Simpson Electric Co.

National Labor Relations Board - Board Decisions

Apr 30, 1980

249 N.L.R.B. 148 (N.L.R.B. 1980)

148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Simpson Electric Company, a Division of American
Gauge and Machine Company and International
Brotherhood of Electrical Workers, Local 117,
AFL-CIO. Cases 13-CA-18343 and 13-RC-
14785
April 30, 1980
DECISION, ORDER, AND DIRECTION
OF THIRD ELECTION
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND TRUESDALE
On January 24, 1980, Administrative Law Judge
Michael D. Stevenson issued the attached Decision
in this proceeding. Thereafter, Respondent filed ex-
ceptions and a supporting brief, and the General
Counsel filed a brief in answer to Respondent's ex-
ceptions and in support of the Administrative Law
Judge's Decision.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,' and conclusions 2 of the Administrative Law
Judge and to adopt his recommended Order.3
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
The Administrative Law Judge inadvertently stated that the unfair
labor practice charge in Case 13-CA-18343 had been filed on January 8,
1978. The record, however, reveals that the charge was filed on January
3, 1979, and amended on January 8, 1979.
2 The Administrative Law Judge erroneously referred to Respondent's
supervisor. Glen Olafson, as the "factory manager of the Elgin facility
who personally handed magazines to employees." The record reveals,
however, that Olafson was supervisor over only one department in that
facility and that he distributed copies of the publication "Meter Reader"
to employees within his own department. This finding, however, in no
way affects our decision to adopt the Administrative Law Judge's con-
clusion that Respondent violated Sec. 8(aXI) of the Act and also engaged
in objectionable conduct sufficient to warrant setting aside the election
held on December 21, 1978.
In adopting the Administrative Law Judge's findings, we find it unnec-
essary to rely on his interpretation of statements made by Respondent in
a document received in evidence and entitled "A Comprehensive Benefits
Program," which summarized Respondent's existing benefits and which
was distributed to employees on October 6, 1978. Additionally, we find it
unnecessary to rely on his statement that Respondent "could have de-
layed its raises for all plants until the critical period at Elgin had ended"
(see sec. III, B, 3 of his Decision).
The Administrative Law Judge found that a bargaining order was not
warranted in this case, noting that the General Counsel did not seek one.
No exceptions were taken to that finding. Furthermore, no evidence was
presented with regard to the Union's having obtained a card majority and
thus the issue was not fully litigated. Under these circumstances we shall
not provide for such a remedy but rather shall order that a new election
be held.
3 Nothing in our Decision and Order herein shall be construed as re-
quiring Respondent to rescind the wage increases and other benefits, the
granting of which, we find, violated the Act.
249 NLRB No. 24
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and
hereby orders that the Respondent, Simpson Elec-
tric Company, a Division of American Gauge and
Machine Company, Elgin, Illinois, its officers,
agents, successors, and assigns, shall take the action
set forth in the said recommended Order.
It is further ordered that the election held on
December 21, 1978, in Case 13-RC-14785 be, and
it hereby is, set aside and that a new election be
conducted as directed below.
[Direction of Third Election and Excelsior foot-
note omitted from publication.]
DECISION
STATEMENT OF THE CASE
MICHAEL D. STEVENSON, Administrative Law Judge:
This case was heard before me at Chicago, Illinois, on
June 25 and 26, 1979,1 pursuant to a complaint issued by
the Regional Director for the National Labor Relations
Board for Region 13 on March 9, 1979. In addition, on
March 15, 1979, the Regional Director ordered consoli-
dated certain issues arising from a representation election
in Case 13-RC-14785. The complaint, based on a charge
filed on January 8, 1978, by Local 117, International
Brotherhood of Electrical Workers, AFL-CIO (herein
called the Union), alleges that Simpson Electric Compa-
ny, a Division of American Gage and Machine Company
(herein called Respondent), has engaged in certain viola-
tions of Section 8(a)(1) of the National Labor Relations
Act, as amended.
The Union's representation petition was filed on June
24, 1978, and sought a representation election among cer-
tain of Respondent's hourly rated employees. An election
was held pursuant to a Regional Director's decision on
October 26, 1978. Objections to conduct affecting the
outcome of the election were filed by Respondent and
pursuant to a Supplemental Decision on Objections and
Direction of Election, dated November 21, 1978, a rerun
election was held on December 21, 1978. The tally of
ballots served on the parties immediately following the
election showed that, of approximately 280 eligible
voters, 245 cast ballots, of which none were void, 82
were cast for the Union, 147 were cast against the
Union, and 16 ballots were challenged. The challenged
ballots were not sufficient in number to affect the results
of the election. On December 26, 1978, the Union filed
timely objections to conduct affecting the results of the
election. In the objections, the Union alleged, inter alia,
that, in the critical period before the rerun election,2 Re-
' All dates herein refer to 1978 unless otherwise indicated.
2 In Goodyear Tire and Rubber Company, 138 NLRB 453 (1962), the
Board defined the critical period before an election as the interval from
the date of the filing of the petition to the time of the election. Conduct
occurring during the period found to have interfered with the employees'
freedom of choice at the polls may be grounds for setting aside the elec-
tion.
SIMPSON ELECTRIC COMPANY 149
spondent promised unit employees increases in wages
and improvements in fringe benefits.3
Issues
1. Whether Respondent violated Section 8(a)(i) of the
Act as alleged by granting to its employees raises in
wages, and improvements in fringe benefits for the pur-
pose of affecting the outcome of the election.
2. Whether for the reasons stated in item I above, an
objection to the conduct of the election held in Case 13-
RC-14785 has merit to warrant setting aside the election
results.
3. All parties were given full opportunity to partici-
pate, to introduce relevant evidence, to examine and
cross-examine witnesses, to argue orally, and to file
briefs. Briefs, which have been carefully considered,
were filed on behalf of General Counsel and Respondent.
Upon the entire record in the case, and from my ob-
servation of the witnesses and their demeanor, I make
the following:
FINDINGS OF FACT
I. RESPONDENT'S BUSINESS
Respondent admits that it is an Illinois corporation en-
gaged in the manufacture, design, and sale of electric
meters and testing equipment; it has a place of business
located in Elgin, Illinois. It further admits that during the
past year, in the course and conduct of its business, it has
purchased and received goods and materials valued in
excess of $50,000 from suppliers outside Illinois. Accord-
ingly, it admits, and I find, that it is an employer en-
gaged in commerce and in a business affecting commerce
within the meaning of Section 2(2), (6), and (7) of the
Act.
II. THE LABOR ORGANIZATION INVOLVED
Respondent admits, and I find, that International
Brotherhood of Electrical Workers, Local 117, AFL-
CIO, is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
Respondent, Simpson Electric, is a division of Ameri-
can Gage and Machine Company, Inc., 80 percent of
which is owned by Katy Industries. Respondent main-
tains facilities in Illinois, California, and Wisconsin. Of
these, only the facility located at Elgin, Illinois, was the
subject of an organizing drive by the Union. Two elec-
tions have already been held as a result of that organiz-
ing drive and a third is sought. The instant case involves
a dispute between the parties with regard to an increase
in wage and benefits in the period before the second
election, while Respondent's objections to the first elec-
tion were pending. To begin, a list of pertinent events
and dates will be helpful:
A second objection to the election has, with the approval of the Re-
gional Director, been withdrawn.
1. June 6-Respondent first became aware of Union's
organizing at Elgin.
2. June 14-Union filed its petition requesting an elec-
tion.
3. September 14-Regional Director issued his deci-
sion on the unit determination 4 and Direction of Elec-
tion.
4. October 26-First election is held and won by the
Union.
5. November 2-Respondent filed its objections to the
conduct of the election.5
6. November 17-Respondent filed an unfair labor
practice charge against the Union for misrepresentation
during the preceding election campaign and Respondent
further requested a 90-day cooling-off period before the
next election.s
7. November 17-Respondent announced its wage and
benefit improvements to its employees at all its facilities.
These increases were effective December 4, while a 7-
percent salary range increase was effective January 1,
1979.
8. November 21-Regional Director issued a report on
Respondent's objections to the election setting aside the
first election.
9. November 29-Regional Director notified Respond-
ent that he would refuse to issue a complaint in the
Company's unfair labor practice charge against the
Union filed on November 17.
10. November 30-Regional Director issued a notice
of second election setting December 21 as the date for
the second election.
11. December 20-Respondent distributed copies of
"Meter Reader," a house publication, to its employees.
This publication reiterated the wage and salary benefits
formally announced on November 17; in addition, it con-
tained the first written notification of a 7-percent in-
crease in salary ranges effective January 1, 1979; finally,
the publication also contained the first written notice of
improvements in health insurance coverage, the addition-
al cost for which was paid by the Company.
12. December 21-Second election is held and won by
Respondent.
The increases announced on November 17 consisted of
25-cent-per-hour wage adjustment granted to all employ-
ees effective December 4. In addition, hourly rate ranges
were adjusted upwards by 25 cents per hour7 and salary
ranges were adjusted upwards by 7 percent effective Jan-
uary 1, 1979. To these wage and salary increases were
added group insurance benefit improvements such as an
4 On September 22, Respondent filed a request for review of this deci-
sion alleging the unit of hourly and salaried workers was inappropriate.
On November 22, this appeal was denied.
I These objections, which were found to be valid by the Regional Di-
rector, alleged that, shortly before the election, the Union distributed
leaflets to Respondent's Elgin employees saying that Respondent had
been found guilty of certain unfair labor practices. Said statements were
untrue.
I The parties stipulated that, based on a telephone call from General
Counsel to Respondent's attorney, Respondent had knowledge prior to
November 17 that the Regional Attorney intended to sustain Respond-
ent's objections to the first election. They could not agree on the date of
this prior notice.
I This increase was not applicable to technicians and tool-and-die per-
sonnel which were given different salary ranges.
SIMPSON ELECTRIC COMPANY .
150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
increase in major medical claim coverage per incident
from $20,000 to $50,000, coverage from first day of birth
under major medical provisions and other improvements
in health care insurance benefts. Prior to the December 4
effective date of increased coverage, the last increase in
health insurance benefits occurred in 1974. At that time,
Respondent shared with its employees the additional pre-
mium cost. For the increase at issue in this case, Re-
spondent paid the entire additional premium cost.
The wage and benefit increases and improvements
were announced to employees in a three-step process:
First, the word-of-mouth method; an outline of the in-
creases was distributed to managers and supervisors
about I week before the November 17 formal announce-
ment date. (G.C. Exh. 2.) Top management explained the
increases to middle management which in turn held
group meetings with respective subordinate employees
for the purpose of explaining these wage and benefit in-
creases. While not completely clear, these group meet-
ings were apparently held about I or 2 days before No-
vember 17.
The second method of announcing benefits to employ-
ees was the posting of a formal notice on November 17,
in and around Respondent's facilities, reflecting, in spe-
cific, the increase in wages and, in general, the increase
in salary ranges. The notice reads as follows:
SIMPSON ELECTRIC COMPANY
NOTICE
WAGE ADJUSTMENTS
November 17, 1978
Simpson Management is pleased to announce that a
$0.25 per hour wage adjustment will be granted to
all hourly employees effective Monday, December
4, 1978. Hourly rate ranges will also be adjusted up-
wards by $0.25 per hour. At the same time, salary
ranges will be adjusted upward. Your supervisor
will have any information you will need to know
about the program.
We share with each of you the greatest confidence
in the future of our company,-a confidence based
upon the knowledge that our people will respond to
the challenge for the increased productivity and in-
creased sales that will permit us to remain competi-
tive and thereby maintain Simpson's hard-won ac-
ceptance in the marketplace.
/s/ Gerald N. Goldberger
President
GNG:vp
The third and final method of announcing benefits to
employees was the distribution on December 20 of the
Meter Reader, referred to in the listing of pertinent dates
above. This magazine is published two times a year, in
July and in December. The usual method of distributing
the Meter Reader in the past had been to drop off bun-
dles of the publication around the plant so that employ-
ees could take one off the stack if they desired. On De-
cember 20, Glen Olafson, factory manager of the Elgin
facility, personally handed the magazines to employees.
B. Discussion and Analysis
The announcement or granting of wage and benefit in-
creases during an election campaign, given with the in-
tention of inducing employees to reject the Union, is un-
lawful since the employees will read this as a demonstra-
tion of employer economic power held in reserve which
can just as readily be used for reprisals. N.L.R.B. v. Ex-
change Parts Company, 375 U.S. 405 (1964). General
Counsel may rely on the presumption of unlawfulness
after having shown that wage and benefit increases were
made during the critical period before an election. In this
case, the formal announcement of wage increases on No-
vember 17 was preceded by formal announcements from
supervisors to employees at group meetings. Then writ-
ten announcements of other increases in salary ranges
and health insurance benefit improvements followed on
December 20. The election was December 21. I find that
the increases occurred within the critical period.
As the court stated in N.L.R.B. v. Styletek, Division of
Pandel-Bradford. Inc., 520 F.2d 275, 281 (Ist Cir. 1975):
". .. whatever the parameters of the sensitive pre- (and
post-) election periods, this period is obviously well
within them." The court in Styletek states at 280 that
even postelection benefits, while there is the possibility
of a rerun election, have been regarded as prima facie in-
terference. 8
In this case, a finding of a prima facie case is further
supported by two additional factors. First, Respondent
increased its health insurance benefits in the manner de-
scribed in "The Facts" and paid the entire additional
premium. The last increase in insurance benefits occurred
in 1974 when Respondent shared the increased premium
cost. In defending this increase in benefits, Respondent
first argues that the planning for these benefits occurred
prior to the critical period. I agree. The record shows
that Warren Funst, general counsel for Katy Industries,
had begun the planning for the improvements as far back
as April 1978. The record also shows that the insurance
carrier did not receive final authority to implement the
insurance benefits until December 4. Thus, the timing be-
comes of great importance. In Hineline's Meat Plant, Inc.,
193 NLRB 867 (1971), the employer announced to em-
ployees 11 days before the election a new profit-sharing
plan. The planning for the profit sharing had begun 4
days before the Union's petition had been filed. The
Board found a violation because they believed the timing
of the announcement of the plan was calculated and de-
signed to influence the employees in their choice of a
bargaining representative in the election.9 Thus, "Prede-
termination alone is not determinative, the timing of the
announcement must also be considered." N.L.R.B. v.
8 See also Luxuray of yew York, Division of Beaunit Corporation v.
N.L.R.B., 447, F.2d 112, 118-120 (2d Cir. 1971); N.L.R.B. v. Gruber's
Super Marke,. Inc., 501 F.2d 697, 702-703 (7th Cir. 1974), enfg. 201
NL.RB 612 (1973); Triangle Plastics, Inc., 166 NLRB 768 (1967); Ralph
Printing & Lithographing Co., 158 NLRB 1353 (1966); Mercury Industries,
Inc., 242 NLRB No. 24 (1979). But see N.L.R.B. v. Ambox. Incorporated,
357 F.2d 138, 141 (5th Cir. 1966).
9 See also N.L.R.B. v. Rich's of Plymouth, Inc., 578 F.2d 880, 883 (Ist
Cir. 1978).
SIMPSON ELECTRIC COMPANY 151
Arrow Elastic Corporation, 573 F.2d 702, 706 (st Cir.
1978). To the extent that Respondent seeks to link the
timing of its health insurance benefits improvements to
the timing of its wage increases, I have already found the
latter presumptively unlawful. Therefore, any alleged
historical policy of linking both increases together must
fail as a defense here.
Another aspect of this issue concerns a letter from Re-
spondent to its employees dated October 6, containing
Respondent's arguments why its employees should vote
against the Union. Respondent included with this letter a
separate two-page document summarizing existing com-
pany benefits. This document reads in part:
Simpson Electric
A Comprehensive Benefits Program
Note: These are your benefits which Simpson pro-
vides. They are reviewed frequently to keep them
updated. Under NLRB restrictions, we cannot proceed
with further review at this time. Emphasis supplied.
Jt. Exh. 22]
A fair interpretation of this statement is that Respondent
would increase benefits but for NLRB restrictions and
that said increases would come when the election was
over. Then, Respondent increased benefits before the
second election. Not only did this act convey to employ-
ees that support for the Union would be futile, as argued
by the General Counsel, but, also, it conveyed to the em-
ployees that Respondent's power was sufficient even to
overcome "NLRB restrictions." The Company never ex-
plained to employees why "NLRB restrictions" did not
apply to the period before the second election. The infer-
ence was that only the employer could affect their bene-
fits, a classis example of a "fist inside the velvet glove."
N.L.R.B. v. Exchange Parts Co., supra at 409.
I further agree with General Counsel that the fact that
Respondent's actions may have been undertaken as a
result of legal advice is no defense to a course of con-
duct which is otherwise illegal. °
Finally, I note the fact that Respondent paid the entire
cost of the increased premium. In 1974, the date of the
last increase in health insurance benefits, Respondent
shared the cost with the employees. Respondent states in
his belief, "Only once in the last ten years has Simpson
passed along insurance cost increases to employees; this
was in 1974." Unfortunately, the record does not tell
how many times in the last 10 years health insurance
benefits were increased prior to the 1974 increase. In the
absence of this evidence, I consider the fact that Re-
spondent paid the entire cost of increased premiums in
December, still another factor which supports the find-
ing of a prima facie case.
In finding that General Counsel has a prima facie case,
I have relied on the totality of the evidence as discussed
above, including a final factor which I discuss next. The
manner of Respondent's announcement of benefits, in the
context of this case, is convincing evidence of an unlaw-
ful intent to influence the second election. As described
1o The Great Atlantic and Pacific Tea Co.. Inc. 166 NLRB 27 (1967).
in "The Facts," Respondent used three methods, word of
mouth, posted notices, and publication in the Meter
Reader to announce benefits.
The use of three modes of announcing the wage and
benefit increases, together with the sequence of an-
nouncement, was a departure from past practices. Usual-
ly one of these methods was used to announce wage and
benefit increases and occassionally two methods were
used, but never all three. Furthermore, the Meter Reader
was never used before to announce wage increases.
Moreover, the manner of distribution of the Meter
Reader on December 20 can only be described as ex-
traordinary. In the past, the magazine had been placed in
bundles in and around the plant for employees to take as
they wished. One day before the election the factory
manager himself was passing out these magazines to em-
ployees!' This, of course, conveyed the impression to
employees that Respondent had good news for them to
read before the election. Whether they had heard or read
the news before became irrelevant. Respondent argues
that the manner of announcement of benefit is a nonissue.
I disagree and find that the manner of distribution is
highly probative and consistent with other evidence sup-
porting the presumption of unlawfulness. Accordingly, it
becomes necessary to examine the defenses tendered by
Respondent to the extent not yet discussed to see wheth-
er they are sufficient to rebut the presumption. Respond-
ent contends that its actions in this case are justified by
past practice and business necessity. A full discussion of
these defenses follows.
I. The alleged past practice of wage increases every
II months
Respondent first of all argues that, in announcing the
wage and salary increases at issue, it was merely follow-
ing past practice of wage increases every I I months. Be-
ginning with the current wage increases, I note Respond-
ent's recent history of increases:
Effective Date
(1) 12/4/78
Description
(a) General Wage increase
.25 per hour for all hourly
employees at all
Respondent's facilities
(b) Wage range increase .25
per hour for each job
classification
(c) Exempt and nonexempt
salary range increases (7
percent, and effective 1/1/
79
II Respondent has not presented evidence to show that, at its other
plants where there was no union election pending, its factory manager
personally distributed copies of the Meter Reader to employees. Accord-
ingly, I must conclude that this method was used only at the Elgin facili-
ty.
SIMPSON ELECTRIC COMPANY 151
152 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(2) 1/1/78 Wage range increase
Affected only those hourly
rated employees who were
below the new grade
minimum. They received
wage adjustment to the new
minimum grade
(3) 2/28/77 General wage increase 5
percent for all employees
(4) 4/5/76 Salary increment bracket
extended from 24 months to
60 months
(5) 11/17/75 General wage increase 5
percent for all employees in
anticipation of minimum
wage change effective 1/1/
76
(6) 7/16-12/31/73 General wage increase .06
per hour effective 7/16/73
and .06 per hour effective
12/31/73 (Chicago, Eligin,
Aurora, and Escondido
employees only; Wisconsin
employees received two
raises of .05 per hour)
(7) 7/12/71 .06 per hour effective 7/12/
71 and .06 per hour
effective 1/3/72 (Chicago,
Elgin, and Aurora
employees only; Wisconsin
employees received two
raises of .05 per hour)
(8) 7/28/68 .06 per hour effective 7/28/
69 and .06 per hour
effective 1/5/70 (Chicago,
Elgin, and Aurora
employees only; Wisconsin
employees received two
raises of .04 per hour)
The above does not indicate to me any convincing pat-
tern of wage increases at 11-month intervals sufficient to
be a valid defense to the wage increases announced
during the critical period at issue here.
Over the years covered, there are major differences
between what has occurred in the past and what is at
issue here. These differences include amount and type of
increase, reason for increase, and location of affected em-
ployees. Moreover, the intervals for wage increases, par-
ticularly in the earlier part of the relevant period, does
not show an I -month pattern. In J. C. Penney Co., Inc.
v. N.L.R.B., 384 F.2d 479, 484-485 (10th Cir. 1967), a
case similar to the instant case, the court affirmed the
Board's rejection of a defense based on a historical prac-
tice of wage increases every 12 to 15 months with a typi-
cal interval being 14 months. The Board had held that,
with a decision in the representation case iminent and the
possibility of an election soon thereafter, a matter of rea-
sonable expectation, it was difficult to understand why
the employer felt impelled to grant the wage increase at
the time it did. The increases in Penny, as here, could
have been withheld until after the election and still been
within the customary span of time. The court affirmed
the Board's finding of an 8(a)(1) violation.
It is true, as General Counsel argues, that Respondent
has never given an increase of the type and coverage as
that in issue here. 2 Therefore, Respondent's evidence is
even weaker than that which the Board and later the
court rejected in Penny.
2. The alleged past practices of anticipating
increases in employees' social security withholding
taxes and in the federal minimum wage
Somewhat related to Respondent's first defense, yet
deserving of special consideration is Respondent's al-
leged defense of anticipating increases in social security
withholding taxes and Federal minimum wage rates.
Both were increased effective January , 1979. While
none of the salaried individuals within the bargaining
unit were below the new Federal minimum wage, they
were nevertheless subject to the same increased social se-
curity taxes as the hourly rated employees. However, the
salaried employees in the bargaining unit received no
salary increase prior to January 1, 1979. While the
record does not contain a detailed list of past increases in
Federal social security withholding taxes so that these
can be compared to Respondent's salary increases de-
tailed above, it does appear that in 1972 the rate of with-
holding was 5.2 percent on the first $9,000 of earnings
while in 1973 the rate was 5.85 percent on the first
$10,000 of earnings. The wage increases for the period of
increase were effective 7-16-73 and 12-31-73. Thus,
there does not appear to be the same coincidence as is
present here between an increase in the withholding tax
and increase in wages.
Turning next to Respondent's history of wage in-
creases with respect to anticipating an increase in the
Federal minimum wage, the evidence is somewhat
stronger, yet still not persuasive. In the past, beginning in
1969, when Respondent anticipated a raise in the Federal
minimum wage, it documented a perceived need for a
salary increase in anticipation of the raise. Thus, the
record shows that on June 11, 1967 (Resp. Exh. 1), on
June 21, 1971 (Resp. Exh. 2), and on September 20, 1975
(Jt. Exh. 3), Respondent discussed in detail why it
thought that a wage increase before an increase in the
Federal minimum wage was necessary. No such docu-
mentation is present in this case. Moreover, there was no
convincing evidence to show that employees expected
any increase in wages prior to the January 1, 1979, in-
crease in the Federal minimum wage. 13
To support its contention here, Respondent cites the
case of International Union of Electrical, Radio and Ma-
chine Workers, AFL-CIO, Local 806 [SNC Manufacturing
Co., Inc.] v. N.L.R.B., 434 F.2d 473 (D.C. Cir. 1970). Re-
spondent argues that this case approves the concept that
a company may legitimately increase wages in anticipa-
tion of an increase in the Federal minimum wage, even
during a union election campaign. However, this case
does not apply here. In affirming the Board's holding
that certain wage increases granted to employees near
2 See Arthur Fulmer of Mississippi, Inc., 212 NLRB 732 (1974).
'3 N.L.R.B. v. Rich'v of Plymouth, Inc.. supra at 884.
SIMPSON ELECTRIC COMPANY 153
the time of the election did not violate the Act, the
court, in Local 806, found it significant that the payment
period in question was the fourth step in a 5-year plan
and that, 2 days prior to the wage increase, the company
informed the union of its plan to increase and the union
did not object. Neither of these factors is present in the
instant case. Moreover, other factors involving improve-
ments in health insurance benefits and the method of an-
nouncing all the wage and benefit increases, all detailed
above, make Local 806 and Respondent's defense inappli-
cable here.
3. Other alleged defenses
Respondent raises several other defenses to its presum-
ably unlawful wage increases. These can all be classified
as business-necessity defenses. Respondent first argues
that it had a problem with high turnover. The record
shows Respondent's first concern about this problem on
April 5, 1978.(G.C. Exh. 5) In the memo, Respondent's
personnel director told Gerald Goldberger, Respondent's
president, that Respondent's low wages were causing
high turnover. In part, the memo reads, "There is noth-
ing that is really surprising in the results [of the compen-
sation survey]." Thus, when Respondent contends in its
brief that "Simpson's 1978 turnover rate was so high that
it could fairly be classified as disastrous," one is inclined
to be unimpressed since wages could have been raised
back in April when the problem was first identified and
some 2 months before Respondent became aware of the
Union's interest in organizing the Elgin plant. This de-
fense has little probative value for raising wages and
benefits at the time in question. If anything, the fact that
Respondent waited until it did supports rather than re-
futes the presumption of unlawful increases. 14
Respondent also raises the argument of compulsion
based on the premise that because it granted wage and
benefit increases at its 10 facilities nationwide, where
two-thirds of Respondent's hourly workers are em-
ployed, it was forced to give the same increases to the
remaining one-third of Respondent's workers at Elgin.
None of the other eight facilities was the object of a
union organizing campaign. In support of its contention,
Respondent cites Essex International, Inc., 216 NLRB
575 (1975), and other cases. In Essex, the employer made
its announcement at the same time and in the same
manner as it had in the previous 8 years, irrespective of
the existence of a union campaign. This central fact is
not present in the instant case. Respondent's other cases
may be similarly distinguished. The mere fact that Re-
spondent elected to increase the wages and benefits at its
other facilities in California and Wisconsin at the same
time it increased benefits at the Elgin plant does not
render lawful what would otherwise be unlawful. It is
true that Respondent could not have increased wages
and benefits at the other plants, but not at Elgin. Howev-
er, it could have delayed its raises for all plants until the
critical period at Elgin had ended. This possibility is not
discussed by Respondent in its brief. As the court stated
in N.L.R.B. v. Styletek, supra, 520 F.2d at 280 (Ist Cir.
1975):
'4 Frito-Lav. Inc. v. N L.RB., 585 F 2d 62. h6 (3d Cir 1978).
Justifying the timing is different from merely justi-
fying the benefits generally. Wage increases and as-
sociated benefits may well be warranted for business
reasons; still the Board is under no duty to permit
them to be husbanded until right before an election
and sprung on the employees in a manner calculated
to influence the employees' choice. 5
Respondent also contends that it showed good faith by
asking for a 60- to 90-day cooling-off period which, if
granted, would have sufficiently dissipated the effect of
the unlawful increases. This argument has three flaws:
First, it would have permitted Respondent to benefit
from its own misconduct by delaying the election for the
time requested. Second, Respondent would have addi-
tional time to attempt to convince its employees to vote
against the Union. Finally, Respondent's employees
would have their right to vote in a speedy election de-
feated for reasons over which they had no control and
for which they were not responsible. Respondent cites
no case in support of its argument here and I find that
the defense is not valid.
I reject Respondent's defenses, which I have consid-
ered both individually and in toto, and I find that it has
not rebutted the presumption of unlawfulness raised by
the General Counsel's prima facie case. I further find that
Respondent has violated Section 8(a)(l) of the Act as the
increases were reasonably calculated to, and did, inter-
fere with the employees in the exercise of their freedom
of choice in selecting or rejecting the Union as their col-
lective-bargaining representative.
C. The Objection to the Election
I have found, supra, that, on December 4, Respondent
unlawfully gave the unit employees increases in wages
and benefits to undermine the Union's organizational
campaign. This conduct was sufficient to have interfered
with the election and to warrant setting the election
aside.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent set forth in section III,
above, found to constitute unfair labor practices occur-
ring in connection with the operations of Respondent de-
scribed in section I, above, have a close, intimate, and
substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor dis-
putes burdening and obstructing commerce and the free
flow thereof.
CONCLUSIONS OF LAW
I. Simpson Electric Company, a Division of America
Gage and Machine Company, Inc., is an employer en-
gaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. International Brotherhood of Electrical Workers,
Local 117, AFL-CIO, is a labor organization within the
meaning of Section 2(5) of the Act.
""See also N.LR. B. . Arrow Elalic (orp. 573 F 2d 702
SIMPSON ELECTRIC COMPANY
154 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3. By granting wage and benefit increases to its em-
ployees to undermine the Union's organizational cam-
paign, Respondent has interfered with, restrained, and
coerced its employees in the exercise of their rights guar-
anteed in Section 7 of the Act and has engaged in unfair
labor practices in violation of Section 8(a)(1) of the Act.
4. The Union's objection has been sustained by the evi-
dence and Respondent has thereby interfered with and il-
legally affected the results of the Board election held on
December 21, 1978.
5. The aforesaid unfair labor practice affects commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in an
unfair labor practice within the meaning of Section
8(a)(l) of the Act, I shall recommend that it cease and
desist therefrom and take certain affirmative action to ef-
fectuate the policies of the Act.
Further, having found that the Union's objection to
the election was sustained by the evidence, I shall rec-
ommend that the election held on December 21, 1978, be
set aside and a new election be ordered by the Regional
Director as soon as feasible. 16
Upon the foregoing findings of fact, conclusions of
law, and the entire record, and pursuant to Section 10(c)
of the Act, I hereby issue the following recommended:
ORDER' 7
The Respondent, Simpson Electric Company, a Divi-
sion of American Gage and Machine Company, Inc.,
Elgin, Illinois, its officers, agents, successors, and assigns,
shall:
1. Cease and desist from:
(a) Granting wage and benefit increases to its employ-
ees to undermine the Union's organizational campaign.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of their
rights guaranteed them in Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act:
(a) Post at its Elgin, Illinois, facility copies of the at-
tached notice marked "Appendix." 18 Copies of said
notice, on forms provided by the Regional Director for
Region 13, after being duly signed by Respondent's au-
8 The General Counsel does not seek a bargaining order in this case.
Given the complete history of this case, I am in agreement and therefore
will not recommend such.
A' In the event no exceptions are filed as provided by Sec. 102.46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions, and recommended Order herein shall, as provided
in Sec. 102.48 o the Rules and Regulations, be adopted by the Board and
become its findings, conclusions, and Order, and all objections thereto
shall be deemed waived for all purposes.
IH In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
thorized representative, shall be posted by Respondent
immediately upon receipt thereof, and be maintained by
it for 60 consecutive days thereafter, in conspicuous
places, including all places where notices to employees
are customarily posted. Reasonable steps shall be taken
by the Respondent to insure that said notices are not al-
tered, defaced, or covered by any other material.
(b) Notify the Regional Director for Region 12, in
writing, within 20 days from the date of this Order, what
steps the Respondent has taken to comply herewith.
IT IS FURTHER RECOMMENDED that in Case 13-RC-
14785 the Board issue an Order sustaining Petitioner
Union's objection to employer conduct affecting the stat-
utory election held therein under the Act on December
21, 1978, to the extent occurring between November 2
(the date of the filing of objections to the first election)
and December 21, 1978 (the date of election), therein
and found to have constituted an unfair labor practice in
Case 13-CA-18343 setting aside said election and its out-
come; and directing that a third election be held as soon
as feasible, under the supervision of and at such time as
the Board's Regional Director for Region 13 deems that
circumstances permit free choice of bargaining repre-
sentative.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An agency of the United States Government
After a hearing at which all sides had an opportunity to
present evidence and state their positions, the National
Labor Relations Board found that we have violated the
National Labor Relations Act, as amended, and has or-
dered us to post this notice.
WE WILL NOT grant wage and/or benefit in-
creases to our employees to undermine a union's or-
ganizational campaign.
WE WILL NOT in any like or related manner in-
terfere with, restrain, or coerce our employees in
the exercise of their rights guaranteed them by Sec-
tion 7 of the Act.
The election held on December 21, 1978, by the Na-
tional Labor Relations Board has been set aside and its
results voided because of our unlawful conduct affecting
the outcome of that election, as found by the Board,
during the period preceeding that election. In due time,
another election will be held, and you will be notified of
the date, time, and place.
SIMPSON ELECTRIC COMPANY, A DIVISION
OF AMERICAN GAGE AND MACHINE COM-
PANY, INC.