Blackman-Uhler Chemical Division

National Labor Relations Board - Board Decisions

Dec 6, 1978

239 N.L.R.B. 637 (N.L.R.B. 1978)

BLACKMAN-UHLER CHEMICAL DIVISION
Blackman-Uhler Chemical Division-Synalloy Corpo-
ration and International Molders & Allied Workers
Union, AFL-CIO. Cases 1-CA-6300 and I -RC-
3936
December 6, 1978
SUPPLEMENTAL DECISION, ORDER. AND
DIRECTION OF SECOND ELECTION
On April 9, 1976, the National Labor Relations
Board issued its Decision and Order in the above-
entitled proceeding,' finding that Respondent had
violated Section 8(a)(5) and (I) of the Act by refusing
to bargain wvith the Union which was certified by the
Board 2 as the exclusive bargaining representative of
Respondent's production and maintenance employ-
ees following a Board election.
Respondent filed a petition to review and set aside
the Order of the National Labor Relations Board
and the Board cross-applied for enforcement of its
Order. A split panel of the United States Court of
Appeals for the Fourth Circuit on February 28, 1977,
granted enforcement of the Board's Order on the
grounds that a union campaign leaflet contained no
material misrepresentation of Respondent's profits
warranting invalidation of the representation elec-
tion.3 Respondent petitioned for review of the
Board's Order and the court granted a rehearing en
banc. In its September 12, 1977, per curiam decision, 4
the en bane court indicated that, if it were to decide
the case in accordance with the law in effect at the
time the case was decided by the Board and the
panel decision, the en banc court, by a split vote,
would deny enforcement of the Board's Order for the
reasons set forth in the dissenting panel opinion.
However, noting the Board's April 8, 1977, decision
in Shopping Kart Food Market, Inc., 228 NLRB 131 1,
the court declined enforcement of the Board's Order
without prejudice to a renewed application for enforce-
mentand remanded the case to the Board for a determi-
nation whether the rule in Shopping Kart is applica-
ble to the instant case and, if so, whether the
Employer should be ordered to bargain.
The Board, having accepted the remand, issued a
notice advising the parties that they may file a state-
223 NLRB 827.
2 In the underlying representation proceeding, Respondent contended
that a union campaign leaflet matenally misrepresented its profits. The
Board at 217 NLRB 38 (1975), Member Kennedy dissenting. adopted the
Regional Director's recommendation that the objection be overruled. find-
ing that the leaflet contained no mreenal misrepresentation which would
warrant setting the election aside.
3 Blackman-Uhler Chemica. Di:tsion, Synallov Corporation v. N. LR.B.,
588 F.2d 705 (Judge Winter dissentng).
Blackman-Uhler Chemical Division, Synallo' Corporation v. N lR.B.,
561 F.2d I 1s8.
ment of position or a brief with respect to the issues
raised by the court's remand. Thereafter, Respon-
dent filed a response to the Board's notice.
The Board, having reviewed the case in light of the
entire record, the court's opinions, and Respondent's
response to the Board's notice, is of the opinion that
it would not effectuate the policies and purposes of
the Act to apply Shopping Karl in this case. The prac-
tice of applying a pronouncement of a new rule of
law retroactively, that is, to the case in which it arises
and to all pending cases, is traditional and, we be-
lieve, the proper course to follow.5 However, the case
before us is one in which the Board has not only
decided the representation case but has also rendered
a bargaining order under the law as it then existed
(Holhlwood Ceranics Company, Inc., 140 NLRB 221
(1962) ); in these circumstances we decline to reopen
this matter which we have finally decided. 6
Considering all the circumstances in this case, and
with all due respect to the U.S. Court of Appeals for
the Fourth Circuit, we are satisfied that, for the rea-
sons set forth in our decision in the repesentation
proceeding (217 NLRB 38), the union leaflet did not
constitute a material misrepresentation, under the
standards of Hollywood Ceramics, which would war-
rant setting aside the election. However, as the
Fourth Circuit has already indicated it would not en-
force the Board's bargaining order under the Holly-
wood Ceramics standards, we shall accept the Fourth
Circuit's opinion to be the law of the case and set
aside the election. Accordingly, we shall remand this
case to the Regional Director for the purposes of
conducting a second election at a time he deems ap-
propriate.
ORDER
It is hereby ordered that the complaint in Case 11-
CA-6300 be, and it hereby is, dismissed.
I' Is FURTHER ORDERED that the certification issued
in Case 1 -RC 3936 be, and it hereby is, vacated.
IT IS FURTHER ORDERED that the election conducted
in Case I 1-RC-3936 on September 12, 1974, be, and
it hereby is, set aside.
IT IS FURTHER ORDERED that Case I I-RC-3936 be,
Thus. Shopping Karl was applied to cases pending at the time Shopping
Karl issued: Thomas E. Gates & Sons, Inc., 229 NLRB 705 (1977}(Chairman
Fanning dissenting); Alson Manufacturing Aerospace Division of Alson Indus-
tries, Inc.. 230 NLRB 735 (1977); National Council of Young Israel dbh/a
Shalom Nursing Home, 230 NLRB 980 (1977) (Chairman Fanning dissent-
in§)
Additionally, Chairman Fanning and Member Jenkins, in accordance
with their Shopping Kart dissent, would not apply Shopping Karl in any
event. They further note that, in General Knit of CaliJormia, Inc., 239
NLRB 619. Issued this day, a majority of the Board has readopted the
Hollywood Ceramics standard for evaluating campaign misrepresentation.
in light of our acceptance of the court's opinion as the law of the case,
we have consolidated the representation case with the unfair labor practice
proceeding and shall dismiss the complaint and remand the representation
case to the Regional Director.
637
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and it hereby is, remanded to the Regional Director
for Region 11 for the purpose of conducting a second
election at such time as the Regional Director deems
appropriate.
[Direction of Second Election omitted from publi-
cation.] I
MEMBER MURPHY. concurring:
Although I was on the majority which overruled
Hollywood Ceramics in the Shopping Kart decision, I
was also on the panel which granted summary judg-
ment in the instant case under the law as it then ex-
isted. The Board thus having applied Hollywood Ce-
ramics in both the representation case and the unfair
labor practice case, I agree with the majority here
that it would not be appropriate to apply Shopping
Kart retroactively upon reconsideration now.
MEMBER TRUESDALE, concurring in part and dissent-
ing in part:
I agree with Chairman Fanning and Member Jen-
kins, for the reasons stated by them, that the stan-
dards of Hollywood Ceramics Company, Inc., 140
NLRB 221 (1962), and not those of Shopping Kart
Food Market, Inc., 228 NLRB 1311 (1977), govern
this proceeding. It should be noted, however, that I
was not a member of the Board when the underlying
decision in the representation case was issued (217
NLRB 38 (1975). Had I participated in the represen-
tation case and applied the then prevailing rule of
Hollywood Ceramics, I would have found that the
Union substantially misrepresented the Employer's
earnings at a time (the morning of the election)
which prevented the Employer from making an ef-
fective reply, and that the misrepresentation may rea-
sonably have been expected to have had a significant
impact on the election. I would therefore have voted
to set the election aside and direct a second election.
Accordingly, I join my colleagues-Chairman Fan-
ning and Member Jenkins-in directing a second
election at this time.
MEMBER PENELLO. dissenting:
On September 12, 1977, the United States Court of
Appeals for the Fourth Circuit, sitting en banc, issued
an opinion in this proceeding in which it concluded
that if it decided the case under Hollywood Ceramics
Company, Inc., 140 NLRB 221 (1962), the court
"would deny enforcement of the Board's [bargaining]
order." Blackman-Uhler Chemical Division, Synalloy
Corporation v. N.L.R.B., 561 F.2d 1118, 1119. How-
ever, the court also stated that, if it decided the case
under Shopping Kart Food Market, Inc., 228 NLRB
1311 (1977), "the views of the majority of the in banc
court might well be different." Since the Board in the
first instance should determine whether Shopping
Kart is to be given retroactive effect and applied
where, as here, the election was held before that deci-
sion issued, the court remanded the case to this
Agency. In so doing, the court emphasized that
Board application of Shopping Kart to this proceed-
ing "may well have an impact on the obligation of
the employer to engage in collective bargaining nego-
tiations."
In a companion case issued this day, General Knit
of California, Inc., 239 NLRB 619, a majority of the
Board, with Member Murphy and myself dissenting,
has decided to overrule Shopping Kart and revive the
Hollywood Ceramics rule. Therefore, it is not surpris-
ing that the majority has voted here not to apply
Shopping Kart retroactively.9 Regrettably, the result
of this decision is to eliminate the possibility ex-
plicitly left open by the Fourth Circuit of presently
issuing an enforceable bargaining order. Contrary to
my colleagues, I would give full effect to the
employees' secret-ballot choice for collective repre-
sentation by applying the Shopping Kart decision ret-
roactively and directing this Employer to the bar-
gaining table.
If Shopping Kart were applied retroactively to this
case, it is clear that the election would be upheld
because the union campaign leaflet in issue con-
tained nothing more than a misleading statement.1 0In
determining whether to do so, it is necessary to bal-
ance the adverse consequences of retroactivity, if
any, against "the mischief of producing a result
which is contrary to a statutory design or to legal and
equitable principles." Securities & Exchange Commis-
sion v. Chenery Corporation, 332 U.S. 194, 203 (1947).
Citing the Supreme Court's decision in Chenery, the
Second Circuit has phrased the test in terms of
"whether the practical operation of the Board's
change of policy . . . [will] work hardship upon re-
spondent altogether out of proportion to the public
ends to be accomplished." N. L R.B. v. National Con-
tainer Corp., 211 F.2d 525, 534, (2d Cir. 1954).
Retroactive application of Shopping Kart would
impose no "hardship" upon the Employer. This is
not a case involving the proscription of conduct
which was lawful at the time a party acted. Nor is
any kind of monetary award involved here. The most
that can be said is that the Employer, in reliance
upon the Hollywood Ceramics rule, refrained from
I [Excelsior footnote omitted from publication.)
9 As indicated in her separate opinion, Member Murphy agrees with the
General Knit majority that Shopping Kart should not be applied retroactively
here apparently because she was on the panel which granted summary judg-
ment in the instant case under the law as it then existed.
10 The facts of the instant case are fully set forth in my dissenting opinion
in General Knit, supra. and there is no need to repeat them here. Suffice it to
say that the Employer's objection alleges that the Union violated the Holly-
wood Ceramics rule by distributing a leaflet which materially misrepresented
the Employer's profits. In its statement of position on remand, the Em-
ployer does not contend that the leaflet is objectionable under Shopping
Karln.
638
BLACKMAN-UHLER CHEMICAL DIVISION
making any misrepresentation of its own during the
election campaign. Further, inasmuch as Shopping
Kart rejected the assumption that misleading state-
ments influence the employees' election choices, the
Employer cannot be said to have been prejudiced by
the fact that its conduct conformed to the require-
ments of the Hollywood Ceramics rule.
Turning to the other side of the Chenery scale, fail-
ure to apply Shopping Kart retroactively would in-
deed be contrary to the "statutory design" and "legal
equitable principles." Unless the Employer is now or-
dered to bargain, the employees' free choice of a bar-
gaining representative 4 years ago will have been nul-
lified, and the effectuation of their statutory right to
collective representation will be subject to yet further
delays. Such a result hardly comports with the Act's
central policy of promoting collective bargaining.
Under these circumstances, and inasmuch as no ad-
verse consequences ensued from the Employer's reli-
ance on the Hollywood Ceramics rule, the conclusion
is inescapable that the balance should be struck in
favor of immediate vindication of employee rights by
applying Shopping Karl retroactively.
In analogous cases, the Board, with court ap-
proval, has given retroactive effect to policy changes.
Thus, in Pacific Coast Association of Pulp and Paper
Manufacturers, 121 NLRB 990 (1958), the Board
shortened the period during which a collective-bar-
gaining agreement would bar an election and stated
that the new rule would be applied retroactively for
the reasons set forth in the companion case of Deluxe
Metal Furniture Company, 121 NLRB 995 (1958). In
Deluxe Metal the Board rejected the petitioner's re-
quest that any new policy apply in futuro, stating:
[I]n establishing revisions of precedent there is
always the likelihood that such revisions will
bring about a different result in some pending
proceeding than would have obtained under a
prior policy or procedure. This is true not only
of the case in which such revisions are first an-
nounced and applied, but also with respect to
any other case which has not yet been decided,
because it has not reached the Board's level or is
at one of the other stages of the administrative
process such as the hearing. Thus, to adopt these
revisions of contract-bar policy and then allow
the instant proceeding as an exception without
permitting a similar exception to all pending
cases would be inequitable. To establish an in
futuro rule for all pending cases would create an
adminstrative monstrosity. The judicial practice
of applying each pronouncement of a rule of law
to the case in which the issue arises and to all
pending cases in whatever stage is traditional
and, we believe, the wiser course to follow. [121
NLRB at 1006-07.1
The retroactive application of the new contract-
bar rule of Pacific Coast was subsequently reviewd
by the District of Columbia Circuit in Leedom v. In-
ternational Brotherhood of Electrical Workers, Local
Union No. 108, AFL-CIO [General Cable Corp.]., 278
F.2d 237 (1960). The court accepted the union's con-
tentions that it relied on the former bar rule in nego-
tiating its existing contract and that applying the new
rule retroactively threatened to deprive it of its repre-
sentation rights. The court nevertheless sustained the
Board's action, noting that this was not a case where
"the Board made conduct actionable which thereto-
fore had not been actionable." 278 F.2d at 243.
In The Laidlaw Corporation v. N.L.R.B., 414 F.2d
99 (7th Cir. 1969), cert. denied 397 U.S. 920 (1970),
the court held that the employer's reliance on prior
Board law did not preclude retroactive application of
a new rule or enforcement of a backpay order esti-
mated at oral argument to be $450,000. The Board's
brief to the court acknowledged that the Board had
overruled previous decisions, relying instead on
N.L.R.B. v. Fleetwood Trailer Co., Inc., 389 U.S. 375
(1967), which issued after the conduct in question.
Citing the Chenery formula, the court concluded that
"complete vindication of employee rights should take
precedence over the employer's reliance on prior
Board law." 414 F.2d at 107.
Similarly, in H. & F Binch Co. v. N.L.R.B., 456
F.2d 357, 365 (2d Cir. 1972), the Second Circuit up-
held retroactive application of the Board's Laidlaw
doctrine, even though it "established a new norm of
employer conduct." In reaching its conclusion, the
court "weigh[ed] the hardship in imposing liability on
the company for conduct conforming to what it may
reasonably have thought the limit of its duties against
the hardship to the employees in being denied impor-
tant rights that are now recognized to have been
properly theirs."
Here, the case for giving the change in policy ret-
roactive effect is even more compelling than in the
decisions discussed above. Applying Shopping Kart
retroactively would not upset justifiable expectations
(as in Leedom) or subject the party who relied on
prior law to financial liability (as in Laidlaw and
Binch). Applying Shopping Kart prospectively, how-
ever, would deny employees their Section 7 right to
the collective representation for which they voted 4
years ago, and would be contrary to the fundamental
policy of the Act of promoting collective bargaining.
With the Chenery scale so clearly tipped in favor of
applying Shopping Kart retroactively, I am confident
that a Board bargaining order explicitly based on
that decision would have been sustained by the
639
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
court. The majority's refusal to issue such an order
represents one more triumph for the Hollywood Ce-
ramics rule which will continue to frustrate employee
free choice in untold numbers of future cases now
that it has teer granted renewed vitality. By its deci-
sion today, the majority has carved the name Black-
man-Uhler on a tombstone and has added it to the
graveyard that has been the final resting place of so
many other Board certifications infected by the fatal
Hollywood Ceramics virus."
" See the cases listed in sec. I of my dissenting opinion in General Knit,
suprd.
640