to which

the knowledge of the misconduct was disseminated among eligible

voters, (4) the seriousness of the misconduct, and (5) the degree of

persistence of the misconduct in the minds of the eligible voters. See,

e.g., Phillips Chrysler Plymouth, Inc., 304 NLRB 16, 16 (1991).

When reviewing a Board decision to uphold a certification election,

we reverse only if the Board has abused its discretion. See Case

 11
Farms of North Carolina, Inc. v. NLRB, 128 F.3d 841, 844 (4th Cir.

1997); Industrial Acoustics Co. v. NLRB, 912 F.2d 717, 719 (4th Cir.

1990). The Board, however, is bound to follow the law as set forth

by the relevant court of appeals, see Industrial Turnaround Corp. v.

NLRB, 115 F.3d 248, 254 (4th Cir. 1997), and we review the legal

conclusions of the Board and its hearing officers de novo. See NLRB

v. C.W.I. of Maryland, Inc., 127 F.3d 319, 330 (4th Cir. 1997). In

short, where the Board has made a legal error, we are required to correct it. See Virginia Concrete Co. v. NLRB, 75 F.3d 974, 980 (4th Cir.

1996).

The Board's stated goal in regulating the conduct of representation

elections is to "provide a laboratory in which an experiment may be

conducted, under conditions as nearly ideal as possible, to determine

the uninhibited desires of the employees." Case Farms, 128 F.3d at

844 (citation omitted). The Board has also recognized that such laboratory conditions are made impossible by electoral propaganda,

appeals, or arguments which are intended solely"to inflame the racial

feelings of voters in the election." Sewell Manufacturing Co., 138

NLRB 66, 71 (1962). Indeed, it is self-evident that racial appeals,

whether in union campaigns or in broader contexts, pollute the atmosphere necessary for a free and rational election because, when unrelated to an election campaign issue, they can only have the effect of

inflaming passions and distorting the sober, informed exercise of the

franchise. See NLRB v. Schapiro & Whitehouse, Inc., 356 F.2d 675,

679 (4th Cir. 1966) (vacating a representation election because the

union's "call upon racial pride or prejudice in the contest could `have

no purpose except to inflame the racial feelings of the voters in the

election'"); see also Schneider Mills, Inc. v. NLRB, 390 F.2d 375,

379-80 (4th Cir. 1968) (invalidating an election in which union literature compared the company's president to Hitler).

The facts of Schapiro & Whitehouse demonstrate the breadth of the

Sewell doctrine and our application of it. In that case, the NLRB certified a representation election, but we denied enforcement because of

relatively mild racial appeals contained in two leaflets distributed by

the union during the election campaign. One leaflet stated that "the

people at Cambridge didn't get scared nor did they give up because

their friends were arrested." Id. at 678. This reference to Cambridge,

we noted, "was an allusion to recent racial strife there." Id. at 679.

 12
The second leaflet contained a newspaper article describing how a

black member of the Maryland House of Delegates had criticized

other black leaders for demonstrating for "social rights" while overlooking "the real Negro problem of unfair employment practices." Id.

In overruling the NLRB, we stated:

This type of propaganda is deplorable. . . . Equality of race

in privilege or economic opportunity was not presently an

issue. That a majority of the employees were Negroes did

not make it so. For the union to call upon racial pride or

prejudice in the contest could "have no purpose except to

inflame the racial feelings of voters in the election."

Id. (quoting Sewell, 138 NLRB at 71).

Accordingly, both the Board in Sewell and this court in Schapiro

& Whitehouse have concluded that when a party to a representation

election wins the election based on its appeal to racial prejudice on

matters unrelated to election issues, the election must be set aside. As

the Board admonished in Sewell and we adopted in Schapiro &

Whitehouse,

The Board does not intend to tolerate as "electoral propaganda" appeals or arguments which can have no purpose

except to inflame the racial feelings of voters in the election.

356 F.2d at 679 (quoting Sewell, 138 NLRB at 71).

In this case, however, the Board found no evidence that either of

the parties had engaged in race-based misconduct. Neither Flambeau

Airmold nor the Union initiated the rumor, although supporters on

both sides apparently spread it. But the Board observed, this is an

inadequate basis to attribute the conduct to either Flambeau Airmold

or the Union. When we cannot attribute race-based misconduct, in

this case the initiation of a pernicious rumor, to a party but only to

a third party, we apply a higher standard for setting aside an election.

As we explained in NLRB v. Herbert Halperin Distributing Corp.,

because "third parties are not subject to the deterrent of having an

election set aside and third-party statements do not have the institu-

 13
tional force of statements made by the employer or the union," "[l]ess

weight is accorded the comments and conduct of third parties than to

those of the employer or union." 826 F.2d 287, 290 (4th Cir. 1987)

(citation omitted). Moreover, in the absence of a heightened threshold, third parties or even parties themselves might be tempted to

create anonymous incidents in attempts to set aside an election. See

Bush Hog, Inc. v. NLRB, 420 F.2d 1266, 1269 (5th Cir. 1969).

Although the more relaxed Sewell standard for setting aside elections

bars parties from making inflammatory race-based appeals by denying them the benefit of an election victory, it could, if applied to thirdparty conduct, lead to an endless cycle of elections because interested

employees could repeatedly undermine elections by spreading inflammatory, race-based rumors. Because it would be impossible to know

which side a third party favored, secretly pro-company employees

could spread inflammatory rumors favorable to the union, thus invalidating the union's anticipated victory, and vice versa.

Even though we have not yet specifically addressed the issue of

race-based appeals introduced by third parties during representation

election campaigns, the majority holds that the standard we applied

in Halperin -- that an election need not be set aside unless "an atmosphere of fear and coercion rendered free choice impossible" --

applies to this case because in Halperin racial conduct "played some

part." This application of Halperin is fundamentally in error. Halperin

did not turn on the existence of racially inflammatory conduct. It recognized that conduct is not classified as racially inflammatory simply

because race is mentioned. Rather, our precedent makes amply clear

that conduct is racially inflammatory only if there is an appeal to the

racial prejudice of the workers or an accusation that management or

the union is bigoted. See Case Farms, 128 F.3d at 846. Thus, when

a union has appealed to workers' racial prejudice or has compared a

manager to Hitler, we have set aside elections, see Schapiro &

Whitehouse, 356 F.2d 675; Schneider Mills , 390 F.2d 375, but when

there was "no appeal to racial prejudice, and[no] accus[ation] of bigotry," although there was much mention of ethnicity, we have

declined to set aside an election, Case Farms , 128 F.3d at 846.

The conduct at issue in Halperin was clearly conduct that was not

racially inflammatory. While the majority states that Halperin

involved "appeals to racial fears" or to "racial prejudice," those

 14
phrases appear in the Halperin opinion only with regard to what the

employer in that case alleged. See Halperin, 826 F.2d at 288, 289,

290. We rejected those characterizations, noting that the comments

"constitute[d] little more than isolated remarks and name-calling

among co-workers." Id. at 292. They were made by a couple of

employees about their co-employees and did not charge management

or the union with racial prejudice. Even a cursory look at the three

racial comments that were at issue show that they did not appeal to

racial prejudice or accuse management of bigotry. One black

employee allegedly stated that "the white guys should get together

and help the black guys because you'll lose your jobs by not signing

union cards." Id. at 289. Another black employee allegedly told a

white employee, "Boy, you white sons-of-bitches, you are all the

same, you're scared to take a stand," and was overheard saying "those

Goddamn white boys -- they're gonna vote no [on the union], they

won't support the blacks." Id.

These comments were obviously not designed to appeal to anyone's racial prejudice or to accuse anyone of bigotry. If anything, they

demonstrated the speakers' own anti-white prejudice, and this demonstration would clearly not have appealed to any prejudice of the white

listeners. As we concluded in Halperin, these remarks "were not

directed at the owners and do not reflect an attempt to win the election by creating animosity along religious or racial lines." Id. at 293

n.2. Moreover, the remarks did not "represent a deliberate attempt by

the union to divert the employees from legitimate issues by insinuating an irrelevant appeal to race." Id. at 293. We did imply, however,

that if there had been an appeal to racial prejudice, the standard in

NLRB v. Katz, 701 F.2d 703 (7th Cir. 1983), would be applicable. Id.

at 292. That case, as I discuss below, sets a much lower threshold for

overturning a representation election than was applied to the alleged

coercion actually considered in Halperin.

The facts in this case are materially different from those in

Halperin. The misconduct in this case -- a false accusation, circulated on the eve of the representation election, that a manager referred

to the employees as a "bunch of niggers" -- was most clearly an accusation of racial bigotry. It was directed at management; it was an

attempt to win the election by creating animosity along racial lines;

and it was an attempt "to divert the employer from legitimate issues

 15
by insinuating an irrelevant appeal to race." Moreover, the rumor was

inflammatory, as the hearing officer found. Thus, this case can only

be analyzed as one which involves the type of race-based inflammatory conduct that this court and the NLRB have long deplored and

have consistently found justifies setting aside elections.

While we have not specifically addressed the standard to apply to

racially inflammatory conduct when it is introduced into an election

campaign by third parties, other circuits have. For instance, in NLRB

v. Katz, the Seventh Circuit adopted a low threshold for setting aside

the elections when they were tainted by third-party racial influence.

The court held that a new election would have to be ordered when

third-party, racially "inflammatory remarks could have impaired the

employees' freedom of choice in the subsequent election." Katz, 701

F.2d at 705, 707 (emphasis added and citation omitted) (finding a

prima facie case for overturning an election in which a priest, who

was not a union agent, stated that workers should vote for the union

because the company's owners were Jewish and "Jewish people are

rich and we are poor and killing ourselves for them"). Similarly, the

Eleventh Circuit has adopted a standard giving little tolerance to

racially inflammatory conduct. In M&M Supermarkets, Inc. v. NLRB,

818 F.2d 1567 (11th Cir. 1987), the court held that third-party racial

remarks will warrant setting aside an election "if the acts disrupted the

voting procedure or destroyed the atmosphere necessary to the exercise of free choice in the representation election." Id. at 1572 (emphasis added). The court in M&M invalidated an election in which an

employee stated, "Us Blacks were out in the cotton fields while they,

the damn Jews, took their money from the poor hardworking people."

Id. at 1569.

Keeping in mind the Board's goal of conducting representation

elections which accurately report the "uninhibited desires of the

employees," Case Farms, 128 F.3d at 844, I would nevertheless conclude that the Seventh Circuit standard, which authorizes setting aside

an election when an inflammatory remark "could impair" an employee's freedom of choice, Katz, 701 F.2d at 707, might be too broad and

would require invalidation of virtually every election in which thirdparty race-based conduct is present. Any inflammatory comment

"could impair" the exercise of free choice. To accept this standard,

which would essentially extend the "zero tolerance" of Sewell to

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third-party conduct, would fail to take into account the reasons that

we have already recognized for imposing a higher standard when

third-party conduct is involved. Indeed, the Seventh Circuit itself may

be withdrawing from the low threshold of its Katz holding. Recently

in Clearwater Transport, Inc. v. NLRB, 133 F.3d 1004 (7th Cir.

1998), the court, while purporting to apply Katz , seemed to impose

a higher standard. The court ruled against an employer's challenge to

a representation election because the employer "did not provide any

evidence that [an employee's] remark [calling the employer's owner

a "Jewish son of a bitch"] had an effect on the election." Id. at 1011

(emphasis added). Thus, in Clearwater, the Seventh Circuit seemed

to require that a party challenging a representation election show that

a third-party race-based remark actually had an effect on the election

rather than, as Katz held, that the remark could have had an effect on

voter free choice.

The Eleventh Circuit standard, requiring only that the atmosphere

for free choice be destroyed, also fails sufficiently to take into account

arguments made by both the Board and the Union in this case. For

instance, if the court were too willing to strike down elections based

upon third-party conduct, a company or union that expected to lose

an election could start an inflammatory rumor detrimental to itself,

disguising the rumor as third-party conduct, and then use the rumor

to challenge the election.

For these reasons, I believe that it would be more consistent with

the Board's standards for conducting elections to adopt a two-prong

approach which, while maintaining a low threshold when racial prejudice is involved, would, to a degree, shift emphasis to a greater consideration of the actual prejudice caused by third-party race-based

inflammatory conduct. Accordingly, I would require a new representation election based on third-party race-based inflammatory conduct

when (1) the conduct was of the type that would pollute the atmosphere necessary for the exercise of free choice, and (2) the overall

circumstances suggest that, more likely than not, the conduct altered

the outcome of the election. This standard is proportional to the one

that we adopted when evaluating non-inflammatory conduct by a

party:

To succeed [in setting aside an election], it must be shown

by specific evidence that (1) the alleged acts did in fact

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occur, and (2) such acts sufficiently inhibited the free choice

of employees so as to affect materially the results of the

election.

NLRB v. Coca-Cola Bottling Co., 132 F.3d 1001, 1003-04 (4th Cir.

1997) (citation and internal quotation marks omitted). My two prong

approach for third-party, race-based inflammatory conduct also draws

on both the Eleventh Circuit's standard that the conduct have "destroyed the atmosphere necessary to the exercise of free choice" and

the Seventh Circuit's now apparent requirement that the conduct have

had an effect on the outcome of the election. Moreover, it would fill

the open gap in our jurisprudence for racially inflammatory conduct

by a third party.

Thus, where there is racially inflammatory conduct by a party and

that party wins the representation election, the Sewell doctrine would

be invoked and the election overturned. Where there is alleged misconduct of a different type by a party and that party wins the representation election, the Coca-Cola Bottling standard applies, and the

election would be overturned if the other party demonstrates that the

misconduct "affect[ed] materially the results of the election." 132

F.3d at 1004. Where there is third-party misconduct in the form of

threats and intimidation, the election would be set aside if the conduct

was "sufficiently substantial in nature to create a general environment

of fear and reprisal such as to render a free choice of representation

impossible." Methodist Home, 596 F.2d at 1183; see also Halperin,

826 F.2d at 290. And where, as here, there is third-party misconduct

that is inflammatory race-based, the election would be set aside if (1)

the conduct was of the type that would pollute the atmosphere necessary for the exercise of free choice, and (2) the overall circumstances

suggest that the conduct more likely than not affected the outcome of

the election.

III

With this standard, I now turn to the facts of this case to determine

whether the race-based rumor initiated by a third party at Flambeau

Airmold's Roanoke Rapids' plant was of the type that would pollute

the atmosphere necessary for the exercise of free choice and whether

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it, more likely than not, altered the outcome of the May 2, 1996 representation election.

I begin with the undisputed facts that provide the backdrop for this

representation election. The unit of employees being polled was twothirds African-American and the Union's campaign was cognizant of

this racial make up, aiming its message at African-Americans. Management was referred to as the "masters," and their allegedly underpaid employees were said to be "slaving" for the masters. The general

manager of the plant, who was white, was referred to as "`Good Ole'

Bill Budzien," and African-American heroes were drawn on to urge

the Union cause. Civil rights leader Jesse Jackson sent a letter to the

employees urging their support for the Union, and the words and

actions of Martin Luther King, Jr. and Malcolm X were recounted to

employees. While no explicit appeals for racial voting were made, the

overall effect of the Union's efforts was to make the campaign

racially sensitive, suggesting that a black employee would be voting

consistently with African-American causes by voting in favor of the

Union.

It was against this backdrop that the rumor about white management calling the employees at the plant "a bunch of niggers" circulated throughout the plant one day before the election. By all

accounts, including the hearing officer's factual findings, this rumor

was widespread and generated much emotion among the employees.

Racial prejudice was at this last, important moment explicitly

appealed to. Such a rumor could only have the tendency to divide

management from its employees and to unite employees, particularly

African-Americans, in collective action against their employer.

Management was at a loss as to how to react in order to neutralize

the rumor's effect, and its means for retrieving reason were limited.

It was bound by an NLRB rule which prohibits employers and unions

"from making election speeches on company time to mass assemblies

of employees within 24 hours before the scheduled time for conducting an election." Peerless Plywood Co., 107 NLRB 427, 429 (1953);

see also Kalin Construction Co., 321 NLRB 649, 651 (1996) (reiterating and extending the Peerless Plywood rule). Similarly, the employees, some of whom testified that they believed the rumor, had no way

of evaluating the rumor for truthfulness. If the rumor had been a con-

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clusory opinion -- for example, that "the general manager is a racist"

-- then it might have been possible for employees to apply their

knowledge of the manager and evaluate whether they agreed or disagreed with the assertion. But when the rumor made an assertion of

historical fact -- that the general manager or another manager

described the employees as "niggers" -- it was impossible for an

employee to evaluate whether such a statement was made absent independent knowledge of the facts. In this case, no employee had independent knowledge of what the managers had said in their meeting.

The hearing officer found that while some employees believed the

rumor to be false, others believed it to be true.

Applying the first prong of the standard at hand-- whether this

conduct was of the type that would pollute the atmosphere necessary

for the exercise of free choice -- compels a different conclusion from

that reached by the Board under its standard requiring that free choice

be impossible. In the context of this election campaign in which racial

issues were important to all parties, an eleventh-hour rumor that a

white manager during a management meeting had referred to employees as "niggers" could have no other effect than polluting the atmosphere necessary for the exercise of free choice.

Under the second prong of the standard, a probability of prejudice

must also be demonstrated: it must appear more likely than not that

the conduct altered the outcome of the election. In making this determination, we should consider a number of factors relevant to the conduct including (1) the closeness of the vote, (2) the timing of the

conduct in relationship to the election, (3) the extent to which knowledge of the conduct was disseminated among the eligible voters, (4)

the seriousness of the misconduct at issue, and (5) the degree of the

persistence of the conduct in the minds of eligible voters. See Phillips

Chrysler Plymouth, Inc., 304 NLRB 16, 16 (1991).

The Union won the election by a vote of 96 to 94. One changed

vote would have tied the election vote at 95 to 95, giving Flambeau

Airmold a victory and altering the election's outcome. It is inconceivable that from among 190 persons voting, not one was moved by so

pernicious a rumor circulated in so racially sensitive an atmosphere.

Even though the hearing officer did not permit evidence of the

rumor's effect on the votes of individuals, denying Flambeau Airmold

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its effort to present such evidence, there nevertheless was evidence in

the record that at least one employee did change her vote in favor of

the Union because of the rumor. Shirley High, an African-American

who had indicated that she was voting against the Union, told a fellow

employee after hearing the rumor that she was going to vote for the

Union; "that was it [the last straw] for her."

The vote in this election was extremely close; racial feelings and

cohesion were closely tied to campaign issues; the rumor that circulated was a wicked, racial slur drawing on the most emotional appellation that could divide a majority white management from a majority

black workforce; it was circulated close to the time of the election --

one day before; and it was widely circulated. Thus, the application of

the relevant factors that have been identified compels the conclusion

that third-party conduct more likely than not altered the election's

outcome.

Unlike most other external influences during a representation election, racially inflammatory conduct both blinds and distorts through

substantially heightened emotions, destroying the process by stripping

away the sober, informed exercise of the franchise. This is especially

true given the racial history in the United States, and particularly

North Carolina.

Up until today, this court has been unwilling to sanction racially

inflammatory conduct in union representation elections. Today, the

court abandons that policy and rewards such conduct. More unfortunately, the majority's opinion encourages if not licenses, employees

in future elections -- both those favoring unionization and those

favoring management -- to engage in appeals to racial prejudice and

accusations of bigotry.

Because the representation election at the Flambeau Airmold plant

on May 2, 1996, was fatally tainted, I would conclude that the Board

may not rely on it to compel Flambeau Airmold to bargain with the

Union so elected. Accordingly, I would deny enforcement of the

Board's application in this case.

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