Court Opinion

ID: 9471848
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:42:35.206013+00
Date Added: 2024-06-11T17:42:36.471099
License: Public Domain

*841COFFEY, Circuit Judge,
dissenting in part.
I respectfully dissent from that portion of the majority opinion which supports the Board’s determination that statements made by Harrison Steel’s management prior to the representation election violated § 8(a)(1) of the Act as constituting “threats” prohibited by the Act. I would hold that the statements were not threats because they were consistent with an employer’s right to freedom of speech.
The Board first objects to the statement made by Harrison Steel’s management in the company newspaper’s “election special.” The article read in part:
“If you would be called out on strike by the union during contract negotiations, such a strike is called an ‘economic’ strike and all employees not reporting for work can be PERMANENTLY REPLACED. A company cannot fire employees for striking but it can ‘permanently replace’ them. Permanent replacements hired for strikers are allowed by law to keep the striker’s job even after the strike ends. Thus, employees who go on strike and are replaced have no job' to return to when the strike ends.”
The Board asserts that an employer cannot state that replaced strikers “have no job to return to when the strike ends.” Somehow, through speculative and novel reasoning they believe that the employees may have interpreted this statement as an implied threat of discharge for engaging in protected activity. I fail to see how the Board, through the process of logical reasoning, can reach this conclusion as the employer took great care in prefacing this allegedly illegal statement with an unequivocal assurance that “a company cannot fire employees for striking.” The Board seems to have made up its mind as to how the case should be decided and to achieve their desired result took part of the statement out of context, and thereby cast aside the real import and intent of the statements in their entirety. Reading the statements in their entirety, I fail to understand the thought process the Board undertook that allowed it to conclude that an employee could interpret the employer’s statements as an improper threat of job termination thus inhibiting employee free choice. The Board would evidently mandate that each and every employer would have to explain in minute detail the procedures through which workers, once permanently replaced, must be rehired as vacancies occur if they still desire employment after the strike. The Board imaginatively reasons that because the employer failed to give this explicit, thorough explanation, the message was “subject to an interpretation of final job elimination without resurrection as vacancies occur during the post-strike period.” Even though they have taken one sentence out of context to achieve their desired end, any such interpretation would be strained to say the least considering that the employer specifically stated that “[a] company cannot fire employees for striking but it can ‘permanently replace’ them.”
I do not agree with the Board’s implication that the Act requires an employer to explain each and every technical point of labor law to its employees, particularly when no reasonable person could conclude that they would lose all rights to their jobs. The Board has recently ruled that employees are realistically able to assess misleading campaign propaganda and that it will not set aside representation elections based upon misleading campaign statements. Midland National Life Insurance Co., 263 NLRB 127 (1982). The Board recognizes “employees ‘as mature individuals who are capable of recognizing campaign propaganda [i.e., puffing and exaggerations] for what it is and discounting it.’ ” Id. at 130 (quoting Shopping Kart Food Market, Inc., 228 NLRB 1311, 1313 (1977)). In Midland Life, the Board stated that its decision “removes impediments to free speech by permitting parties to speak without fear that inadvertant errors will provide the basis for endless delay or overturned elections .... ” Id. at 132. While the case before us does not deal with campaign propaganda, the Midland Life holding should have equal or greater application in a case such as this when the statements made by management *842personnel could not be considered to be misleading. See, Excessive Restriction on Employers’ Predictions Daring Union Representation Campaigns, 66 Marq.L.Rev. 785, 812-15 (1983). Harrison’s employees were “realistically able to assess” the statements made. No reasonable employee would have taken the final sentence out of context, as the Board did in an attempt to achieve their desired result, and concluded that they would be fired without opportunity for reemployment at a later date.
In any event, the employer’s statement that employees who are “replaced have no job to return to when the strike ends” is a literally true and factually correct statement. If the employer does in fact hire replacements during the strike, those strikers whose jobs were filled by replacements would not have jobs to return to when the strike ended absent other vacancies. True, at some point in the future when and if vacancies occur, they would have a job to return to, but not immediately upon the termination of the labor walkout.
Furthermore, this case is readily distinguishable from Board decisions which found employer statements objectionable when employees were told that they would “permanently lose” their jobs without being advised, as Harrison’s employees were, that “a company cannot fire employees for striking.” See, e.g., Webel Feed Mills & Pike Transit Co., 217 NLRB 815 (1975); Hicks-Ponder Co., 186 NLRB 712 (1970), enf’d, 458 F.2d 19 (5th Cir.1972). Such threats are clearly objectionable and violate the Act in contrast to the facts in this case where employees were specifically told they could not be fired for striking and the employer truthfully and accurately informed them that if the company exercised its right to hire replacements the striking employees would not have a job to return to when the strike ended. The Board has recently ruled that a company may inform its employees that permanent replacements can be hired to fill their jobs and that there is no need to fully detail their re-employment rights. Eagle Comtronics, Inc., 263 NLRB 515 (1982). The Board reasoned that “[t]o hold otherwise would place an unwarranted burden on an employer to explicate all of the possible consequences of being an economic striker.” Id. at 516. Similarly, in this instance, an unwarranted burden is imposed upon employers because contrary to the Board’s novel interpretation, there was no threat of job loss since the employees were unequivocally told they could not be fired for striking. In N.L.R.B. v. Eastern Smelting & Refining Corp., an employer told employees that “a strike occurred” in the past and that as a result “employees lost their jobs.” 598 F.2d 666, 672 (1st Cir.1979). The court ruled that the employer’s “failure to state the full sequence, viz., that some employees had been replaced and not recalled, and its summary form that they had lost the jobs [was] not significant, ... the test is the ‘total effect.’ ” Id. at 672 (citations omitted). The “total effect” of Harrison’s statements here do not convey a meaning logically or realistically consistent with a conclusion that the statements were “subject to an interpretation of final job elimination.” Since the Board has held that employers need not “explicate all of the possible consequences of being an economic striker,” Eagle Comtronics, Inc., 263 NLRB at 516, I cannot understand why the Board found Harrison’s remarks objectionable. Therefore, I would hold that the employer’s statements in this regard were permissible.
Two additional statements made by Harrison Steel’s management to the effect that as a result of unionization some jobs might be lost were also found illegal by the Board. In the first statement, the company asserted that unionization would increase their overall costs and therefore decrease their competitiveness which could ultimately result in a loss of jobs. The “election special” of the company newspaper stated:
“Some of Harrison Steel Castings Company’s competitors are non-union and some are located in the Southern part of the United States where wage rates are traditionally lower, and if we become union the company may become non-competitive with a resulting loss of business and jobs. This loss of business could come about through increased cost of op*843eration, not due to wage or benefit increases to employees, but rather due to the inherent increased cost in operating a union plant. At union companies much time is spent on grievance processing, contract negotiations, and dealing with the union, which add to the cost of operation, but do not put any benefits in the employee’s pocket.”
While the majority agrees with the Board that the company established a realistic foundation to support their premise, they nevertheless find these statements illegal because the company failed to demonstrate a causal connection between a projected increase in labor costs and a possible loss of some jobs. The majority believes that N.L.R. B. v. Gissel Packing Co., 395 U.S. 575, 89 S. Ct. 1918, 23 L.Ed.2d 547 (1969) requires that a company must establish a factual basis sufficient to show its predictions were “likely” to occur. There the court held that an employer could make a prediction if it was “carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control ... . ” Id. at 618, 89 S.Ct. at 1942. While I agree that the employer did not produce a balance sheet certified by a “big eight” CPA firm, what the employer did in this case is precisely what Gissel permits. It is being faulted for not showing that its projected increased costs would be substantial enough to result in employees losing jobs. It is uncontroverted that the employer “reasonably believed” some jobs would be lost. Based on a common sense review of the questioned statement, I conclude that the majority’s position is an unwarranted and unduly strict interpretation of Gissel. Contrary to the majority’s position Gissel did not mandate the degree of certainty that an employer must demonstrate before making a prediction based on “probable consequences.” See e.g., Williams, Distinguishing Protected from Unprotected Campaign Speech, 1982 Labor Law J. 265, 266.
Gissel dealt with a clear and unequivocal threat to close a plant which is a far more drastic and serious consequence than the possible loss of a few jobs. The message conveyed in Gissel “was not to predict that unionization would inevitably cause the plant to close but to threaten the employees ... regardless of the economic realities.” 395 U.S. at 619, 89 S.Ct. at 1943. To the contrary, in this case it is those very economic realities, i.e., increased labor costs as a result of unionization due to factors such as more holiday pay and a higher wage scale, and the greater costs inherent in operating a union plant, which the majority concedes Harrison realistically established, that formed the basis for the statements objected to.
Gissel also held that the First Amendment does not protect employer speech
“[i]f there is any implication that an employer may or may not take action solely on his own initiative for reasons unrelated to economic necessities and known only to him . ... ”
395 U.S. at 618, 89 S.Ct. at 1942. Gissel cautioned that in circumstances such as this the least an employer could do would be to “avoid coercive speech simply by avoiding conscious overstatements he has reason to believe will mislead his employees.” 395 U.S. at 620, 89 S.Ct. at 1943. The record in this case falls far short of substantiating a conclusion that the statements referred to here could be viewed as “conscious overstatements” intended to mislead Harrison Steel employees or that Harrison would take action solely on its own “initiative for reasons unrelated to economic necessities.” In N.L.R.B. v. Intertherm, Inc., 596 F.2d 267 (8th Cir.1979), an employer’s remarks that evinced a fervent anti-union stance and raised the specter of plant shutdown were found not to be an unfair labor practice. The employer told his workers that “I have dealt with a number of unions in which I have had to shut down plants, or move them elsewhere. I’ve sat at the bargaining table and told an international union that you’ll either have to agree with the company’s position or we’ll shut the plant down. These are not threats, these are simply facts showing what I think all of you really understand.” Id. at 277-78. The court ruled that the remarks did not imply *844“that the company would shut down its plants on its ‘own initiative for reasons unrelated to economic necessities Id. at 278 (quoting N.L.R.B. v. Gissel Packing Co., 395 U.S. at 618, 89 S.Ct. at 1942). I believe it is eminently clear that the remarks of Harrison’s management were more restrained and reasoned as well as milder in tone, and had a stronger economic foundation than the statements approved in Intertherm.
Our court’s application of Gissel in N.L. R.B. v. Berger Transfer & Storage Co., 678 F.2d 679 (7th Cir.1982), involved factually dissimilar circumstances. In that case the employer threatened job loss and plant shutdown without articulating “any objective facts.” Id. at 690. See also, N.L.R.B. v. Rich’s Precision Foundry, Inc., 667 F.2d 613, 623 (7th Cir.1981); Zim’s Foodliner, Inc. v. N.L.R.B., 495 F.2d 1131, 1137 (7th Cir.1974). I find it very troubling that the objective facts known to Harrison and the possible consequences of those facts should not have been shared with its employees. In my opinion, the employer would be less than honest with his employees if he did not share the information with them. Are we not witnessing an increased tendency on the part of employers to undertake accurate explanations of the economic realities during negotiations with their employees as a result of the yearly loss of billions of dollars in Gross National Product to cut-throat foreign competition? Requiring employers to make almost perfect and precise estimates of such economic consequences and only allowing them to inform employees of those facts if they are “likely” (i.e., greater than 50% chance) to occur is not only unrealistic but impractical. Such estimates are incapable of being made with absolute precision unless a detailed econometric study is conducted and it is common knowledge that excessive union demands, along with other factors, has not only caused many firms in the mid-west to lose business to foreign and “sun-belt” competitors, but also to shut down and lose plants to states located in the “sun-belt” region.1 I believe that a “realistic foundation” is sufficient, under the circumstances, to allow a company to present the possible consequences of unionization, both pro and con, to its workers. Contrary to the majority’s conclusion, I further believe that there is no need for an employer to present “balance sheet” quality evidence that additional costs will result in a worsened competitive position as that conclusion is more than patently obvious. In the present case, the employer’s prediction of job loss due to a worsened competitive position was truthful since it was a realistic and foreseeable consequence of the increased wages and costs associated with operating the union plant.
Our court recently recognized the uncertainty prevailing in the area of permitted and forbidden employer predictions regarding the consequences of unionization on future employment, and refused to enforce a board order which ruled that a small employer committed an unfair labor practice when it made pre-election predictions about the adverse consequences of such unionization. N.L.R.B. v. Village IX, Inc., d/b/a Shenanigans, 723 F.2d 1360 (7th Cir.1983). In that case the court stated that it did “not read Gissel to require [an] employer to develop detailed advanced substantiation .. . for predictions founded on common sense and general experience.” Id. at 1368. The majority, in footnote 18, attempts to distinguish N.L.R.B. v. Village IX, Inc. d/b/a Shenanigans by stating that “[i]n Shenanigans, particular emphasis was placed on evidence concerning the unique and highly competitive nature of the restaurant business in Decatur, Illinois. Indeed, this court relied specifically on the Company’s evidence that ‘only one restaurant in Decatur was unionized and it was doing badly.’ Id.” *845The majority fails to point out, however, that the employer’s statements regarding the consequences of unionization had no greater support in objective fact (the key to the analysis of the propriety of employer prediction) than in the present case. In Shenanigans, the employer essentially stated that he could not afford to pay union wages without any reference to balance sheets or other type of objective analysis, yet the court found that the objective support for this statement was sufficient since the prediction was based on “common sense and general experience.” Shenanigans, at 1368. In the present case, Harrison stated that the increased costs of a union shop could result in the company becoming noncompetitive with a thereby resulting loss of jobs. Again a common sense statement which is discernible from nothing more than general experience. The preceding comparison between Shenanigans and the present case should make it apparent that Shenanigans is not distinguishable. The key was the objective support for the employer’s statements, not the competitiveness or unionization of the market in which they operated.
The last statements made by Harrison to which the Board took exception involve Harrison’s expected loss of business and jobs caused by a changed relationship with its major customer, Caterpillar. While the majority concedes that the company presented sufficient evidence to establish a substantial factual basis for Harrison’s prediction that unionization would result in a loss of Caterpillar business, they conclude that this decrease in Caterpillar business will not necessarily mean that job loss would occur. I disagree after reviewing the evidence presented.
A Caterpillar executive testified before the administrative law judge that Harrison supplied 25% of its steel casting requirements and that Caterpillar business was the “lifeblood” of Harrison’s operations. Harrison produced between 140 and 150 casting patterns for Caterpillar which amounted to 85% of Harrison’s total production. 116 of those patterns were “exclusive” patterns of which Harrison was the only Caterpillar supplier. The uncontroverted testimony indicated that if Harrison became unionized, Caterpillar would place a “good many” of these exclusive patterns with other suppliers so that it could be assured of a source of supply in the event of a strike at Harrison. The testimony also indicated that Caterpillar would then give those alternate suppliers between 10 and 25% of the normal production business related to those patterns in order to protect their future supply needs. As a result, Harrison stood to lose a significant portion of its Caterpillar, and thus total, business. Anyone with rudimentary knowledge of economics would safely conclude that given such circumstances job loss is not only likely but imminent. Employment is inextricably tied to the success of the employing company. Caterpillar, Harrison’s key customer, informed Harrison how they would cut back Harrison’s business in order to protect themselves from a shutdown of Harrison’s plant. Harrison’s statements in this regard did not violate the Act since they were “economic consequences reasonably foreseeable as a result of predictable responses of [a] key custom-erf ].” Patsy Bee, Inc. v. N.L.R.B., 654 F.2d 515, 516-17 (8th Cir.1981).
I believe that this alone is sufficient to compel a conclusion that Harrison’s statements were in fact not threats, but accurate information based on reliable facts. Furthermore, requiring any greater degree of precision regarding specific job loss would place next to an impossible burden on the employer. Labor costs are but one variable of the cost of doing business and it is a well known fact that economic predictions do not of themselves lend to mathematical certainty. As Harrison points out it was in the best position to evaluate the effects of the objective evidence. Not allowing Harrison to inform its employees of such possible consequences is not only a disservice to the employees but a lack of sincerity and truthfulness. I am certain they would prefer to hear all of the possible consequences before voting in a vacuum rather than as they are handed layoff or termination notices. The majority has failed to recognize that “the *846exercise of free speech in union organization campaigns should not be narrowly restricted.” N.L.R.B. v. Fisher Cheese Co., 652 F.2d 607, 608 (6th Cir.1980). Accord N.L.R.B. v. Lenkurt Electric Co., 438 F.2d 1102, 1108 (9th Cir.1971).
“It is highly desirable that the employees involved in a union campaign should hear all sides of the question in order that they may exercise the informed and reasoned choice that is their right.”
Id. at 1108. The Board’s narrow construction of the employer’s right to exercise free speech which is endorsed by the majority will no longer allow employees to make a knowledgeable and reasoned choice based on factual information.2 Millions of dollars of business is lost annually to foreign markets in part due to labor costs. Our courts as well as the Board must be aware of and consider these economic realities of life when reaching decisions. “Courts not only have the obligation to operate within the law, but must also continue to be aware of economic reality .... ” Air Line Stewards, etc. v. Trans World Airlines, 713 F.2d 319, 323 (7th Cir.1983).
Nor does the majority realize that it is “important to avoid discovering veiled threats or sinister ambiguities by placing a strained interpretation on the employer’s remarks.” Bok, Regulating NLRA Election Tactics, 78 Harv.L.Rev. 38, 77 (1964). Here, Harrison is being faulted for informing its employees of the possible effect of the action the customer providing its “economic lifeblood” said it would take if unionization occurred. I would hold that there is no “veiled threat” under such circumstances and refuse to join in support of the Board’s strained interpretation of Harrison’s statements. The majority’s decision unnecessarily ties the hands of employers and prevents them from honestly and truthfully informing employees of the possible adverse consequences of unionization. Accordingly, I would deny enforcement of that portion of the Board order relating to those statements referred to in this dissent.

. See, e.g., Alexander Grant & Co., General Manufacturing Business Climates, (1982). This study, prepared by a major CPA firm, notes that the Great Lakes Region, which includes the three states of this circuit, is ranked last in terms of “business climate” among the eight major regions of the United States. Among the relevant factors which the study considered were wages, unionization and change in unionization. Indiana, Illinois and Wisconsin all rank in the bottom fourth nationally with respect to the wage and unionization factors.

. There is authority for the proposition that employers’ statements have little influence on employees. A lengthy empirical study indicates that employees make their choice early in a representation campaign and subsequent campaigning does not alter pre-campaign attitudes. J. Getman, S. Goldberg & J. Herman, Union Representation Elections: Law and Reality, (1981). See also Getman, Goldberg and Herman, Union Representation Elections: Law and Reality: The Authors Respond to the Critics, 79 U.Mich.L.Rev. 564 (1981). The authors advocate “wholly free speech” during campaigns. Id. at 564.