Court Opinion

ID: 2971034
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Date Created: 2015-09-22 16:27:29.260544+00
Date Added: 2024-06-11T12:48:26.444664
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                Pursuant to Sixth Circuit Rule 206                          2    Ishikawa Gasket Am. v. NLRB           Nos. 02-1167/1310
        ELECTRONIC CITATION: 2004 FED App. 0007P (6th Cir.)
                    File Name: 04a0007p.06                                                      _________________
                                                                                                     COUNSEL
UNITED STATES COURT OF APPEALS
                                                                            ARGUED: Maurice G. Jenkins, DICKINSON, WRIGHT,
                   FOR THE SIXTH CIRCUIT                                    PLLC, Detroit, Michigan, for Petitioner. David Seid,
                     _________________                                      NATIONAL LABOR RELATIONS BOARD, Washington,
                                                                            D.C., for Respondent. ON BRIEF: Maurice G. Jenkins,
 ISHIKAWA GASKET AMERICA , X                                                Jennifer K. Nowaczok, Paul R. Bernard, DICKINSON,
 INC.,                            -                                         WRIGHT, PLLC, Detroit, Michigan, for Petitioner. David
                                                                            Seid, Aileen A. Armstrong, Frederick C. Havard,
                     Petitioner/ -                                          NATIONAL LABOR RELATIONS BOARD, Washington,
                                  -   Nos. 02-1167/1310
            Cross-Respondent, -                                             D.C., for Respondent.
                                   >
                                  ,                                                             _________________
            v.                    -
                                  -                                                                 OPINION
 NATIONAL LABOR RELATIONS -                                                                     _________________
 BOARD ,                          -
                    Respondent/ -                                             BOYCE F. MARTIN, JR., Circuit Judge. Ishikawa Gasket
               Cross-Petitioner. -                                          America, Inc. seeks review of the National Labor Relations
                                  -                                         Board’s decision that it violated section 8(a)(1) and (3) of the
                                 N                                          National Labor Relations Act (29 U.S.C. § 158(a)(1) and (3)),
       On Petition for Review and Cross-Application                         by reducing its annual bonus for hourly production employees
            for Enforcement of an Order of the                              during a union organization effort. The Board cross-applies
             National Labor Relations Board.                                to enforce its order. For the following reasons, we affirm.
                     No. 8-CA-31292.
                                                                                                           I.
                    Argued: October 21, 2003                                  The facts are well documented in the administrative law
                                                                            judge’s report, which was adopted and incorporated in the
              Decided and Filed: January 7, 2004                            Board’s order. The facts relevant to this Court’s review,
                                                                            however, are summarized as follows.
 Before: MARTIN and SUTTON, Circuit Judges; MILLS,
                  District Judge.*                                            Ishikawa Gasket America, Inc., a wholly-owned subsidiary
                                                                            of Ishikawa Gasket of Japan, Inc., manufactures head and
                                                                            manifold gaskets for the automotive industry at its production
                                                                            facility located in Bowling Green, Ohio. Ishikawa’s
    *                                                                       administrative offices are located in Farmington Hills,
     The Hon orable R ichard M ills, United States District Judge for the
Central District of Illinois, sitting by designation.                       Michigan. The Bowling Green facility began operations with

                                   1
Nos. 02-1167/1310        Ishikawa Gasket Am. v. NLRB         3    4    Ishikawa Gasket Am. v. NLRB           Nos. 02-1167/1310

only twelve employees, but has since grown to more than two         Additionally, Makowski and Kendrick created a racist
hundred employees.       Prior to the acquisition by the          leaflet and constructed it so that it appeared to be authored by
International Association of Machinists and Aerospace             the union with the intention that it would dissuade employees
Workers, AFL-CIO, of an interest in Ishikawa’s employees,         from organizing. The document referred to the “Japs
an attempt to organize the employees occurred in October          bomb[ing] Pearl Harbor” and stated that, “We give you your
1997, and a second attempt occurred approximately a year          own bomb to drop on the sneaky BASTARDS!!!” Finally,
later.                                                            the supervisors began an unprecedented practice of soliciting
                                                                  the employees’ complaints and after discovering that the
  In 1999, Ishikawa employees began another attempt to            employees’ chief complaint was the management, Vice
organize and Ishikawa’s reaction to this campaign gave rise       President Masanori Yamanami fired several supervisors
to this litigation. Apparently, the organization attempt          including Kendrick and Makowski.
coincided with internal management disputes and the
development of two management factions, which were chief            On November 30, the Union filed a petition to represent
among the employees’ complaints. The campaign against the         Ishikawa’s employees. Two days prior to the election to
union organization started at the top with President              determine whether the union would represent the employees,
Tsunekazu Udagawa’s command that the supervisors “must            President Udagawa reminded the employees that their
not let this drive[] succeed at any cost. You must stop it,       complaints were taken care of and there was no reason for a
period.”     Many of the supervisors shared President             union. A stipulated election was held on January 21, 2000
Udagawa’s distaste for unions and began a relentless              and the employees overwhelmingly voted against the union.
campaign against the union and those who supported the
cause.                                                              A consolidated complaint alleging various violations of the
                                                                  National Labor Relations Act was filed on October 30, 2000.
   Examples of Ishikawa’s repeated attempts to dissuade           Relevant to this appeal, the complaint specifically alleged that
union supporters are well preserved in the record, but a few      Ishikawa reduced its annual Christmas bonus from fifteen
bear mention. Notably, supervisor Dave Kendrick convinced         cents per hour worked in a forty-hour work week to thirteen
employees to surveil the union activities that were occurring     cents per hour worked in a forty-hour work week and that the
and promised them compensation in return. Joe Makowski,           reduction was based upon and in retaliation for the
Vice President of Manufacturing in charge of the Bowling          employees’ organization attempt.
Green facility, compiled a list of pro-union and anti-union
employees and later looked to it to develop ways to “put a           The administrative law judge found that Ishikawa had
stop to the Union.” Much of the surveillance focused on           violated section 8(a)(1) of the National Labor Relations Act
employee Julie Wilson, the person who spearheaded the             (29 U.S.C. § 158(a)(1)) by chilling the efforts to organize,
campaign for union representation or, as Makowski called          soliciting employee grievances in an attempt to persuade
her, the “pain in the [expletive]”or the “Union antagonist.”      employees that a union was unneeded, surveilling the
Upon Ishikawa’s direction, the supervisors removed union          employees’ union activities, distributing inflammatory
literature located in the production facility. Indeed, Kendrick   literature, and discriminatorily warning and suspending
and other managers began making a “morning walk-through”          Wilson and terminating her employment because of her union
to discover and remove any union paraphernalia.                   activities and because she had previously filed charges with
                                                                  the Board. Finally, the administrate law judge found that
Nos. 02-1167/1310         Ishikawa Gasket Am. v. NLRB          5    6    Ishikawa Gasket Am. v. NLRB           Nos. 02-1167/1310

Ishikawa violated section 8(a)(1) and (3) of the Act by             overturned only if it is unsupported by substantial evidence,
reducing the employees’ bonuses because of their union              even if this Court were to draw a contrary conclusion had it
activities.                                                         engaged in de novo review. See id.; Gen. Fabrications Corp.,
                                                                    222 F.3d at 225.
  With slight modifications, the Board adopted the
administrative law judge’s findings. The Board issued an              An employer runs afoul of 29 U.S.C. § 158(a)(1) when it
order which required Ishikawa to cease and desist its unfair        engages in conduct that is designed to “interfere with,
labor practices and to post a remedial notice that stated that it   restrain, or coerce employees in the exercise” of their right to
had violated the Act and explained the rights of the                organize. Relatedly, an employer commits a violation of 29
employees. Additionally, the Board required that Ishikawa           U.S.C. § 158(a)(3) when it discriminates in the terms or
reinstate Wilson and make her whole for any losses she              conditions of employment as a means of discouraging union
suffered, and to make the production employees whole for the        membership. This Court has adopted a burden-shifting
unlawful reduction in the Christmas bonus. Ishikawa appeals         approach to determine whether anti-union animus motivated
only the Board’s decision that Ishikawa’s reduction of the          an employer’s decision. See Gen. Fabrications, 222 F.3d at
employees’ bonuses violated the Act. The National Labor             226. First, the Board must establish a prima facie case by
Relations Board cross-applies to enforce its order issued           demonstrating that “the employee’s protected activities were
against Ishikawa. Because Ishikawa failed to challenge the          a motivating factor in the employer’s decision.” Id. Second,
Board’s findings with respect to all other violations of the Act    the burden shifts to the employer to demonstrate by a
beside the bonus issue, we conclude that the Board is entitled      preponderance of the evidence that it would have made the
to summary enforcement of the Board’s findings that went            same decision regardless of the fact that the employees
unchallenged. See N.L.R.B. v. Gen. Fabrications Corp., 222          engaged in protected activity. Id.
F.3d 218, 231-32 (6th Cir. 2000).
                                                                                                  B.
                               II.
                                                                      Ishikawa argues that it made its decision to reduce the
                               A.                                   annual bonus before it was aware of the organization attempt
                                                                    and, therefore, its decision could not have been motivated by
   This Court’s review of the Board’s decision is limited. The      anti-union animus. In support of this assertion, Ishikawa
Board’s findings of facts are conclusive unless they are            points to an electronic message dated November 16, 1999, in
unsupported by substantial evidence. Id. at 225. Substantial        which President Udagawa and Vice President Yamanami
evidence exists when the evidence is “adequate, in a                discussed decreasing the amount of the bonuses. The record,
reasonable mind, to uphold the [Board’s] decision.” Id.             however, belies this argument. We find that there is
(internal quotations and citations omitted). When presented         substantial evidence in the record which demonstrates that
with conflicting factual inferences, this Court is not at liberty   Ishikawa made its decision fully aware that its employees
to draw an inference different from the inference drawn by the      were attempting to organize.
Board. Stark Ceramics, Inc. v. N.L.R.B., 375 F.2d 202, 205
(6th Cir. 1967). The Board’s determination that Ishikawa was          As an initial matter, Ishikawa makes no attempt to
motivated by an improper purpose in its decision to reduce          overcome Yamanami’s testimony that when considering
the Christmas bonus is a question of fact that may be               whether to reduce the bonuses he considered the union
Nos. 02-1167/1310        Ishikawa Gasket Am. v. NLRB         7    8    Ishikawa Gasket Am. v. NLRB           Nos. 02-1167/1310

activity “very seriously.” This statement alone demonstrates      then this Court must find that Ishikawa’s decision to reduce
that Ishikawa was clearly aware of the ongoing union              the employees’ bonuses was motivated by that same concern.
organization attempt when it made its decision. Additionally,     As Ishikawa argues, “[g]iven the pervasive affect [sic] of
when asked whether at “the time you made the decision to          factionalism throughout the Bowling Green facility, there is
reduce the bonuses, [was he] aware that there was a Union         no way to separate the decision to reduce the managers’
organizing drive going on at the Bowling Green plant,”            bonuses from the decision to reduce employee bonuses.”
Yamanami replied: “Yes, I do.”                                    Additionally, Ishikawa argues that if the factions were the real
                                                                  reason to reduce the managers’ bonuses then there would be
   Moreover, Yamanami testified that he had not made his          no reason to also reduce the managers’ bonuses at the
final decision to reduce the bonuses until late November. At      Farmington Hills, Michigan, facility because the factionalism
that time, Ishikawa was not only aware of the union activity,     was only a problem at the Bowling Green facility. Again, we
but had launched the campaign against the union. Indeed, by       find Ishikawa’s arguments unpersuasive.
late November, Wilson had conducted two union meetings
from her home that Ishikawa’s supervisors had instructed             First, we note that regardless of Ishikawa’s motivation for
anti-union employees to monitor. Additionally, by late-           reducing the managers’ bonuses, there was substantial
November the supervisors had begun to take down union             evidence in the record that demonstrates that the decision to
literature located in the Bowling Green facility.                 reduce the employees’ bonuses was motivated by Ishikawa’s
                                                                  desire to chill protected activity.        Stated differently,
   Furthermore, the record demonstrates that as early as          Ishikawa’s motivation for reducing the managers’ bonuses is
November 2 the management knew of the union organization          simply irrelevant to its motivation for reducing the
attempt. On that date, Kendrick had confirmed his suspicions      employees’ bonuses. With that said, however, the record
that the employees were attempting to organize and in a           demonstrates that the decision to reduce the managers’
meeting shortly after this confirmation, President Udagawa        bonuses was made because of the factionalism and
made his statement that the supervisors “must not let this        performance related reasons, which are legitimate reasons to
drive[] succeed at any cost. You must stop it, period.” Thus,     reduce the bonus. Yamanami himself testified that when
we find Ishikawa’s argument that it made its decision to          determining whether to pay bonuses to its management, it
reduce the bonus without knowledge that the employees were        considered the managers’ performance. Specifically,
attempting to organize unpersuasive in light of the substantial   Yamanami stated: “for the managers, we determine the bonus
evidence in the record to the contrary.                           by the performance.” As the Board noted, the management
                                                                  was “the area where Yamanami had his main problem,”
                              C.                                  whereas there was no such legitimate explanation to reduce
                                                                  the employees’ bonuses. Second, Ishikawa presents no
  Ishikawa also argues that the fact that it also reduced the     evidence to demonstrate that Ishikawa had ever before treated
managers’ bonuses and at a much higher rate, fifty percent,       its management and production employees differently
negates the Board’s conclusion that the decision to reduce the    determined by whether they worked at the production facility
employees’ bonuses was based upon an anti-union                   or the administrative facility. Instead, the only evidence we
motivation. Further, Ishikawa argues that because the Board       have before us suggests that Ishikawa was group-minded, as
accepted the conclusion that the decision to reduce the           opposed to facility-minded.
managers’ bonuses was because of the management factions,
Nos. 02-1167/1310        Ishikawa Gasket Am. v. NLRB          9    10   Ishikawa Gasket Am. v. NLRB          Nos. 02-1167/1310

   In sum, we find that substantial evidence supports the             First, in Citizens Hotel the Board found no direct evidence
Board’s finding that Ishikawa’s anti-union animus motivated        of anti-union motivation, whereas in this case there was
its decision to reduce the employees’ bonuses. Indeed, the         abundant evidence of anti-union motivation. Id. Second, in
most crucial piece of evidence demonstrating Ishikawa’s            Citizens Hotel the court described the evidence of the Hotel’s
motivation in reducing the bonus went uncontradicted by            deteriorating financial condition as “overwhelming” evidence
Ishikawa in its brief presented to this Court. That is, Ishikawa   that “the hotel was suffering great and increasing losses.” Id.
announced its decision to reduce the employees’ bonuses, on        In this case, however, the Board found that Ishikawa was less
the heels of its statement that “the Japanese take the posting     than forthcoming about its financial situation and what little
of flyers for a Union as threat [sic] and they wouldn’t tolerate   financial information that Ishikawa had presented actually
any third party coming into their plant.” At oral argument,        showed an improvement in productivity and profitability.
however, Ishikawa suggested that the statement that it was         Indeed, the sparse financial information that Ishikawa
going to reduce the employees’ bonuses actually came before        provided showed increased sales from $26,205,587 in 1998
the statement regarding the posting of union flyers.               to $28,948,426 in 1999. Also, the net losses decreased from
Regardless of which statement preceded the other, Ishikawa         $4,495,729 in 1998 to $2,019,904 in 1999. Although the
has made no effort to explain the linking of these two             financial information demonstrated that the accumulated
statements and how this Court could construe their linking as      deficit continued to grow, the minimal information that
anything other than that Ishikawa made its 1999 bonus              Ishikawa provided left the Board without an explanation or a
reduction decision because of the union organization events.       way in which the Board could distinguish “how and why
Ishikawa’s silence on this issue is deafening and we conclude      [Ishikawa] established its bonus in past years as compared
that Ishikawa’s decision to reduce the employees’ bonuses          with 1999 and [how] it established that it would have
was unlawfully motivated.                                          decreased an admitted incentive based bonus when in fact the
                                                                   financial results for 1999 show apparent success in that it had
                              III.                                 a major profit gain over the previous year.”
   Ishikawa has presented the defense that it had a legitimate        We find that Ishikawa has not met its burden of establishing
business reason for its decision, and thus, it would have made     by a preponderance of the evidence that it would have made
its decision to reduce the employees’ bonuses even absent any      the same decision regardless of the fact that its employees
anti-union motivation. Ishikawa argues that its deteriorating      were engaged in protected activity. Gen. Fabrications Corp.,
financial condition motivated its decision to reduce the           222 F.3d at 226. Ishikawa’s asserted business justification is
employees’ bonuses. Ishikawa relies on National Labor              simply unpersuasive in light of its increased productivity and
Relations Board v. Citizens Hotel Company, 326 F.2d 501            profitability and because even the sparse financial information
(5th Cir. 1964), in support of this argument. In Citizens          that Ishikawa had provided warned of its lack of reliability.
Hotel, the Fifth Circuit found that even though the Hotel had      Indeed, the letter introducing the financial information warns
established a practice of paying its employees a Christmas         that “[w]e have not audited or reviewed the accompanying
bonus, its decision to end the practice did not establish an       financial statements and, according[ly], do not express an
anti-union motivation in light of the Hotel’s financial            opinion or any other form of assurance on them.”
situation. Id. at 506. We find Ishikawa’s reliance on Citizens
Hotel misplaced.
Nos. 02-1167/1310      Ishikawa Gasket Am. v. NLRB      11

  Based on the foregoing, we AFFIRM the decision of the
Board and GRANT the Board’s petition for enforcement of its
order.