Factor Sales, Inc.

National Labor Relations Board - Board Decisions

Jul 31, 2006

347 N.L.R.B. 747 (N.L.R.B. 2006)

FACTOR SALES
347 NLRB No. 66
747
Factor Sales, Inc. and United Food and Commercial
Workers Union, Local 99.1 Case 28–RC–6290
July 31, 2006
DECISION AND CERTIFICATION OF RESULTS OF
ELECTION
BY CHAIRMAN BATTISTA AND MEMBERS SCHAUMBER
AND WALSH
The National Labor Relations Board, by a three-
member panel, has considered objections to an election
held March 11 and 12, 2005, and the hearing officer’s
report recommending disposition of them. The election
was conducted pursuant to a Stipulated Election Agree-
ment. The tally of ballots shows 109 for and 169 against
the Petitioner, with 41 challenged ballots, an insufficient
number to affect the results.
The Board has reviewed the record in light of the ex-
ceptions and briefs and, contrary to the hearing officer’s
recommendation, has decided to overrule the Petitioner’s
Objection 7, which alleged that “[t]he Employer pre-
vented off-duty employees from talking to Union repre-
sentatives,” and to certify the results of the election.2
The hearing officer recommended sustaining Objection
7 and setting aside the election because he found that the
Employer engaged in objectionable conduct by promul-
gating and enforcing an overly broad no-talking rule and
by engaging in surveillance of its employees’ concerted
protected activity. We do not adopt the hearing officer’s
recommendation because we find that the allegation of
Objection 7 differs materially from the hearing officer’s
basis for setting aside the election. The objection was
that the Employer issued an improper directive to off-
duty employees. The hearing officer set aside the elec-
tion on the basis that the Employer had issued an im-
proper directive to “on the clock” employees.3 Further,
the issue of surveillance, another ground for setting aside
the election, was not alleged as an objection at all.4 Be-

1 We have amended the caption to reflect the disaffiliation of the
United Food and Commercial Workers International Union from the
AFL–CIO effective July 29, 2005.
2 The Employer has excepted to some of the hearing officer’s credi-
bility findings. The Board’s established policy is not to overrule a
hearing officer’s credibility resolutions unless a clear preponderance of
all the relevant evidence convinces us that they are incorrect. Stretch-
Tex Co., 118 NLRB 1359 (1957). We find no basis for reversing the
findings.
In the absence of exceptions, we adopt pro forma the hearing offi-
cer’s recommendation to overrule the Petitioner’s Objections 1, 2, 8,
and 9. The Petitioner withdrew Objections 3, 4, 5, and 6 at the hearing.
3 The Regional Director’s Order Directing Hearing used identical
language to describe the issue set for hearing under Objection 7.
4 Contrary to the dissent, we do not find that “surveillance” was rea-
sonably encompassed by Objection 7. That objection alleged only that
the Employer issued an improper directive to off-duty employees that
they not talk to union representatives, and that was the precise allega-
cause the Employer was not afforded due process, we
will overrule Objection 7.5
Background
The hearing officer found that, at the conclusion of a
captive audience meeting held at the Employer’s offices
about 2 weeks before the election, the Employer’s labor
consultant told 15–20 unit employees who were attend-
ing the meeting that union representatives were outside
and that the employees were not to “stop to talk” to those
representatives. After this meeting, four of the Em-
ployer’s security guards accompanied the employees as
they walked the several blocks back to the store. The
hearing officer further found that the employees were
“on the clock” during the meeting and the walk back to
the store. The hearing officer concluded that, through its
instruction at the meeting, the Employer promulgated an
overly broad no-talking rule and that, by providing the
escort of security guards, the Employer enforced this rule
and engaged in surveillance of its employees’ protected
activities. Based on these findings, the hearing officer
recommended that Objection 7 be sustained and a rerun
election held.
In its exceptions, the Employer argues that it was de-
prived of due process because the objections set for hear-
ing did not allege the conduct that the hearing officer
found objectionable. The Employer observes that none
of the Petitioner’s objections alleged either that the Em-
ployer promulgated and enforced an overly broad no-
talking rule or that it engaged in surveillance through its
security guards. In particular, the Employer points out
that Objection 7 referred to conduct affecting “off-duty”
employees whereas the hearing officer found conduct
affecting employees who were “on the clock.”
DISCUSSION
We agree that the Employer was denied due process
because we find that the wording of Objection 7 failed to
provide the “meaningful notice . . . and . . . full and fair
opportunity to litigate” that are the fundamental require-

tion against which the Employer defended. The dissent begins with the
allegation that the Employer prevented employees from talking to the
Union. The dissent then says that this allegation encompasses the
presence of a security guard. The dissent then goes on to say that the
presence of the security guard encompasses surveillance of the employ-
ees. In short, the surveillance is two steps removed from the the origi-
nal allegation. This chain of reasoning might have been correct if the
objecting party had alleged it. The objecting party did not do so.
5 Though Member Schaumber joins in finding a denial of due proc-
ess, he is persuaded that a single instruction to an inexact but small
number of employees that they should refrain from talking to union
representatives during the brief period required to walk back to their
duty stations was de minimis in nature and effect and could not rea-
sonably have affected the outcome of this election, which the Petitioner
lost by a vote of 169–109.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD748
ments of procedural due process. Lamar Advertising of
Hartford, 343 NLRB 261, 266 (2004). To be “meaning-
ful,” the notice must provide a party with a “clear state-
ment” of the accusation against it. Id. “It is axiomatic
that a [party] cannot fully and fairly litigate a matter
unless it knows what the accusation is.” Champion In-
ternational Corp., 339 NLRB 672, 673 (2003).
Here, the objection alleged misconduct affecting “off-
duty” employees, leading the Employer reasonably to
assume that the dispositive issue raised by the objection
was whether the employees in question were on, or off,
duty. The Employer’s posthearing brief and the record
of the hearing show that the only fact that the Employer
sought to prove in order to defend its conduct at, and
immediately after, the meeting was that the employees
were on work hours.6 Moreover, the hearing officer in-
dicated that he considered the off-duty/on-the-clock dis-
tinction to be central to the case. He did this by conduct-
ing his own examination on the question. The hearing
officer ultimately agreed with the Employer that the em-
ployees were “on the clock,” but he then went on to find
that the instruction was discriminatory and overly broad
as directed to the “on the clock” employees. We need
not pass on whether that instruction was indeed discrimi-
natory and overly broad. Suffice it to say that this was
not the basis for Objection 7.
In sum, the Petitioner failed to put the Employer on
notice of the legal theory under which the consultant’s
instruction might be objectionable, thereby depriving the
Employer of the opportunity to introduce evidence that
might have rendered the instruction, under the totality of
the circumstances, unobjectionable.7 Not only did the

6 The Employer also presented evidence of its concerns for em-
ployee safety in order to defend its providing the security guard escort.
We reject our dissenting colleague’s speculation that, because this
evidence might also have provided legal justification for the instruction
at the meeting, its presentation shows that the Employer was on notice
that the instruction itself was at issue.
7 It is axiomatic, of course, that the mere presence in the record of
evidence relevant to an unstated accusation “does not mean the [de-
fending] party . . . had notice that the issue was being litigated.” Con-
air Corp. v. NLRB, 721 F.2d 1355, 1372 (D.C. Cir. 1983).
The dissent faults us for not explaining what sort of mitigating evi-
dence the Employer might have presented. That is the Employer’s task,
not ours. We will not speculate about possible defenses the Employer
might have put forward. The point is, Objection 7 did not give the clear
notice the Employer needed in order to have the opportunity to prepare
its defense.
The dissent also accuses us of excessive solicitude for the Em-
ployer’s due process rights. We disagree that our concern is excessive.
Due process is a fundamental right, which we are obligated to protect.
Our decision also accords with the settled principles that
“[r]epresentation elections are not lightly set aside” and that “the bur-
den of proof on [objecting] parties is a heavy one.” Safeway, Inc., 338
NLRB 525 (2002) (internal quotations omitted). Given these princi-
ples, it also follows that elections should not be set aside unless the
wording of the objection and the course of the litigation
fail to provide clear notice of the allegation, they also
affirmatively misled the Employer into defending against
a theory that was irrelevant to the true issues at stake.8
For these reasons, we overrule Objection 7. Because
all of the Petitioner’s objections have been either over-
ruled or withdrawn, we shall issue a certification of re-
sults of election.
CERTIFICATION OF RESULTS OF ELECTION
IT IS CERTIFIED that a majority of the valid ballots have
not been cast for United Food and Commercial Workers
Union, Local 99, and that it is not the exclusive represen-
tative of these bargaining unit employees.
MEMBER WALSH, dissenting.
The Board should sustain the Petitioner’s Objection 7,
which alleged that “[t]he Employer prevented off-duty
employees from talking to Union representatives.” My
colleagues overrule the objection on the ground that by
referring to “off-duty” rather than “on the clock” em-
ployees, the objection “differs materially” from the
grounds on which the hearing officer set aside the elec-
tion. They contend that this discrepancy prevented the
Employer from putting on a relevant defense and there-
fore deprived it of due process. The majority ignores the
fact that the Employer presented the relevant—albeit
wholly discredited—defense that its actions were taken
out of concern for employee safety. And my colleagues
offer no indication of anything in the record or the briefs
to suggest that the Employer had any other defense for
the facially coercive and discriminatory preelection con-
duct found by the hearing officer. Instead, the majority
denies employees their statutory right to a fair election
on the basis of a newly-fashioned “red herring” theory of
due process which rewards the Employer for its inability
to present an effective merits defense. Accordingly, I
dissent.
The hearing officer recommended sustaining Objection
7 on the basis of the following findings: (1) the Em-
ployer’s labor consultant told 15–20 employees, while
they were “on the clock” at a captive audience meeting
held at the Employer’s offices 2 weeks before the elec-
tion, that they were not to stop to talk to union represen-
tatives on the street outside; and (2) after this meeting the
Employer’s security guards escorted the employees as
they walked the several blocks from the offices back to

nonobjecting party has received clear notice to allow it to properly
defend its allegedly objectionable conduct. For the reasons explained
above, the Employer did not receive such notice here.
8 See Precision Products Group, 319 NLRB 640, 640–641 (1995)
(overruling election objection on due-process grounds where the non-
objecting party was affirmatively misled as to the relevant issues at
stake).
FACTOR SALES 749
the store where the employees worked. The hearing offi-
cer found that, by its instruction at the meeting, the Em-
ployer promulgated an overly broad no-talking rule and
that, by the security escort, the Employer enforced this
rule and engaged in surveillance of its employees’ pro-
tected concerted activity. He therefore recommended
that Objection 7 be sustained.
In its exceptions, the Employer argues that it was de-
prived of due process because Objection 7 referred to
objectionable conduct affecting “off-duty” employees,
whereas the hearing officer found conduct affecting em-
ployees who were “on the clock.” Even assuming that
the objectionable conduct found differed from the objec-
tionable conduct alleged, the Employer’s due-process
defense fails because it is well settled that in objections
cases, the hearing officer may consider issues that “do
not exactly coincide with the precise wording of the ob-
jections” if those issues are “reasonably encompassed
within the scope of” the objections set for hearing, Preci-
sion Products Group, 319 NLRB 640, 641 fn. 3 (1995),
and are fully litigated, e.g., Pacific Beach Hotel, 342
NLRB 372, 373 (2004). Here, both elements of this
standard are satisfied.
First, the hearing officer’s recommendation was based
on findings that were reasonably encompassed within the
scope of Objection 7. Both the instruction at the meeting
and the security escort were elements of a single course
of conduct whereby the Employer prevented its employ-
ees at the meeting from talking to union representa-
tives—precisely as alleged by Objection 7. The instruc-
tion constituted a verbal directive to the employees that
they were not to talk to union representatives; this direc-
tive was enforced by the security escort. The instruction
and escort together prevented employees from talking to
union representatives, just as the Petitioner alleged in
Objection 7.
The only way in which the objectionable conduct
found by the hearing officer even arguably varied from
that alleged in the objection is that the conduct affected
employees who were not expressly found to be “off
duty.” In this context, however, the question of whether
the employees were on or off duty is of no legal signifi-
cance. The Employer’s prevention of employee contact
with union representatives was objectionable because it
singled out union-related activity for prohibition. Mont-
gomery Ward, 269 NLRB 598, 599 (1984). The Em-
ployer’s conduct was impermissible whether or not the
affected employees were on or off duty. Id. The Em-
ployer’s decision to litigate the sole legally immaterial
fact alleged in Objection 7 cannot and does not alter the
reality that the Petitioner alleged that the Employer pre-
vented employees from talking to union representatives,
and the Petitioner proved that the Employer prevented
employees from talking to union representatives. Thus,
the factual circumstances found were not merely “rea-
sonably encompassed” within the scope of Objection 7’s
allegations, Precision Products, supra, they were materi-
ally identical to them.1
Second, the issue of the instruction at the meeting was
fully litigated. At the hearing, the Petitioner’s witnesses
testified on direct examination that they were instructed
at the meeting not to talk to union representatives. The
hearing officer signaled that he viewed the instruction at
the meeting as a relevant fact by questioning the Peti-
tioner’s witnesses regarding the number of employees
who were present at the meeting. Moreover, the Em-
ployer’s conduct at the hearing indicated that it under-
stood that its actions at the meeting were at issue: the
Employer made no objection to the relevance of the tes-
timony regarding the instruction; it sought to establish
that the employees at the meeting were being paid for
their time; and it offered evidence that it provided the
security escort because employees present at the meeting
opposed to union representation were concerned for their
safety.
The majority contends that to direct a second election
on the basis of the conduct found objectionable by the
hearing officer would violate the Employer’s right to due
process. The only specific ground my colleagues offer
for this contention is their newly-fashioned “red herring”
theory, i.e., that Objection 7’s characterization of the
employees at issue as “off duty” misled the Employer
into presenting the irrelevant defense that the employees
were actually “on the clock.”2 However, the Employer
has not made this argument in its exceptions brief or at
any other stage of these proceedings. Thus, the majority
appears to be more solicitous of the Employer’s due
process rights than is the Employer itself. Rather than

1 Although the “reasonably encompassed” standard of Precision
Products is applicable here, the particular facts of Precision Products
are clearly distinguishable from those of the instant case. In Precision
Products, the Board found that a nonobjecting party had been denied
due process because the hearing officer recommended setting aside an
election on the basis of conduct alleged in an objection that had been
specifically withdrawn prior to hearing. 319 NLRB at 641 fn. 3.
2 The majority observes in passing that the hearing officer addition-
ally found that the Employer engaged in surveillance, which, the major-
ity states, “was not alleged as an objection at all.” I disagree. The
objection did not use the term “surveillance,” but, as explained above,
the objection’s allegation that the Employer “prevented” employee-
union contact reasonably encompassed both the instruction at the meet-
ing and the security guard escort by which the Employer enforced that
instruction. Because, as the hearing officer found, the escort would
have prevented such contact by monitoring any attempts by the em-
ployees to talk to the union representatives on the street, the hearing
officer’s legal conclusion that the Employer thereby engaged in surveil-
lance conforms to the language of the objection.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD750
allow the Employer to suffer the usual consequences of
failing to present a sufficient defense on the merits, the
majority puts the onus on the Petitioner for “misleading”
the Employer. The majority cites no case, however, for
the proposition that the inclusion of an irrelevant inaccu-
racy in an objecting party’s allegations absolves the non-
objecting party from defending on the merits as to the
material facts alleged.
Unlike my colleagues, I would not allow the Employer
to avoid the consequences of its preelection misconduct
simply by pointing to a legally irrelevant inaccuracy in
the pleadings. The majority ignores the basic principle
that procedural due process requires that the defending
party be afforded reasonable notice of the charges
against it.3 The mere inclusion of the phrase “off duty”
in the language of Objection 7 was not so misleading as
to deprive the Employer of reasonable notice of the
grounds on which its conduct interfered with its employ-
ees’ representational rights. As explained above, Objec-
tion 7 alleged that employees were prevented from talk-
ing to union representatives, and that is precisely what
the evidence shows. Moreover, the Employer asserts that
the purported defect in the wording of Objection 7 de-
prived it of due process without giving any indication of
what alternative defenses it might have presented had the
objection lacked this defect, or what evidence it might
have used to support any such defense.4 The Employer’s

3 See, e.g., Mullane v. Central Hanover Bank & Trust Co., 339 U.S.
306, 314 (1950).
4 Compare J. K. Pulley Co., 338 NLRB 1152, 1153 (2003), where
the Board upheld a due process defense in a representation case when,
reticence on this point does not, however, deter my col-
leagues from inferring a fatal defect in the wording of
Objection 7 from the Employer’s flawed conduct of the
litigation. To uphold the Employer’s due process de-
fense in these circumstances rewards it for its unreason-
able and unexcused failure to present an effective merits
defense.
Finally, the majority’s assumption that an absence of
sufficient notice may be justly inferred from the absence
of a colorable defense is not only bad logic, it is simply
inapplicable to the circumstances of this case. The record
of the hearing shows that the Employer did in fact offer a
viable defense to its conduct at the meeting. The Em-
ployer put on witnesses who testified that the Employer
provided the security escort in order to protect from vio-
lence employees at the meeting who were opposed to
union representation, an argument that the Employer
renewed in its exceptions. The hearing officer discred-
ited this testimony, but, had it been credited, it might
have been one circumstance that could have helped jus-
tify the instruction at the meeting as well as the provision
of a security escort.
For all of the above reasons, I would reject the Em-
ployer’s “due process” defense and adopt the hearing
officer’s recommendation to sustain Objection 7.

in its exceptions brief, the Employer proffered the evidence that it could
have used to defend against the unalleged grounds for a ballot chal-
lenge that was sustained by the hearing officer.