Automobile Club of Michigan

National Labor Relations Board - Board Decisions

Sep 7, 1977

231 N.L.R.B. 1179 (N.L.R.B. 1977)

AUTOMOBILE CLUB OF MICHIGAN Automobile Club of Michigan; Detroit Automobile Inter-Insurance Exchange; Motor Land Insurance Company; and Group Insurance Company of Michigan and Michigan AAA Sales Association, Inc. Case 7-CA-13168 September 7, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND MURPHY On April 27, 1977, Administrative Law Judge Irwin H. Socoloff issued the attached Decision in this proceeding. Thereafter, Respondents filed exceptions and a supporting brief, and the General Counsel filed cross-exceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached 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, as modified herein.3 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge, as modified below, and hereby orders that the Respon- dents, Automobile Club of Michigan; Detroit Auto- mobile Inter-Insurance Exchange; Motor Land Insurance Company; and Group Insurance Compa- ny of Michigan, Dearborn, Michigan, their officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order, as so modified: 1. Substitute the following for paragraph 2(b): "(b) Make the above-listed employees whole for any loss of pay they may have suffered by reason of the Respondents' discrimination against them, by payment to each of them of a sum of money equal to that which that employee normally would have earned as wages from the date of the discrimination to the date of Respondents' offer of reinstatement in the manner set forth in F. W. Woolworth Company, 90 NLRB 289 (1950), less his net earnings during such period, with interest as set forth in Isis Plumbing & Heating Co., 138 NLRB 716 (1962), and Florida Steel Corporation. "4 231 NLRB No. 99 2. Insert the following as paragraph 2(c) and reletter the remaining paragraphs accordingly: "(c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due and the rights of employment under the terms of this Order." 3. Substitute the attached notice for that of the Administrative Law Judge. I We agree with the Administrative Law Judge that Respondent's suspension of II employees and subsequent discharge of 9 of them were in reprisal for their protected concerted activity in issuing the press release concerning employee grievances and therefore violated Sec. 8(aX l) of the Act. The General Counsel excepts to the failure of the Administrative Law Judge to find that the suspensions and discharges were also motivated by the employees' participation in the lawsuit thereby violating Sec. 8(aX)l) of the Act and/or by their union activity thereby violating Sec. 8(aX3) and (I) of the Act. We find it unnecessary to pass upon this contention, since the broad order herein is sufficient to remedy any such additional violation of the Act. 2 Member Murphy believes that, although Respondents' contention that the press release constituted "a vitriolic attack" upon its product may have some merit, the employees' rights to issue the press release are protected by the first amendment to the United States Constitution. In William C. Linn v. United Plant Guard Workers, 383 U.S. 53 at 62-63 (1966), the Supreme Court said: We acknowledge that the enactment of § 8(c) manifests a congressional intent to encourage free debate on issues dividing labor and management. [Footnote omitted.] And, as we stated in another context, cases involving speech are to be considered "against the background of a profound ... commitment to the principle that debate . . .should be uninhibited, robust, and wide-open. and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks." New York Times Co v. Sullivan, 376 U.S. 254, 270 (1964). Such consideration likewise weigh [sic] heavily here: the most repulsive speech enjoys immunity provided it falls short of a deliberate or reckless untruth. To the extent Respondents may have been injured by any defamatory statements in the press release, Respondents' redress must be sought in another forum. William C. Linn v. United Plant Guard Workers, supra 3 The Administrative Law Judge inadvertently neglected to include in his recommended Order certain language concerning the method of computing Respondents' backpay obligation and concerning making certain business records available to the Board or its agents. 4 In accordance with our decision in Florida Steel Corporation. 231 NLRB 651 (1977), we shall apply the current 7-percent rate for periods prior to August 25. 1977, in which the "adjusted prime interest rate" as used by the Internal Revenue Service in calculating interest on tax payments was at least 7 percent. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT suspend or discharge employees for engaging in concerted activities for their mutual aid or protection. WE WILL NOT condition reinstatement of employees upon their execution of an affidavit disavowing their concerted activities. 1179 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL NOT inform employees that reinstate- ment of suspended employees is conditioned upon their execution of an affidavit disavowing their concerted activities. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in the National Labor Relations Act. WE WILL offer Robert Baker, Ronald Bryant, Joseph Catalano, Neil Eisele, Charles Glasson, Raymond Jeske, Robert Kunec, David Miller, Hugh O'Neil, Jr., David Remer, and Gary Schmidtke immediate and full reinstatement to their former positions or, if such positions no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges. WE WILL make Robert Baker, Ronald Bryant, Joseph Catalano, Neil Eisele, Charles Glasson, Raymond Jeske, Robert Kunec, David Miller, Hugh O'Neill, Jr., David Remer, and Gary Schmidtke whole for any loss of earnings together with interest because of the discrimination against them. AUTOMOBILE CLUB OF MICHIGAN; DETROIT AUTOMBOILE INTER- INSURANCE EXCHANGE; MOTOR LAND INSURANCE COMPANY; AND GROUP INSURANCE COMPANY OF MICHIGAN DECISION STATEMENT OF THE CASE IRWIN H. SOCOLOFF, Administrative Law Judge: Upon charges filed July 12, 1976, by Michigan AAA Sales Association, Inc., herein referred to as the Union, against Automobile Club of Michigan; Detroit Automobile Inter- Insurance Exchange; Motor Land Insurance Company; and Group Insurance Company of Michigan, herein called Respondents, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 7, issued a complaint dated August 17, 1976, and an amended complaint dated November 2, 1976, alleging violations by Respondents of Section 8(a)(3) and (1) and Section 2(6) and (7) of the National Labor Relations Act, as amended, herein called the Act. Respondents, by their answers, denied the commission of any unfair labor practices. Pursuant to notice, the hearing was held before me in Detroit, Michigan, on November 15, 1976, at which all parties were represented by counsel and were afforded full opportunity to be heard, to examine and cross-examine 'On August 16, 1974, by means of a Board-conducted election, Respondents' salesmen voted against representation by the Union. The results were certified on August 26, 1974. witnesses, and to introduce evidence. Thereafter, the parties filed briefs which have been duly considered. Upon the entire record in this case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT I. JURISDICTION Respondents are Michigan corporations engaged in the business of providing insurance and related services to their members. They are affiliated businesses, with com- mon ownership, management, and labor relations policies, and constitute a single-integrated business enterprise. During the year ending December 31, 1975, a representa- tive period, Respondents received gross revenues in excess of $500,000. In that same time period, they paid insurance claims, valued in excess of $50,000, directly to claimants located outside the State of Michigan. I find that Respondents, and each of them, are employers engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. LABOR ORGANIZATION Michigan AAA Sales Association, Inc., is a labor organization within the meaning of Section 2(5) of the Act.' IIl. THE UNFAIR LABOR PRACTICES A. Background On May 20, 1976, the Union, and 11 named individual plaintiffs,2 who were employed by Respondents as sales- men, filed a class action lawsuit against Respondents in Wayne County Circuit Court. The suit alleged, inter alia, that Respondents "systematically, intentionally, willfully and wantonly set about to deprive the plaintiffs, and the class which they represent, the commissions which they earned by converting said commissions to the Company's own use . .. " On the same day, plaintiffs' attorney, Robert McWhorter, issued a press release describing the lawsuit, and stating: Plaintiffs claim that over the past 6 years the Company has intentionally and systematically withheld commissions from the salesmen, contrary to the salesmen's contract with the Exchange. The salesmen also claim that the Company has intentionally and systematically set about to deny them commissions by altering sales territories, discriminating against certain sales persons in favor of other salesmen, and divesting the salesmen of their vested interest in future commis- sions, all of which accrues, according to the salesmen, to the Company's benefit. It is the contention of the salesmen that AAA, through its bookkeeping procedures, has been able to skim off between five and ten percent of the million two-hundred fifty-thousand policies without paying the salesmen their rightful commissions .... The proofs 2 Those individuals constituted the entire executive board of the Union. 1180 AUTOMOBILE CLUB OF MICHIGAN show that the Company through its various fifty-two branches, has been systematically changing the com- mission stamps on new and renewed business, from a salesman's commission to a commission for the Company. The salesmen are extremely loyal to the AAA, they, the salesmen believe that they have the best product in the world to sell and are proud to represent the Company. They also believe that they should be paid in accordance with the contract with AAA... On the following day, May 21, 1976, the press release appeared, in various forms, in numerous Michigan newspa- pers. In the instant case, the General Counsel contends, inter alia, that Respondents violated the Act by suspending the 11 individual plaintiffs to the class action suit; by later discharging 9 of them; and by insisting that those individuals sign affidavits disavowing portions of the press release, as a condition of employment. The General Counsel asserts that the press release was the product of protected concerted activity by those I 1 employees, and that Respondents' retaliatory actions were unlawful.3 In defense, Respondents maintain that the press release was defamatory in character, constituted an unprotected attack upon Respondents' "product," and was calculated publicly to impugn Respondents' business and its reputation. As such, according to Respondents, the press release "clearly exceeded the reasonable parameters of 'concerted protect- ed activity' as defined in the Act." In addition, the complaint alleges, and Respondents deny, that certain statements by middle level supervisors, made to several of the salesmen, were coercive and in violation of Section 8(a)(l) of the Act.4 B. Facts Following issuance of the press release, on June 4, 1976, each of the 11 subject individuals received a letter from Respondents' executive vice president, Richard R. Dann, advising that the addressee had been suspended pending investigation of responsibility for the press statement. That letter further stated that, by virtue of the press release, Respondents had been "maliciously and falsely accused of skimming off commissions . . . of systematically changing commission stamps on new and renewed business to divert commissions to itself, and of other acts which similarly maligned the Exchange . .. damage[d] our reputation and business . . . and exposed [the Exchange] to financial loss." The suspension letters were accompanied by two form affidavits: one disavowing prior knowledge of the :' Alternatively. the General Counsel contends that: (I) the suspensions and discharges were motivated by the employees' participation in the lawsuit itself and (2) said suspensions and discharges were motivated by antiunion considerations. However. the record contains no evidence in support of these alternative theories. I Those statements by Supervisors Jerald Marvin and Gerald Arbour were, at best. ambiguous as well as isolated and of minimal impact. Indeed. the General Counsel has made no mention of them in his brief I shall. accordingly. recommend dismissal of those allegations. ; Specifically. the second affidavit called for disavowal of statements that "the Exchange skimmed off commissions belonging to its sales representa- tives, systematicall) changed commission stamps on new and renewal press release, and the other disavowing its content if there was prior knowledge.5 Salesmen Robert Kunec and Jospeh Catalano submitted such signed affidavits to Respondents and were reinstated. By letters dated June 25, 1976, and July 16, 1976, Respondents informed its salesmen of the reinstatements, and further advised that the remaining nine suspended salesmen would be discharged unless they also furnished the requested statements. Also on July 16, Respondents sent letters to the suspended salesmen informing them that they would be discharged on July 26, 1976, "unless those affidavits are signed and delivered to your branch manager prior thereto." Suspended salesmen Robert Baker, Ronald Bryant, Neil Eisele, Charles Glasson, Raymond Jeske, David Miller, Hugh O'Neil, Jr., David Remer, and Gary Schmidtke declined to sign the form affidavits. Several of them advised Vice President Dann that they were apprehensive about signing the second affidavit because, in their view, they would be disavowing language contained in their suit and "admitting themselves out of court." Dann assured them that that was not his intent, and that his concern was with the "defamatory part" of the press release.6 Dann declined to provide assurances that signing the affidavit would result in reinstatement. As noted, the nine above- named individuals did not submit the requested sworn statements and, on July 26, they were discharged. C. Conclusions The Board has held that the filing of a civil action by a group of employees against their employer is protected under the Act unless done with malice or in bad faith.7 It is also well established that employees have the right to appeal to the public for support of such efforts.8 However, in the instant case, Respondents contend that the protec- tion of the Act was lost because the employees assertedly utilized improper means in appealing to the public; namely, an attack upon the quality and integrity of Respondent's "product," evidencing disloyalty. Contrary to that contention, I have concluded that the press release was a legitimate exposition of the views of the employees concerning a labor dispute with their employer, and did not constitute an attack upon the quality of the services which Respondents sell to their customers. In Jefferson Standard Broadcasting Company, 9 the Board held that Section 7 of the Act "does not embrace concerted activity undertaken for an unlawful objective, or protect employees against discharge for resorting to 'indefensible' means (such as sit-down strikes, sabotage, 'violence, or similar conduct') in pursuit of their collective ends, business to divert commissions to itself, and committed other improper acts not expressly alleged in the complaint filed in the Wayne Circuit Court . . ." 6 Schmidtke proposed a substitute statement which was not accepted by Respondents. ? Trinit' Trucking & Matertals Corp., 221 NLRB 364 (1975): Leiiton Manufacturing Compann, Inc., 203 NLRB 309 (1973). 8 Communit, Hospital of Roanoke Valley, Inc., 220 NLRB 217 (1975). enfd. 538 F.2d 607 (C.A. 4, 1976). 9 94 NLRB 1507. 1511-12 (1951), enfd. sub nom. N.LR B. v. Local Union No. 1229, Inrernarional Brotherhood of Electrical Workers, 346 U.S. 464 (1953). 1181 DECISIONS OF NATIONAL LABOR RELATIONS BOARD however, lawful." In that case, employees distributed a handbill accusing their employer, a broadcasting company, of mulcting the public by furnishing technically inade- quate, "second-class" television service. The Board found that the employees had deliberately attempted to alienate the employer's customers by impugning the technical quality of his product, and concluded: The Board has held, and we reaffirm, that the Act protects employees against employer reprisal when they speak freely "on organizational matters" . . . and in one way or another denounce their employer for his conduct of labor relations or affairs germane to the employment relationship. Moreover, employees acting in concert may exhort consumers to refrain from purchasing their employer's product unless and until he alters his labor policy or practices. But this is a different case. Here, the subject matter of the employees' verbal attack upon the employer was not related to their interests as employees. And the gist of their appeal to the public was that the employer ought to be boycotted because he offered a shoddy product to the consuming public-not because he was "unfair" to the employees who worked on that product. [Footnotes omitted.]' 0 In the instant case, Respondents' salesmen, through their press release, advertised the fact of the lawsuit against their employer, and the underlying grievances which gave rise to that suit. Certain phrases contained in that release, such as that charging that Respondents have "been able to skim off" commissions, are harsh. The critical fact, however, is that those charges pertain to employee grievances, and not to the quality of Respondents' "product." Indeed, the press release highly praised that product ("... they, the salesmen, believe that they have the best product in the world to sell and are proud to represent the Company"). While Respondents maintain that, since they sell services rather than a tangible product, they are particularly reliant upon their "reputation for honest dealings, good service and reliability," that assertion cannot serve to deprive employees of their statutory right to publicize labor disputes, and to denounce their employer for his conduct of labor relations. Accordingly, I conclude that by suspending, and later discharging employees because they issued a press release, Respondents violated Section 8(a)(l) of the Act. Respondents further violated the Act by conditioning reinstatement upon execution of affidavits disavowing the contents of the press release, and by so informing the subject employees as well as the other salesmen. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondents set forth in section III, above, occurring in connection with Respondents' opera- tions described in section 1, above, have a close, intimate, "I See also The Patlerson-Sargenl Company, 115 NLRB 1627 (1956), and Coca Cola Bortling Works, Inc., 186 NLRB 1050 (1970). In those cases, the Board found that discharges for disloyalty were lawful since the offending employees had distributed leaflets to the general public which impugned the quality. usability, and safety of their employer's product. II In the event no exceptions are filed, as provided by Sec. 102.46 of the and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening commerce and the free flow of commerce. V. THE REMEDY Having found that Respondents have engaged in unfair labor practices in violation of Section 8(aXI) of the Act, I shall recommend that they be ordered to cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. CONCLUSIONS OF LAW 1. The Respondents, Automobile Club of Michigan; Detroit Automobile Inter-Insurance Exchange; Motor Land Insurance Company; and Group Insurance Compa- ny of Michigan, constitute a single-integrated business enterprise, and are employers engaged in commerce and in operations affecting commerce, within the meaning of Section 2(2), (6), and (7) of the Act. 2. Michigan AAA Sales Association, Inc., is a labor organization within the meaning of Section 2(5) of the Act. 3. By suspending and discharging certain of their salesmen, by conditioning their reinstatement upon execu- tion of an affidavit, and by informing its employees that reinstatement was so conditioned, Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8(a)(l) of the Act. 4. Respondents have not otherwise engaged in unfair labor practices within the meaning of the Act. Upon the foregoing findings of fact, and conclusions of law, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER I The Respondents, Automobile Club of Michigan; De- troit Automobile Inter-Insurance Exchange; Motor Land Insurance Company; and Group Insurance Company of Michigan, Dearborn, Michigan, their officers, agents, successors and assigns, shall: 1. Cease and desist from: (a) Suspending and discharging employees because they engage in concerted activities for their mutual aid or protection. (b) Conditioning reinstatement of employees upon their execution of an affidavit disavowing their concerted activities. (c) Informing employees that reinstatement of suspended employees is conditioned upon their execution of an affidavit disavowing their concerted activities. (d) In any other manner, interfering with, restraining, or coercing employees in the exercise of their rights under Section 7 of the Act to engage in concerted activities for their mutual aid and protection, or to refrain from such activity. Rules and Regulations of the National Labor Relations Board, the findings. conclusions, and recommended Order herein shall, as provided in Sec. 102.48 of 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. 1182 AUTOMOBILE CLUB OF MICHIGAN 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Offer to Robert Baker, Ronald Bryant, Joseph Catalano, Neil Eisele, Charles Glasson, Raymond Jeske, Robert Kunec, David Miller, Hugh O'Neil, Jr., David Remer, and Gary Schmidtke immediate and full reinstate- ment to their former positions or, if those positions no longer exist, to substantially equivalent positions. without prejudice to their seniority and other rights and privileges. (b) Make the above-listed employees whole for any loss of pay they may have suffered by reason of Respondents' discrimination against them, by payment to each of them a sum of money equal to that which that employee normally would have earned as wages from the date of the discrimination to the date of Respondents' offer of 12 In the event that the Board's 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 Pursuant reinstatement, less his net earnings during such period, with interest thereon at 6-percent per annum. (c) Post at its offices located in the State of Michigan, copies of the attached notice marked "Appendix."' 2 Copies of said notice, on forms provided by the Regional Director for Region 7, after being duly signed by Respondents' representative, shall be posted by it immedi- ately upon receipt thereof, and be maintained by Respon- dents for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Region 7, in writing, within 20 days from the date of this Order, what steps Respondents have taken to comply herewith. to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 1183