Court Opinion

ID: 9463962
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:21:30.020094+00
Date Added: 2024-06-11T17:38:23.195831
License: Public Domain

WINTER, Circuit Judge,
dissenting:
I respectfully dissent. The majority opinion, in my view, strains the facts and ignores the controlling principles of law.
I.
The case turns upon the text of the union “handout,” a one-sheet broadside clearly calculated to assert that the employer was reaping tremendous profits while treating its employees unfairly. As the majority notes, the document identified its source for the financial statement set forth therein as “Synalloy Corporation Six-Month Report to Stockholders.” While this reference may indicate the origin of certain data, it far from explains its true meaning. Nothing in the document suggests that the profits figures themselves relate solely to Synalloy as opposed to its dye-making division (Black-man-Uhler).
The actual financial statement bears the title “Statement of Consolidated Earnings.” Under generally accepted accounting principles, a “consolidated statement” reflects the financial status of a parent corporation and its subsidiaries. The majority therefore correctly reasons that the profit could not possibly apply to Blackman-Uhler alone.1 While an accountant, a tax expert and a sophisticated investor would probably draw this conclusion, it is sheer fantasy to expect the same analysis from the employees eligible to vote in this election.2 There can be no doubt about the impact of this leaflet. The message intended and the message conveyed are one and the same: The profit “bonanza” and the “250% increase in Company profits” are attributable to one branch of Synalloy (the Blackman-Uhler plant) rather than the sum of its component parts.
II.
The majority also suggests that two critical elements for the invalidation of any election have not been satisfied. A careful review of the record suggests an entirely opposite conclusion.
This Circuit recognizes a tri-partite test of union campaign rhetoric. An election will not be set aside unless “(1) there has been a material misrepresentation of fact, (2) the misrepresentation comes from a party who has special knowledge or was in an authoritative position to know the true facts, and (3) no other party had sufficient opportunity to correct the misrepresentations before the election.” NLRB v. Santee River Wool Combing Co., 537 F.2d 1208, 1210 (4 Cir. 1976), quoting from Celanese Corp. of America v. NLRB, 291 F.2d 224, 226 (7 Cir.), cert. denied, 368 U.S. 925, 82 S.Ct. 360, 7 L.Ed.2d 189 (1961). See NLRB v. Bata Shoe Co., 377 F.2d 821, 829 (4 Cir.), cert. denied, 389 U.S. 917, 88 S.Ct. 238, 19 L.Ed.2d 265 (1967). The majority urges that the first two requirements have not been met.
*709The opinion states that “while the leaflet may have been ambiguous or misleading, it was not of sufficient degree to constitute a material misrepresentation.” At 707 (emphasis added). The leaflet deals with employee wages and the ability of Blackman-Uhler to furnish wage increases (as measured by its profit margin). The union suggests that current wages are “measley” while company profits (and payouts to shareholders) have reached “jackpot” proportions. The obvious implication is that management has engaged in virtual extortion and will continue to do so unless and until the union steps in.
It is difficult to conceive of a subject having greater impact on the majority of union elections. As noted by one court of appeals, “[W]ages [are], ‘the stuff of life for Unions and members, the self-same subjects concerning which men organize and elect their representatives to bargain.’ ” LaCrescent Constant Care Center, Inc. v. NLRB, 510 F.2d 1319, 1322 (8 Cir. 1975), quoting from NLRB v. Houston Chronicle Pub. Co., 300 F.2d 273, 280 (5 Cir. 1962). See also Aircraft Radio Corp. (Div. of Cessna Aircraft Co.) v. NLRB, 519 F.2d 590, 593-94 (3 Cir. 1975); Argus Optics v. NLRB, 515 F.2d 939, 944-45 (6 Cir. 1975); NLRB v. G. K. Turner Associates, 457 F.2d 484, 488 (9 Cir. 1972).
The opinion next maintains that “the union used no specific figures nor any specific information to show or to imply a knowledge on its part of Blackman — Uhler profits.” At 707 (emphasis added). Our prior decisions do not require that the union reveal actual knowledge of the facts it misrepresents. Unfairness may ensue when the union is simply in “an authoritative position” to ascertain the truth while continuing to insist on false or deceptive declarations. Santee River, supra, at 1210. Here, there can be no question that union officials, conducting an election campaign, are ideally situated (and generally inclined) to scrutinize the employer’s published financial statements. Certainly, their position is far superior to the average employee, upon whose “common sense” the majority relies:
[A union business agent’s] function, which is to organize and serve as liaison with management, requires him to learn as much as possible about the financial condition of the employer with whom he negotiates on behalf of its employees.
. Without casting any reflections upon the employees, ... it strikes us as unreasonable to expect that they, . would have any knowledge as to the Company’s profits, much less access to such information.
Henderson Trumbull Supply Corp. v. NLRB, 501 F.2d 1224, 1229-30 (2 Cir. 1974).3
III.
Finally, the majority seeks to invoke the general rule that Board decisions are entitled to deference, especially when dealing with issues of campaign rhetoric. NLRB v. Sumter Plywood Corp., 535 F.2d 917, 920 (5 Cir. 1976). While “laboratory conditions” may be unattainable in the real world of unionization efforts, this is not a case exhibiting the normal degree of “puffing and propagandizing” one must expect and tolerate. “[A] point may be reached where the pre-election propagandizing has created an atmosphere rendering the free choice of a bargaining agent by the employees highly improbable. In such event the election must be invalidated.” LaCrescent, supra, at 1322. I believe that the critical point has been exceeded. The subject matter of the union handout must be recalled together with the timing of its distribution. In addition, the record reveals that the final election tally was extremely close.4 When such a result ensues, the courts have taken a more critical view of misrepresentation, ei*710ther by the employer or by the union. Aircraft Radio Corp. (Div. of Cessna Aircraft Co.) v. NLRB, 519 F.2d 590, 594 (3 Cir. 1975); Henderson Trumbull Supply Corp. v. NLRB, 501 F.2d 1224, 1230 (2 Cir. 1974). Under this set of facts, it is reasonably predictable that the leaflet had a crucial (and undeserved) effect on the voting.
IV.
Because of the aforementioned reasons, I would deny enforcement.

. The record is unclear as to whether Black-man-Uhler operates as a division or a subsidiary of Synalloy Corporation, but the distinction is irrelevant for purposes of this appeal. Although divisions are distinct from subsidiaries and are not the subject of “consolidated statements,” counsel, in oral argument, indicated that Synalloy does have other corporate holdings which qualify as the latter. Accordingly, the “consolidated statement” reflects more than one corporate entity (a fact which the majority relies upon but which would escape the average employee).

. The employees eligible to vote were “[a]ll production and maintenance employees, including laboratory employees, truckdrivers, and plant clerical employees . excluding all office clerical employees, guards, professional employees and all supervisors as defined in the Act.”

. Henderson dealt with oral misrepresentations by a union business agent at a union meeting. However, the rationale expressed by the Second Circuit applies equally well in the present context.

. The record indicates that the union was victorious by a vote of 58 to 50.