Essex International, Inc.

National Labor Relations Board - Board Decisions

Feb 12, 1975

216 N.L.R.B. 575 (N.L.R.B. 1975)

ESSEX INTERNATIONAL, INC. 575
Essex International , Inc. and International Union,
United Automobile, Aerospace and Agricultural
Implement Workers of America, UAW, Petitioner.
Case 7-RC-12422
February 12, 1975
DECISION AND CERTIFICATION OF
RESULTS OF ELECTION
BY MEMBERS JENKINS, KENNEDY, AND
PENELLO
Pursuant to a Stipulation for Certification Upon
Consent Election executed by the parties and
approved by the Regional Director for Region 7 of
the National Labor Relations Board on May 15,
1974, an election by secret ballot was conducted in
the above-entitled proceeding on June 13, 1974,
under the direction and supervision of the Regional
Director among the employees in the unit agreed to
be appropriate. At the conclusion of the balloting,
the parties were furnished a tally of ballots in
accordance with the Board's Rules and Regulations,
Series 8, as amended, which showed that there were
approximately 433 eligible voters and that 416 valid
votes were cast, of which 206 were for and 210
against the Petitioner, 3 were challenged, and 2 were
void. The challenged ballots are not sufficient in
number to affect the results of the election.
On June 20, 1974, the Petitioner filed timely
objections to conduct affecting the results of the
election. After a preliminary investigation, the
Regional Director issued and duly served upon the
parties a notice of hearing on objections to resolve
the issues raised with respect to the Petitioner's
objections. Pursuant to said notice of hearing on
objections, a hearing was held on August 8 and 9,
1974, in Traverse City, Michigan, before Hearing
Officer Robert E. Day. On October 29, 1974, the
Hearing Officer issued and duly served upon the
parties his Report and Recommendations Upon
Objections to Election in which he recommended
that all objections except Objection 1 be overruled
and that, in finding merit to Objection 1, the election
of July '13, 1974, be set aside and a new election
directed. Thereafter, the Employer filed timely
exceptions to the Hearing Officer's report and a
supporting brief and the Petitioner filed a reply brief
answering the Employer 's exceptions to Hearing
Officer's report and recommendations.'
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
Upon the entire record in this case, the Board
finds:
1. The Employer is engaged in commerce within
the meaning of the Act, and it will effectuate the
purposes of the Act to assert jurisdiction herein.
2. The Petitioner is a labor organization claiming
to represent certain employees of the Employer.
3. A question affecting commerce exists concern-
ing the representation of certain employees of the
Employer within the meaning of Section 9(cXl) and
Section 2(6) and (7) of the Act.
4. The parties stipulated, and we find, that the
following employees constitute an appropriate unit
for the purpose of collective bargaining within the
meaning of Section 9(b) of the Act:
All production and maintenance employees,
employed by the Employer at its plants located in
Traverse City, Michigan; but excluding truck
drivers, office clerical employees, plant clerical
employees, technical employees, engineering em-
ployees, and confidential employees, professional
employees, guards, watchmen-custodians, assist-
ant foremen, foremen, and all other supervisors as
defined in the Act.
5. The Board has duly considered the entire
record in this case, including the Hearing Officer's
report,2 the Employer's exceptions thereto, and the
Petitioner's reply brief to the Employer's exceptions,
and hereby adopts the findings and recommenda-
tions 3 of the Hearing Officer only to the extent
consistent herewith.
The Hearing Officer, in recommending that Objec-
tion 1 be sustained, found that the Employer
interfered with the free exercise of employee voting
rights under the Act when it announced changes in
wages and other terms and conditions of employ-
ment to its employees 13 days before the election.
We disagree.
On May 31, 1974, Plant Manager Ted Edginton
held a meeting for each shift where he announced
that everyone was going to receive a 20-cent-per-
hour pay raise ; that the Company was cutting the
wage progression period so that assemblers would
reach the top pay rate in 1 year instead of 2 and other
' On January 21, 1975, the Employer filed a letter with the Board
contending that the unit previously agreed to by the Employer in a
Stipulation for Certification Upon Consent Election is no longer appropri-
ate because of changed circumstances and that the case is thereby rendered
moot. On January 24, 1975, the Union filed a letter to the Board in reply to
the Employer's contentions . In view of our decision, as hereinafter set forth,
we need not rule on the Employer's contentions or the Union's opposition
216 NLRB No. 101
thereto.
2 The Hearing Officer's report and recommendations , in pertinent part,
is attached as an appendix hereto.
3 In the absence of exceptions thereto , the Board adopts, proforma, the
Hearing Officer's recommendation that the Petitioner be allowed to
withdraw Objection 3 and that Objections 2 and 4 through 15 be overruled.
576 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
classifications would reach the top pay rate in 1-1/2
years instead of 2-1/2; and that the employees would
be given an opportunity to vote on whether or not
they wanted the Company to institute a pension plan
in which 5 cents of the 20-cent-per-hour wage
increase would be placed into a pension fund .4 The
record indicates that every year since the Traverse
City plant opened in 1966, the Employer has made
its only wage and benefit presentation to the
assembled employees in the last week of May or the
first week in June and has effectuated the changes on
the first Monday of the following July. The timing of
the May 31, 1974, presentation did not deviate from
this past practice. The substance of the May 31, 1974,
presentation had been jointly determined 1 or 2
months prior to that date by Traverse City Plant
Manager Edginton, the managers of two other Essex
International plants in Michigan, and the division
manufacturing manager . Identical presentations
were made simultaneously at the other two Michigan
facilities.
Although the 20-cent-per-hour increase was higher
than that which had been given in some of the
preceding years, on at least one other occasion a 20-
cent-per-hour increase had been granted, and, in
1973, a 19-cent increase included 13 cents for wages
and 6 cents for insurance benefits. Also, the wage
progression period had been reduced previously.
Edginton testified without contradiction that the
wage progression period was reduced in 1974 in
order to attract more employees to the plant and to
reduce the turnover rate of employees.
Although granting employee benefits during the
period immediately preceding an election is not per
se ground for setting aside an election , in the absence
of a showing that the timing of the announcement
was governed by factors other than the pendency of
the election , the Board will regard such timing as
calculated to influence the employees in their choice
of a bargaining representative.5 The burden of
showing other factors is upon the employers We find
that the Employer has met this burden here. As a
general rule, an employer, in deciding whether to
grant benefits while a representation election is
pending, should decide that question as it would if a
union were not in the picture.7 The Employer made
its announcement at the same time and in the same
manner as it had in the previous 8 years irrespective
of the existence of a union campaign . Moreover, the
announcement itself made no mention of the Union
or of the pending elections A group of employees at
* The employees voted against the creation of a pension plan.
a Cf. Performance Measurements Co., Inc., 148 NLRB 1657, 1658 ( 1964);
also see Performance Measurements Co, Inc., 149 NLRB 1451 (1964).
e Id
I Oxco Brush Division of Vistron Corporation, 171 NLRB 512, 513 ( 1968);
The Great Atlantic B Pacific Tea Company, Inc., 166 NLRB 27, in . 1 (1967);
the plant who opposed the Union's organizational
efforts had formed a "Fact Committee" which
distributed literature throughout the campaign. The
Hearing Officer found, and we agree, that the
Employer neither sponsored nor dominated the
"Fact Committee" and that no agency existed
between the Employer and the "Fact Committee."
Following the May 31, 1974, presentation by the
Employer, the "Fact Committee" distributed a letter
in which it stated, "We feel we got a very good
package this year! . . . We think this is a big
improvement! Could the UAW do better?"; however
in view of the complete independence of the "Fact
Committee," there is no basis for finding that this
letter supports the contention that the Employer's
presentation was an effort to influence the employees
in their choice of a bargaining representative. Nor do
we find that the June 12, 1974, speech by Frank
Gallucci, the Employer's corporate labor relations
director, in which he made several references to the
new rate of $2.70 per hour, suggests that the increase
was motivated by the union campaign.
A wage increase granted during the pendency of an
election, which is somewhat in excess of that granted
in prior years, is not necessarily objectionable
conduct if it can be shown that the employer was
motivated by valid business considerations.9 Here,
the wage increases and progression time reduction
were granted in order to reduce employee turnover
and to attract new employees to the plant. The
increases were granted during, a time of high
inflation, and, in any event, when compared to the
Employer's past practice, the amount of the 1974
package in both wage increases and progression time
reduction was not excessive. Under all the circum-
stances, any inference from the size of the increase of
improper motivation is unfounded.
It is also significant that the identical presentation
made to the Employer's Traverse City employees was
simultaneously made to the employees of two other
Michigan plants owned by the Employer. In neither
of those plants was there a pending election or an
organizational campaign. It is somewhat inconceiva-
ble that the Employer would have offered increased
wages, a reduced progression period, and a pension
plan, which it otherwise would not have offered, to
all three plants in order to thwart the union
campaign at only the Traverse City facility.10 Had
the Employer granted the new benefits at the other
facilities but withheld them at the Traverse City plant
because of the pendency of the election, it might
McCormick Longmeadow Stone Co., Inc., 158 NLRB 1237, 1242 (1966); also
we Grede Foundries, Inc. (Milwaukee). 205 NLRB 39, ALJD part II (1973).
8 Oxco Brush Division of Vistron Corporation, supra.
9 Meter 's Wine Cellars, Inc., 188 NLRB 153, 154 (1971).
10 See Freightmaster, a Division of Halliburton Services, 186 NLRB 3, 11-
12(1970).
ESSEX INTERNATIONAL , INC 577
thereby have committed an unfair labor practice.ii
Under the circumstances, namely, the past practice
of announcing changes in wages and terms and
conditions of employment at the same time every
year, the absence of unjustified or excessive changes
compared to past practice, and the fact that the same
changes were announced at two other area facilities
not involved in the union campaign, we conclude
that the Employer did not attempt to influence the
employees in their choice of a bargaining representa-
tive, but rather it proceeded as it would have done
had the Union not been on the scene.12 Accordingly,
we find that the Employer did not engage in
objectionable conduct by making its annual an-
nouncement of changes in wages and other terms
and conditions of employment on May 31, 1974, and
we therefore overrule objection 1.
As the Union has not received a majority of the
valid ballots cast, we shall certify the results of the
election.
CERTIFICATION OF RESULTS OF
ELECTION
It is hereby certified that a majority of the valid
ballots have not been cast for International Union,
United Automobile, Aerospace and Agricultural
Implement Workers of America, UAW, and that said
labor organization is not the exclusive representative
of all the employees in the unit herein involved,
within the meaning of Section 9(a) of the National
Labor Relations Act, as amended.
11 Gold Circle Department Stores, a Division of Federated Department
Stores, Inc, 207 NLRB 1005 (1973), Grede Foundries, inc, supra, The Gates
Rubber Company, 182 NLRB 95 (1970)
12 Although we note that the Petitioner , throughout its campaign, raised,
inter alga , the issues of wages, progression periods, and pension plans, we
find on the facts here that the Employer' s action in these areas was
economically motivated and was not in response to this union literature
APPENDIX
VII. Objection 1:
1. Promised and/or put into effect changes in
wages, hours, or other terms and conditions of
employment to influence the election outcome.
Petitioner contends that on May 31, 1974, Plant
Manager Edginton held a meeting for each shift.
Employees were told that the Employer would not
hold up its annual wage increment as some source
had alleged. (Presumably the UAW, but the record
does not so indicate.) Employees were informed that
plans for a new hospitalization plan were being
worked up and the results would soon be passed on
to them. Edginton then stated,
This year everyone is going to receive 20 cents an
hour increase across the board. We are also
cutting one year off the bottom of the progression
raises so that assemblers will reach top pay in one
year instead of two. Other classifications will only
take one and a half years instead of two and a
half to reach the top. This means assemblers with
less than one year of seniority will get 36 cents an
hour. To offset this for people who have been
with us longer, they are the top 99 people who not
[sic] get 7 years, with 7 years seniority will get 3
Weeks paid vacation, plus we are, farther down in
my talk, we're going to offer you a pension plan
and Jerry Hope will make that presentation to
you.
On Monday, June 3, 1974, the employees voted not
to have 5 cents of the 20-cent increase per hour go
toward a pension fund. On June 7, 1974, a UAW
letter dealt solely with the Employer's presentation of
May 31, 1974. On or about the same date, the FC
circulated its next to last leaflet . Contained therein is
the following paragraph,
We feel we got a very good package this year!
Twenty cents across the board plus-for example,
all the new people will be at $2.70 in one years
time. After July 1, [1974] new employees start at
$2.56 per hour and reach $2.70 in one year. We
think this is a big improvement! Could the UAW
do better? Plus still the possibility of improvement
on our insurance.
The record reflects that the elimination of the
progression rate effectively brought all assemblers
(newer employees) up to the highest comparable area
standards for that job classification (Gallucci
speech). Moreover, the 20-cent-an-hour increase
meant much more than that figure for persons who
were effected by the elimination of the progression
rate. The record, supported both by the Fact
Committee and Edginton's testimony, warrants a
conclusion that the increase for newer employees
could mean about 36 cents an hour increase.
Each year since 1966 the Employer has made
annual wage presentations. Without exception the
presentations were made during the last week in May
or the first week in June. Wage increases were
uniformly effective the first week of July, the month
following the announcement. Only in 1967 had the
Employer initiated as much as a 20-cent-per-hour
raise. The record reflects the fact that in prior years
fringe benefits had 'been announced, increased, or
made a cohditional part of a wage package. There is
no indication of the extent of such fringe benefits,
nor does the record indicate the fringes in existence
as of May 31, 1974. At the time of Edginton's May
31, 1974, presentation similar announcements were
simultaneously made at two other area Essex
578 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
facilities. Edginton testified that this year's presenta-
tion had been delayed until the end of May. The
decision as to what the wage increase would be was
made a month or two prior to May 31, 1974. The
delay was caused by some Essex official who was
investigating a change in the hospitalization insur-
ance which was alluded to in the May 31, 1974,
speech.
Petitioner contends that the wage increase, reduc-
tion of time for progression raises and the hint of a
better insurance and pension plan within 2 weeks of
the election warrants setting aside the election. In
support of this contention Petitioner asserts that this
increase is the highest ever given and is directly
related to campaign issues . The Employer contends
that it had business justification for its increase, and
that not only was this year's increase annual in
nature, but it was also the same program presented at
two other facilities. All prior presentations were
made on an annual basis. Moreover, it is alleged that
Petitioner anticipated this increase in its literature.
The Board's long-established rule concerning the
granting of benefits to employees during the preelec-
tion period is that the granting of such benefits is not
per se grounds for setting aside an election, but that
such timing will be regarded as calculated to
influence the employees in their choice of a bargain-
ing representative, absent a showing that the timing
of the benefits or the announcement thereof was
governed by factors other than the pendency of the
election. The burden of showing other factors is upon
the Employer. i i
I find that pay and benefit increases were in fact
announced and implemented within the objectiona-
ble period. I further find that the Employer has not
sustained its burden of proof that the timing and
announcement of such increases was unrelated to the
pendency of the Petitioner's organizational campaign
and the election.
This report will assume that no adverse inference
should be drawn from the delayed timing of the
announcement. Clearly a past practice had devel-
oped. The organizing drive began in December 1973,
the petition was filed in April of 1974, the election
agreement was taken on or about May 14, 1974, and
the election was June 13, 1974. Sometimes it is of
import that during or as part of a wage increase no
reference or allusion is made to the Union or its
organizing drive. N. L. R. B. v. Allegheny Mining Corp.,
167 NLRB 81 (1967). Herein not much can be made
of this factor because of the Fact Committee's
subsequent reinforcement to employees shortly after
June 3, 1974, of the import of this increase. No loose
end exists after the Fact Committee states "Could the
UAW do better?" Thereafter on June 12, 1974,
Gallucci in detail sets forth area standards for
assemblers. The denouement of his presentation of
June 12, 1974, is that Essex employees are within 2
cents of the top hourly rate in the area. Then
Gallucci tempers the import of this increase with the
negative pregnant that anything at present in excess
of $2.70 an hour is economically prohibitive. This
message is suggested throughout his entire speech.
The Employer could have done whatever he
normally did in the past with wage increments. The
record is silent on the nature of prior increments.
Herein the Employer stops at a showing of regular
annual wage announcements. The touchstone to this
analysis is whether or not the nature of the
increments was intended to undermine the Union. It
has been noted how much the 1974 raises were, their
impact on area standards, the constant subtle
(Gallucci's speech) and not so subtle (Fact Commit-
tee leaflet, P-6) references to the effect that the UAW
is not necessary to achieve a better and more
substantial wage increment.
Increases a little out of the ordinary may not be
objectionable, N.L.R.B. v. Meier's Wine Cellars, Inc.,
188 NLRB 153 (1971). However, a wage increase
which is out of line with all prior timely wage
increases is sufficient to set aside an election.
N.L.R.B. v. The Savings Bank Co., 207 NLRB 269.
A new change in working conditions or wage rate
which substantially undercuts the union organiza-
tional drive and which is attuned to a major
campaign issue should afford a basis to set aside an
election, N.L.R.B. v. Sanford Finishing Corp., 175
NLRB 371 (1969). In Sanford like in this matter, the
employer drastically cut the time it would take a new
hire to reach top pay within their classification. Also
in Sanford, the employer, as here, sought to justify
the elimination of its progression system on the basis
that it sought to reduce turnover and attract a better
work force. The Board adopted an Administrative
Law Judge finding on this issue. The Administrative
Law Judge rejected the employer's defense and set
aside the election. In Sanford, as in this case, there
had also been an across the board wage increase
granted along with elimination of progression steps.
The wage increase was found by the Board not
violative of the Act or tainted sufficiently to set aside
the election. The basis for that finding was that the
employer, like here, had established a pattern for
such increases. However, the fact of a historical
pattern for announcing and granting wage increases
did not shelter the parallel elimination of job
progression steps within a classification. The Admin-
istrative Law Judge reasoned that the employer's
t I Performance Measurements, Inc, 148 NLRB 1657 ( 1964), International Shoe Company, 123 NLRB 682 (1959).
ESSEX INTERNATIONAL, INC.
conduct, viewed against what had been done in the
past as well as the advent of the organizational drive,
was designed to undercut the, momentum of the
union campaign. Herein, unlike Sanford, the Em-
ployer announced its elimination of progression
steps. However, in this case the elimination could not
have been clandestinely implemented as the UAW
had criticized the Employer's progression system
since early in 1974.
I conclude the extraordinary nature of the increase
was dictated by the union campaign. True, this is an
inference, but an inference warranted by a close
examination of surrounding circumstances and the
form in which the extraordinary increase was
presented.12 After May 31, 1974, many UAW
campaign issues are rendered moot: (1) progression
rates for assemblers; 13 (2) area standard wages; 14
and (3) a pension plan.15
A cursory examination of the sources in the record,
cited in footnotes 12, 13, and 14, will reveal how
early in the campaign and with what force the UAW
12 The Board has held that specifically remedying certain working
conditions or employee complaints after knowledge of an organizing drive
and the filing of a petition "warrants an inference" that the action is taken
to "defuse the employees ' union activity." NLR.B. v. American National
Stores, Inc, 195 NLRB 127 (1972) In American National Stores, the
Employer agreed to adjust its system of handling employee commissions.
Prior to the union dnve , the situation existed and nothing happened to
remedy the complaint. Enter the union , and the exact adjustment sought is
achieved presumably with a uniformly advantageous effect on each
579
criticized the Employer's job classification progres-
sion rate. Moreover, the impact and effect of the
wage increase becomes exacerbated after May 31,
1974. The magnitude of the pay increase and its
relationship to area standards are reinforced by
constant subtle (Gallucci's speech of June 12, 1974)
and not so subtle (Fact Committee leaflet, P-6,
quoted above) campaigning.
I conclude that the invariable tendency of the wage
announcement was to suggest how needless a union
would be. The vote spread in this election was only
four votes. The wage presentation in the form chosen
had interfered with the free exercise of employee
voting rights under the Act.
Accordingly, I recommend that Objection I be
sustained.
VIII. Recommendation:
I recommend that all objections, save Objection 1,
be overruled. Objection 1 is found to have merit, and
it is recommended that the election of July 13, 1974,
be set aside and a new election directed.
employees' disposable income.
13 See Petitioner 's Exh P-10 dated Jan 22, 1974, P-13 dated Feb 28,
1974, P-15 dated Mar 14, 1974, P-16 dated Apr 4, 1974, and especially P-
20 dated May 16, 1974.
14 Petitioner's Exh . P-13 dated Feb . 28, 1974; P-20 dated May 16, 1974.
15 Petitioner 's Exh P- 10 dated Jan . 22, 1974, P-14 dated Mar 7, 1974,
P-16 dated Apr 4, 1974, P-I8 dated Apr 18, 1974, P-19 dated May 9, 1974,
P-20 dated May 16 , 1974, P-21 dated May 23, 1974 and P-22 dated May 30,
1974.