Case Name: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. WALTON MANUFACTURING COMPANY, Respondent
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1961-03-17
Citations: 289 F.2d 177
Docket Number: No. 18345
Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. WALTON MANUFACTURING COMPANY, Respondent.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 289
Pages: 177–188

Head Matter:
NATIONAL LABOR RELATIONS BOARD, Petitioner, v. WALTON MANUFACTURING COMPANY, Respondent.
No. 18345.
United States Court of Appeals Fifth Circuit.
March 17, 1961.
Wisdom, Circuit Judge, dissented in part.
Russell Specter, Atty., N.L.R.B., Marcel Mallet-Prevost, Asst. Gen. Counsel, N.L.R.B., Dominick L. Manoli, Associate Gen. Counsel, Stuart Rothman, Gen. Counsel, Melvin Pollack, Attys., N.L.R.B., Washington, D. C., for petitioner.
Robert T. Thompson, Alexander E. Wilson, Jr., Wilson, Branch & Barwick, J. Frank Ogletree, Jr., Atlanta, Ga., for respondent.
Before RIVES and WISDOM, Circuit Judges, and CHRISTENBERRY, District Judge.

Opinion:
RIVES, Circuit Judge.
This petition seeks enforcement of a cease and desist order of the Board based upon findings that respondent violated Section 8(a) (1) of the Act by promulgating rules which (1) forbade its employees from engaging in union solicitation in the plant during nonworking time, and (2) required its employees to conduct collective bargaining through a management-employee committee sponsored by respondent.
The findings rest entirely upon a nine-page, mimeographed document which the respondent issued and distributed to its employees on or about April 10, 1959, entitled:
"Employment Policies and Rules for Employees of Walton Manufacturing Company, Loganville, Ga."
That document starts with a declaration of policy:
"These pages contain some of the principal policies and rules which have been established for the purpose of maintaining good employee relations, promoting the general welfare of the employees and the Company, and encouraging orderly and efficient operations. From time to time the Company will review these policies and rules and will make such changes, additions, and deletions as appear necessary to meet changing conditions."
The document is then divided into five main parts, the contents of which are fairly indicated by their captions and principal subcaptions:
"Part I — Hours, Wages, and General Provisions.
"Section A — Hours of Work. "Section B — Overtime Work. "Section C — Payroll Practices. "Section D — Holidays.
"Section E — Vacations.
"Section F — Reporting Pay. "Section G — Seniority.
"Section H — Upgrading.
"Section I — Temporary Assignments.
"Section K — Layoffs and Rehirings.
"Section L — Leaves of Absence for Illness, Injury and Other Legitimate Reasons.
"Section M — Insurance and Hospitalization.
"Part II — Joint Committee on Safety, Sanitation and Advisory Matters.
"Part III — Grievance Procedure.
"Part IV — General Working Conditions.
"Part V — Regulations.
"Section A — What Every Good Employee Should Know.
"Section B — Merit Ratings.
"Section C — Thing to Avoid. "Section D — Rules and Regulations Concerning Absences and Tardiness."
The alleged violations involve particularly the following parts of the document :
"Part II — Joint Committee on Safety, Sanitation and Advisory Matters.
"(1) There will be a Joint Management-Employee Committee for safety, sanitation and advisory matters which will meet at least once monthly. The purpose of this committee shall be to work together to improve safety of operations, sanitation and cleanliness of the premises, and the general welfare of the employees and the Company.
"(2) The employee membership of this committee shall consist of one representative from each of the departments (or sections) listed below:
"1. Cutting and shipping departments
"2. Pressing department
"3. Assembly section
"4. Sleeve and lining sections
"5. Pocket, fronts, and finishing sections
"6. Office
"(3) The representative from each department shall serve a two months term and will then be succeeded by the next member of their department, in order of seniority sequence. Thus, each employee will ultimately have an opportunity to serve from time to time.
"(4) Employee committeemen shall cooperate with the management representative on the committee in planning the program and agendas of meetings and in obtaining maximum attendance by committee members.
"(5) The meetings of the committee will be held outside of regular working hours whenever possible, however, for time spent attending the regular monthly meetings of the committee, the committee members will be compensated at their regular straight time hourly rate.
*
"Part V — Regulations.
"Section A — What Every Good Employee Should Know.
*
"(3) Carrying on Outside Business — conducting outside business on company property without obtaining permission from your department head is prohibited. This includes solicitations of money or memberships, selling lottery chances or any other items, and the posting or circulating of advertisements, circulars and handbills.
*
"Section C — Thing to Avoid.
"Group II (g). Commission of any of the following acts shall furnish cause for immediate discipline, including discharge:
*
"Conducting outside business on company property without the Company's permission, including solicitations of money or memberships, the sale of lottery chances or any other item, and the posting or circulating of advertisements, circulars, or handbills."
The unfair labor practice charge was filed only two weeks after the respondent had issued and distributed the document to its employees; and at the time of the hearing before the Trial Examiner the management-employee committee had not been established.
The Board concluded that respondent, in violation of Section 8(a) (1) of the Act, had unlawfully interfered with the organizational rights of its employees guaranteed by Section 7 of the Act, by (1) promulgating a rule prohibiting employees from soliciting union membership or distributing union circulars and handbills in the plant during their nonworking time; and (2) imposing a requirement that employees bargain collectively through a management-employee committee sponsored by respondent.
The Board's order requires respondent to cease and desist from engaging in the unfair labor practices found, or from in any like or related manner interfering with its employees' organizational rights; to distribute to each employee a written notice rescinding the rules found unlawful by the Board; and to post appropriate notices.
Company rules prohibiting organizational solicitation on company property may serve production, order, and discipline, and are not necessarily violative of the Act. In this connection, a distinction must be observed between rules applicable to employees and those applicable to nonemployees. A no solicitation rule applicable to employees during their non-working time unlawfully interferes with their right to discuss self-organization among themselves, unless the employer proves special circumstances that make such a restriction necessary to maintain production or discipline. No contention is made in this case of the existence of any such special circumstances.
Respondent's contention on this charge is that the document prohibits solicitations of membership only when that is a part of the conduct of "outside business," and that union activity by employees cannot properly be considered as "outside business." According to respondent's brief, "the only legal justification for transacting union business on company property (absent some peculiar circumstance not present here) is that it is the business of the employees — it is the exercise of their rights. Well if it is their business and they are the ones who cannot be denied the right to engage in it on company premises, then it is not 'outside' business within the clear terms of the rule under consideration."
Whether respondent infringed upon its employees' freedom to engage in union or concerted activity guaranteed by Section 7 of the Act depends upon the reasonably foreseeable effects of its conduct upon its employees. An employee notified by his employer. that "conducting outside business on company property includes solicitations of memberships," and that doing so "shall furnish cause for immediate discipline, including discharge," might well be deterred, or else reasonably assume that he acted at his peril. At least that inference was open to the Board.
The Board could reasonably believe that the employees would understand the proscription to be directed against the solicitation of union memberships. It is not limited to working time, and no showing is made of special circumstances which might justify the breadth of the prohibition. In that state of the record, we agree with the Board that it is unlawful on its face.
As to Part II of the document, "Joint Committee on Safety, Sanitation and Advisory Matters," the Board found that respondent's announcement of such a management-employee committee also violated Section 8(a) (1) of the Act, by unlawfully interfering with the organizational rights of its employees guaranteed by Section 7 of the Act. Section 7 guarantees to employees "the right to self-organization" and "to bargain collectively through representatives of their own choosing."
The Board's view was that Part II would be reasonably understood by the employees to require them, as a condition of employment, to conduct any collective bargaining they might desire through a management-employee committee, sponsored, formed and assisted by the employer — a clear violation. See N. L. R. B. v. Cabot Carbon Co., 360 U.S. 203, 79 S.Ct. 1015, 3 L.Ed.2d 1175.
It is true that the committee never came into being, but respondent's announcement was more than an expression of desire to create the committee. It was a positive and unequivocal statement that, "There will be a joint Management-Employee Committee etc.," and a requirement that, "the representative from each department shall serve etc." That the unfair labor practice charge was filed almost as soon as the document was distributed, and that the management-employee committee was not actually established, do not detract from the coercive effect of the document itself.
Respondent's more plausible defense is that the expressed purpose of the committee was to deal with matters of safety and not with conditions of employment. Part II states that, "the purpose of this committee shall be to work together to improve safety of operations, sanitation and cleanliness of the premises, and the general welfare of the employees and the Company." Respondent argues that the broad concluding expression, "and the general welfare of the employees and the Company," should be limited to the preceding specific matters, "safety of operations, sanitation and cleanliness of the premises." Whether or not the employees would naturally give the phrase such a lawyerlike construction might be better determined by the Board with its experience and expertise than by this Court.
It may be noted that the identical phrase, "the general welfare of the employees and the company," was employed also in the policy declaration at the beginning of the document. Even lawyers should naturally and properly construe the document as a whole. The Board's reasoning we find to be certainly rational, if not indeed conclusive:
"As to contention (2), we find, as the Trial Examiner did, that because the committee was 'to work together to improve,' among other things, 'the general welfare of the employees and the Company,' and so far as appears conditions of employment were the only matters of common interest between management and the employees, and because the part of Respondent's April 1959 notice to the employees dealing with the committee appears in the middle of a 'Magna Charta' of employment covering everything usually set out in a collective bargaining agreement, the committee was intended to deal with conditions of employment and was so understood by the employees, despite the absence of any explicit reference to wages, hours or other conditions of employment."
The petition to enforce the Board's order is granted.
. 29 U.S.C.A. § 158 (a) (1).
. That was more than a year after the conduct considered in N. L. R. B. v. Walton Mfg. Oo. and Loganville Pants Co., 5 Cir., 286 F.2d 16, m/s, decided January 6, 1961, and N. L. R. B. v. Walton Mfg. Co., 5 Cir., 286 F.2d 26, m/s, decided January 6, 1961.
. See note 1, supra.
. 29 U.S.C.A. § 157.
. N. L. R. B. v. United Steelworkers, CIO, 357 U.S. 357, 78 S.Ct. 1268, 2 L.Ed.2d 1372.
. Republic Aviation Corporation v. N. L. R. B., 324 U.S. 793, 65 S.Ct. 982, 89 L. Ed. 1372; N. L. R. B. v. Babcock & Wilcox Co., 351 U.S. 105, 76 S.Ct. 679, 100 L.Ed. 975.
. That the respondent might look on union activities as "outside business" was plainly indicated by its earlier letter sent to employees, quoted in N. L. R. B. v. Walton Mfg. Co. et al., 5 Cir., 286 F.2d 16, 20:
"We are happy that no employee has to pay dues or initiation fees to any outside union to work at these plants. Nou will not be forced to make payments to outsiders for the privilege of working here. What earnings you make here are yours. No part goes to organizers."
. See N. L. R. B. v. Seven-Up Co., 1953, 344 U.S. 344, 348, 73 S.Ct. 287, 97 L.Ed. 377; Franks Bros. Co. v. N. L. R. B., 1944, 321 U.S. 702, 64 S.Ct. 817, 88 L. Ed. 1020; N. L. R. B. v. Standard Oil Co., 2 Cir., 1943, 138 F.2d 885, 887.