Mercury Industries, Inc.

National Labor Relations Board - Board Decisions

May 8, 1979

242 N.L.R.B. 90 (N.L.R.B. 1979)

DECISIONS OF' NATIONAL LABOR RELA'TIONS BOARD
Mercury Industries, Inc. and Drivers, Salesmen,
Warehousemen, Milk Processors, Cannery, Dairy
Employees and Helpers Union Local No. 695, affili-
ated with the International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers of
America, Petitioner. Case 30-RC 3271
May 8, 1979
DECISION AND DIRECTION OF THIRD
ELECTION
By CHAIRMAN FANNING AND MIMBERS PNI.I ()
AND TRUESDALE
Pursuant to authority granted it by the National
Labor Relations Board under Section 3(b) of the Na-
tional Labor Relations Act, as amended, a three-
member panel has considered the objections to an
election held on November 8. 1978,1 and the Hearing
Officer's Report on Objections with findings and rec-
ommendations regarding disposition of same. The
Board has reviewed the record in light of the excep-
tions and brieft, and hereby adopts the Hearing Offi-
cer's findings 2 and recommendations.3 the relevant
portions of which are attached hereto.
[Direction of Third Election and Excelsior footnote
omitted from publication.]
MEMBER PENE.I.(), dissenting:
I decline to pass on the issues the Employer raises
in its exceptions to the Hearing Officer's report. For
the reasons stated in my dissent in the Decision and
Direction of Second Election in this case, reported at
238 NLRB 896 (1978), I would have certified the Pe-
titioner ab initio and thereby given effect to the em-
ployees' clearly stated desire for union representation.
APPENDIX
Objection 9 alleges that a wage raise implemented by the
Employer in June was objectionable. The Employer admit-
ted implementing the raise indeed the fact of the raise was
stipulated to by the parties on the record but denied that
its implementation was intended to influence employee feel-
ings towards the Petitioner. Instead, the Employer defended
the raise on the basis of past practice and economic and
business justifications.
The salient facts concerning the raise are not in dispute.
The Employer started its business in early 1976, and by late
summer 1976, had hired its employee complement and had
I The election was conducted pursuant to a Stipulation for ('ertification
Upon Consent Election. The tally was 45 for, and 64 against, the Petitioner.
There were 4 challenged ballots, an insufficient number to affect the results
2 For the reasons set forth in the Hearing Officer's report, we agree the
election should be set aside on the basis of the Petitioner's Objection 9.
Having made this determination, we find it unnecessary to reach the issue
raised by the Petitioner's Objection 6.
In the absence of exceptions thereto, we adopt, pro forma, the Hearing
Officer's recommendations to overrule Objections 3, 4, 5, 7, 8, 10, and II
commenced production. At that time, pay raises for em-
ployees in the various job classifications were set forth in a
progression schedule, which provided for progression to the
top pay level after 6 months of employment. In May 1977,
the Employer modified its progression schedule to provide
for additional steps at the 12- and 18-month marks. Also,
for those employees in the higher-rated job classifications
where more lengthy progression steps prevailed, these steps
were condensed to allow for step increases at shorter time
intervals. According to Vice President Brown, these
changes had the effect of providing raises to approximately
40 percent of the work force immediately, and to approxi-
mately 90 percent of the employees within 90 days after the
progression changes were implemented. According to
Brown, these raises averaged 16 cents an hour, and ranged
as high as 25 cents an hour. In January, when the federal
minimum wage was changed, raising the minimum wage to
$2.65 an hour. the Employer raised the wages of those em-
ployees whose hourly rates were below that level to the
$2.65 rate. Apparently. the wages of' the other employees
were not adjusted at that time. Brown explained that when
the Employer was established as a contract manufacturer
for the main product line marketed by Merkle-Korff Indus-
tries of Illinois (both he and President Simms are. respec-
tively, vice president and president of Merkle-Korff)., its fis-
cal year and wage review policies were established along
the lines of those in existence at Merkle-Korff. Hence, the
Employer's fiscal year ends each January 31, wage reviews
are generally conducted each March and April, and wage
changes are generally implemented each May or June. Be-
cause of this procedure, Brown testified, the wage rates of
those employees who were not below the $2.65 level were
not adjusted at that time, pending the normal March-April
review. Brown said that when the review was conducted in
March and April, cognizance was taken of the fact that the
minimum wage level was scheduled to be raised again, to
$2.90, on January 1. 1979. Accordingly, said Brown, the
progression schedule was altered by the elimination of two
of the steps, and an across-the-board wage increase of 26
cents an hour was simultaneously implemented. The 26-
cent figure raised the base wage to $2.91 an hour, in antici-
pation of the then-upcoming minimum wage level rise. Peti-
tioner's witnesses confirmed their receiving a 26-cent-an-
hour wage increase in June. Finally, Brown testified that at
the time the Employer decided, and then implemented, the
June wage increase, the Employer's objections to the March
election were still pending. As such, he said he had no way
of knowing whether there would even be a second election,
and he denied that that wage increase was in any tied to the
Petitioner's campaign.
As should be clear from the above recitation, the Em-
ployer defends the June wage increase partly on the
grounds that it conformed to the Employer's established
practice of increasing wages at that time of year, and partly
on the justification that the rises in the minimum wage floor
necessitated a sizeable adjustment so the experience of giv-
ing only some of the employees raises in January could be
avoided at the same time in 1979. In support of its argu-
ment, the Employer cites. inter alia, Essex International,
Inc., 216 NLRB 575 (1975): Micro Measurements, an A-u-
tonomouls Division of 'ishal' Inlertechnology, Inc., 233
242 NLRB No. 24
90
MERCURY IND[)USRIES. IN('.
NLRB 76 (1977). and ttardv-Iterpolsheimer Diision of .1-
lied Stores orl'Michigan. Inc.. 173 NLRB 1109 (1968). Es.svt
is cited for the proposition that the employer is obliged to
conduct itself in granting wage increases as it would it the
petitioning union had not been in the picture. licro is cited
to justify such wage increases when they are founded on
viable economic or legal considerations, and Hardv is ad-
vanced to show that wage increases granted in anticipation
of increases in the federal minimum wage are permissible.
The Petitioner, to the contrary, places reliance on .L. R. B.
v. Exchange Parts Co.., 375 U.S. 405 (1964) to argue that the
granting of wage increases during the pendency of a union's
election petition is objectionable.
Close scrutiny of Hardy shows the employer. prior to its
implementation of its wage increases and before the advent
of the union, had advised its employees that a raise was in
the offing (although no notice regarding the structure of the
raise was revealed). When the raises were later imple-
mented, following the union's appearance on the scene.
they were large enough to encompass the scheduled mini-
mum wage increases for both that year and the next. More-
over, the employer there adjusted the wages of those em-
ployees not affected by the rise in the minimum wage floor
so as to preserve their wage positions relative to the new
minimum wage levels. No other factors were taken into
account by the employer when it formulated this wage in-
crease. The Board reached the same conclusion in American
Motors Inns d/h/a Rodewav Inn, 228 NLRB 1326 (1977). In
that case, the employer raised its employees' wages during
the pendency of a union petition because of an increase in
the minimum wage law, and also raised the wages of its
other employees proportionately to preserve their relative
wage levels. As the increase was forced upon the employer
by federal law, the Board held the wage raises not to be
objectionable.
The facts herein differ, however, from the above cases.
Here, the Employer has a very limited history of wage re-
views. A comparison of the raises granted in 1977 and 1978
show marked differences in the manner of the increases.
Thus, the 1977 adjustments were effected solely b changes
in the wage progression structure, with the result being that
employees received their raises only as their statLs within
the revised progression structure changed. Accordingly. the
1977 raises were not actually received by the emplosees at
the same time, but rather, they were received by various
employees over a 90-daL period. By contrast. the 1978 wage
increases were across-the-hoard increases in the usual
sense: all the employees received raises at the same time. As
changes in the progression structure were also made at this
time, it is curious that the Emplo\er, if it was trueIs adher-
ing to its past pattern. would not again on the re\ised pro-
gression structure to graduaill effectuate the increases.
Brown testified that the pending representation matter
was not in an was a factor when the increases \here de-
cided upon. Yet, President Simms personally announced
the increases to the employees in June, an unprecedented
method of announcement and a statement made when the
outcome of the then-pending objections to the March elec-
tion was every bit as much in doubt as it was when the
decision to grant the increases was made. Simms' act lends
a strong inference that the pendency of the representation
matter was of very great concern to the Employer after all.
In Micro M.easurementls, .supra. the Board based its holding
that that employer's wage increases were lawful partly on
its standard that the employer's legal duty was to grant the
increases in the same manner as it would have in the
union's absence. The eidence clearly shows that the wage
increases granted by this Employer were not granted in the
same manner as in the past. hence I cannot conlude that the
increases were granted in accordance with the tficro stan-
dard. FinallyN case law indicates that where an employer is
flaced with the possibility of a second election, an inference
is warranted that wage increases granted during the pen-
dency of objections to the first election were actually de-
signed to erode union support among its employees. Gabhriel
At. o.. Inc.. 201 NLRB 1015 (1973): .All-7ronics, Inc.,
175 NLRB 644 (1969). I conclude that the Employer's
granting of swage increases in June constituted objection-
able conduct.
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