Opinion ID: 392021
Heading Depth: 1
Heading Rank: 2

Heading: THE SECTION 8(a)(1) VIOLATIONS

Text: 1. Introduction 4 With two important exceptions set forth below, we hold that substantial evidence exists to support the findings of the Board that the company committed several violations of Section 8(a)(1) of the Act during the union campaign. 5 Although each of these findings is vigorously contested by the company, it is firmly established that findings of the Board are entitled to judicial enforcement if supported by substantial evidence. 29 U.S.C. § 160(e) (1976); Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). 5 We are unable to find substantial evidence, however, to support a finding of the Board that the company violated Section 8(a)(1) by implementing a health insurance plan for its employees during the union organizational drive. Proper resolution of this issue requires a detailed review of the facts surrounding the implementation of the plan. 6 2. The Facts Relating to the Establishment of the Health Insurance Plan 7 The subject of health insurance coverage for employees of the restaurant first arose in either late 1975 or at some unspecified time in 1976. ALJ 7. Employees were told on this first occasion that the restaurant was not in a suitable financial position to provide insurance. Id. However, on April 23, 1977, the subject again arose during an employee meeting, and Peter S. Ramirez, president and co-owner of the company, told employees that the company was in a position to begin to collect bids from insurance companies. ALJ 8. Ramirez stated that he thought coverage could be secured by the end of the year. No date was mentioned, however, as to when such a plan would go into effect. Id. 8 Although the company contends that several insurance companies were contacted unsuccessfully after the April 23 meeting, the only documentary evidence to support this contention is a letter dated November 18, 1977, indicating that State Farm Insurance had been requested to submit a bid. ALJ 8. In mid-December 1977, however, Harold Hobson, an experienced insurance broker, was introduced to company management and agreed to solicit additional bids. Id. Hobson contacted the Prudential Life Insurance Company and the New York Life Insurance Company. Another broker, Jack Montgomery, also solicited bids from three additional underwriters. Id. During January, 1978, several meetings were conducted between company officials and representatives of the insurance companies. ALJ 8; A. 99, 263. 6 On February 1, 1978, Prudential submitted a formal, written proposal. ALJ 8. The company compared this proposal with the others subsequently received from other underwriters, and, on March 6, 1978, Pedro's executed an application with Prudential and tendered the initial premium that commenced coverage of the plan. ALJ 10. 7 9 In mid-March, Ramirez held a meeting with the employees and informed them that they had been insured for a week. ALJ 7. He introduced Hobson and a representative from Prudential, who in turn explained the new health insurance coverage and gave the employees forms to fill out. No reference to the union was made at this meeting. Id. 10 3. The Legality of the Grant of Insurance Benefits 11 It is firmly established that an employer may not grant benefits to employees during an organizational drive in an attempt to influence the outcome of a pending election. In NLRB v. Exchange Parts Co., 375 U.S. 405, 84 S.Ct. 457, 11 L.Ed.2d 435 (1964), the Supreme Court held: 12 We have no doubt that (Section 8(a)(1)) prohibits not only intrusive threats and promises but also conduct immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect. 13 375 U.S. at 409, 84 S.Ct. at 459. However, a benefit granted in the normal course of the business of an employer, without any motive of inducing employees to vote against the union, does not violate the Act. NLRB v. Tommy's Spanish Foods, Inc., 463 F.2d 116 (9th Cir. 1972); Jervis Corp., Bolivar Division v. NLRB, 387 F.2d 107 (6th Cir. 1967). 8 The question presented, therefore, is whether the disputed insurance benefit was granted in the normal course of business by the employer, or outside the normal course of business in an attempt to influence the outcome of the election. In Free-Flow Packaging Corp. v. NLRB, 566 F.2d 1124, 1130 (9th Cir. 1978), the court stated that (t)he question quite simply is whether the employer in good faith sought to comply with the requirements of law. 9 14 In the present case, the Board acknowledged that preparations for the implementation of a health insurance plan had begun well in advance of the union organizational drive. The ALJ concluded that the company had commenced serious attempts to secure health insurance coverage prior to the commencement of the union organizational campaign. ALJ 15. The Board here contends, however, that Pedro's accelerated its efforts to locate and implement a plan upon learning of the union activities of its employees. 15 In reviewing the record in this case, we are unable to find any evidence that the company accelerated its efforts to implement a health insurance plan because of the union's organizational drive. The company had initially announced the possibility of an insurance plan in April of 1977. At least one insurer was contacted between April and November, 1977. Then, in December 1977, well before the union campaign began, the company secured the services of an experienced insurance broker. From the moment that Hobson entered the picture, substantial progress was made in obtaining bids and securing a plan. In addition, there was nothing unusual about the amount of time that it took Hobson to secure an insurance plan for the company, and the plan was implemented within a time frame that was consistent with industry practice. ALJ 10. In short, the Board has produced no evidence that the health insurance plan was implemented outside the normal course of business, in an attempt to induce employees to vote against the union. 10 16 We are aware that certain courts have imposed a heavy burden on an employer to justify a grant of benefits during a union election campaign. 11 In this case, the company presented evidence that it was the introduction of insurance broker Hobson, and not the union organizational drive, that advanced the implementation of the health insurance plan. The Board has found nothing to rebut this evidence. Thus, to the extent that the company had a burden to justify the implementation of the health insurance plan in a case of this sort, 12 that burden has been met. 17 In NLRB v. Exchange Parts Co., 375 U.S. 405, 410, 84 S.Ct. 457, 460, 11 L.Ed.2d 435 (1964), the Supreme Court stated that (o)ther unlawful conduct may often be an indication of the motive behind a grant of benefits while an election is pending, and to that extent it is relevant to the legality of the grant. Thus, if uncertainty exists as to employer motive, an improper motive may be inferred from the presence of unlawful conduct with respect to other events. In the present case, however, the company produced ample evidence that preparations for the implementation of a health insurance plan were begun well in advance of the union campaign, and that a plan was implemented in the normal course of business when negotiations were completed. The Board has found nothing to rebut this evidence. Therefore, we do not believe that an inference of improper motive may be drawn from the fact that the employer has been found guilty of unfair labor practices relating to incidents that arose after the union campaign had commenced and that had nothing whatsoever to do with the insurance plan. 18 Our ruling here is consistent with the Board's own recent decision in American Sunroof Corp., 248 N.L.R.B. 748 (1980). In American Sunroof, the company considered implementing a new pension plan for its employees for over two years. After a union organizational drive began at one plant, the company agreed on a final plan. Although this plan was announced to employees one day before a scheduled election, the Board found no violation of the Act. As stated by the Board: 19 In sum, whatever dividend Respondent received from the announcement of the pension plan, it is clear that Respondent granted this benefit for reasons unrelated to the union activity and that it lawfully announced this benefit when, in the normal course of business, the plan was finalized. 248 N.L.R.B. at 749. 13 20 Similarly, it is clear on the record before us that Pedro's implemented a health insurance plan for reasons unrelated to the union activity, and that it lawfully announced this benefit when, in the normal course of business, the plan was finalized. The Board simply has failed to present sufficient evidence that the company accelerated its efforts to implement a health insurance plan as a result of the union campaign. As a result, we decline to enforce the finding of the Board that the implementation of the plan violated Section 8(a) (1). 14