UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MONTGOMERY WARD & COMPANY,

INCORPORATED,

Petitioner,

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent, No. 95-2654

and

WAREHOUSE UNION, LOCAL 730, A/W

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, AFL-CIO,

Intervenor.

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

v.

No. 95-2669

MONTGOMERY WARD & COMPANY,

INCORPORATED,

Respondent.

On Petition for Review and Cross-Application for

Enforcement of an Order of the National Labor Relations Board.

(5-CA-22686)

Argued: June 7, 1996

Decided: September 20, 1996

Before MURNAGHAN and NIEMEYER, Circuit Judges, and

CURRIE, United States District Judge for the District of South

Carolina, sitting by designation.
Order enforced by unpublished per curiam.

_________________________________________________________________

COUNSEL

ARGUED: Marshall Bruce Babson, OGLETREE, DEAKINS,

NASH, SMOAK & STEWART, Washington, D.C., for Montgomery

Ward. Christopher Warren Young, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for NLRB. Elizabeth Jane Head,

BEINS, AXELROD, OSBORNE, MOONEY & GREEN, P.C., Washington, D.C., for Intervenor. ON BRIEF: Erin E. Powell,

OGLETREE, DEAKINS, NASH, SMOAK & STEWART, Washington, D.C., for Montgomery Ward. Frederick L. Feinstein, General

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

Supervisory Attorney, NATIONAL LABOR RELATIONS BOARD,

Washington, D.C., for NLRB. John R. Mooney, BEINS, AXELROD,

OSBORNE, MOONEY & GREEN, P.C., Washington, D.C., for

Intervenor.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Montgomery Ward & Company, Inc., has petitioned for review of

a decision and order issued against it by the National Labor Relations

Board ("Board") on April 19, 1995. Reversing the administrative law

judge ("ALJ") who originally heard the case, the Board found that

Montgomery Ward violated sections 8(a)(1) and (a)(3) of the National

Labor Relations Act ("Act"), 29 U.S.C. §§ 158(a)(1) and (3). Montgomery Ward has contended that the Board's finding of unlawful termination is not supported by substantial evidence in the record as a

whole and that its finding of unlawful statements is improper because

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it is not consistent with the allegations contained in the complaint.

The Board has cross-petitioned for enforcement of the order. We

hereby enforce the order.

I.

Montgomery Ward operates warehouse storage and distribution

facilities nationwide to supply merchandise to its retail stores. In January 1992, Montgomery Ward consolidated its mid-Atlantic distribution operation by closing two distribution centers and opening a new

facility in Brandywine, Maryland. In April 1992, Warehouse Employees Local Union No. 730, (the "Union"), which had conducted an

unsuccessful organizational campaign at the Brandywine facility,

filed a charge against Montgomery Ward before the Board. Subsequently, the Board's General Counsel issued a complaint, alleging

that the company (1) violated sections 8(a)(1) and (3) by discharging

two employees solely because of their union activity; and (2) violated

section 8(a)(1) by making statements that implied that it would be

futile for employees to choose union representation. 1 An ALJ held a

two-day hearing in which Montgomery Ward denied making unlawful

statements and having knowledge of the discharged employees' union

involvement. The company maintained that it fired the two employees

because of their poor job performance.

During the relevant time period, approximately 235 employees

worked at the Brandywine center, filling between 1,500 and 3,000

orders for shipment to retail stores each day. About 16 employees

worked as "order fillers." In that capacity, they used "picking tickets"

to identify, locate and collect merchandise for shipment. They affixed

the tickets to the designated merchandise and then sent it out to the

loading docks. At the docks, other employees worked as "loaders,"

_________________________________________________________________

1 Section 8(a)(1) makes it an unfair labor practice for an employer "to

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

rights to self-organization and to form, join or assist labor organizations

as guaranteed in Section 7 of the Act. 29 U.S.C.§ 158(a)(1).

Section 8(a)(3) prohibits 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).

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placing the designated items on to trucks after scanning their bar

codes for inventory purposes.

Montgomery Ward hired both Dennis Guss and Paul Groenwoldt

in February 1992. Guss worked as an order filler, while Groenwoldt

worked as a loader. In early January 1992, before the Brandywine

facility was fully operational, the Union began an organizational campaign with leafletting in the parking lot and the distribution of authorization cards to employees.

Regarding the company's anti-union statements, the record indicates that at the end of February, Montgomery Ward officials held a

meeting with all Brandywine employees.2 At the meeting, company

Vice-President Thomas Cato apparently spoke about"third-party representation." There was testimony before the ALJ that Cato told

employees that he anticipated a fruitful working relationship without

such interference and that "we don't need no third-party or organization come in here over my dead body."

Company officials met again with Brandywine employees in midMarch to address the benefits and drawbacks of union representation.

In a series of smaller meetings, Cato apparently compared the

employee benefits at Brandywine to those at the company's unionized

Baltimore facility in an effort to show that the union could not guarantee higher wages and discussed the Union's organizing drive. There

was testimony before the ALJ that Guss requested additional information about "union benefits," but Cato could not provide any. There

was also testimony that Cato told employees at one of the gatherings

that "if he had anything to do with keeping the union out, he would,"

and that "there would be blood on the floor before the Union came

in." The record further shows that the company issued a memorandum

to Brandywine employees on March 20, explaining that the Union

was attempting to organize and urging employees not to sign union

authorization cards.

_________________________________________________________________

2 Among those officials present at the meeting were: Thomas Cato, the

vice president of Logistics and Product Services; James Schmitt, the

manager of the Brandywine facility and East Coast distribution centers;

and Michael Cardamone, the operations manager at the Brandywine

facility.

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As to Guss and Groenwoldt's union activity, there was testimony

that, at Guss's suggestion, the two men and one other Montgomery

Ward employee attended the Union's first and only organizational

meeting on April 13. While there, they signed authorization cards and

agreed to distribute cards to other employees. They apparently asked

the Union not to notify Montgomery Ward that they were on its organizing committee because they did not want the company to know of

their activities.

Testimony showed that during the next three days, Guss and

Groenwoldt solicited union support from other Brandywine employees. Guss discussed the Union with 18 to 20 employees in the cafeteria at lunchtime and in the parking lot after work and distributed a

handful of authorization cards. Groenwoldt apparently talked to six or

seven employees about the Union and asked them to sign authorization cards, but passed out no cards. There was testimony that the two

men came to believe that management was watching them more

closely than usual, and so informed the Union that they wanted to

"chill a little while." Company management testified that they knew

nothing about the union involvement of Guss and Groenwoldt.

The evidence relating to the discharges of Guss and Groenwoldt

showed that the facility's operations manager, Michael Cardamone,

fired both employees within minutes of each other on April 17 --

only three days after the organizational meeting. There was conflicting testimony regarding the job performance of each man.

Guss testified that he received no criticism before April 16.

Although he apparently misplaced a picking ticket three weeks earlier, supervisors never disciplined him or complained. Instead, Guss

said he was regularly summoned to work overtime and once asked to

monitor another employee. His "group leader" testified, however, that

she had spoken with Guss and complained to her superiors about his

attitude, failure to stack merchandise properly, propensity to lose

picking tickets and low productivity. Supervisors discussed these criticisms with Guss on April 16. The following morning, Guss again

misplaced two picking tickets and was fired without warning at the

end of his shift. Guss testified that his immediate boss, Todd Lennox,

admitted to him that the firing was "bullshit" ordered by upper management.

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Similarly, there was evidence that Groenwoldt received his first

reprimand for failing to follow proper procedure when scanning merchandise on April 15. At that time, supervisors merely reminded him

of the proper method. While Groenwoldt admitted that he did not

always use the proper method, testimony indicated that he was not the

only employee to do so. Another employee seen improperly scanning

during the same week received a warning about what consequences

he would suffer for repeating the mistake. Like Guss, Groenwoldt was

fired without warning at the end of his shift. His discharge notice

indicated that he had been observed improperly scanning on April 15

and 17.

The ALJ ruled that the General Counsel had failed to establish a

prima facie case of unlawful discrimination in the termination of Guss

and Groenwoldt. Although he found that Guss and Groenwoldt

engaged in union activity and that Montgomery Ward demonstrated

strong anti-union animus and discriminated against Guss and Groenwoldt shortly after their union activity, the ALJ recommended dismissing the unlawful discharge allegations nonetheless because he

found no evidence that Montgomery Ward knew of the two employees' union activity. The ALJ also found that although Cato made

unlawful anti-union statements, those statements were not encompassed in the allegations of the complaint. Thus, the ALJ recommended dismissing all charges against Montgomery Ward.

A panel of the Board overturned the ALJ. The panel inferred

employer knowledge of the participation of Guss and Groenwoldt in

the union campaign and determined that the company violated sections 8(a)(3) and (a)(1) by discharging the two men for engaging in

protected activities. The Board also concluded that Montgomery

Ward violated section 8(a)(1) with two statements Cato made to

employees implying that it would be futile for them to select union

representation. The Board ordered Montgomery Ward to cease and

desist from the unfair labor practices found and to reinstate and make

whole the discharged employees.

II.

Montgomery Ward has challenged the Board's conclusion that the

discharges constituted violations of sections 8(a)(1) and (3) of the Act

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as well as its determination that two employer statements violated

section 8(a)(1) by implying the futility of selecting union representation.

In general, our standard of review is one of deference. We may not

disturb the Board's findings and conclusions if they are supported by

substantial evidence taken from the record as a whole. 29 U.S.C.

§ 160(e); Universal Camera Corp. v. NLRB , 340 U.S. 474, 487-91

(1951); FPC Holdings, Inc. v. NLRB, 64 F.3d 935, 942 (4th Cir.

1995). We "may not displace the Board's choice between two fairly

conflicting views even though [we] would justifiably have made a different choice had the matter been before [us] de novo," Universal

Camera Corp., 340 U.S. at 488; accord NLRB v. Frigid Storage, Inc.,

934 F.2d 506, 509 (4th Cir. 1991).

We note that the Board is not precluded from drawing inferences

or legal conclusions that are contrary to those of the ALJ. See

American Thread Co. v. NLRB, 631 F.2d 316, 320 (4th Cir. 1980).

The substantial evidence standard of review is applicable to the

Board's inferences from facts because "[t]he Board, not the ALJ, is

ultimately vested with the responsibility for determining whether an

unfair labor practice has been committed." Id.; see also Frigid

Storage, 934 F.2d at 509.

A

Termination in retaliation for union activity, including attempts to

organize a union, violates both sections 8(a)(1) and (a)(3) of the Act.

NLRB v. Transportation Management Corp., 462 U.S. 393, 397-98

(1983); FPC Holdings, 64 F.3d at 941; NLRB v. Nueva Eng'g Inc.,

761 F.2d 961, 969 (4th Cir. 1985). The Board applies a basic, burdenshifting formula for determining when a discharge is unlawful.3 See

Transportation Management Corp., 462 U.S. at 400-04 (affirming the

Board's "Wright Line test"). Under that approach, the General Counsel must first establish a prima facie case, showing by a preponderance of the evidence that anti-union animus motivated the employer's

_________________________________________________________________

3 The Board's formula was first articulated in Wright Line, 251 NLRB

1083 (1980), enf'd, 662 F.2d 899 (1st Cir. 1981), cert. denied, 455 U.S.

989 (1982).

 7
decision to terminate an employee. The burden then shifts to the

employer to prove affirmatively that it would have taken the same

action even in the absence of union involvement by the employee.

FPC Holdings, 64 F.3d at 942 (citations omitted); accord

Transportation Management Corp., 462 U.S. at 401-02. If the Board

determines, however, that the employer's asserted reasons are pretextual -- i.e., that they did not exist or were not relied upon -- then the

employer has failed to meet its burden. See Nueva Eng'g, 761 F.2d

at 968-69. A violation occurs only when "there is a basis in the record

for a finding that the employee would not have been discharged . . .

except for the fact of his union activity." NLRB v. Kiawah Island Co.,

650 F.2d 485, 490 (4th Cir. 1981) (citation omitted); see also Goldtex,

Inc. v. NLRB, 14 F.3d 1008, 1011 (4th Cir. 1994) ("Unwise and even

unfair decisions to discharge employees do not constitute unfair labor

practices unless they are carried out with the intent of discouraging

participation in union activities.").

We affirm the Board's findings and conclusions regarding the discharges of Guss and Groenwoldt. Substantial evidence supports the

determination that Montgomery Ward would not have discharged the

two employees were it not for their participation in protected activity.

Montgomery Ward's attempts to challenge the Board's decision are

without merit. First, the company contends that the ALJ properly concluded that the General Counsel failed to establish a prima facie case

of unlawful discharge for either Guss or Groenwoldt because it was

unable to show that the company knew of their union activities. Second, Montgomery Ward maintains that it provided substantial evidence that, in any event, it would have fired each employee for poor

performance.

To prove a prima facie case, "the General Counsel must show

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

employer was aware of the activity, (3) that the activity was a substantial or motivating reason for the employer's action." FPC

Holdings, 64 F.3d at 942. When there is no direct proof, employer

knowledge may be shown by circumstantial evidence from which a

reasonable inference may be drawn. Id. at 943-44; Davis Supermarkets, Inc v. NLRB, 2 F.3d 1162, 1168 (D.C. Cir. 1993), cert. denied,

114 S. Ct. 1368 (1994); NLRB v. Wal-Mart Stores , 488 F.2d 114, 117

 8
(8th Cir. 1973); see generally NLRB v. Link-Belt Co., 311 U.S. 584,

602 (1941). Such circumstances may include knowledge of general

union activity, demonstrated anti-union animus, suspicious timing and

nature of the discharge and disparate treatment of employees. See

Hunter Douglas, Inc. v. NLRB, 804 F.2d 808, 813-15 (3rd Cir. 1986),

cert. denied, 481 U.S. 1069 (1987); see also Abbey's Transp. Servs.

v. NLRB, 837 F.2d 575, 580 (2d Cir. 1988); Wal-Mart Stores, 488

F.2d at 117.

Montgomery Ward concedes that it had general knowledge of the

Union's organizing efforts at the Brandywine facility. Substantial evidence supports the Board's inference that the company had specific

knowledge of Guss's and Groenwoldt's participation in those efforts.

Based on the openness of their campaigning at the facility, their positions as the only Brandywine employees to show significant interest

in unionization, the closeness of their firings to their union activity,

the abrupt nature of their discharges and the strong anti-union animus

displayed at the company's highest corporate levels, the Board's

inference that the company knew about the union activity of Guss and

Groenwoldt is reasonable. The Board relied only on evidence adduced

before the ALJ and did not overturn any of his credibility determinations in concluding that a "confluence of circumstances" showed that

Montgomery Ward was aware of the employees' participation in the

unionization effort. Although there is some evidence to the contrary,

the evidence offered to show that Montgomery Ward management did

not know of the two employees' activities does not outweigh the circumstantial proof allowing the Board to infer that it did.

Similarly, we find that substantial evidence supports the Board's

finding that Montgomery Ward's proffered reasons for discharging

Guss and Groenwoldt were pretextual. Testimony before the ALJ

indicated that no one questioned Guss's work and production levels

until he began soliciting employees for the Union. He lost a picking

ticket three weeks before his termination, yet no supervisor reprimanded him. At the time of his discharge, his immediate boss conceded that the firing was "bullshit" ordered by higher company

officials. Finally, supervisors offered conflicting descriptions of company policy regarding lost picking tickets and provided no evidence

of prior discipline for the error.

 9
Similarly, Groenwoldt was not disciplined or even reprimanded for

poor performance prior to his participation in the union campaign.

Although he admitted improperly scanning merchandise, he received

no warning before his termination, although other employees who

also used improper methods did. Finally, substantial evidence supports the Board's conclusion that the events surrounding Groenwoldt's discharge were indicative of a set up. Testimony showed that

when Groenwoldt arrived at work on April 17, he was told to report

to Cardamone's office at the end of his shift, and when he did so, he

was fired for improperly scanning merchandise on April 15 and earlier that same day.

In short, evidence before the ALJ showed that both men were

praised for their work before they participated in the union campaign,

and disciplined afterward. Neither received notice of poor performance or a warning that termination was possible. Again, there is

some evidence of substandard performance on the part of each

employee. Yet that evidence fails to override the substantial support

for the Board's conclusion that Montgomery Ward would not have

fired either Guss or Groenwoldt if they had not engaged in union

activity. Accordingly, we must enforce that part of the order relating

to the unlawful discharges.

B

An employer's warnings to employees that unionization will be

futile or fruitless can amount to a violation of section 8(a)(1) as an

interference with an employee's right to self-organization. See, e.g.,

Standard-Coosa-Thatcher Carpet Yarn v. NLRB, 691 F.2d 1133, 1136

(4th Cir. 1982) (finding that comment made on union election day

that company's contract covering unionized employees was not beneficial was unlawfully coercive), cert. denied , 460 U.S. 1083 (1983);

NLRB v. McCormick Concrete Co., 371 F.2d 149, 152 (4th Cir. 1967)

(holding that statement that "a union would do employees no good"

can be unlawfully coercive). Substantial evidence supports the

Board's finding that Vice President Cato made two statements --

those concerning unionization "over my dead body" and only after

"blood on the floor" -- which violated section 8(a)(1). However,

instead of contesting the Board's finding, Montgomery Ward claims

that the two statements were outside the allegations of the complaint.

 10
The ALJ so found, but we agree with the Board's contrary conclusion.

The complaint satisfies NLRB regulations requiring a clear and

concise description of the acts which are claimed to constitute unfair

labor practices. See 29 CFR § 102.15(b). Furthermore, the Board's

determination that Montgomery Ward engaged in unfair labor practices does not rest on facts outside or unrelated to the allegations in

the complaint. See NLRB v. Threads, Inc., 308 F.2d 1, 9 (4th Cir.

1962) ("Evidence without supporting allegations cannot serve as the

basis of a determination of an unfair labor practice."); see also

Clearwater Finishing Co. v. NLRB, 670 F.2d 464, 468 (4th Cir. 1982)

(applying Threads, and finding that Board improperly allowed nonalleged facts to serve as evidence of a violation).

General Counsel alleges in the complaint that Montgomery Ward

violated section 8(a)(1) with statements Cato made to employees on

March 9, 1992. Without quoting any particular comment, the complaint states that Cato told employees that: (1) Montgomery Ward

"would learn the identity of those who signed union authorization

cards;" (2) "strikes and violence would inevitably result from selecting a union as their representative;" and (3)"it would be futile for

them to select a union as their bargaining representative." While there

may be some discrepancy over the exact date Cato made each statement, the fact remains that the allegations of the complaint do encompass the two statements at issue. Furthermore, consideration of those

statements cannot be said to have deprived Montgomery Ward of due

process as the complaint provided sufficient notice of the acts alleged

to constitute unfair labor practices and the company received a full

and fair opportunity to litigate the matter. See Pergament United

Sales, Inc. v. NLRB, 920 F.2d 130, 134 (2d Cir. 1990) (due process

requires notice and meaningful opportunity to defend); see also NLRB

v. MacKay Radio & Tel. Co., 304 U.S. 333, 349-51 (1938). The statements certainly did not call for a different defense than the one

mounted by the company. See FPC Holdings, 64 F.3d at 942.

Finally, both the ALJ and the Board found that the two statements

demonstrate anti-union animus, and we agree. Considering not only

the substance of the statements but the context in which they were

made, they are coercive and would have a tendency to intimidate

 11
employees from engaging in union activity. See NLRB v. Gissel Packing Co., 395 U.S. 575, 617 (1969) (assessment of an employer's statements "must take into account the economic dependence of the

employees on their employers, and the necessary tendency of the former, because of that relationship, to pick up intended implications of

the latter that might be more readily dismissed by a more disinterested

ear"); J.P. Stephens & Co. v. NLRB, 638 F.2d 676, 687 (4th Cir.

1980) ("an employer's speech must be viewed in the context of its

labor relations setting").

We see no reason, therefore, to disturb the Board's conclusion that

Montgomery Ward violated section 8(a)(1) with Cato's statements.

III.

In sum, we find that substantial evidence supports the Board's findings of fact and conclusions of law. Accordingly, Montgomery

Ward's petition for review is hereby denied and the order is

ENFORCED.

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