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A brief history of the landmark cases leading to the present NLRB policy follows:
In Joy Silk Mills, 24 LRRM 1548 decided September 13, 1949, the Board held that an employer may be required to bargain with a union without an election where;
(1) The union has secured membership or authorization cards from the majority of the employees before demanding recognition;
(2) The employer insists upon an election not because of a good faith doubt of majority, but to gain time in which to dissipate that majority by unfair labor practices; and
(3) The employer then embarks upon a campaign of unfair labor practices to destroy that majority. It is hard to quarrel with the decision in Joy Silk and the hundreds of cases based thereon, although the act provides other methods of relief and the case marked a departure from the time-honored secret ballot election requirement. As a remedy to be used only in the most extreme cases of employer unfair labor practices, the decision can be supported. Senator Javits' bill would seem to write Joy Silk into the act, but would it repeal the cases discussed below?
The next landmark case was Aiello Dairy, 35 LRRM 1235, decided in December 1954. This case and many following cases based upon it, hold that the union has alternative remedies. If the union knows that the employer is engaging in unfair labor practices which may destroy its card majority it may either file refusal to bargain charges or petition the NLRB for an election. It cannot do both. It cannot lose the election and then obtain bargaining rights by filing unfair labor practice charges.
In Bernel Foam Products, 56 LRRM 1039, decided in May 1964, the rule of election of remedies provided by the Aiello Dairy case was reversed. The union lost the election by a vote of 53 to 34. It then filed refusal to bargain charges and the Board required the employer to bargain. Briefly, the facts were: (1) When the union demanded bargaining by the employer prior to the election it had 53 of the 88 employees' signatures to membership or authorization cards; (2) the union suggested a card check by a disinterested third party and the employer replied that he would not bargain without the majority first being established in a secret ballot election conducted by the NLRB; (3) the employer did commit unfair labor practices prior to the election.
A little-noticed decision, Snow and Sons, 49 LRRM 1228, decided in November 1961, fills out the background. In Snow and Sons the employer agreed to a card check against its payroll by a neutral third party. The card check showed that 31 of the 40 employees had signed cards. The employer then said he wanted a secret ballot election and refused to bargain. The Board ordered the employer to bargain with the union. The Board found no unfair labor practice, no conduct to destroy the majority. The employer did nothing-just demanded a secret ballot election. If the case is considered just as union versus employer, perhaps there is something wrong about the employer changing his mind. But what about the rights of the employees? Some of those 31 cards may have been forgeries. Some may have been signed just to obtain an election. Some may have been signed by employees who intended to vote against the union. Some may have been signed because others in the car pool signed. Some may have been signed by employees who did not know what they were signing. The list of motivation for card signing could go on indefinitely. True, in Snow and Sons the union had six cards more than a majority. But in more recent cases, a majority of one has been held sufficient.
In just 2 days (June 29 and 30, 1964) the Board decided three cases under the new rules.
The cases were Fleming and Sons, 56 LRRM 1395, Sabine Vending, 56 LRRM 1386, and Flomatic Corp., 56 LRRM 1391. In Flomatic there was not even a request for bargaining by the union. The union had a card majority when it wrote a letter to the employer saying it would petition for an election if the employer did not reply to its request for a meeting. Two days later the union did file an election petition; the employer consented to an election and the union lost. The Board found the employer to have made mild, implied promises which a prior Board might well have considered to be “free speech. The Board required the employer to bargain with the union when and if it requested bargaining.
Two cases decided in February 1965, Indiana Rayon, 58 LRRM 1348, and Purity Food Stores, 58 LRRM 1294, illustrate the continuation of the trend. In Indiana Rayon the union had 119 cards in a unit of 236 on the day of its bargaining demand. The union filed an election petition and the employer consented to an election which the union lost by a vote of 120 to 85. The Board ordered bargaining, finding that the employer had committed minor violations of the act. There has not been sufficient review by the courts to determine just how far they will permit the Board to go in ordering bargaining on card-determined majority but generally they appear to support the Board. In Winn-Dixie Stores, 58 LRRM 2475, decided February 27, 1965, the sixth circuit affirmed the Board's bargaining order where the union had sent photostatic copies of cards to the employer with its bargaining demand. The cards counted up to a majority of one. The cards could have been considered confusing because they state both "authorization for representation under the National Labor Relations Act” and “hereby authorize
to represent me and in my behalf petition the NLRB for an election to determine bargaining rights." While there were some findings that the employer had exceeded his rights of free speech the court did not consider these findings in affirming the Board's order to bargain.
The eighth circuit in Johnnie's Poultry (59 LRRM 2117), decided April 29, 1965, reversed the Board. The union had presented photostats of cards signed by 49 of 93 employees. The court threw out the Board's finding that the employer had violated the act in making an isolated antiunion statement in a friendly conversation with an employee some time before the union's organizational campaign began. However, the court said that it had and would again in a proper case require an employer to bargain on the basis of a card check where the employer did not have a good faith doubt of the majority.
The fifth circuit in Dan River Mills (45 LRRM) reversed the Board on a card check determination of majority, holding that the employer had a good faith doubt and was entitled to have it resolved in an election. The ninth circuit affirmed the Board's bargaining order in a card check case, Trimfit of California (33 LRRM 2705).
The seventh circuit reversed the Board in Abrasive Salvage (47 LRRM 2397), finding that the cards were signed under the mistaken impression that they were merely to obtain an election. It is fairly clear that the NLRB has and will order bargaining in a naked case of majority by cards where the employer has not even discussed unionization with the employees. It is also fairly clear that a court will sustain such ruling. It is true that in most all cases the Board finds some violation of section 8(a)(1) of the act. However, this will happen to the most careful employer. During election campaigns, some supervisor invariably goes further than the free speech provision permits. The most common is a simple question, “How do you stand on the union?' Many unions now instruct their organizers to obtain signatures of over 50 percent without bringing the campaign into the open and to the attention of the employer and then file refusal-to-bargain charges. In these cases, the employees never learn anything about the union because the employer is never able to use the free speech permitted by the act.
It is no answer to say that the employer can go into circumstances surrounding the signing and the fact of signing by questioning employees on the witness stand. It is a very time-consuming procedure. Also, few witnesses will admit they did not know what they were doing when they signed a card if they are later placed on the witness stand.
The NLRB has now extended its Joy Silk doctrine to the outermost limits. Any disinterested observer must agree that in many cases employees are thus given union representation which the majority did not wish. If section 14(b) of the statute is eliminated, that same majority may be forced into a union shop (compulsory membership) because the employer yields to the union's pressure for such a contract.
The underlying premise requiring enactment of a "right-to-vote" bill is the fallacy in the Board's recent thinking that authorization cards are a true and valid indication of employee desires. An employee at all times should be entitled to the right to vote for or against a labor organization, especially where a majority of employees can by that action initiate collective bargaining which can provide for a union shop. Most employees when they sign authorization cards today expect that they will at some later time be able to exercise their right to vote, but the NLRB has taken that right away by requiring that an employer bargain without an election if the union has presented him with 51 percent of the authorization cards.
It should be clear that employees sign cards for many reasons; some are unable to say, “No”; some do not wish to be labeled one way or the other, and some 1 See also Iroing Air Chute (57 LRRM 1331 (November 1964)); Eat mor Super Market (4 CA 3411 (May 4, 1965)); S.S, Logan Packing Co., (9 CA 3140 (May 5, 1965)); Associated Beet Depots (30 CA 62 (May 5, 1965).
simply feel that they would like to give the union an opportunity to present their side but that their final choice will be made by secret ballot. This is confirmed by statistics cited by NLRB Chairman McCulloch in a speech in 1962 wherein he stated:
"In 58 elections, the unions presented authorization cards from 30 to 50 percent of the employees; and they won 11 or 19 percent of them. In 87 elections, the unions presented authorization cards from 50 to 70 percent of the employees; and they won 42 or 52 percent of them. In 57 elections, the unions presented authorization cards from over 70 percent of the employees; and they won 42 or 74 percent of them." The case against voluntary recognition
There have been situations where an employer will "voluntarily” recognize and bargain with a union. In each of these situations, the employees do not have the opportunity to cast their vote for or against a decision that has been made for them between the employer and the union. These voluntary recognitions generally fall into the following categories:
(1) Where an employer chooses to recognize a union in order to enter into a contract whereby his employees will receive a minimum of benefits, the signed contract then prevents the employees from seeking any more benefits during the term of the contract, and likewise prevents another union from enticing the employees during that period. This is commonly referred to as a "sweetheart contract”. Such conduct is contrary to existing law. However, the practicalities of obtaining proof have prevented successful enforcement of this type of violation. Those cases which have been brought to a successful conclusion pointing out this violation invariably involves a rival union which is able to present the necessary evidence.
(2) Frequently a union will approach an employer and ask that he sign a contract. Many times in these situations the union will not have spoken with a single employee. The employees simply wake up one morning and find that they are now being represented by a labor organization and must pay dues. The employer did not contact his employees because he was very likely presented with an ultimatum by the union that if he did not sign the contract immediately, or within 24 hours, he would be faced with a strike, stoppage of deliveries, or other economic coercion, and in some instances with physical threats of violence. This example of coercion by a union occurs far more frequently than the reported cases would indicate. It is only where the union's tactics are so outrageous than an employer makes a stand that we have reported decisions.
(3) An employer opening a new plant already has a contract with a union in his existing plant, and may wish to sign a contract with the same union for the new facility. In these situations the necessity of an election may delay negotiations for a week or two, but we believe the future relationship will be improved if the employees have the opportunity to express their desires in a secret ballot election.
(4) An employer may sign a contract with the union without going through an election because he sincerely believes that the union represents a majority of his employees and an election would be a useless act. The employer and the union agree to a card check by a neutral third person. Even here there is a flaw. The basic premise for a "right-to-work” bill is that authorization cards are not an accurate indication of employee desires. If this premise is accepted there should be no voluntary recognition.
We have considered the disservice to employees. The NLRB line of decision also presents many problems for an employer. Presented with a bargaining demand, he may agree to recognize the union. In so doing he has violated the law if the union does not have a majority in fact. He may have violated the law if the agreement to recognize does not cover an appropriate unit. On the other hand, if he does not recognize the union which has a card majority he has violated the law.
The last 2 years have witnessed a groundswell of complaints against the Board in its handling of representation cases. Its elections (when actually held) are honest, fair, and free from complaint. The complaints go to its direction of elections and disposition of objections to elections. We have discussed the problem of obtaining an election, We now turn to the appropriate unit problem.
Section 9 of the act covers the responsibilities of the Board in connection with representation cases, The Board is give wide latitude to determine what the voting unit should be. Over the years a volume of precedent was built up to the point where the retail industry could rely on the appropriate unit being the store or the employer's stores in a metropolitan area. Wholesale destruction of these precedents began in 1963. Unions requested and were granted splinter units within stores. See for example Stern's, Paramus (58 LRRM 1081); Rich's Inc. (56 LRRM 1179); Frisch's Big Boy (56 LRRM 1246); J. W. Mays (56 LRRM 1336); City Stores (56 LRRM 1337).
Retailers resisted these petitions, relying for the most part on section 9(c)(5) which limits the Board in finding appropriate units by providing the extent to which the employees have organized shall not be controlling.” The Board however, granted the unions the voting unit which they had requested. The C.S. Court of Appeals for the First Circuit assessed the Board's current findings in the insurance industry, after reviewing many cases as follows: “Looking at its (Board) actions, however, we have not found a single instance since Quaker City (1961) wherein the majority of the Board refused the debit insurance agent unit petitioned for by the union.” Metropolitan Life (55 LRRM 2444). The court might well have been talking about the retail industry.
We now wish to touch briefly on another area of the representation cases where we believe the Board has completely nullified a provision of the law. Section 8(c), “free speech, was written into the law to permit employers to discuss unionization with employees during organizational campaigns. Here we could cite hundreds of cases where elections were set aside after being lost by the union where the employer exercised his right of free speech and made no threats or promises of benefits.
Under present procedure, the only way to gain court review of representation cases, including unit determinations and objections to elections, is by refusal to bargain with the union, and then only when the union has been successful in the election. In order to gain review, the employer must technically violate section 8(a)(5), the refusal to bargain section. Then the employer has a hearing before a trial examiner, must be found guilty, then a review of the trial examiner's decision by the NLRB and be again found guilty before there is access to the courts. This procedure takes between 1 and 2 years' time. During such period, the morale of the employees deteriorates. It is an unworkable remedy.
The only remedy we are able to suggest is to make direction of elections a final order with direct review by a court.
We appeared before the House committee considering repeal of section 14(b). We were told that elections and other matters pointed out above were collateral and should be taken up separately. However, we are realists. The Wagner Act remained unchanged from 1934 to 1947. The Taft-Hartley Act was not significantly amended until 1959. Now, in 1965, you are considering repeal of section 14(b). We can hardly anticipate another opportunity to air our grievances at an early date.
To conclude, the American Retail Federation urges:
(2) The law should be amended to make it clear that even where the union shop is presently permissible, the union must first demonstrate its majority status in an appropriate unit in an NLRB-conducted election.
(3) Direction of elections and disposition of objections to elections should be made directly reviewable by a court.
Mr. SHROYER. Let me say first we are here this morning representing the American Retail Federation. That is spelled out on the first two pages of the statement.
I think for present purposes I should say that it is not a trade association but a federation comprised of 45 State and 31 National associations.
Just a word about myself and Mr. Browne, who is sitting with me. I am general counsel of the American Retail Association; however, I am also a practicing lawyer in the labor field. In the 80th Congress I was the chief counsel to this committee. I am sorry that Senator Morse has gone, he is the only familiar face from those days.
And in the S1st and 82d Congresses I was the minority counsel.
Mr. Browne and I also have in common the fact that we were both the chief legal officers of the National Labor Relations Board in Ohio for a period of time. Both of us are practicing lawyers in this labor management field.
I might also say that Mr. Browne and I appeared before the House committee on this same subject. We were told that some of the matters that we wanted to discuss, namely elections were collateral matters and should be taken up separately.
That may well be true, but I think we should point out that we are realists. The Wagner Act remained unchanged from 1934 to 1947 and then Taft-Hartley was not significantly amended until 1959.
Now in 1965 we are considering repeal of section 14(b) and I think we would be unrealistic to anticipate another opportunity to present this one problem on elections, National Labor Relations Board elections at any other time than now. In other words, we believe that this committee must consider the right of employees to a secret ballot election in any recommendation it may make to the Senate with regard to the repeal or modification of section 14(b).
If Federal law is to permit compulsory membership throughout the United States, surely the union must represent the majority of employees.
We submit that under the present rules or decisions of the labor board, employers are ordered to bargain with the union which the majority of the employees do not wish to represent them.
How substantial those cases are with respect to the total volume of cases, I am not sure; perhaps 10 percent of the total.
Mr. Browne will wish to develop this point at some length, but first we would like to tell the committee why our membership feels so strongly that 14(b) should remain unchanged.
Now, proponents of the repeal of section 14(b) argue that they merely desire to create a situation where unions and employers may freely enter into compulsory membership contracts.
As a practical matter the word freely is a little bit of a misnomer, especially with respect to small business.
In my own practice I am mainly concerned with small business; I do not represent any large corporations. I have done a considerable
a amount of bargaining.
It has been my experience that we may have bargaining on wages and fringe benefits but there just is not any bargaining on union shop. An employer is reduced to the position of saying "Yes" or "No". If he says "No' and sticks to it, he must expect a strike or picketing. I have had clients who, as a matter of principle, insisted that there should be no compulsory membership features in a contract, but where they stuck to it I have never had a case that did not end up in a strike.
A retailer is more vulnerable to strikes and picketing than employers in other industries, because you see when a store is shut down or there is picketing some customers just will not cross picket lines, and to a retailer that is business that you never recoup, because some competitor is always ready to take care of your customers; you just do not get them back.
Therefore, I would say that the small retailer is more easily forced to agree to compulsory membership and dues, than perhaps any of the major manufacturing people.
That is also true of many of the giant retail chains.
Another point that I do not like to agree to, but most employers are inclined, especially small employers, to agree to a union shop