Citizens Investment Services Corp.

National Labor Relations Board - Administrative Judge Opinions

Dec 23, 2003

06-CA-033153 (N.L.R.B. Dec. 23, 2003)

JD-115-03
Pittsburgh, PA

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES

CITIZENS INVESTMENT SERVICES
CORPORATION

and Case 6—CA—33153

CHRISTOPHER HAYWARD, An Individual

Barton Meyers, Esq., for the General Counsel.
James P. Hollihan, Esq., of Pittsburgh, Pennsylvania,
for the Respondent.
Daniel W. Cooper, Esq., of Carnegie, Pennsylvania,
for the Charging Party.

DECISION

STATEMENT OF THE CASE

PAUL BUXBAUM, Administrative Law Judge. This case was tried in Pittsburgh,
Pennsylvania on September 11 and 12, 2003. The charge was filed December 31, 2002, and
the complaint was issued May 29, 2003.

The complaint alleges that the Company discharged its employee, Christopher Hayward,
because he engaged in protected concerted activity and in order to discourage its other
employees from engaging in such activity. The Company’s conduct is asserted to be in violation
of Section 8(a)(1) of the Act. The Company filed an answer to the complaint, denying the
material allegations of the complaint and contending that its actions relating to Hayward were
based on legitimate business considerations.

As described in detail in the decision that follows, I determine that Hayward engaged in
protected concerted activities and that the Company was aware of his participation in such
activities. I also conclude that the General Counsel has carried its burden of proving that
Hayward’s participation in those activities was a substantial motivating factor in the decision to
discharge him from employment. Finally, I find that the Company has failed to meet its burden
of demonstrating that it would have discharged Hayward regardless of his participation in
protected concerted activities.

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On the entire record1, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel, the Charging Party, and the
Respondent, I make the following

Findings of Fact

I. Jurisdiction

The Company, a corporation, has been engaged in providing financial services and
making retail sales of financial investment products at its offices throughout Pennsylvania,
where it annually derived gross revenues in excess of $1,000,000 from its operations within the
Commonwealth of Pennsylvania and purchased and received at its Pennsylvania offices
products, goods, and materials valued in excess of $50,000 directly from points outside the
Commonwealth of Pennsylvania. The Company admits2 and I find that it is an employer
engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.

II. Alleged Unfair Labor Practices

A. The Facts

The events in controversy arise from difficulties associated with a change in ownership
and management of a financial services company. The financial services operation in question
was a component of the Mellon Bank known as Dreyfus Investment Services Corporation. Its
mission was to provide investment services to customers of Mellon’s retail banking business. A
group of employees known as financial consultants were key participants in this enterprise.
Typically, Mellon Bank officials would refer prospective customers to these financial consultants
who would meet with the clients and assist them in making appropriate investments. The
consultants were paid commissions on their investment sales.

On July 1, 2001, Citizens Bank, a large New England banking concern, announced that
it was acquiring both the existing retail banking business and the associated investment
services operation from Mellon. The new investment services company would be known as
Citizens Investment Services Corporation (CISC).3 The formal date of this transaction was
December 1, 2001. As one of the Company’s officials put it, this was “the actual legal Day 1” for
the new concern. (Tr. 257.)

As early as September 2001, management of Citizens realized that the transition of the
investment component to their full control would be complicated. Given the need for various

1 There are several errors in the transcript. At p. 156, l. 5, the witness actually stated that
the branch manager wished the customer to “buy” things. At p. 197, l. 8, the witness indicated
that he could speak with a colleague without being “uncomfortable.” At pp. 223—224, the
witness testified that managers told employees that they were “tired” of hearing about
complaints. At p. 519, l.8, I advised counsel that it “would” be necessary to brief the remedial
issue raised by counsel for the General Counsel. At p. 524, l. 7, I asked counsel for the General
Counsel if he was relying on the doctrine set forth in “Shattuck Denn.” (I was referring to
Shattuck Denn Mining Corp., 362 F. 2d 466, 470 (9th Cir. 1966).) The remaining errors of
transcription are not significant or material.
2 See, amendment to respondent’s answer filed September 9, 2003. (GC Exh. 1(f).)
3 Counsel for the Company described CISC as a “subsidiary” of Citizens Bank. (R. Br. at p.
2.)
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legal and administrative formalities, the full conversion of the investment operation to CISC
could not be completed by December 1. Therefore, although the employees of Dreyfus were
acquired by CISC on that target date, the actual investment portfolios and associated files and
records remained within the control of Dreyfus during a protracted transition period. As will be
seen, this led to a variety of problems that form a significant portion of the context of the events
under consideration.

Naturally, the financial consultants were very concerned about their employment
prospects after the acquisition of their employer. Among them was the charging party in this
case, Christopher Hayward. Hayward had been employed as a financial consultant for Dreyfus
for approximately 6 years.4

Both Mellon and Citizens expressed interest in hiring the consultants. In August, an
official of Mellon, Russell Hanscom, met with the consultants, including Hayward, and presented
an outline of a possible employment opportunity for them. While the consultants were
interested in Mellon’s thoughts, the general impression was that the plan to employ the
consultants in a new role at Mellon was disturbingly vague regarding such issues as their
compensation.

Shortly thereafter, on September 10, 2001, Barry Toothaker, the President of CISC, held
a similar meeting with a number of the financial consultants. The meeting was held in
Philadelphia. Among the consultants who attended was Edward Chess, Jr. Chess testified that
one of the crucial subjects discussed at the meeting was the question of whether so-called “trail
payments” would be available to the consultants. Trail payments are commissions paid to
consultants for ongoing management of investments that were originally purchased in previous
years. It is apparent that the scope and size of such trail payments would greatly affect the
income received by experienced financial consultants. Chess reported that Toothaker indicated
that such payments would be paid to CISC’s financial consultants. Even better, he stated that
the size of the payments would be based on the consultant’s position on the compensation grid.
This grid consisted of a chart that awarded a larger commission on sales to higher producing
employees. In other words, the more a consultant sold overall, the higher his or her commission
was on each individual sale. Chess opined that the prospect of receiving trail commissions in
amounts determined by application of the compensation grid was a highly satisfactory method
of compensation for experienced financial consultants.

After the meeting with Toothaker, Chess held a telephone conference with his
colleagues and reported the details of CISC’s proposal. Had events in our country proceeded
normally, Chess would have flown back to Pittsburgh on the following day, September 11, 2001.
Because of the intervention of evildoers, this became impossible. As a result, two of Chess’
colleagues, Hayward and Jeffrey Russo, drove to Philadelphia to pick him up. On the ride back
to Pittsburgh, the men discussed the merits of the competing job offers and decided that it
would be preferable to select employment at CISC. Hayward testified that among the factors
that influenced this decision were a “very satisfactory” compensation grid and the plan to pay a
“full trail through the grid.” (Tr. 124—125.) The upshot was that the financial consultants were
“extremely hopeful and happy” about CISC’s employment proposals. (Tr. 125.)

4 At one point, he had a break in service, having obtained employment with another
company. Subsequently, he returned to Dreyfus and resumed his duties as a financial
consultant.
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The first written information regarding the terms and conditions of employment for
CISC’s financial consultants was distributed during a sales meeting on October 8, 2001. This
was entitled “FY 2002 Incentive Plan for Financial Consultants.” It was clearly labeled as a
draft.5 (GC Exh. 2.) Both Chess and Hayward testified that it reflected a lower percentage for
trail payments than had been proposed during the September meeting with Toothaker.6 Chess
was also concerned that this written proposal failed to include another source of compensation,
payment to the consultants of a portion of the commissions earned by certain lower-level
employees known as financial relationship managers.

Due to his anxiety regarding these aspects of the proposed compensation, Chess
initiated a series of emails to his superior, John Halechko, a senior vice president and director of
investment sales for CISC.7 In the first email, dated October 22, Chess complained that the pay
plan contained in the draft was “changed so significantly” from the plan outlined by Toothaker in
Philadelphia. (GC Exh. 3, p. 8.) In particular, Chess raised the question of whether trail
payments would be made through the compensation grid. Halechko send an immediate
response, telling Chess that, “[t]rail is paid through the grid.” (GC Exh. 3, p. 8.) Several hours
later, Halechko retracted this assertion about the draft plan, observing that he had not been
correct about the status of the trail payments. He now noted that, “[t]he trails are not paid
through the base grid.” [Boldface in the original.] (GC Exh. 3, p. 7.) Chess responded by
thanking Halechko for the clarification and expressing the hope “that my 2 cents helps to design
the best plan we can have.” (GC Exh. 3, p. 7.) Halechko then replied, observing, “I don’t mind
your 2 cents. If you don’t ask you don’t get. As long as you[r] position makes sense and the
wording of your email doesn’t piss me off I’m open to any of your suggestions.” [Italics in the
original.] (GC Exh. 3, p. 7.)

Just one minute later, Halechko’s language provoked a response from Chess. In an
obvious expression of fear and concern, he told Halechko that, “I hope I didn’t piss you off . . .
that was not the intention. If I did, I apologize.” (GC 3, p. 6.) Halechko then attempted to
reassure Chess, telling him that he was not angry and that, “[i]t was a joke.” (GC Exh. 3, p. 6.)

Chess testified that during this period he felt great pressure to obtain definitive
commitments regarding compensation. This pressure arose from the need to enroll in the
benefit programs offered by Citizens. For example, he noted that he needed to learn more
precise information regarding his expected annual earnings so that he could determine the
amount of disability insurance required to protect him. As a result, on October 25, he emailed
Hanscom, explaining the nature of what he characterized as this “urgent” problem. (GC Exh. 3,
p. 4.) Hanscom sent a terse response, indicating that the issue of calculation of the benefit
base “was covered in the round table with Barry [Toothaker], you were there.” (GC Exh. 3, p.
4.) Chess responded by observing that he was “trying very hard not to lose my mind with this.”
He contended that he was being given differing answers that were leaving him “angry and
befuddled.” (GC Exh. 3, p. 4.)

5 The parties stipulated that the handwritten annotations on the copy of this document
received into evidence are later additions that are not to be considered part of the record.
6 More accurately, it reflects a reduction for experienced financial consultants and an
increase for newer employees whose position on the compensation grid was lower. As both
Chess and Hayward were experienced and highly productive consultants, it is logical that they
perceived the change as negative.
7 The initial email was also addressed to Hanscom.
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Several days later, Chess resumed his email discussion with Halechko, explaining that
although his enquiries regarding compensation issues “make me look like a complainer . . . they
are important issues.” He also provided information as to the attitude of his colleagues,
asserting “I can honestly tell you that no one is happy right now with some of the decisions that
have been made.” (GC Exh. 3, p. 2.) Halechko responded in a reassuring manner, telling
Chess that he did not think, “you are a complainer.” He noted that “[t]he points you address are
valid and important to many of your peers,” including another group of employees in
Philadelphia who raised the same questions. His response included an attempt to provide more
information regarding the benefits base issue and, in boldface, he solicited more information
from Chess by asking him to “[p]lease elaborate on what other decisions being made are
becoming dissatisfiers for the group.” (GC Exh. 3, p. 2.)

Taking advantage of the opportunity offered by Halechko, Chess responded by listing
what he termed the “major” issues for the group. He reported that “trail was the 1st issue,”
specifically whether it would be paid through the compensation grid. He next raised the issue of
payments to consultants based on sales made by financial relationship managers.8 He
characterized the Company’s description regarding this issue as “Clintonesque.” (GC Exh. 3, p.
1.) Chess next returned to the issue of benefit calculations. Finally, he objected to the manner
in which new financial consultants were being hired, asserting that the selection of in-house
employees over highly qualified outside candidates “seems to de-value” the incumbent
consultants. Overall, Chess contended that the experienced consultants saw “nothing to reward
them for being, well veterans. For being loyal or being productive.” (GC Exh. 3, p. 1.)
Halechko responded by informing Chess that it was not financially possible to pay trail
commissions through the grid. He briefly addressed the payment of commissions on sales
made by the financial relationship managers and forcefully asserted that management intended
to promote existing employees before turning to outside candidates, noting that “[a]ll of us were
new at one time. This has no impact on any FC [financial consultant] and I’m not sure why it
would be anyone’s concern.” (GC Exh. 3, p. 2.)

As has been noted, the principal step in the transition to ownership by Citizens occurred
on December 1, 2002. Although the financial consultants continued to manage investment
accounts that remained technically under the control of Dreyfus, they became employees of
CISC. Under examination by counsel for the General Counsel, Halechko agreed that, except
for the remaining issue of Dreyfus’ control of the investment accounts, the financial consultants
were “working fully for Citizens after the beginning of January 2002.” (Tr. 300.) At that time,
the consultants received a new supervisor, Regional Sales Manager David Hunter. Hunter
maintained a practice of holding monthly meetings with the financial consultants who were
under his supervision.

At the monthly meeting in January 2002, Hunter distributed a new compensation plan
entitled, “Financial Advisor Incentive Plan Effective January 1, 2002.” (GC Exh. 4.) This
contained provisions governing the compensation-related issues that had already provoked
concern and controversy. Both Chess and Hayward testified that this revised plan was
unsatisfactory. It contained a “much reduced” trail payment and favored lower producers over
higher producers. (Tr. 55.)

As the year progressed, the experienced financial consultants began to have complaints
not only about the structure of their compensation plan, but also regarding the actual amounts
8 His email refers to the financial relationship managers by the acronym of BSS. This is an
abbreviation for another title used to describe this class of employees.
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they were receiving under that plan. As Hayward put it, “my pay was substantially short almost
every month that we got commission checks. They were late several different times and my
lowest range of shortness of my pay was I remember being [$]4,000 and then the most was
[$]10,000.” (Tr. 128.) Halechko testified that Hayward was the first employee to bring this
problem to his attention, informing him that, “I don’t think they’re paying us right.” (Tr. 267.) As
Halechko put it, “Chris [Hayward] identified the problem, he figured out that there was
something wrong, now we had to look into it.” (Tr. 268.) In his testimony, Halechko contended
that he was “happy” that Hayward had raised the problem since it was clearly a serious matter
that required management investigation. (Tr. 268.) Nevertheless, it is noteworthy that Halechko
also testified that it was at approximately this time that he had his first conversation with Hunter
regarding problems with Hayward.

The Company’s officials testified that the serious compensation problems just referenced
were caused by the difficulties in obtaining accurate account information from Dreyfus. As
Halechko put it, “we had to rely on the information given to us by Dreyfus and that’s how we
paid all of our employees.” (Tr. 258.) It had been hoped that the full transfer of the accounts
would be accomplished as of February 15. Unfortunately, this did not occur and the target
transfer date had to be postponed to March 15 and, again, to April 15. Halechko noted that one
of the reasons for the delay in implementation stemmed from the fact that the personnel who
handled the Pittsburgh accounts for Dreyfus were going to lose their jobs once the transfer to
Citizens was accomplished. As a result, it was in their pecuniary interest to slow down the
transfer operation.

During this awkward transition period, specifically in April 2002, Halechko testified that
he first began to consider discharging Hayward. He indicated that this was based upon reports
from Hunter that Hayward “didn’t want to change his behavior, to change with our new strategy”
resulting from the transfer of ownership to Citizens. (Tr. 282.) In addition, Halechko testified
that at this time Hunter told him about “a situation . . . And I’m not sure if it was Chris [Hayward]
going into somebody’s territory, or I’m not clear of the exact issue at the time.” (Tr. 283.) This
vague reference to a “situation” refers to a sales transaction that figures prominently in the
Company’s defense to the unfair labor practice charge.

By way of background, it must be noted that the Company’s financial consultants
operated out of specified territories. Each consultant was responsible for handling client
referrals from particular branches of the retail bank. Generally speaking, it was improper for a
consultant to solicit investment clients from the territory assigned to another consultant. One of
the newer financial consultants, Gail Saunders, was responsible for the territory that included
the Oakland Branch of the bank. The branch manager at Oakland was Valerie Stevens. In
turn, Regional Manager Jeanine Fallon supervised Stevens.

The Oakland Branch referred an elderly woman of considerable means to Saunders as a
potential investment customer. Saunders and Stevens met with this lady and began the
process of selling her a fixed annuity. While preparing the documents for the sale, Saunders
discovered that the lady’s age precluded her from eligibility for the annuity. As a result, the
meeting terminated without any sale to the potential customer. Significantly, Halechko testified
that Saunders was unable to propose alternative investment options for this client because she
lacked the licensure required to offer such products. The evidence indicates that this
unsatisfactory outcome left Stevens “very upset.” (Tr. 149.) Stevens conveyed her
unhappiness to her superior, Fallon, and requested that Hayward be brought into to assist with
the customer.

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Fallon was familiar with Hayward’s skills and experience since she had served as his
supervisor in the past. She telephoned Hayward and requested his assistance.9 Hayward
testified that he told Fallon “that you have to contact David Hunter. You have to talk to him
about the case. If he says it’s okay, then I’ll come in and do that.” (Tr. 150.) Hayward further
testified that he received another call from Fallon who advised him “that she had talked to Dave
[Hunter]. It was okay.” She also told Hayward that she had discussed another referral with
Hunter as well.10 (Tr. 150.) Hayward also testified that he had a brief discussion with Hunter
about Fallon’s request for his services. He indicated that Hunter authorized the transaction,
saying that it was “no big deal.”11 (Tr. 196.)

Based on his assurances from Fallon, Hayward proceeded to schedule a meeting with
the elderly woman. He was favorably impressed with her acuity, but did not make any sale at
that time. She indicated that she intended to seek outside advice regarding Hayward’s
proposed investment. At a second meeting on April 4, 2002, the client informed Hayward that
her independent advisors had agreed with his recommendations. At that time, she invested in a
Pennsylvania municipal bond mutual fund. Hayward received his customary commission from
this transaction.

Hunter testified that after Hayward completed the transaction with the elderly investor,
he received a telephone call from Saunders, “who was very upset.” (Tr. 370.) She told Hunter
that she had previously met with the investor and had determined that “she did not have a
product that she felt was suitable for that customer.” (Tr. 371.) She complained that Hayward
had not spoken to her before meeting with the customer himself. As a result, Hunter scheduled
a meeting with Hayward to discuss the incident. Hunter testified that Hayward told him “he
thought that the regional manager [Fallon] had called me.”12 (Tr. 371.) Hunter further testified
9 Hayward reported that this type of request for his services had been “very common”
throughout his career. (Tr. 150.)
10 I credit Hayward’s testimony regarding this key conversation with Fallon. While some of
the significant aspects of events in the Oakland Branch are in dispute, I find it noteworthy that
the Company did not present Fallon or Stevens as witnesses. As management officials at
Citizens, their availability to testify was certainly within the Company’s control. Citing language
from a treatise, the Board has observed that it is appropriate to draw an adverse inference from
a party’s failure to present evidence “within the control of the party whose interest it would
naturally be to produce it.” Martin Luther King Sr., Nursing Center, 231 NLRB 15 (1997) at fn. 1.
More recently, the Board applied this inference against a company that failed to present the
testimony of the only management participant in a crucial meeting. Daikichi Corp., 335 NLRB
622 (2001) at fn. 4. In resolving conflicts involving the incidents at the Oakland Branch, I find it
appropriate to draw this type of adverse inference from the Company’s failure to present the
testimony of either Regional Manager Fallon or Branch Manager Stevens.
11 I recognize that Hunter denies having had any prior consultations about the transaction
with either Fallon or Hayward. I do not credit this blanket denial. As to a talk with Fallon, the
Company failed to call her to corroborate Hunter on this point. With regard to Hayward, I note
that Hunter has strong grounds to exhibit animus against him. The evidence showed that
Hunter’s perceived failure to adequately manage the experienced financial consultants resulted
in his removal as Regional Sales Manager. Furthermore, Fallon’s request to have Hayward
meet with this client in circumstances where a less experienced consultant had been unable to
offer the client an appropriate investment vehicle strikes me as, in fact, “no big deal.” I am not
surprised that Hunter would use this language in discussing it with Hayward.
12 Hunter’s testimony as to this point is corroboration of Hayward’s testimony that Fallon told
him she had spoken to Hunter.
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that he told Hayward that he should have spoken to him directly before taking action.13 Hunter
reports that he advised Hayward to handle any such future situations by calling the financial
consultant involved and seeking consent. He also noted that, “[i]f the two FCs [financial
consultants] could work it out themselves, it was not necessary to call me.” (Tr. 372.) Hunter
then telephoned Fallon. He reports that she “apologized to me and assured me that it would not
happen again.”14

Hunter testified that no formal disciplinary action was taken against Hayward or any
bank employee arising from this episode. He did speak about it to Halechko, “not with the
degree of urgency, but I did in my almost daily conversations mention that this had happened
and that I had dealt with it.” (Tr. 376—377.) Halechko’s testimony confirmed the relative lack of
importance placed on this event by the two managers. He noted that Hunter told him about “a
situation . . . And I’m not sure of it was Chris going into somebody’s territory, or I’m not clear of
the exact issue at the time.” (Tr. 282—283.)

Barbara Blyth, a human resources group manager for Citizens Bank, provided further
insight into Halechko’s thought processes regarding Hayward at this juncture. Blyth testified
that on April 10 she met with her new boss, June Barry. The first item Barry raised was a phone
conversation she had with Halechko. She reported that Halechko had told Barry that Hayward
“was not buying into the change within the organization, he was not displaying good teamwork,
and that he felt that, that he could not have this, it was affecting the morale of the group, and he
would like to terminate Chris’ employment.” (Tr. 478.)

One week later, Hayward reduced his complaints regarding compensation to writing. On
April 17, he addressed an email to Halechko reporting that his trail payments have been either
missing or incorrect. Ignoring rules of capitalization in a writing style characteristic of some
computer users, he observes that, “im not bitching. im just saying that the general consensus
around here is that some things tend to just get swept under the rug . . . people are starting to
get upset, i just wanted to let you know.” (GC Exh. 7, p. 1.) Halechko responded briefly, telling
Hayward he did not want things swept under the rug.

Shortly thereafter, Hayward became involved in another episode involving the Oakland
Branch of the Bank. The incident arose when Saunders, in association with a bank employee,
was making telephone calls to a list of prospective customers. When they reached a particular
name, the bank employee suggested to Saunders, who is African-American,15 that she may
13 I do not credit this testimony, having already found that Hayward has credibly testified that
he did have a brief conversation with Hunter who authorized him to proceed with the meeting,
telling him that it was “no big deal.” (Tr. 196.)
14 Hunter’s reference to an apology from Fallon is unclear. I cannot ascertain whether
Hunter means that Fallon apologized for not calling him in advance (despite having assured
Hayward that she had done so) or for involving Hayward in the situation at all. Under
examination by counsel for the Charging Party, Hunter asserted that the apology was for
violating company policy and placing Saunders in a bad light. When pressed, he conceded that
the apology may “very well” have been for inaccurately telling Hayward that she had spoken to
Hunter about the referral. (Tr. 398.) This is another point that may have been clarified had the
Company chosen to present Fallon’s testimony.
15 It is with a sense of discomfort that I note the racial background of certain participants in
these events. In a better world, it would be irrelevant. Unfortunately, given the nature of the
events about to be described, the lawyers for the parties and I have reluctantly concluded that it
is necessary information regarding the context of this incident.
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wish to skip that call since the customer was unwilling to meet with minorities and had even
used the “N word.” (Tr. 374.) Saunders decided to call him anyway. During their conversation,
he refused to meet with her but agreed that she could call him in the future.

Hayward testified that he received a call from Branch Manager Stevens, requesting that
he handle this customer. Stevens, who is also African-American, told him about this customer’s
racist views and asserted that, “I don’t care what this guy says, you know, I want him to buy
things and I want him to buy them from us.” She added, “I don’t care what his problem is. Let’s
just take care of him.” (Tr. 156.) Hayward did not speak to Saunders before contacting this
potential investment customer. He testified that he made this decision because, “I just didn’t
think that that was my place being that this was all being handled through my manager and
managers of other, you know, areas of the bank.” (Tr. 158—159.)

Although Hayward did not contact Saunders, he testified that he was aware that “this
client was a client of another Financial Consultant” who had made investment sales to him. (Tr.
156.) Hayward called this consultant and sought her consent for him to meet with the investor.
She authorized him to conduct the meeting, warning him that the customer was a “jerk.”16 (Tr.
157.) Hayward proceeded to meet with the client and sold him a fixed annuity and a mutual
bond fund. He received the normal commissions in due course.

Several days later, the bank employee who had informed Saunders of the client’s racist
views told her that, “we called Chris [Hayward] and Chris got a sale” from this customer. (Tr.
374.) Saunders then telephoned Hunter, who noted that she was in tears and was threatening
to report the matter to the human resources department. Hunter testified that Saunders also
told him that, “[s]he felt that on some level race was a part of it, but not on Chris’ part, but on the
part of the regional manager, the bank regional manager [Fallon].” (Tr. 374.) In consequence,
Hunter called Fallon. Fallon told him that she had not made the referral to Hayward, reporting
that “the branch manager [Stevens] had—had done this without regional’s permission.” (Tr.
374—375.) She also told Hunter that she had just learned of the incident herself. Stevens
informed her because Saunders had become very upset upon learning about it. Hunter testified
that he was worried that Saunders might “take some type of legal or discriminatory action based
on this.” (Tr. 375.) As a result, he informed Halechko. In turn, Halechko informed the human
resources department and they arranged a conference call with the bank managers and
Halechko in order to obtain the details. Despite this investigation, no discipline was imposed on
Hayward, Stevens, or any other bank employee.
16 Hayward also contended that he spoke with Hunter regarding this proposed sale. Hunter
denies this. In this instance, I find that Hayward is mistaken. His testimony on this point was
marked by confusion and uncertainty. He stated that he “believe[d]” that he spoke with Hunter,
but also noted that it was “hard to recall.” (Tr. 196—202.) While I have already noted that I
credit Hayward’s testimony that Hunter told him it was “no big deal” to meet with the elderly lady
whom Saunders had been unable to assist, I find it likely that the same would not apply to this
situation. Hunter, who is also African-American, can hardly be expected to have blithely told
Hayward to proceed with this transaction. At a minimum, I conclude that Hunter would have
engaged in more discussion before authorizing such a distasteful meeting. While Hayward
detailed Stevens’ thought processes articulated while requesting him to proceed, he does not
provide such details regarding Hunter’s response to his purported discussion. In any event, this
point is of limited importance since Hayward did comply with Hunter’s instructions. It will be
recalled that Hunter testified that, after the incident with the elderly woman, he told Hayward that
there was no need to involve him if he could work it out these problems with the prior financial
consultant involved with the customer. Hayward complied with these instructions.
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After many postponements and the threat of litigation, Dreyfus completed the transfer of
the investment services accounts to CISC on May 13, 2002. Thereafter, CISC was no longer
required to rely on information provided by Dreyfus in calculating commissions and trail
payments owed to the financial consultants. Coincident with the completion of the lengthy
transition period, CISC issued a document entitled “FY 2002 Commission Plan Financial
Consultants—Mid-Atlantic.” (GC Exh. 6.) This document set forth the method and procedures
for calculation of the compensation of the financial consultants.

On the following day, Chess addressed another email to Halechko and Hunter
complaining that his trail payment for March 2002 was “grossly wrong.” He asserted that his
payment should have been $754.14, but he only received $218.52. (GC Exh. 5, p. 3.)
Halechko responded by disagreeing with some, but not all, of Chess’ assertions. He directed
another official, Andrew Kim, to investigate. (GC Exh. 5, p. 3.) Hunter also wrote an email
urging Kim to correct the problem and noting that, “THIS IS A HIGH PRIORITY ISSUE in the
Pittsburgh Market.” [Capitalization in the original.] (GC Exh. 5, p. 3.) Kim responded by
rejecting Chess’ calculations and continuing to plead that CISC did not have access to the
“Mellon systems.” (GC Exh. 5, p. 2.) At this point, an exasperated Chess emailed Halechko,
asserting that, “I realize this isn’t your top priority, but I think paying your Reps correctly should
be priority one. By the way, I’ve done all the work here, so please don’t act so put out by me
wanting what is due me.” (GC Exh. 5, p. 1.)

Halechko responded to Chess by informing him that he was “losing my patience with
your tone when addressing your issues to me. If your [sic] not satisfied with my answer you are
welcome to email my direct supervisor, Barry Toothaker.” (GC Exh. 5, p. 1.) Chess replied that
he was not being disrespectful and said that he did not wish to “be in your doghouse again and
I’m wary of that issue so I would not try to piss you off. I respect you and your position. [W]ho
else am I to turn to on matters like this?” (GC 5, p. 1.) At the same time, Chess forwarded
Halechko’s email to Hayward and other financial consultants. (GC Exh. 7, p. 3.)

While Chess was making vigorous complaints about the errors in calculation of his
compensation, Hayward was taking similar action. He emailed Halechko and Hunter, offering to
“make a little wager” regarding whether Kim would fix his compensation payments. (GC Exh. 7,
p. 4.) Halechko urged him to “think positive” and asked him if he had referred his problems to
Toothaker. (GC Exh. 7, p. 4.) Hayward wrote that he was “still very positive” and had
addressed Toothaker by email. He also described circumstances that caused him to doubt
Kim’s work on the compensation problem. (GC Exh. 7, p. 4.)

Russo, one of the experienced financial consultants, testified that during this period in
mid-May productivity of the consultants declined “dramatically” because “there was just so much
disgruntled frustration about the paperwork and sales support and everything else not
happening.” (Tr. 231, 225.) At approximately this time, Hayward took the opportunity to speak
with Halechko after a training session. He testified that he asked Halechko “is there anything
I’m ever doing, saying, that is out of line or anything you do not like, anything you would want
me to change?” (Tr. 140.) Halechko responded, “Chris, everything is fine . . . You raise good
concerns for the right reasons.” (Tr. 140.)

In this uneasy atmosphere, the Company held a quarterly dinner meeting at the
Carnegie Science Center. A group of experienced financial consultants were seated together at
a table. Hayward was one of this group. Hayward asked Human Resources Group Manager
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Blyth to join them. He testified that she responded by observing, “do you know how bad this
looks in front of everybody here . . . sitting with the Senior Financial Consultant group . . .”17 (Tr.
143.) Hayward told Blyth that there were problems with commissions and other compensation
issues for the consultants. As Blyth put it in her testimony, “the issue that they wanted to bring
to my attention was compensation . . . In particular, they weren’t being paid what they felt was
properly, adequately.” (Tr. 481.) Hayward asked Blyth if he could contact her again regarding
these issues.18 Blyth reported that, immediately thereafter, she “made a beeline” for Hunter and
told him “you have some very unhappy FCs [financial consultants], you know, in how they’re
being paid.” (Tr. 481.) Hunter told her that management was handling the problem. She
decided to accept this explanation.

When asked for his response to learning that Hayward and other consultants had
complained to Blyth during the dinner meeting, Hunter replied that he “would have preferred that
they would have went to their own management” rather than raise the issue with human
resources. (Tr. 378.) Despite this, he contended that he was not angry or annoyed.

After the formal events at the Carnegie Center concluded, a group of employees decided
to have an informal gathering at a local restaurant. While walking through the parking lot,
Hunter and Hayward conversed. Hunter told Hayward that he would have to take his
compensation issues to human resources.19 In addition, Hayward raised the incident with the
racist customer. He told Hunter he had sold the man a fixed annuity, jokingly adding a comment
about “what better way to treat a jerk that to sell him a fixed annuity.” (Tr. 157.) Hayward’s
reference was to be understood in the context that he had been vocal within the organization
regarding the fact that he did not generally favor this type of investment vehicle. Hayward
testified that Hunter found his remark to be very amusing.

Hunter testified that he had to make an early exit from the informal gathering of
employees. On the following day, several of the newer financial consultants told him that it was
unfortunate that he had departed early. They complained that Hayward had told them that, “you
folks are going to have to kiss a lot of ass to get ahead.” (Tr. 364.)

On May 28, Hayward addressed another email to Halechko regarding compensation
issues, including trail payments. (GC Exh. 7, p. 5.) At the end of the month, Halechko
contacted Eric Hosie, a highly regarded regional sales manager in a territory adjacent to the
Western Region. Halechko sought Hosie’s assistance in turning around the dismal sales
situation in Pittsburgh. In particular, after a successful first quarter of the year, the second
quarter saw a precipitous drop in transactions. During that quarter, the financial consultants
achieved only 60 percent of the sales goal. Halechko told Hosie “there was a lot of . . . finger-
17 Blyth testified that she did not recall making this comment, but if she had made such a
remark, it would have been because it “looked like a meeting with HR.” (Tr. 517.) Russo
confirmed Hayward’s account, testifying that Blyth told the consultants that “this doesn’t look
good, me talking to you guys.” (Tr. 230.) Russo’s corroborative account, coupled with Blyth’s
failure to rule out the possibility of her having make the comment, lead me to credit Hayward’s
account.
18 Hayward testified that he made attempts to phone Blyth in order to pursue the matter.
She did not return his calls. Blyth testified that she did have a telephone conversation with
Hayward about his complaint that the consultants “weren’t being paid correctly.” (Tr. 483.) She
was unable to remember whether this occurred before or after the Carnegie dinner meeting.
19 Hayward testified that he later reported this communication to his fellow financial
consultants.
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pointing. Well, the FCs don’t do this. Well, the bank isn’t giving me any leads. Well, we just
can’t get along . . .”20 (Tr. 414.) As a result, it was arranged that in early June Hosie would
replace Hunter as regional sales manager in Pittsburgh.

Upon taking over the supervision of the Pittsburgh region, Hosie conducted a series of
meetings with the individual financial consultants. His purpose was “to uncover why we didn’t
produce at a higher level.” (Tr. 416.) Two strong themes emerged from these meetings. The
newer and less experienced financial consultants complained that their veteran colleagues and
the bank managers with whom they were supposed to work did not value their skills and respect
them. As a result, the bank managers looked for opportunities to steer investment prospects to
the veteran consultants. By contrast, the veteran consultants took the opportunity afforded by
these meetings to complain to Hosie about their compensation problems. It is now appropriate
to describe several of these meetings, beginning with the meetings with the newer consultants.

Hosie testified that Saunders complained about the two Oakland incidents involving
Hayward. She told him that the situation “was disrupting her ability to do business in that
market and in that office, because if she was to, you know, go on vacation or be unavailable,
someone else would just be called in, at that time.” (Tr. 425.) In other words, bank
management would refer investment customers to other financial consultants in the event of her
unavailability. Hosie indicated that another new consultant, Loretta Bushy, told him that
Hayward was rude to the newer employees during meetings.21 A third new consultant, Arlene
Gentile, complained that the veteran consultants looked down on the newer hires. She
contended that this caused bank managers to believe that, “when she [Gentile] leaves or goes
on vacation or something, we can slip her referrals to other people.” (Tr. 427.) Yet a fourth
member of the group of newer consultants, Mike Kennedy, indicated that 3 out of 4 of his
relationships with the bank branches were satisfactory. He did describe problems with the
“ownership” of individual accounts. (C.P. Exh. 1.) In other words, it was unclear which financial
consultant should service some particular accounts, the consultant assigned to that territory or
the consultant who had worked with that investor in the past.

When Hosie interviewed the experienced consultants, he heard a different set of
complaints. For example, Charles White and Jesse Datra, among others, raised issues
regarding their compensation. Hosie testified that during his meeting with Chess, he
complained about Chess’ lack of production during May. Chess told him that part of the reason
for this poor showing was that he “just didn’t have the drive to produce that particular month
because a lot of these things were dissatisfying to me.” In making these remarks, Chess was
referring to “the compensation issues.” (Tr. 77.) Chess testified that Hosie warned him that he
should “watch my emails, tone them down a little bit, you never know who is going to be reading
them.” (Tr. 81.) Finally, Hosie challenged Chess by telling him that, “[y]ou’re either in the game
or you’re out of the game. Where are you?” (Tr. 81.) Hosie testified that he told Chess that he
was “salvageable.” (Tr. 461.)

20 Hosie testified that in describing the problems in Pittsburgh, Halechko did not mention
either of the incidents involving Saunders and Hayward.
21 Interestingly, during cross examination of Hosie, counsel for the General Counsel
confirmed that Hosie’s notes made during this meeting do not show that Bushy specifically
named Hayward as a person who was causing difficulties for the newer consultants.
Examination of the actual notes reveals that Hosie listed Bushy’s comments as applying to all
the veteran consultants, whom he referred to as “FC3’s.” (GC Exh. 10.)
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Hosie’s meeting with Russo was characterized by pointed comments. He told Russo
that it seemed like he did not want “to be here.” (Tr. 232.) Russo asked why Hosie held this
notion, and Hosie told him that it was “based upon the commissions and based upon
complaining about the commissions and the trails and everything else.” (Tr. 232.) Hosie also
raised similar complaints by others, specifically mentioning Hayward, whom he accused of
“complaining a lot.” (Tr. 234.) Hosie described his own purpose in managing the Pittsburgh
operation as to either “fix or get rid of the problem.” (Tr. 236.)

Of greatest importance to this case, Hosie held a lengthy meeting with Hayward. Hosie
testified that Hayward made complaints about “compensation, . . . trail payments, clear
communication on when it would be paid and how it would be paid, discrepancies over the
trades that he placed, that were not on his adjustment log; time frame for the adjustment log
people to get back to him; and all these things.”22 (Tr. 430.) Hayward also raised the same
issue referenced by Kennedy, the ownership of investment accounts. Hosie responded by
telling Hayward that his concern about assignment of accounts to consultants made it sound like
he was not a team player.

After discussion of Hayward’s subjective assessment of the situation, Hosie raised the
incidents involving Saunders. Hosie testified that, after Hayward explained the episode
concerning the elderly lady, the thing that caught his attention was “the manner in which Chris
said, see, I made the sale and she didn’t, so this proves that they shouldn’t have her as a
financial consultant.” (Tr. 433.) As to the transaction involving the racist customer, Hayward
confirmed that he knew the reason that the customer was being referred to him. He also
repeated the joking comment he had earlier made to Hunter, telling Hosie not be worry,
“because I did the worst thing you can do and sold him a fixed annuity.” (Tr. 434.) Hosie
testified that he was troubled by this comment since it indicated that Hayward looked down on
the consultants who sold fixed annuities. Hayward’s attitude also suggested that he was not
respectful of the company’s products.

Hayward testified that they also discussed yet another situation involving the New
Kensington Branch of the Bank. In that instance, the branch manager contacted Hayward to
seek his assistance in making investments for the bank’s own employees. Hayward met with
the employees and sold them investment products. Hosie told him that he should have held a
joint meeting with the consultant assigned to that branch of the bank.23 Hayward responded by
agreeing that it was “unfortunate” that the branch employees did not wish to use the services of
the consultant assigned to that branch, but noted that this was not “my call.” (Tr. 161.) He told
Hosie that this situation did not involve a client referral by the bank, but only concerned
employees’ personal business.

Hayward testified that at this point in his discussion with Hosie, he became concerned.
He asked Hosie “am I in trouble here?” (Tr. 163.) Hosie told him he was not sure yet and “we’ll
see next week.” (Tr. 163.)

During and after the meeting with Hayward, Hosie took a series of notes. He reported
that Hayward’s “[e]xpectations [were] too high.” He also concluded that Hayward had “[c]rossed
22 In this testimony, Hosie agreed that these were all “legitimate issues.” (Tr. 430.)
23 In its defense against the unfair labor practice charge, the Company specifically cites the
two incidents at the Oakland Branch as justification for Hayward’s discharge. It does not cite
the New Kensington incident, but presumably relies upon it as a component of the contention
that Hayward was not a team player.
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from troubleshooter to maker—should help [junior financial consultants] not hurt them.” In the
same regard, he noted that Hayward’s “views on new reps very poor and likely fueling Retail’s
discontent.”24 He concluded his notes by observing that Hayward appeared “willing to
circumvent colleagues and tell me it is because he is better—teamwork.” (R. Exh. 2.)

Also in early June, Hayward wrote an email that is one of the defining events leading to
his discharge less than a month later. This email, dated June 6, 2002, was addressed to
Hunter. He discussed aspects of his compensation issues and asserted that, if these were
satisfactorily addressed, he would “go on a month long vow of silence. (no constructive
criticism).” He ended this email with a letter-style conclusion as follows:

your[s] truly,

christopher s. hayward
union president, west25

(GC Exh. 7, p. 6.) Of course, no labor organization or union actually represented the financial
consultants. In his testimony, Hayward made two observations in explanation of this choice of
language for the conclusion of his email. He noted that being the union president was “my role
for the group.” He also reported that this choice of words was his way of “being funny.” (Tr.
140.)

Hayward’s attempt at barbed humor did not meet with Hunter’s favor. Hunter testified
that it represented part of a pattern of “snide remarks, the sarcasm” in Hayward’s emails and
comments during meetings. He added that, “I remember when I saw that, I was cringing.” (Tr.
409.)

Two weeks later, Hosie and Halechko met. Since Hosie had completed his interviews
with the Pittsburgh consultants, it was decided to arrange a conference call to address
disciplinary issues uncovered by Hosie’s investigation. Given the intent to impose substantial
sanctions on certain employees, Company policies required the participation of human
resources representatives. As Blyth put it, the purpose of their participation was “[t]o validate
the reasons for termination.” (Tr. 479.)

The conference call was held on June 25. Management participants included Halechko,
Hosie, and Hunter. Blyth and another human resource employee were also on the call.
Problems related to a number of Pittsburgh employees were the subject of discussion. Blyth
testified that Halechko, Hosie, and Hunter all sought Hayward’s discharge from employment.
She reported that they had “a host of reasons.” (Tr. 492.) She noted that their “[p]rimary
reason” was Hayward’s “unethical behavior” consisting of his “crossing into other individuals’
territories.” (Tr. 492—493.) This included an allegation not raised in any of the managers’ trial
testimony, a contention that Hayward went into the computer system and assigned certain
accounts to himself.

Blyth further testified that the Oakland situation involving the racist customer was also
discussed during the conference call. Blyth testified that the managers’ “issue around the Gail
24 In referring to “Retail,” Hosie meant Citizens’ retail banking operation.
25 Haywood’s use of the term “west” is a reference to CISC’s Western Region
encompassing western Pennsylvania.
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Saunders thing” was that Hayward had openly boasted to his peers that “he did get that
business” from the customer “[a]nd they felt very strongly that this was inappropriate.” (Tr. 494.)
Blyth testified that Hayward’s emails and his complaints about compensation issues were not
brought up during the conference call. Finally, Blyth noted that there was discussion about the
use of “progressive corrective action” to address the problems with Hayward. (Tr. 495.) This
course was rejected because Halechko, Hunter, and Hosie “felt very strongly” that Hayward’s
unethical behavior and its impact on the morale of the newer consultants could not be changed
through such corrective action. (Tr. 497.)

Blyth testified that she took contemporaneous notes during the conference call. The
notes pertaining to Hayward indicate that “[e]thics + behavior warrant termin[ation].” Three
bullets are listed beneath this conclusion: “racist client, ‘rep’ list, denigrated peers.”26 (R. Exh.
3.)

Halechko also testified regarding the discussion of Hayward during this crucial
conference call. He reported that the recommendation was for termination due to “performance
management issues.” (Tr. 295.) Hayward was not contributing to a teamwork environment and
was not helping his peers. Halechko also cited the two incidents involving Saunders and
Hayward’s alleged failure to comply with oral instructions from Hunter. Halechko indicated that
Hayward’s compensation issues played no role in the termination decision and the managers
were “happy” that he had raised these matters. (Tr. 298.)

Hosie also provided a brief description of the conference call and its decision-making
process regarding Hayward, indicating that he concluded that Hayward should be terminated for
making derogatory comments about Saunders and Kennedy. He noted that the management
team discussed the possibility of attempting to use “corrective action.” The “consensus” was
that it was impossible to change Hayward’s “attitude about his colleagues.” (Tr. 449.) As a
result, the decision was made to terminate his employment.

Finally, Hunter described this key conference. His account of the participants’ reasoning
differs somewhat from that of his colleagues. In accord with Halechko and Hosie, he reported
that Hayward’s problems with being a team player and adapting to the “new culture at CISC”
were components of the decision to fire him. (Tr. 380.) Significantly, Hunter also cited another
factor, Hayward’s “complaining, the constant lack of deportment in doing—in complaining.” (Tr.
380.) Upon further examination, Hunter indicated that his reference to Hayward’s complaints
included those related to compensation issues.27 The managers concluded that “the behaviors
would probably not change, and so there was a feeling, since those behaviors would not
change, the best thing to do was to move forward with the termination.” (Tr. 380.)

In addition to the decision-making process regarding Hayward, the management group
discussed problems involving at least 10 other employees of the Pittsburgh region. Blyth’s
notes show that the group decided to utilize a “performance action plan” regarding Ron
Freedlander and an “action plan” for Charles White. As to Chess, her notes show that he was
to receive a “blunt conversation.” The notes also mention the possibility of a plan for “final for
c/a [corrective action],” as well as, the alternative of an offer of a severance package. It was
26 Parenthetical references are made to Gail Saunders and Mike Kennedy.
27 Shortly thereafter, Hunter asserted that Hayward’s complaints about compensation issues
played no role in the decision to fire him. This is totally inconsistent with his earlier description
of the managers’ reasoning in reaching the decision to fire Hayward. I do not credit this attempt
to backtrack.
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also decided to offer Russo a severance package. Another employee was referred to the
Employee Assistance Program. The remaining employees were listed, but their fates were not
described in Blyth’s notes. (R. Exh. 3.) In his testimony, Hosie confirmed that the group
discussed “corrective action” for a number of other individuals. (Tr. 448.) It was agreed that the
affected employees would be informed of these decisions in individual meetings on July 2.

As planned, Halechko, Hosie, and Blyth met with Hayward on July 2. Halechko informed
him that he was being terminated. Hayward testified that he attempted to persuade the
managers to retain him, but they were uninterested. He also testified that he told Blyth, “I’ve
never been put on corrective action. There’s—I’ve never been talked to about doing anything
inappropriate. There has to be something here and she said, well, you wrote business outside
of your territory and that’s why we’re firing you.” (Tr. 167—168.) Hayward also asked Halechko
and Hosie for an explanation of their decision to fire him. They told him that he “didn’t fit in” and
wasn’t a “team player.” (Tr. 189.) Hayward indicated that he might have responded by
remarking on the oddity of emphasizing the need for a team player “in an individual sales
game.” (Tr. 189.) In his testimony, Hayward confirmed that neither Halechko nor Hosie related
his termination to any of his complaints about compensation issues.28

After his termination on July 2, 2002, the Company has not employed Hayward. On
December 31, 2002, he filed this charge, alleging that his termination was the result of his
involvement in protected concerted activity. (GC Exh. 1(a).)

B. Legal Analysis

Assessment of the propriety of the Company’s decision to discharge Hayward requires
the application of core principles of labor law in a work setting dramatically different from the
industrial context in which those principles were largely developed.29 Instead of a universe of
factories and foundries, the events in controversy occurred in office suites and branch banks.
While the outer trappings vary greatly, the legal framework remains constant.

Sec. 7 of the National Labor Relations Act provides, inter alia, that “[e]mployees shall
have the right . . . to engage in . . . concerted activities . . . for the purpose of . . . mutual aid or
protection.” Sec. 8(a)(1) makes it unlawful for an employer to “interfere with, restrain or coerce
employees” in the exercise of this right. In a leading case, the Supreme Court addressed the
contours of this right as it relates to employees who are not represented by a labor organization.
NLRB v. Washington Aluminum Co., 370 U.S. 9 (1962), involved employees of an aluminum
fabrication shop who were not members of a union. During a period of bitterly cold weather, the
shop building was unheated. After making individual complaints about the temperature, which
the company chose to dismiss as mere “gripes,” the workers brought the “individual complaints
into concert so that some effective action could be considered.” 370 U.S. at 15. The

28 At his own individual meeting on this date, Chess was told that if he continued to engage
in “constant criticisms,” he would be “out the door.” (Tr. 83.) Chess resigned in March 2003.
By the same token, Russo was told that it appeared that he did not want to remain with CISC.
He was informed of the possibility of a severance package. Russo accepted a severance
package and left the Company’s employ on August 14, 2002.
29 Of course, not all of the important precedents involve industrial settings. For example,
KNTV, Inc., 319 NLRB 447 (1995), involved a television news reporter’s activities in seeking
additional compensation for reporters who were assigned to be substitute news anchors. The
Board found the reporter’s actions to be protected concerted activity and determined that his
discharge for engaging in this conduct was unlawful.
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employees decided to walk off the job in protest against their working conditions. Management
discharged them, citing their violation of a company rule prohibiting departure from work without
permission. The Board found the discharges to be unlawful under the Act.

In writing for an undivided Court, Justice Black observed that the employees,

had no bargaining representative and, in fact, no representative
of any kind to present their grievances to their employer. Under
these circumstances, they had to speak for themselves as best
they could . . . Having no bargaining representative and no
established procedure by which they could take full advantage
of their unanimity of opinion in negotiations with the company,
the men took the most direct course to let the company know
that they wanted a warmer place to work.

370 U.S. at 15. The Court held that their decision to take concerted action to address their
conditions of employment was entitled to the protection of Section 7 of the Act. As the Court put
it, “an employer is [not] at liberty to punish a man by discharging him for engaging in concerted
activities which §7 of the Act protects.” 370 U.S. at 17.

Following this mandate from the Supreme Court, the Board has developed a framework
for analysis of cases in which it is alleged that unrepresented employees have been subjected
to adverse employment action for participation in protected concerted activities. In Amelio’s,
301 NLRB 182 (1991), the standard was succinctly stated:

The General Counsel presents a prima facie case that an employer
has discharged an employee in violation of Section 8(a)(1) when
the evidence shows that the employee has engaged in protected
concerted activity—that is, the individual acts with or on the
authority of other employees—the employer knew of the concerted
nature of the activity, and the discharge was motivated by the
employee’s protected concerted activity. [Footnotes omitted.]

301 NLRB at 182. The Board also observed that, “[w]e will find that an individual is acting on
the authority of other employees where the evidence supports a finding that the concerns
expressed by the individual employee are a logical outgrowth of the concerns expressed by the
group.” [Citations omitted.] 301 NLRB at fn. 4. Once the General Counsel meets the burdens
imposed by this test, the employer assumes the responsibility of persuading the fact-finder that
the adverse action against the employee would have been issued even in the absence of the
protected concerted activity. Kysor Industrial Corp., 309 NLRB 237 (1992), citing Wright Line,
251 NLRB 1083, 1089 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989
(1982), approved in NLRB v. Transportation Management Corp., 462 U.S. 393 (1982).

I will now address each of the elements of this analytical framework. The Company
contests the notion that some of Hayward’s complaints were of the type that invokes the
protection of the Act. For example, in his opening statement, counsel for the Company argued
that Hayward’s complaints about the qualifications of newly hired financial consultants were not
legitimate complaints about terms and conditions of employment. As counsel put it, those
complaints “constituted Chris Hayward sticking his nose in areas of management authority
where had no business playing.” (Tr. 20.) There is certainly some logic in this argument. When
Chess presented similar complaints, Halechko responded by noting that, “[t]his has no impact
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on any FC [Financial Consultant] and I’m not sure why it would be anyone’s concern.” (GC Exh.
3, p. 2.)

It is clear that in order to constitute protected activity, an employee’s complaints must
relate to the terms and conditions of his or her employment. The Supreme Court has
recognized that analysis of this question must be flexible. For example, in Eastex, Inc. v. NLRB,
437 U.S. 556 (1978), the Court found that employees’ distribution on an employer’s premises of
a union handout containing political commentary constituted protected activity. In any event, it
is unnecessary to speculate concerning the possible impact on conditions of employment of a
management decision to hire less qualified employees. It is abundantly clear that the financial
consultants’ complaints, including those pressed by Hayward, predominantly involved issues
directly related to their compensation. These complaints fall into two broad categories. First,
the consultants addressed management regarding the contours of the payment structure for
financial consultants. They were particularly anxious to obtain the most favorable method for
calculating commissions and trail payments through an advantageous compensation grid. They
were also desirous of obtaining derivative commissions on the sales made by subsidiary
employees. There can be no doubt that such issues go to the heart of the concept of terms and
conditions of employment. As the Supreme Court put it when addressing the same type of
issues in the usual industrial context, “[f]ew topics are of such immediate concern to employees
as the level of their wages.” Eastex, Inc., supra at p. 569.

The second aspect of the consultants’ complaints regarding their compensation involves
an even more basic aspect of the terms of their employment. For example, Hayward testified
that during monthly group meetings with Hunter, he would raise questions

about our compensation mostly, why our paychecks were consistently
wrong, why would our trail payments be 100 percent of the time wrong,
why is it that we would not get the trade detail reports prior to the
commission checks coming out . . . if we didn’t get the trade detail reports
then we couldn’t make the corrections so that our paychecks would be
correct. We would just never get them. Like I said, sometimes I would
complain about why we didn’t even get the commissions at all . . .

(Tr. 131.) Hunter confirmed Hayward’s testimony on this issue, noting that Hayward complained
about “compensation . . . trail payments . . . discrepancies over the trades that he placed that
were not on his adjustment log . . . and all these things.” (Tr. 430.) In other words, in addition to
seeking improvements in the structure of their compensation system, the financial consultants
raised persistent complaints that their pay was incorrectly calculated within the existing
compensation system. As Chess put it, the paycheck he received was “grossly wrong.”30 (GC
Exh. 5, p. 3.)

Complaints about commission payments that were wrongly calculated, late, or
nonexistent go directly to the heart of what is meant by terms and conditions of employment. As
a result, when Hayward addressed management about the compensation structure and about
30 For example, Chess reported that his trail payment for March 2002 was $218.52. He
contended that it should actually have been $754.14. Thus, he believed that he had been
underpaid in the amount of $535.68 for the month. (GC Exh. 5, p. 3.) Hayward testified that he
had been underpaid as much as $10,000 in a single month. (Tr. 128.)
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the difficulties experienced by the consultants involving the amount and timeliness of their pay,
he was engaging in conduct that is protected by Sec. 7 of the Act.31

Having found that Hayward engaged in protected activity directly related to the terms
and conditions of his employment, I must determine whether the activity was also concerted
within the meaning of the Act.32 The Supreme Court has noted that the Act does not impose a
restrictive test for determining whether particular conduct should be deemed concerted activity.
Writing for the Court, Justice Brennan observed that

it is evident that, in enacting §7 of the NLRA, Congress sought
generally to equalize the bargaining power of the employee
with that of his employer by allowing employees to band together
in confronting an employer regarding the terms and conditions of
their employment. There is no indication that Congress intended
to limit this protection to situations in which an employee’s activity
and that of his fellow employees combine with one another in any
particular way. Nor, more specifically, does it appear that Congress
intended to have this general protection withdrawn in situations in
which a single employee, acting alone, participates in an integral
aspect of a collective process.

NLRB v. City Disposal Systems, Inc., 465 U.S. 822, 835 (1984). The Board has recognized that
a “myriad of factual situations . . . have arisen, and will continue to arise, in this area of the law.”
Meyers Industries, 268 NLRB 493, 497 (1984), remanded sub nom. Prill v. NLRB, 755 F.2d 941
(D.C. Cir 1985), cert. denied 474 U.S. 971 (1985).

The evidence shows that Hayward engaged in two forms of concerted activity, individual
acts taken on behalf of the group of experienced financial consultants and participation in group
activities for the same purpose.33 Turning first to the individual acts, in April 2002, Hayward
addressed his initial email to Halechko regarding compensation issues. He complained that the
trail payments were incorrect or absent and specifically noted that there was a “general
consensus around here” and that “people are starting to get upset.”34 (GC Exh. 7, p. 1.) Of
course, the most clear-cut example of an individual act by Hayward that was intended to be
representative for the entire group was Hayward’s June 6 email in which he characterized
31 A recent case arising in a different legal context, New Mexico Symphony Orchestra, 335
NLRB 896 (2001), clearly demonstrates the Board’s strongly held view of the importance of
timely payment of employees’ compensation.
32 None of Hayward’s activities in any way transgressed the Board’s standards of employee
conduct such that his behavior would lose its protected status. Compare: Honda of America,
334 NLRB 751 (2001), with American Golf Corp., 338 NLRB No. 73 (2002), and Nynex Corp.,
338 NLRB No. 78 (2002).
33 Indeed, counsel for the Company essentially conceded the concerted nature of Hayward’s
conduct in his opening statement, noting that Hayward was “complaining about these trail
payments and you’ll hear that he was one of all of the FC’s who were complaining about this . . .
Mr. Hayward was not unique in that regard and you’ll see notes that there were a number of
other FCs . . . who also complained about that.” (Tr. 28.)
34 Hayward was not the only financial consultant to undertake this type of concerted activity
regarding compensation issues. For example, in an email on October 29, 2001, Chess told
Halechko that, “I can honestly tell you that no one is happy right now with some of the decisions
that have been made.” (GC Exh. 3, p. 2.)
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himself as the “union president.” (GC Exh. 7, p. 6.) Hayward testified that he used this
expression, in part, because “[t]hat was my role for the group.”35 (Tr. 140.)

These individual acts, taken with the intention of furthering the interests of all of the
experienced financial consultants, constituted concerted activity. A recent decision of the Board
makes this clear. In Phillips Petroleum Co., 339 NLRB No. 111 (2003), an employee was
discharged after attempting to obtain changes in the company’s family medical leave policy.
The Board noted that the employee’s efforts “originated because of his need to care for his wife
and children,” but also “embraced the larger purpose of obtaining this benefit for all of his fellow
employees.” It held that concerted activity occurred “when an individual attempts to bring a
group complaint to the attention of management.” 339 NLRB No. 111, slip op. at 3. For the
same reasons, I conclude that Hayward’s individual steps to address the group’s compensation
issues through emails and conversations with management officials were concerted activity
within the meaning of the Act.

Beyond his individual actions, Hayward engaged in obvious group activity as well. A
particularly clear example involved his conduct during the May 2002 dinner meeting at the
Carnegie Science Center. The experienced financial consultants were seated at the same
table. On behalf of the group, Hayward invited a human resources manager to join them for a
discussion of compensation issues. In addition, Hayward was a leading advocate of the
consultants’ viewpoint during monthly meetings conducted by Hunter. For example, Russo
testified that, during these meetings, Hayward raised compensation issues “[a]ll the time.” (Tr.
218.) As to trail payments, Hayward “would lead the fight” during the meetings. (Tr. 219.)
Russo also noted that Hayward raised other specific compensation problems, including the
failure to pay commissions. He also broached structural problems, such as issues related to the
compensation grid. Hunter essentially confirmed this testimony, agreeing that Hayward made
complaints about compensation issues during the meetings. He reported that Hayward and
Chess were the most outspoken as to these issues.

I conclude that Hayward’s conduct in seeking changes to the structure of consultants’
compensation and complaining about problems with the actual compensation paid within the
existing structure, including both individual and group communications, constituted protected
concerted activity relating to the terms and conditions of employment for the experienced
financial consultants. It is evident that management at all levels was clearly aware of Hayward’s
participation in these protected concerted activities. His activities were not those involved in a
secretive organizing campaign or other clandestine behavior. Instead, virtually all of his conduct
was specifically addressed to management, including his subjective belief that he was acting on
behalf of the group. This is most clearly illustrated by reference to his self-styled title as union
president. It is equally clear that Hayward was subjected to adverse employment action when
he was terminated on July 2, 2002.

Since Hayward engaged in a pattern of protected concerted activity of which his
employer was aware, and he was subsequently terminated from his employment, the focus of
analysis becomes the existence of a nexus in the employer’s decision-making process between
the protected concerted activity and the adverse employment action. Before delving into the
35 These examples belie the Company’s contention that “there is no evidence that the group
nature of these discussions [among FCs regarding the compensation issues] was ever
communicated to CISC’s management.” (R. Br. at p. 9.) In their emails, both Hayward and
Chess specifically informed management that their colleagues were upset with the Company’s
treatment of their compensation issues.
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question of the employer’s motivation, it is necessary to set the context by considering
Hayward’s history as an employee.

Prior to the acquisition of Mellon by Citizens, Hayward had been employed as a financial
consultant for approximately 6 years. There is no evidence that he experienced any disciplinary
problems at Mellon. While at Mellon, he was a top producing consultant, typically the first or
second highest producer in the office. After the corporate acquisition, his continuing value to
Mellon was demonstrated by his invitation to attend a meeting for the purpose of hearing an
offer of continued employment. After comparing Mellon’s offer to the proposals outlined by
CISC’s president, Hayward elected employment with Citizens.

Hayward worked for CISC from at least January 1, 2002 through July 2, 2002. During
that time, he received no disciplinary sanction. Indeed, Hayward’s employer, a large financial
institution, did not introduce into evidence a single document reflecting any sort of personnel
action regarding Hayward. While the record is devoid of any formal documentation of
Hayward’s asserted deficiencies as an employee, the testimonial evidence was impressively
uniform in establishing that he continued his past practice of being an outstanding producer of
investment sales for CISC.

Russo testified that he competed with Hayward for the top honors in production each
month. They traded first and second rankings. Hayward’s managers confirmed Russo’s
recollection.36 Halechko reported that Hayward was always first or second in production within
the office. Hunter, his immediate supervisor, testified that Hayward was a “very good producer.”
(Tr. 360.) When asked if he was one of the top producers, Hunter responded, “[a]bsolutely.”
(Tr. 360.) Indeed, later in his testimony, Hunter characterized Hayward as “the top producer.”
(Tr. 361.) On cross-examination, he conceded that Hayward’s record of production made him
“particularly valuable” as an employee. (Tr. 384.) A more concrete measure of Hayward’s
value to the Company as a generator of investment sales and resultant commissions and fees
was his compensation. Hayward testified that during the six months that he was employed by
CISC, he was paid approximately $130,000 to $140,000. Thus, the evidence establishes that
Hayward was an exemplary salesperson of investment products and had no documented
history of disciplinary problems of any sort.37

I will now examine the direct and circumstantial evidence that illuminates the Company’s
motivation in discharging one of its most productive employees. There is a variety of direct
evidence establishing that the Company’s managers took a dim view of the consultants’
complaints regarding their compensation. As early as October 2001, Halechko set the tone. In
an email response to Chess’ communication about compensation issues, he observed:

36 Counsel for the Company forthrightly conceded that Hayward was “a top producer. He
was at the top of the list.” (Tr. 28.)
37 I recognize that Hunter indicated that he gave Hayward some informal admonitions
regarding the tone of his complaints and his activities in response to requests for his assistance
from the Oakland Branch. None of these purported admonitions is documented in any way.
Even if Hunter is accurate, I place no particular weight on such admonitions since they would
form a component of virtually every employment relationship. The perfect employee has yet to
be born. As I will discuss later in this decision, the Company maintained a formal process for
discipline. The key fact is that Hayward was never subjected to even the mildest component of
that disciplinary process.
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As long as you[r] position makes sense and the wording
of your email doesn’t piss me off I’m open to any of your
suggestions. [Emphasis in the original.]

(GC Exh. 3, p. 7.) Chess drew the obvious conclusion and responded a minute later by
apologizing. Halechko then attempted to dismiss the incident, telling Chess that he was merely
joking. This was simply disingenuous. As the Supreme Court has observed, when assessing
an employer’s statements, one must “take into account the economic dependence of the
employees on their employers, and the necessary tendency of the former, because of that
relationship, to pick up intended implications of the latter that might be more readily dismissed
by a more disinterested ear.” NLRB v. Gissel Packing Co., 395 U.S. 575, 614 (1969). Such is
the case here.

Another insight into management’s attitude toward the financial consultants’ concerted
complaints was provided by Blyth. At the dinner meeting held at the Carnegie Science Center,
Hayward invited her to sit with the experienced consultants. Two witnesses testified that she
responded by telling the consultants “this doesn’t look good, me talking to you guys.” (Tr. 230.)
Based on the context, I conclude that her comment reflected her awareness that management
considered the experienced consultants to be pariahs due to their complaints.

Russo’s testimony also provided probative evidence regarding management’s animus
toward the complainers in general and Hayward in particular.38 He reported that the
supervisors expressed their exasperation about the complaints by telling the consultants,

hey, guys, I’m tired of hearing about the complaints. I’m tired of
hearing about the paperwork to be resolved. How about concentrating
on productivity.

(Tr. 223—224.) More specifically, Russo testified that during his meeting with Hosie, Hosie
asked him if he wished to continue as an employee of CISC. When Russo asked what had
prompted this rather startling question, Hosie responded that the concern about Russo’s future
with the Company stemmed from his “complaining about the commissions and the trails and
everything else.” (Tr. 232.) Significantly, Hosie also told Russo that Hayward was “complaining
a lot.” (Tr. 234.) Pointedly, Hosie observed that his purpose in coming into the region was to
“fix or get rid of the problem.” (Tr. 236.) Finally, additional insight into management’s overall
attitude toward the financial consultants’ behavior in pressing their complaints was revealed
during Hosie’s meeting with Chess on the same day that Hayward was fired. In that meeting,
Hosie warned Chess that if he continued to make “constant criticisms,” he would be “out the
door.” (Tr. 83.) His meaning could not have been clearer, given the timing of this warning on
the day that Chess’ colleague was terminated from employment.

Finally, there was direct evidence from one of the managers regarding the impact of
Hayward’s complaints on the decision to terminate his employment. When asked why Hayward
was fired, Hunter responded by noting Hayward’s failure to become a team player. He went on
to describe Hayward’s “complaining, the constant lack of deportment in doing—in complaining,
38 I found Russo to be particularly credible. He had a long and somewhat checkered history
as both a financial consultant and a regional manager responsible for supervising other
consultants. In his testimony, he displayed a rueful objectivity about these matters and
appeared to have gained valuable perspective from his participation in the business as both
employee and supervisor.
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nothing wrong with complaining, but how you do it, those types of things.” (Tr. 380.) He
acknowledged that his reference included complaints about compensation. Earlier in his
testimony, Hunter put this even more plainly, noting that

Chris did not exhibit any restraint or decorum in his criticism
of the structure of the investment program, even to, to peers
and to others, and to folks in management. And what I mean
by that is being overly demonstrative about his discontent in
meetings and in other settings where there were other people.

(Tr. 361.) Thus, Hunter clearly draws the direct connection between Hayward’s concerted
activity with his peers and the Company’s animus against him.39

While Hunter’s testimony included a linkage between Hayward’s complaints and his
discharge, the other supervisors were more circumspect. They tended to describe their
criticisms of Hayward by reference to his bad attitude. Realistic appraisal of employers’
explanations for terminating employees suggests that citations to bad attitude are rational when
coupled with a documented history of disciplinary infractions. By contrast, the Board has
repeatedly cautioned that similar characterizations of an employee’s attitude must be viewed
with caution and concern in the absence of such corroborative evidence. In this case, the
Company contends that its decision to discharge Hayward is entirely justified by his “disruptive
behavior and attitudinal problems which were interfering with the efforts of CISC’s management
to build a teamwork atmosphere among its FCs.” (R. Br. at p. 7.) Put another way, in his notes
from his meeting with Hayward, Hosie observed that Hayward had become a troublemaker.

The Board has addressed the meaning of such justifications for adverse action. In
Boddy Construction Co., 338 NLRB No. 165 (2003), it observed, “employer complaints about
‘bad attitude’ are often euphemisms for prounion sentiments, particularly when there is no
alternative explanation for the perceived ‘attitude’ problem.” 338 NLRB No. 165, slip op. at p. 1,
citing James Julian, Inc. of Delaware, 325 NLRB 1109 (1998). Similarly, in United Parcel
Service, 340 NLRB No. 89 (2003), the Board found that calling an employee a “troublemaker”
was also evidence of animus. The Sixth Circuit endorsed this approach in a case with some
similarities to this one. An employee, Hoendorf, was discharged due to a poor attitude. The
company cited two examples, incidents that took place approximately 6 months and 2 months
prior to the termination. Hoendorf had not been disciplined for either incident. In enforcing the
Board’s order for reinstatement, the Court noted that a supervisor’s statement,

that the Company was discharging Hoendorf because he had a
bad attitude and created friction by pressing for resolution of the
problem in front of a fellow employee supports the inference that
the Company discharged Hoendorf for engaging in concerted
activities.

Dayton Typographic Service, Inc. v. NLRB, 778 F.2d 1188, 1193 (6th Cir. 1985). Similarly, I
conclude that CISC’s assertion that the decision to terminate Hayward arose because he was a
troublemaker who had a bad attitude is simply another way of indicating that he was terminated
39 The managers’ disparaging attitude toward complainers is at variance with the Company’s
formal policy. The handbook distributed to the consultants advised them that “it is Citizens’
policy that employees have the right to speak freely about their concerns.” (GC Exh. 8, at p. 15
of the handbook.)
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because he engaged in protected concerted activity when he persistently complained about the
structure of the compensation plan and the manner in which compensation was actually being
paid under that plan.

I conclude that the General Counsel has presented an array of direct evidence that the
Company’s managers were angered and frustrated by the financial consultants’ protected
concerted activity. Furthermore, their animus regarding this activity led them to take a variety of
adverse actions against the complainers, including highly specific and threatening warnings to
Russo and Chess and, ultimately, the termination of Hayward.

The direct evidence of animus is reinforced by a variety of circumstantial evidence of the
types that the Board has historically viewed as highly probative.40 I find the timing of Hayward’s
discharge to be indicative of unlawful motivation. Counsel for the Company argues to the
contrary, noting that Hayward’s complaints began “almost seven months prior to the decision to
terminate Mr. Hayward’s employment.” (R. Br. at p. 15.) In NLRB v. Main Street Terrace Care
Center, 218 F.3d 531 (6th Cir. 2000), the Court enforced the Board’s decision rejecting a similar
argument. In that case, Craig, an employee who had engaged in a pattern of protected
concerted activity, was terminated four days after making a comment that the facility would be a
better place to work if it were unionized. The employer argued that the timing was not
suspicious since it had been aware of Craig’s protected concerted activities since virtually the
beginning of her employment with the company. Both the Board and the Court rejected this
viewpoint. The Court noted that,

[a]lthough it is true that Craig had acted on behalf of other
employees in regard to wage issues since nearly the start
of her employment at Main Street, Craig’s December 11
statement was the only pro-union statement she had made
and could thus have been viewed by Main Street as more
threatening.

218 F.3d 531 at 542. By the same token, while Hayward began his activities months before his
termination, he characterized himself as the “union president,” a statement that could readily be
interpreted as threateningly pro-union, less than a month before his discharge.

While Hayward wrote his “union president” email on June 6 and was not informed of his
termination until July 2, the evidence demonstrates that the decision to discharge him was
reached considerably earlier. The human resources department formally approved the
termination decision during a conference call on June 25. Halechko testified that he had
reached a preliminary conclusion that Hayward should be terminated before convening this
formal conference. I conclude that the decision to terminate Hayward was made no later than
three weeks after he styled himself the “union president” in his email to his supervisor. The
timing of this decision to terminate a highly productive employee without any history of prior
formal disciplinary sanction within such a brief period after his reference to a union in his
correspondence is significant circumstantial evidence of an impermissible motivation.

Another of the Board’s key analytical tools for evaluation of an employer’s motivation is
consideration of whether the employee’s discharge “was inconsistent with its progressive
40 The Board has repeatedly held that animus may be established through circumstantial
evidence, even in the complete absence of direct evidence. Tubular Corp. of America, 337
NLRB No. 13 (2001), slip op. at 1, and the cases cited therein.
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discipline systems and its past practice.” Tubular Corp., supra. Put another way, the Board
holds that evidence establishing “blatantly disparate treatment supports an inference of unlawful
motivation.” Watkins Engineers & Constructors, Inc., 333 NLRB 818 (2001), slip op. at p. 2.
[Internal quotation marks omitted.] I will now consider the two key aspects of this question,
whether the Company followed its formal procedures for imposition of employee discipline and
whether the Company disciplined Hayward in a fashion that was consistent with its treatment of
disciplinary problems involving other financial consultants.

CISC possessed a formal disciplinary process that was outlined in writing to its
employees in an employee handbook dated March 25, 2002. (GC Exh. 8.) The handbook was
distributed to all financial consultants. It defines and explains the Company’s Performance
Improvement Policy, noting that

[t]o ensure the achievement of goals and objectives and
fair treatment of all employees, it may be necessary to
follow Citizens’ Performance Improvement Process when
an employee is not contributing to the successful operation
of the business, either through his or her behavior or
job performance.

(GC Exh. 8, handbook at p. 27.) Significantly, this preamble clearly demonstrates that the
disciplinary process is designed to cover a wide range of issues, including technical aspects of
job performance such as poor productivity and attitudinal issues encompassed by the concept
of general employee “behavior.” The preamble also notes that the goal of the process is to
enable managers to successfully “coach the employee with an objective of bringing his or her
performance to an acceptable level.” (GC Exh. 8, handbook at p. 27.)

Within this framework, the Performance Improvement Process begins with verbal
commentary. If this does not resolve the problems, resort to a formal Performance
Improvement Plan is anticipated. This is a written document issued to the employee that
“specifically identifies the problem and outlines management’s expectations and desired
results.” (GC Exh. 8, handbook at p. 27.) If the issuance of a written plan fails to obtain
adequate improvement from the employee, termination is authorized if it is “approved by the
next level of management and Human Resources.” The Plan is clearly designed to include
principles of progressive discipline. As the handbook puts it,

[p]rogression through the Performance Improvement Process
should be appropriate for the severity of the problem. In
certain cases, such as serious misconduct, a written PIP
[Performance Improvement Plan] may be the first step in the
Performance Improvement Process. Not all situations require
that the manager follow a step-by-step corrective action process.
Some circumstances may justify other action up to and
Including termination.

(GC Exh. 8, handbook at p. 27.)

In her testimony, Blyth confirmed the nature of the progressive disciplinary process. She
reported that the steps in the process are “coaching and counseling,” followed by verbal
warning, final written warning, and termination. (Tr. 496.) A Performance Improvement Plan
may be implemented during any stage “in that continuum.” (Tr. 496.) This consists of a highly
detailed written plan. Blyth also confirmed that the purpose of the various warning stages of the
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process is to enable managers to determine whether the employee is able to change his or her
conduct so as to avoid imposition of termination. Halechko articulated a similar understanding
of the purpose and mechanics of the process. He outlined the “basic process” as involving a
verbal warning, written warning, final written warning, and ultimately termination. (Tr. 296.)

Halechko showed a clear understanding of the intended operation of the policy as it
applied to management’s belief that a financial consultant was making improper email
complaints regarding working conditions. Russo testified that, in May 2002, Halechko told him
about his displeasure with the nature of Chess’ email communications and threatened to fire
Chess for sending disrespectful emails about the trail payment issue. Russo responded by
advising Halechko, “John, you can’t fire him, you know, he’s not on corrective action.” (Tr. 227.)
When counsel for the Company asked Halechko about Russo’s account of this conversation,
Halechko asserted that, “I’ve been in management enough to know you can’t fire someone for
sending an email. Corrective action, absolutely.”41 (Tr. 275.)

While Halechko appears to have understood the necessity of applying the progressive
disciplinary system to attempt to remedy Hayward’s alleged transgressions, he did not
recommend that this be initiated. Several participants in the crucial June 25 conference call
agreed that Halechko, Hunter, and Hosie were opposed to application of progressive discipline
to Hayward’s case. Hosie conceded that they could have given Hayward a final written warning
that one more manifestation of the attitudinal problems such as denigration of the less
experienced consultants would result in termination. He reported that the participants in the
conference:

talked about what potential corrective action we could use.
We had a discussion on that. Consensus of the group,
myself included, was that that was not going to be a plan, that
that would not work, that between Mr. Hunter and Mr. Halechko,
and myself, that we were not going to change his attitude about
his colleagues.

(Tr. 449.) By the same token, Blyth testified that, in her role as human resources
representative, she did not recommend application of the Performance Improvement Process to
Hayward. Counsel for the Charging Party noted that she had first become aware of Hayward’s
alleged performance issues in April 2002. He asked her if she had ever suggested counseling
with Hayward “to identify the problems using specific examples, and provide a reasonable
amount of time for improvement.”42 She responded by indicating that, “I did not have time to do
that.” (Tr. 512—513.) She contended that Hunter had made attempts to correct Hayward’s
misbehavior, but conceded that there was no documentation of these efforts.43
41 Halechko also reported that this conversation with Russo took place prior to Citizens’
acquisition of Mellon, rather than in May 2002. I do not credit this explanation. I have already
noted that I found Russo to be highly credible. Furthermore, Halechko did concede that, as of
May 2002, he was “losing my patience” with Chess’ emails. (Tr. 311.) This is consistent with
Russo’s recollection of the chronology.
42 In phrasing his question in this manner, counsel was quoting directly from the handbook’s
description of how the Performance Improvement Process was supposed to function.
43 In itself, this appears to be irregular. The handbook notes that an employee’s personnel
file “[g]enerally” contains “documents used to determine . . . corrective action or termination.”
(GC Exh. 8, handbook at p. 11.) The Company failed to place into evidence a single such
document relating to Hayward’s conduct or discipline.
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The evidence clearly shows that all levels of management were aware of the
requirements of the progressive disciplinary process and chose not to employ it in Hayward’s
case. Counsel for the General Counsel asked Blyth if it was normal procedure for the Company
to terminate an employee in the absence of any documentation of the employee’s misconduct
and the efforts taken to ameliorate the problems. By responding, “[g]enerally, probably not,”
Blyth strikingly underscored the fact that the Company abandoned its clearly articulated policy
requiring application of principles of progressive discipline.44 Instead, management close to
treat Hayward, a highly productive, experienced employee with no history of disciplinary
problems, in a manner that was highly inconsistent with its normal policies and procedures.
This is strong circumstantial evidence that management was acting out of improper and
unlawful motives.

In addition to the failure to follow proper procedures, the evidence also establishes that
the Company’s treatment of Hayward was in sharp contrast to its contemporaneous treatment of
other financial consultants whose behavior was deemed to require disciplinary corrective action.
In similar circumstances, the Board has consistently held that such disparate treatment of an
employee is probative circumstantial evidence of unlawful motivation. Sears, Roebuck & Co.,
337 NLRB 443 (2002), slip op. at p. 1, citing New Otani Hotel & Garden, 325 NLRB 928 (1998)
and Fluor Daniel, Inc., 304 NLRB 970 (1991).

The Western Region of CISC was a new entity, having begun its formal existence
approximately 6 months prior to Hayward’s discharge. As a result, it is not surprising that no
evidence was presented regarding any past history of disciplinary action against financial
consultants.45 While there is no past history to provide guidance, there is considerable
contemporaneous evidence of the Company’s disciplinary practices regarding allegedly errant
financial consultants. It will be recalled that Hosie was brought into the Western Region to
make a comprehensive evaluation of its problems and to propose personnel actions based on
his findings. Upon completion of Hosie’s investigation, a conference was held to confirm final
determinations regarding disciplinary actions affecting financial consultants in the region. At this
conference, Hayward’s termination was ratified.

During the conference, Blyth, one of the human resources representatives, took notes.
Her notes reflect discussion of “Corrective Action” regarding at least 10 other financial
consultants.46 Hosie confirmed that the conference addressed corrective action for at least
Continued
44 I have considered the Company’s entirely reasonable written position that some forms of
misconduct justify immediate termination without resort to intermediate steps. It is apparent that
this exception to the Progressive Action Policy is designed to address misconduct so serious as
to be intolerable. One may easily visualize application of this exception to employees who
commit embezzlement, engage in workplace violence, or divulge clients’ financial secrets. As I
will discuss shortly, none of the Company’s asserted reasons for Hayward’s termination is
remotely comparable to the types of serious misconduct that would justify immediate termination
under the exception to the Performance Improvement Policy.
45 I note that although Citizens is a much larger and older organization, no evidence was
presented regarding its past disciplinary practices elsewhere in its corporate operations. I draw
no conclusions from this. In this instance, no evidence is simply no evidence.
46 In her testimony, Blyth confirmed that these employees were the subject of disciplinary
consideration and discussion. She claimed that her notes should not be interpreted to mean
that they were all subject to corrective action. She asserted that her designation of “Corrective
Action” applied only to Ron Freedlander. I reject this contention. Examination of her choice of
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_________________________
several of the consultants under the Company’s Performance Improvement Policy. He testified
that, “[w]e talked about how we were going to handle some of the corrective action . . . We
talked about a number of individuals.” (Tr. 448.) The only person who was foreclosed from
some manner of corrective action designed to improve performance and behavior while
preserving employment was Hayward. No other exception was made to the Company’s policy
of graduated disciplinary measures designed to improve performance and behavior. While
some of the other 10 consultants were perceived to have different disciplinary issues than
Hayward such as poor productivity, the fact remains that among the 10 persons under
consideration were individuals who were alleged to have engaged in behaviors similar to those
involving Hayward. In particular, there is no doubt that Chess and Russo were under scrutiny
for alleged disrespectful treatment of newly hired colleagues and Chess was clearly in trouble
for writing disrespectful emails to management. Yet, only Hayward, the self-styled “union
president,” was summarily discharged. I conclude that the disparately severe sanction imposed
on Hayward was motivated by the unlawful desire to remove the self-appointed leader of the
dissenting consultants and to send a warning message to his similarly inclined colleagues such
as Chess and Russo.

In addition to assessment of such circumstantial factors regarding employer motivation
as timing, conformity to established procedures, and disparate treatment, the Board has
endorsed the probative value of examination of the employer’s asserted reasons for taking
adverse action against the employee. Referencing the leading case on this issue, Shattuck
Denn Mining Corp. v. NLRB, 362 F.2d 466, 470 (9th Cir. 1966), the Board has noted that

[i]t is well settled that, where an employer’s stated motive is
found to be false, an inference may be drawn that the true
motive is an unlawful one that the employer seeks to conceal.

Key Food, 336 NLRB 111, 114 (2001).47 In assessing this question, I will consider whether the
employer’s asserted justifications for Hayward’s termination are logical, consistent, and
supported by evidence.

In evaluating the Company’s asserted reasons justifying Hayward’s termination, it must
first be recognized that management never gave a formal written statement setting forth its
conclusions. As a consequence, in order to divine those reasons, it is necessary to rely on the
testimony of the managers and the snippets of reasoning contained in the informal notes written
by those managers. As a result, there is a lack of clarity since each manager tended to lend
emphasis to his or her own chosen factors. For example, Blyth cited an allegation that Hayward
had improperly gone into the computer system and assigned accounts to himself. No other
format for her notes shows that she indented a list of names underneath the heading of
“Corrective Action.” She placed a bullet before Freedlander’s name. In exactly the same
manner, she placed a bullet before the names of each of the other nine listed individuals. (R.
Exh. 3.) I conclude that her notes demonstrate that all 10 of these financial consultants were
considered for corrective action under the Company’s progressive disciplinary system.
47 Counsel for the Company has presented a thoughtful discussion of the extent to which
this principle may be properly applied. (R. Br. at pp. 26—27.) There is controversy as to
whether the Board may predicate a finding of illegal motivation exclusively on evidence of
pretext. See: Michael J. Hayes, Has Wright Line Gone Wrong? Why Pretext Can Be Sufficient
to Prove Discrimination under the National Labor Relations Act, 65 Mo. L. Rev. 883, 2000. This
issue is not presented by the facts of this case. I have already outlined a variety of direct and
circumstantial evidence that supports a finding of unlawful motivation for Hayward’s discharge.
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witness cited this purported misconduct in explaining Hayward’s termination. Hosie cited
Hayward’s disparagement of the Company’s fixed annuity products as evidence that Hayward
was disrespectful of the Company’s products. No other manager mentioned this as an area of
concern. Hunter cited Hayward’s “constant lack of deportment . . . in complaining” and his
“being overly demonstrative about his discontent in meetings.” (Tr. 380, 361.) No other
manager asserted this as a basis for termination.48

Perhaps the ultimate illustration of the lack of clarity or precision in the Company’s
explanations was revealed in Hayward’s uncontroverted testimony regarding his final meeting
with management. Upon being told that he was discharged, he wished to know the reason.
Blyth told him that, “you wrote business outside of your territory and that’s why we’re firing you.”
(Tr. 168.) On the other hand, Hosie and Halechko told him that he was being fired because he
“didn’t fit in” and wasn’t a “team player.” (Tr. 189.) Thus, even during this crucial meeting, the
managers were unable to articulate a consistent reason for the abrupt termination of a highly
productive employee who lacked a prior history of formal disciplinary sanctions.

This lack of clarity and consistency regarding the manner in which the Company has
explained its reasons for Hayward’s termination is an important factor in evaluating the proffered
justifications. In Black Entertainment Television, 324 NLRB 1161 (1997), it was noted that

The Board has long expressed the view that when an employer
vacillates in offering a rational and consistent account of its actions,
an inference may be drawn that the real reason for its conduct is
not among those asserted.

324 NLRB at 1161, quoting Sound One Corp., 317 NLRB 854, 858 (1995). The rationale for
this analytical principle is that when an employer is unable to maintain a consistent explanation,
but rather resorts to shifting defenses, “it raises the inference that the employer is ‘grasping for
reasons’ to justify an unlawful discharge.” Meaden Screw Products Co., 336 NLRB 298, 302
(2001), citing Royal Development Co. v. NLRB, 703 F.2d 363, 372 (9th Cir. 1983).

The evidence demonstrates that out of a thicket of reasons advanced for Hayward’s
discharge, two themes predominate. The managers cited two specific incidents of asserted
misconduct and a generalized allegation that Hayward had a bad attitude and was not a team
player. I will address the two specific incidents first.

The first of these events involved a wealthy elderly customer of the retail bank. The
customer sought investment assistance. Saunders, the financial consultant assigned to the
customer’s territory, met with the customer in the presence of the bank manager. Saunders
recommended a particular investment, but during the process of preparing the necessary
documents she discovered that the investor was too old to qualify. The meeting terminated and
48 Indeed, other managers disclaimed this as a basis for Hayward’s discharge. I have
already noted that Hunter’s testimony as to this point is highly probative direct evidence of
animus against Hayward due to his participation in protected concerted activities. Hence, it is
not surprising that Hunter’s former colleagues did not corroborate his testimony on this. It is
noteworthy that Hunter is the only one of Hayward’s managers who is no longer employed by
the Company. While I have found those portions of his testimony involving his direct
supervision of Hayward to have been influenced by his dislike of Hayward and his desire to
place himself in the best light, other aspects of his testimony may well have been more objective
given his current distance from the situation.
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the customer was left without any proposed investment solutions. Not surprisingly, the bank
manager was chagrined at this state of affairs. The manager contacted her superior, who
arranged for Hayward to meet with the customer. There is no dispute that Hayward was
brought into the picture by the bank’s officers. He testified that this had been a common
practice throughout his career. This testimony is supported by Hosie’s notes, which reflected
that Hayward had been a “troubleshooter” for the Company. (R. Exh. 2.) Hayward held two
meetings with the customer, selling her a product after she had obtained outside advice
indicating that it was a worthy investment vehicle for her.

There was a conflict in testimony concerning whether Hunter’s approval for Hayward’s
assignment had been sought and obtained.49 I have credited Hayward’s testimony that Hunter
gave his approval, telling Hayward that it was “no big deal.” (Tr. 196.) Only afterward, when
Saunder’s lodged a vociferous complaint, did Hunter meet with Hayward and instruct him as to
how to handle such situations in the future.

At trial, the Company claimed that this episode was a serious transgression, forming a
significant basis for Hayward’s discharge from employment. I have no difficulty rejecting this
contention. First of all, the evidence shows that at the time this incident took place,
management was not seriously perturbed by it. Hunter testified that he told Halechko about the
incident during one of their daily telephone conversations. He informed Halechko about it
without any “degree of urgency,” simply “mention[ing] that this had happened and that I had
dealt with it.” (Tr. 376—377.) By the same token, Halechko testified that he could not even
recall the basic details of Hunter’s conversation about it. When Halechko briefed Hosie
regarding the problems in the Western Region that necessitated his intervention, he did not
mention this incident. Finally, I note that Hunter was informed of Saunder’s displeasure shortly
after Hayward’s meeting with the client on April 4. Nevertheless, no disciplinary sanction was
imposed until Hayward’s termination on July 2. Hayward was paid the customary commission
from the transaction.

Beyond the evidence that establishes that management was not significantly troubled by
Hayward’s conduct in this matter, logic and common sense lead to a firm conclusion that
Hayward’s conduct was in no way objectionable. Bank officials had been frustrated by their
inability to assist an elderly client with her financial needs. They sought and obtained expert
help from a highly productive financial consultant. As a result, key objectives of the Company
were accomplished. The customer was assisted with her financial planning and Citizens
derived profit from having provided such assistance. The contention that Hayward poached on
the territory of Saunders is absurd. Saunders had met with the client and concluded that she
was unable to offer the client any assistance. It defies reason to argue that this customer in
some way belonged to Saunders. It was logical and appropriate that another consultant be
assigned to provide for her unmet needs. Any subsequent concern was simply a product of
Saunder’s vociferous, but unjustified, complaint to Hunter. To the extent that the Company
claims that Hayward’s behavior in assisting the Bank’s managers in providing financial services
to a customer who needed them was a justification for Hayward’s termination, I find that this is
an obvious pretextual grasping at straws.

The second incident cited by the Company is more troubling since it involves an ugly
dilemma presented by a racist customer. Once again, Hayward did nothing to initiate
49 As Blyth put it, “I’ll agree that that was very confusing as to which management team
called who first.” (Tr. 494.) Thus, this concededly confusing state of affairs could hardly serve
as appropriate justification for Hayward’s termination.
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involvement in the situation. When the customer refused to meet with the assigned financial
consultant, Saunders, the bank manager asked Hayward to assist. Hayward knew that another
financial consultant had made prior sales to this customer. Following Hunter’s general
instructions to him, he telephoned this consultant, who, while warning him that the customer
was a jerk, authorized him to proceed with the sales meeting. Hayward made the sales. Once
again, Saunders complained to Hunter, going so far as to threaten to take the matter to the
human resources department.

At trial, Halechko presented a high-minded explanation as to why this incident was a
serious indictment of Hayward. He dismissed Saunder’s complaint that Hayward had taken one
of her clients, opining that this was “the least of my concerns.” (Tr. 290.) He reported that his
real concern was that a Company employee had met with an openly racist customer and
engaged in business transactions with that customer. As he put it, such conduct

was unethical and it was not part of what we would do at Citizens.
The appointment should never have occurred. And what we should
have done is closed the customer’s accounts and asked him to leave
the bank.

(Tr. 289.) Unfortunately, this lofty expression of the Company’s goals went completely
unrealized. Management was clearly informed of all of the pertinent details of this transaction.
Certainly, Hayward made no effort to conceal the reasons he was brought in to make the sale.
Although fully informed, management took no steps to remedy this supposedly unethical
conduct by both Hayward and the bank manager. Neither was subject to formal discipline. To
the contrary, Hayward received his usual commission on the sales. This is significant since the
Company clearly had the right to reject an unethical transaction. The Company’s plan for
financial advisors in effect at that time provided that management, “in its sole discretion,
reserves the right to accept or reject any transaction, for any reason whatsoever.” (GC Exh. 4,
p. 2.) When confronted with this Company policy, Halechko attempted to deflect the
implications by reporting that he did not know if the Company was aware of the situation before
Hayward was paid his commissions. Even if this were true, it is not a satisfactory explanation.
The written policy is designed to cover this eventuality, providing that “revenues credited to a
Financial Advisor’s grid will be charged back any previously credited revenues that are
reversed, adjusted or charged back.” (GC Exh. 4, p. 7.) No such charge back was taken once
management learned all of the details of the transaction.

The evidence shows that the Company failed to discipline Hayward or the bank manager
for their supposedly unethical behavior. There is no evidence that the transactions were
cancelled or that the customer was directed to remove his business from the Bank. In fact, it
appears that the Company’s ultimate decision regarding this difficult situation was to adopt the
attitude of Stevens, the bank manager. As she had put it, “I don’t care what his problem is.
Let’s just take care of him.” (Tr. 156.) In concluding that the Company’s attempt to cite this
unpleasant episode as a justification for Hayward’s termination is pretextual, it is important to
note that there was no contention that Hayward’s participation in the transaction was in any way
designed to endorse or further the customer’s racist views. Indeed, Saunder’s told Hunter that,

[s]he felt that on some level race was a part of it, but not on
Chris’ part, but on the part of the regional manager, the bank
regional manager.

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(Tr. 374.) There is nothing to indicate that management took any action whatsoever regarding
this allegation.50 In sum, the evidence shows that a highly placed bank manager asked for
Hayward’s assistance. Following Hunter’s directive, Hayward sought authorization from the
financial consultant who had previously made sales to this customer. After obtaining this
authorization, he met with the customer and serviced his needs, in the process earning
commissions for himself and for the Company. While it is apparent that the episode was
distasteful for all concerned, I do not credit the contention that it represented serious, unethical
behavior in the eyes of the Company’s management. The evidence reveals that to be a tardily
formulated attempt to justify Hayward’s discharge. I reject it as pretextual.

Having rejected as pretextual the two specific instances of alleged misconduct relied
upon by the Company, I must now examine the more generalized allegation that Hayward was a
troublemaker who refused to adjust to the changeover in ownership of the Company,
manifested a bad attitude, and declined to be a team player. In making this assertion, the
managers provided testimony regarding the change in philosophy resulting from Citizens’
takeover of operations from Mellon. Halechko testified that, at Mellon, investment services were
considered a “number one priority” for the bank. (Tr. 257.) After Citizens took over, investment
services “weren’t really a key component anymore for the bank.” (Tr. 257.) Instead,
investments were merely one of five such components. This represented a “total change in the
philosophy,” from being the dominant concern to being one of a number of competing concerns.
(Tr. 264.) Hunter confirmed this description, agreeing that the investment component was no
longer the primary focus. The Company contends that Hayward was unable to adapt to this
new environment.

I credit the managers’ description of the new working environment. The difficulty is that
it proves too much. The same managers agreed that the result of the new and more
challenging working conditions was that financial consultants had to focus more on providing
services to the banking managers. As Hunter put it,

they had to be more accommodating with the branch [banking]
people. And they had to have a strong relationship, because it
[the client referrals] was not going to be handed to them.

(Tr. 387.) Hunter agreed that a consultant’s relationship with the bank managers was at least
as important as his or her relationship with other consultants. Counsel for the General Counsel
asked Hunter if meeting the requests of bank managers “is something generally to be favored?”
(Tr. 387.) Hunter responded that, provided the requests were reasonable, “expectations were
that they would be met, yes.” (Tr. 387.)

Both Halechko and Hosie confirmed Hunter’s view of the importance of good teamwork
with the bank’s managers. Halechko called them “our customer.” (Tr. 255.) He agreed that it
was “important” that they “be kept happy.” (Tr. 304.) During a meeting with the financial
consultants, he told them that

if we’re not getting the referrals that we need, it’s because
your partners don’t want to partner with you anymore. And
50 It is necessary to add that there was no evidence presented in this case regarding the
regional manager’s attitude and motivation and nothing in this decision should be interpreted as
a comment regarding that question.
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that just didn’t happen for no reason, and we need to identify
and become a better partner with the bank.

(Tr. 308—309.) Hosie agreed that, “I think it was important to keep the bank people in your
region happy.” (Tr. 44.) Of course, it was also important for a financial consultant to maintain
good relations with the other consultants. Chess acknowledged as much, noting that a
consultant needed to “work with your colleagues, be a positive influence.” (Tr. 118.)

The record leads to two conclusions regarding this change in banking philosophy and
operations and Hayward’s adaptation to it. First, it is clear that consultants’ relationships with
bank managers were of critical importance. There was no evidence that Hayward had any
problems with those managers. To the contrary, the evidence shows that he was highly
regarded by the bank’s supervisors. Indeed, they viewed him as a troubleshooter who could be
brought in to assist with difficult customer problems. By the same token, his willingness to
become involved in the solutions to these difficult problems speaks highly of his desire to foster
teamwork with the bank’s officers.51 On the other hand, there is evidence that Hayward was
willing to criticize the newer financial consultants. Nevertheless, it is important to note that he
was simply of one a number of experienced consultants who were critical of their newer
colleagues. Halechko specifically testified that Hayward was not a “ring leader” in this problem
of teamwork among consultants. (Tr. 337.) The evidence supports this conclusion. For
instance, the only written complaint about the newly hired consultants was made by Chess, not
Hayward.

I have carefully assessed the Company’s claim that Hayward’s termination was due to
his inability to adjust to the attitudinal and teamwork demands of the new work environment.
The evidence fails to persuade me that this was a motivating factor in the decision to terminate
Hayward’s employment. His attitude and teamwork toward the bank managers was exemplary.
His attitude and teamwork toward his fellow financial consultants was less praiseworthy, but not
significantly worse than that of his peer group. All in all, I am led to the firm conviction that none
of the Company’s proffered explanations for Hayward’s firing serve to explain the decision.
There must have been something else. Based on the direct and circumstantial evidence
discussed above, I find that this missing rationale was Hayward’s prominent and persistent
involvement in protected concerted activity culminating in his decision to refer to himself as the
“union president.” Only when viewed in this light, can one comprehend the abrupt termination of
an outstanding performer with a prior clean disciplinary record.

Ordinarily, analysis of employer motivation under Wright Line, supra, continues to the
final step of the process. At that step, the employer must show that it would have imposed the
same adverse action regardless of the employee’s participation in protected concerted activity.
The Board, however, draws a careful distinction in circumstances where the trier of fact
concludes that the employer’s proffered reasons for the adverse action are merely pretextual.
As the Board noted in La Gloria Oil and Gas Co., 337 NLRB No. 177 (2002), affd. __ F.3d __
(5th Cir. 2003),

Having found that the General Counsel has met its initial burden of
persuasion, we now examine the Respondent’s argument that it
would have taken the same action in the absence of that protected
51 I do not place significance on the fact that Hayward’s sales to difficult customers produced
income to him. He was already a very high producer and his acceptance of difficult cases
located outside his normal area of operations hardly seems a profitable endeavor for him.
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activity. In doing so, we must distinguish between a “pretextual” and
a “dual motive” case. If the Respondent’s evidence shows that the
proffered lawful reason for the discharge did not exist, or was not, in
fact relied upon, then the Respondent’s reason is pretextual. If no
legitimate business justification for the discharge exists, there is no
dual motive, only pretext.

337 NLRB No. 177, slip op. at p. 7. See also, Golden State Foods Corp., 340 NLRB No. 56
(2003), slip op. at p. 2. In this case, I have considered all of the varying reasons advanced in
support of the decision to terminate Hayward. I conclude that the Company, in fact, did not rely
on any of these reasons in discharging him. They are merely pretexts to mask the real
motivating factor in his termination, his involvement in protected concerted activity, capped by
his self-styled appointment as “union president” of the experienced financial consultants. As a
result, the analytical process is complete. I conclude that Hayward’s termination constituted a
violation of Section 8(a)(1) of the Act.

Conclusions of Law

By discharging its employee, Christopher Hayward, due to his participation in protected
concerted activities in order to discourage its employees from engaging in these or other such
activities, the Respondent has been interfering with, restraining, and coercing its employees in
the exercise of the rights guaranteed to them in Section 7 of the Act, in violation of Section
8(a)(1) of the Act.

Remedy

Having found that the Respondent has engaged in an unfair labor practice, I find that it
must be ordered to cease and desist and to take certain affirmative action designed to
effectuate the policies of the Act. The Respondent having discriminatorily discharged an
employee, it must offer him reinstatement and make him whole for any loss of earnings and
other benefits, computed on a quarterly basis from date of discharge to date of proper offer of
reinstatement, less any net interim earnings, as prescribed in F. W. Woolworth Co., 90 NLRB
289 (1950), plus interest as computed in New Horizons for the Retarded, 283 NLRB 1173
(1987).

Because of the rather unusual work setting involved in this case, both counsel for the
General Counsel and counsel for the Respondent have predicted that determination of the
precise parameters of the reinstatement remedy and calculation of the back pay owing to the
Charging Party will be complicated. Thus, counsel for the General Counsel observed that

the income of financial consultants is by its nature impacted
substantially by outside forces, primarily the rise and fall of
the stock market and that said formula [for calculation of
back pay] should take this factor into account.

(GC Br. at pp. 28—29.) Counsel for the Respondent made essentially the same point, noting
that

a back pay award may admittedly be difficult to calculate given
the contingent nature of much of Mr. Hayward’s compensation
which was tied to sales production and likely would have been
impacted by deterioration which occurred in the financial services
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and investment business during 2002 and 2003 as a result of
economic factors unrelated to this case.

(R. Br. at p. 28.)

The Board has broad discretion in resolving remedial issues. Phelps Dodge Corp. v.
NLRB, 313 U.S. 177 (1941). It has chosen to exercise this discretion through a post-trial
administrative compliance process. In Tuv Taam Corp., 340 NLRB No. 86 (2003), the Board
observed that it has a “well established policy of deferring to compliance questions regarding
the specifics of the relief granted.” 340 NLRB No. 86, slip op. at fn. 4, and the cases cited
therein.

In Alaska Pulp Corp., 326 NLRB 522, 523 (1998), enf. in part and remanded, 231 F.3d
1156 (9th Cir. 2000), after noting that resolution of remedial issues is “often problematic and
inexact,” the Board summarized the appropriate administrative process involved. During the
compliance phase of the proceedings, the General Counsel, exercising “wide discretion,”
selects a formula for resolving the issues. If the Respondent seeks to propose an alternative
formula, then an administrative law judge must conduct a hearing. The judge’s duty is to decide
which formula

is the proper one in view of all the facts adduced by the parties
and to make recommendations to the Board as to the most
accurate method of determining the amounts due.

326 NLRB 522, fn. 7, citing American Mfg. Co. of Texas, 167 NLRB 520 (1967). Finally, the
Board will select the “most accurate method” of calculation, taking into account the views of all
parties. 326 NLRB at 523. In so doing, it will resolve any uncertainties against the party whose
wrongdoing created the uncertainty.52

While it was perceptive of both counsel to highlight some of the difficulties that may be
anticipated, it is necessary to defer resolution of these issues to the appropriate phase of the
Board’s processes. Therefore, at the compliance stage of the proceedings, the parties should
be prepared to address the amount of backpay owed53 and the nature of the reinstatement
remedy, including the quality and extent of any client list54 required to meet the Company’s
obligation to provide full reinstatement to Hayward.55
Continued
52 A useful list of guiding principles involved in making these determinations during the
compliance process is set forth in Minette Mills, Inc., 316 NLRB 1009, 1010 (1995).
53 One of the advantages of the Board’s compliance procedures is that resolution of these
issues may commence with informal discussion among the parties. Noting that the parties may
be expected to have familiarity with “rates and methods of compensation . . . and other issues
that will be used to determine gross backpay,” the Board’s Casehandling Manual for compliance
proceedings, at Sec. 10531.2, recommends that the compliance officer ask “both Respondent
and disciminatee how they think gross backpay should be determined and how much it should
be.”
54 The parties have referred to such a list as a “book of business.”
55 I do note that Hosie testified that the Company had a written employment agreement with
the financial consultants, specifying that CISC retained ownership of the client list. As it was not
material in this phase of the proceedings, this document was not offered into evidence. At
compliance, it would certainly become material. I also note that, in his opening statement,
counsel for the General Counsel wisely observed that the individual investment customers have
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_________________________

Counsel for the General Counsel also requests an order requiring the Respondent to
“rescind and expunge” references to Hayward’s termination in “any reports it has made to all
regulatory bodies of the securities industry, both governmental and private.” (GC Br. at p. 29.)
In my view, due to the potentially adverse consequences to Hayward’s professional standing
arising from the filing of such reports, this relief is a necessary component of the proper make
whole remedy. I shall recommend that the Board include such a provision in the order. Given
the nature of the Company’s decentralized operations, I also recommend that the Board adopt
counsel for the General Counsel’s request that the employer be required to post the notice “at
all locations where financial consultant employees are working.” (GC Br. at p. 28.) This is
necessary to accomplish the remedial purposes underlying the posting of notices to employees.

On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended56

ORDER

The Respondent, Citizens Investment Services Corporation, its officers, agents,
successors, and assigns, shall

1. Cease and desist from

(a) Taking adverse action, including termination of employment, against Christopher
Hayward or any other of its employees due to their participation in protected concerted
activities.

(b) In any like or related manner interfering with, restraining, or coercing employees
in the exercise of the rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

(a) Within 14 days from the date of this Order, offer Christopher Hayward full
reinstatement to his former job or, if that job no longer exists, to a substantially equivalent
position, without prejudice to his seniority or any other rights or privileges previously enjoyed.

(b) Make Christopher Hayward whole for any loss of earnings and other benefits
suffered as a result of the discrimination against him in the manner set forth in the remedy
section of the decision.

(c) Within 14 days from the date of this Order, remove from its files any reference to
the unlawful discharge, and within 3 days thereafter notify the employee in writing that this has
been done and that the discharge will not be used against him in any way.

an important interest in who will act as their financial consultant. He suggested that the remedy
include provision for Hayward to contact his former assigned customers to ascertain their
wishes.
56 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and
Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec.
102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed
waived for all purposes.
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(d) Within 14 days from the date of this Order, make every good faith effort to
rescind from its reports submitted to all regulatory bodies of the securities industry, both
governmental and private, all reference to the employee’s termination, and within 3 days
thereafter notify the employee in writing that this has been done.

(e) Preserve and, within 14 days of a request, or such additional time as the
Regional Director may allow for good cause shown, provide at a reasonable place designated
by the Board or its agents, all payroll records, social security payment records, timecards,
personnel records and reports, and all other records, including an electronic copy of such
records if stored in electronic form, necessary to analyze the amount of back pay due under the
terms of this Order.

(f) Within 14 days after service by the Region, post at its each of its facilities in its
Western Region of Pennsylvania where financial consultant employees are working, copies of
the attached notice marked “Appendix.”57 Copies of the notice, on forms provided by the
Regional Director for Region 6, after being signed by the Respondent's authorized
representative, shall be posted by the Respondent immediately upon receipt and maintained for
60 consecutive days in conspicuous places including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the
notices are not altered, defaced, or covered by any other material. In the event that, during the
pendency of these proceedings, the Respondent has gone out of business or closed the
facilities involved in these proceedings, the Respondent shall duplicate and mail, at its own
expense, a copy of the notice to all current employees and former employees employed by the
Respondent at any time since July 2, 2002.

(g) Within 21 days after service by the Region, file with the Regional Director a sworn
certification of a responsible official on a form provided by the Region attesting to the steps that
the Respondent has taken to comply.

Dated, Washington, D.C. December 23, 2003

_____________________
Paul Buxbaum
Administrative Law Judge

57 If this Order is enforced by a Judgment of the United States Court of Appeals, the words
in the notice reading “POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD”
shall read “POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF
APPEALS ENFORCING AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD.”
37
JD–115—03
Pittsburgh, PA

APPENDIX

NOTICE TO EMPLOYEES

Posted by Order of the
National Labor Relations Board
An Agency of the United States Government

The National Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and obey this notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities

WE WILL NOT discharge or otherwise discriminate against Christopher Hayward or any of you
for engaging in protected concerted activities.

WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Federal labor law.

WE WILL, within 14 days from the date of the Board’s Order, offer Christopher Hayward full
reinstatement to his former job or, if that job no longer exists, to a substantially equivalent
position, without prejudice to his seniority or any other rights or privileges previously enjoyed.

WE WILL make Christopher Hayward whole for any loss of earnings and other benefits resulting
from his discharge, less any net interim earnings, plus interest.

WE WILL, within 14 days from the date of the Board’s Order, remove from our files any
reference to the unlawful discharge of Christopher Hayward, and WE WILL, within 3 days
thereafter, notify him in writing that this has been done and that the discharge will not be used
against him in any way.

WE WILL, within 14 days from the date of the Board’s Order, make every good faith effort to
rescind from our reports submitted to all regulatory bodies of the securities industry, both
governmental and private, all reference to the unlawful discharge of Christopher Hayward, and
WE WILL, within 3 days thereafter, notify him in writing that this has been done.

CITIZENS INVESTMENT SERVICES CORPORATION
(Employer)

Dated ____________________ By ________________________________________________
(Representative) (Title)

JD–115—03
Pittsburgh, PA
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
1000 Liberty Avenue, Federal Building, Room 1501, Pittsburgh, PA 15222-4173
(412) 395-4400, Hours: 8:30 a.m. to 5 p.m.

THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST
NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS
NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, (412) 395-6899.