Case Name: SCHNEIDER MILLS, INC. and Jimmy and Josh, Inc., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent
Court: United States Court of Appeals for the Fourth Circuit
Jurisdiction: United States
Decision Date: 1968-01-08
Citations: 390 F.2d 375
Docket Number: No. 10754
Parties: SCHNEIDER MILLS, INC. and Jimmy and Josh, Inc., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 390
Pages: 375–388

Head Matter:
SCHNEIDER MILLS, INC. and Jimmy and Josh, Inc., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
No. 10754.
United States Court of Appeals Fourth Circuit.
Argued Oet. 3, 1967.
Decided Jan. 8, 1968.
Arthur McM. Erwin, Spartanburg, S. C., for petitioner.
Allison M. Brown, Jr., Atty., N.L.R.B. (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, N.L.R.B., on the brief) for respondent.
Before HAYNSWORTH, Chief Judge, and SOBELOFF, BOREMAN, BRYAN, WINTER, CRAVEN and BUTZNER, Circuit Judges.
The case was heard initially on January 13, 1967 before a panel consisting of Sobeloff and Craven, Circuit Judges, and Kaufman, District Judge.

Opinion:
WINTER, Circuit Judge:
Schneider Mills, Inc. and Jimmy and Josh, Inc. (collectively called the "company"), which carry on a unitary business of manufacturing textiles and textile products, with principal offices and places of business at Taylorsville, North Carolina, petition to set aside the findings of the Board that the company violated § 8(a) (5) and 8(a) (1) of the Act by its conceded refusal to bargain with the Textile Workers Union of America, AFL-CIO (the "union"). The petition, and resistance to enforcement of the Board's order directing bargaining, are predicated upon the contention that the union was not certified as the representative of the company's production and maintenance employees pursuant to a valid representation election. We agree that the election was not valid, because of the union's improper election propaganda. We set aside the finding and refuse enforcement of the order.
The election, pursuant to which the union was certified, was held November 5, 1965, under the direction of the Regional Director for the Eleventh Regional Office of the Board. At the election, a majority of the employees voted in favor of representation by the union. The company filed timely objections to the election, but the Regional Director, after investigation, concluded that the objections of the company were without merit and certified the union. When the company refused to bargain with the union, it was charged with an unfair labor practice, violative of § 8(a) (5) and 8(a) (1). At the hearing on the unfair labor practice charges, the company proffered what it intended to prove, but the trial examiner refused receipt of the formal proof and granted general counsel's motion for judgment on the pleadings, stating that no factual matters requiring the taking of testimony or receipt of other evidence were raised by the company. The Board adopted the trial examiner's decision without modification.
Specifically, the company's challenge to the validity of the representation election is predicated upon three union handbills, two of which were circulated on October 21 and November 2, respectively, and the third on the eve and day of the election, and upon the union-sponsored radio broadcasts on the eve of election which were repeated throughout the day of election. Our conclusion that the union's propaganda invalidated the election rests on the third handbill and the radio broadcasts; hence, we find it unnecessary to consider fully the other handbills.
In language undeniably offensive, the handbill of November 4-5 sought to impugn the character and motives of Mr. Schneider, the president of the company, in resisting unionization. The challenged portion of the handbill reads as follows:
"We have been told that he [Schneider] made the remark that he wished he could tie two of the women employees, who are active in the Union, to their machines and set them on fire and watch them burn to death. A person who talks like this is bound to be mentally disturbed and dangerous to be around. This type of filth is what a half million American boys gave their lives to prevent in World War II — to keep another mad man by the name of Hitler from destroying the world."
On the record before us, we must treat the alleged statement of Mr. Schneider as never made. At the unfair labor practice hearing, the company proffered to prove that Mr. Schneider did not make such a statement. It is true that the Regional Director in concluding to issue a Certificate of Representative noted that evidence was offered during the course of the investigation conducted by him which tended to show that a similar remark was in fact made by Mr. Schneider, and that representatives of the union were informed of it. The Regional Director found it unnecessary to determine whether or not such a statement was actually made, in view of his conclusion that name-calling and insulting or derogatory statements by one party about another during an election do not warrant setting aside the results of the election. The evidence to which he referred is not included in the record before us. Absent such evidence and in the light of the company's rejected proffer of proof to the contrary, we assume the facts of the matter in the light most favorable to the company and decide the question raised by the handbill on the basis that Mr. Schneider did not make such a statement.
The radio broadcasts undertook falsely to assert benefits purportedly gained as a result of a union-led strike by employees at the Collins & Aikman plant in Albemarle, North Carolina, some seventy miles from Taylorsville. Some of the assertions in the broadcasts were being made for the first time, but some of them were repetitious of what had been earlier claimed in the handbill of November 2. The Regional Director found that the November 2 handbill was distributed at a time when the company was able to controvert the false statements contained therein and that, in fact, they had been controverted by the company in a campaign flyer, entitled "FACT SHEET," on November 4, one day before the election. The statements contained in the radio broadcasts, their accuracy, and whether they had been previously asserted in the November 2 handbill, are as follows:
1. "Allowance of 15 minutes paid lunch period, 5 minutes for 'wash-up and clean-up' time."
"Allowance for no less than 15% 'rest time' for workers on all job assignments in the plant."
From these statements, broadcast se-riatim, a listener would understand that the benefits described were being stated conjunctively. The Regional Director found that the paid lunch period was a part of the fatigue and personal time, so that the representation that two non-duplicating benefits had been obtained by the union was false. This part of the statements was in the handbill and was repeated in the broadcast. New in the broadcast was the representation that an additional 5 minutes was allowed for "wash-up" and "clean-up" time. In the light of the Regional Director's finding this representation was also false.
2. "Overtime for the sixth day work and double time for Sunday work."
The Regional Director found that the Collins & Aikman contract did provide for double time for Sunday work, but only when Sunday was the seventh consecutive day worked. The statement is substantially a repetition of the misrepresentation contained in the November 2 handbill.
3. "Premiums on Insurance Benefits for employees will be paid by the company and provides Hospital, Health and Surgical coverage, plus Sick Leave pay of $15.00 per week."
The Regional Director found that the provision for sick leave pay was applicable only after the seventh consecutive day of illness. This misrepresentation was a repetition of that contained in the earlier handbill.
4. "During the negotiation sessions both parties had agreed to adoption of the general wage increase ranging from 5 cents to 7 cents an hour, plus 8 weeks back wages."
The Regional Director found that the contract provided for a wage increase of from 5 to 10 cents per hour but that the increase had been unilaterally granted by the employer in August and the contract made it retroactive to June. This misrepresentation was substantially a restatement of that contained in the handbill.
5. "The strike was called by the employees and not by the Union. The Union fed, and paid all bills of the workers while they were on strike."
In the previous handbill the union had claimed that during the strike at the Collins & Aikman plant the union had paid the bills, as distinguished from all bills, of the strikers. In regard to the previous handbill, the Regional Director found that " [Investigation discloses that the Petitioner [union] did in fact spend substantial sums in providing various strike benefits ." From this finding we infer that the broadcast statement was a misrepresentation, more clearly false than its predecessor.
Unquestionably, under the decided cases "the control of the election proceeding and the determination of the steps necessary to conduct that election fairly were matters that Congress entrusted to the Board alone." National Labor Relations Board v. Waterman S.S. Corp., 309 U.S. 206, 226, 60 S.Ct. 493, 503, 84 L.Ed. 704 (1940). Elsewhere stated, "Congress has entrusted 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." National Labor Relations Board v. A. J. Tower Co., 329 U.S. 324, 330, 67 S.Ct. 324, 328, 91 L.Ed. 322 (1946).
The decisions of this Court are fully in accord with the quoted statements of the Supreme Court. We said recently in Overnite Transportation Company v. National Labor Relations Board, 327 F.2d 36, 41 (4 Cir. 1963), "The key factor in setting aside an election, whether by virtue of the conduct of the parties or of the Board, is the failure of those in the bargaining unit to make their collective desire effective." And this statement must be read in the context of our earlier pronouncement that "Whether a representation election has been conducted under conditions compatible with the exercise of a free choice by the employees, is a matter which Congress has committed to the discretion of the Board." National Labor Relations Board v. Shirlington Supermarket, Inc., 224 F.2d 649, 651 (4 Cir. 1955). Sre also, National Labor Relations Board v. National Plastic Products Co., 175 F.2d 755 (4 Cir. 1949). Only if it is found that the Board abused its discretion in the promulgation or application of such standards will the Courts overrule the Board's determination regarding the validity of a representation election. National Labor Relations Board v. Shirlington Supermarket, Inc., supra; National Labor Relations Board v. National Plastic Products Co., supra.
Reference need be made to only two of the Board's decisions establishing its basic policy and its general standards respecting the rights of employees to a free and unrestrained choice in representation elections. In Liberal Market, Inc., 108 N.L.R.B. 1481, 1482 (1954), the Board stated:
"In deciding whether the registration of a free choice is shown to have been unlikely, the Board must recognize that Board elections do not occur in a laboratory where controlled or artificial conditions may be established. We seek to establish ideal conditions insofar as possible, but we appraise the actual facts in the light of realistic standards of human conduct. It follows that elections must be appraised realistically and practically, and should not be judged against theoretically ideal, but nevertheless artificial, standards. Basically, we feel that the results of a secret ballot, conducted under Government sponsorship and with all the safeguards which have been developed throughout the years, should not be lightly set aside. Like any other contest in which the stakes are high, the losing party is likely to protest the result, but this Board cannot be influenced by any subjective considerations."
The leading decision of the Board setting forth the standard for determining the validity of an election is Hollywood Ceramics Co., Inc., 140 N.L.R.B. 221, 224 (1962), where the Board said:
"We believe that an election should be set aside only where there has been a misrepresentation or other similar campaign trickery, which involves a substantial departure from the truth, at a time which prevents the other party or parties from making an effective reply, so that the misrepresentation, whether deliberate or not, may reasonably be expected to have a significant impact on the election."
See also, Walgreen Co., 140 N.L.R.B. 1141 (1963); The Cleveland Trencher Company, 130 N.L.R.B. 600 (1961); Thomas Gouzoule, et al., d/b/a The Calidyne Company, 117 N.L.R.B. 1026 (1957); Reiss Associates, Inc., 116 N.L.R.B. 217 (1956); The Gummed Products Company, 112 N.L.R.B. 1092 (1955).
With full respect to the discretion vested in the Board, not only to establish standards for the conduct of a valid representation election but also to determine if those standards have been met, we can only conclude that the Board abused its discretion in holding that the election in the case at bar met its tests.
First as to the November 4-5 handbill, we recognize that, in political elections, exaggerations, hyperbole and appeals to the emotions are the stuff of which election campaigns are made. "Laboratory conditions" rarely prevail. And even if we were to conclude that in political elections, democracy has taken a backward step in its acceptance of these departures from the truth and that in representation elections an analogous regression should not be tolerated, our limited scope of review would prevent such a decision. The false statements in the November 4-5 handbill, however, exceed by far permissible standards in political elections, no matter how lax.
The statement falsely attributed to Schneider that he would like to see two tied workers incinerated depicts in him such a degree of inhumanity that employees not otherwise disposed to support the union could well conclude that a union would be their only source of protection, thus interfering substantially with their free and untrammeled choice. But the statement went further. It compared Schneider to Hitler, and thereby interjected into the election one of the most sordid episodes of modern history, with all of its overtones of religious persecution. Even though only a single instance, for employees in general, and in particular any employee having any identity with any group persecuted or partially annihilated under the Hitler regime, such propaganda was of a highly inflammatory nature and was manifestly not germane to the issues at stake in the election. That inflammatory statements which "create conditions which make impossible a sober, informed exercise of the franchise" and which are also both not truthful and not germane to the issues before the employees invalidate elections, has been recognized by the Board and approved by this Court. Sewell Manufacturing Co., 138 N.L.R.B. 66, 71-72 (1962); National Labor Relations Board v. Schapiro & Whitehouse, Inc., 356 F.2d 675, 679 (4 Cir. 1966). We think the statements in the November 4-5 handbill are of this nature.
The misrepresentations in the November 4-5 broadcasts dealt with fringe benefits, and with one of the economic consequences of resort to a strike. These were matters of vital concern to employees voting in the election. The Cleveland Trencher Company, supra, at 603; Coca Cola Bottling Company of Louisville, 150 N.L.R.B. 397, 400 (1964). Union misrepresentations concerning wage rates and fringe benefits purportedly obtained by a union for other employees may be of such a substantial nature as to be expected to have a significant impact on an election. Cleveland Trencher Co., supra; Kawneer Co., 119 N.L.R.B. 1460 (1958); Reiss Associates, Inc., supra; The Gummed Products Company, supra. The substantiality of the misrepresentations is not contested by the Board; it defends on the grounds that the company answered the statements contained in the November 2 handbill, and that the broadcasts were merely repetitious of the former.
We reject the defense for several reasons. What was said in the broadcasts was not only repetitive of the statements in the November 2 handbill. One of the statements was a misrepresentation that had not been made before, and another was a prior misrepresentation enlarged upon. To the extent that the new and the enlarged misrepresentations were made, the company had no opportunity to make an effective reply. Hollywood Ceramics Co., Inc., supra. To the extent that previously made misrepresentations were repeated, we think that their vitiating effect on the validity of the election can be obviated only if the company had a second opportunity to make an effective reply, whether the company availed itself of the opportunity or not. It is clear in this case that the company had no such opportunity. Such a rule, we think, was prescribed by the Board in The Gummed Products Company, supra, at 1094, and the Board abused its discretion by not applying it in this case.
Enforcement denied.
. While the company's petition prays only that the order be set aside, the Board's answer prays enforcement of the order.
. Of the approximately 404 employees eligible to vote in the election, 365 cast valid ballots. Of these ballots, 211 were cast in favor of representation by the union and 154 were cast against representation by the union. In addition to the 365 valid ballots, there were 14 ballots which were challenged — a number insufficient to affect the results of the election.
. In Celanese Corporation of America v. National Labor Relations Board, 279 F.2d 204 (7 Cir. 1960,) cert. granted and remanded, 365 U.S. 297, 81 S.Ct. 689, 5 L.Ed.2d 688 (1961), on remand 291 F.2d 224 (7 Cir. 1961), cert. den., 368 U.S. 925, 82 S.Ct. 360, 7 L.Ed.2d 189 (1961), a distinction is aparently made between the scope of judicial review over the Board's wide discretion in promulgating standards for free and fair elections and the scope of judicial review in the application of these standards. Our decisions do not recognize the distinction.
. In dealing with the broadcasts, we are met at the outset with the Board's contention that the company seeks to create a new ground for objecting to the election because it did not assert the invalidity of the election on this ground in the proceedings before the Regional Director or the Board. The company asserts, and the Board does not deny, that the text of the broadcasts was before the Regional Director in his investigation of the election. The record shows that the company relied on the falsity of the broadcasts in its exceptions to the Board concerning the Regional Director's decision, proffered proof to the trial examiner in the unfair labor practice hearing and excepted to the trial examiner's decision, inter alia, on this ground. We consider the point preserved for review.