Power-Seal Corp.

National Labor Relations Board - Board Decisions

Sep 24, 1985

276 N.L.R.B. 357 (N.L.R.B. 1985)

POWER-SEAL CORP.
Power-Seal Corporation and International Union,
United Automobile, Aerospace and Agricultural
Implement Workers of America (UAW). Case
7-CA-23034
24 September 1985 -
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND JOHANSEN
On 9 January 1985 Administrative Law Judge
George F. • McInerny issued the attached decision.
The General Counsel and the Respondent filed ex-
ceptions and supporting briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
-conclusions' and to adopt the recommended' Order
as modified.
1. We agree with the judge's conclusion that the
Respondent's discharge of employees Jackie, Mi-
chael, and Scott Pappas violated Section 8(a)(3)
and (1) of the Act. Under Wright Line,2 the Gener-
al Counsel must first make a prima facie showing
sufficient to support the inference that protected
conduct was a motivating factor in the employer's
decision to discharge the employees. The burden
then shifts to the employer to demonstrate that the
same action would have been taken even in the ab-
sence of the protected conduct.
The facts, as set forth more fully in the judge's
decision, are as follows. In 1983, George Vegella,
the Respondent's president and owner of 75 per-
cent of the Respondent's stock, and Tony Pappas,
the Respondent's vice president and owner of 25
percent of the Respondent's stock, had various dis-
agreements relating to Vegella's attempts to pur-
chase Pappas' stock. The alleged discriminatees
Jackie, Michael, and Scott Pappas are, respectively,
the wife and, sons of Tony Pappas. Tony Pappas
resigned from the. Respondent on 31 December
1983, but his wife and sons remained in the Re-
spondent's employ. _
i In the absence of exceptions, we adopt the judge's conclusions that
the Respondent violated Sec 8(a)(3) and (1) of the Act by discharging
employees Faye Richards and Debra Verougstraete on 13 January 1984
The Respondent has excepted to some of the judge's credibility find-
ings The Board's established policy is not to overrule an administrative
law judge's credibility resolutions unless the clear preponderance of all
the relevant evidence convinces us that they are incorrect Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd 188 F.2d 362 (3d Cir. 1951).
We have carefully examined the record and find no basis for reversing
the findings.
2 251 NLRB 1083 (1980), enfd. 662 F 2d 899 (1st Cir 1981), cert
denied 455 U S. 989 (1982), approved in NLRB v Transportation Manage-
ment Corp, 462 U S 393 (1983)
357
In December _ 1983, certain employees contacted
the Union and an organizing campaign commenced
at the Respondent's facility. Shortly thereafter, on
13 January 1984, the three Pappases were dis-
charged by Vegella. .
The judge found that, at the time of the dis-
charges, Vegella was aware of the union campaign.
Further, and critical to his analysis, the judge cred-
ited the following testimony. Plant engineer White-
foot testified that Vegella told him "that with all
the union talk around, he couldn't take a chance on
the Pappases." Michael Pappas testified that during
his "exit interview" Vegella told him "he couldn't
risk having us around with all this union business
going on." Based on the foregoing, the judge con-
cluded that the discharges "were motivated by Ve-'
gella's conviction that the Pappases and their
friends would choose to support the Union over
the Company." We agree that the evidence relied
on by the judge constituted a prima facie case that
protected conduct was a motivating factor in Ve-
gella's decision to discharge the Pappases.
On brief to the Board, and in its defense,3 the
Respondent maintains that the Pappases were dis-
charged because the Pappas family was involved in
a business that was in competition with the Re-
spondent. In accord with the judge, we find no
merit in the Respondent's defense.
In March 1984, Tony Pappas,- Michael Pappas,
John Whitefoot, and others started a company
called Precision Packing. This company is a com-
petitor of the Respondent. In its brief, the Re-
spondent contends that Precision Packing was
"conceived" in July 1983 and became a viable busi-
ness on 1 January 1984, the day after Tony Pappas
resigned from Power-Seal. The record evidence is
contrary to the Respondent's position. In July 1983
Tony Pappas was negotiating for the purchase of
Bland Co., a plastic bag company, which is not in
competition with the Respondent. The negotiations
for Bland Co. eventually "fell through." It was not
until March 1984-2 months after the discharge of
the three Pappases-that Tony and Michael Pappas
began Precision Packing, the competing company.
Because , among other things, the reason on which
the Respondent purportedly relied `for its decision
to discharge was not shown to have existed at the
3 At trial and before the judge, the Respondent , in attempting to rebut
the General Counsel's case , advanced various reasons for the discharge of
the Pappases ( I) because of a plant reorganization, (2) because of prob-
lems with Tony Pappas, (3) because it did not want information "leaked"
to Tony Pappas , and (4) because of problems in the shipping department
The judge rejected all of the Respondent's defenses On brief to the
Board , the Respondent, in defending its actions, relied on its arguments
concerning the familial relationship of Tony Pappas to the alleged discn-
minatees and the establishment by Tony Pappas of a business that is in
competition with the Respondent
276 NLRB No. 36
358 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
time in question, the Respondent has failed to dem-
onstrate that it would have taken the same action
in the absence of protected conduct.4
2. We disagree, in part, with the judge's remedy.
Contrary to the judge, we shall require that the,
Respondent offer reinstatement to .discriminatees
Jackie, Michael, and Scott Pappas. The Respond-
ent may, however, condition the reinstatement of
Michael - Pappas upon Michael Pappas and Tony
Pappas divesting themselves of all their interest in
Precision Packing. The Respondent may condition
the reinstatement of Jackie and Scott Pappas on the
divestiture by Tony Pappas of all his interest in
Precision Packing. The Respondent must pay back-
pay from the date of discharge until the date on
which Precision Packing began its business oper-
ations . Rex Printing Co., 227 NLRB 1144.(1977).
ORDER
The National Labor Relations Board adopts the
recommended Order of , the administrative law
judge as modified -below and orders that the Re-
spondent, Power-Seal Corporation, Warren, Michi-
gan, its officers, agents , successors, and assigns, .
shall take the action set forth in the Order as modi-_
fled.
1. Add the following phrase to paragraph 2(a):
"to which shall be added"interest." _
2. Insert the following as paragraphs 2(b), - (c),
(d), and reletter the subsequent paragraphs.
"(b) Offer to Michael Pappas immediate and full
reinstatement to his former position or, if that posi-
tion no longer exists, to a, substantially equivalent
position, without prejudice to his seniority or other
rights and privileges,-'provided, however, that Re-
spondent may, ,if -it so desires, condition such offer
of reinstatement upon Michael Pappas and . Tony
Pappas divesting themselves of all ownership inter-
ests in Precision Packing, or any other competing
enterprise.
"(c) Offer to Jackie and Scott Pappas immediate
and full- reinstatement to their former positions or,
if those positions no longer exist, to substantially
equivalent positions, without prejudice to their se-
niority -or other rights and privileges, provided,
however, that the Respondent may, if it so desires,
condition-such offer of reinstatement upon Tony
Pappas' divesting himself of all ownership, interests
in Precision Packing, or any other competing en-
terprise.
"(d) Make Michael,, Jackie, and Scott, Pappas
whole for any. loss they sustained as a result of the
discrimination " against them , with interest and in
4 The fact that - the three Pappases , subsequent to their discharge,
became involved in a competing business has an effect on the remedy,
but not on the violation found
the manner described in the Board's Decision and
Order, from the date of their unlawful discharge to
the date on which Precision Packing began its busi-
ness operations."
3. Substitute the attached notice for that of the
administrative law judge.
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 the National Labor Relations Act
and has ordered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice -
'To. act together for other mutual aid or pro-
tection
To choose notI to engage in any of these
protected concerted activities. -
Accordingly, we give you these assurances:
WE WILL.NOT discharge employees for engaging
in union activities. - -
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of rights guaranteed you by Section 7 of the
Act. .
WE WILL offer Faye Richards and Debra Ver-
ougstraete immediate and full reinstatement to their
former jobs or, if those" jobs are no longer avail-
able, to substantially equivalent positions, without
prejudice -to their seniority or other rights and
privileges, and make them whole for any loss of
earnings and other benefits suffered as a result of
our discriminating against them , with interest
thereon computed in accordance with current
Board policy. . -
WE WILL offer to Michael Pappas immediate and
full reinstatement to his former position or, if that
position no longer exists, to a substantially equiva-
lent position, without prejudice to his seniority or
other rights and privileges, provided, however,
that we may, if we so desire, condition such offer
of reinstatement upon Michael Pappas and Tony
Pappas divesting themselves of all ownership inter-
ests in Precision Packing, or any .other competing
enterprise. .
WE WILL offer to Jackie and Scott Pappas imme-
diate and full reinstatement to their former posi-
POWER-SEAL CORP
tions or, if those positions no longer exist, to sub-
stantially equivalent positions, without prejudice to
their seniority or other rights and privileges, pro-
vided, however that we may, if we so desire, con-
dition such offer of reinstatement upon Tony
Pappas divesting himself of all ownership interests
in Precision Packing, or any other competing en-
terprise. - -
WE WILL make Jackie, Michael, and Scott
Pappas whole for any loss they sustained as a result
of the discrimination against them, with interest
and in the manner described in the National Labor
Relations Board's Decision and Order, from the
date of their unlawful discharge to the date on
which Precision Packing began its business oper-
ations.
POWER-SEAL CORPORATION
Joseph P. Canfield, Esq, of Detroit, Michigan, for the
General Counsel.
Terrence K. Jolly, Esq. (Matheson, Bieneman, Parr, Scholer
& Ewald), of Bloomfield Hills, Michigan, for the Re-
spondent.
Mr. Tony Martini, of Warren, Michigan, for the Charg-
ing Party.
DECISION
GEORGE F . MCINERNY , Administrative Law Judge.
Based on a charge filed on January 19, 1984 , by Interna-
tional Union , United Automobile , Aerospace & Agricul-
tural Implement Workers of America (UAW) (the
Union), the Regional Director for Region 7 of the Na-
tional Labor Relations Board issued a complaint on Feb-
ruary 3, 1984 , alleging that Power -Seal Corporation (Re-
spondent or the Company ), had violated , and was con-
tinuing to violate, the National Labor Relations Act.
Thereafter the Respondent filed an answer in which it
denied the commission of any unfair labor practices.
Pursuant . to the direction of the Regional Director, a
hearing was held before me at Detroit , Michigan, on
July 25 and 26, 1984. At that hearing, all parties were
represented , and had the opportunity to present testimo-
ny and documentary evidence, to examine and cross-ex-
amine witnesses , and to argue orally . Following the close
of the hearing the Respondent and the General Counsel
filed briefs which have been carefully considered.
Based on the entire record, and especially upon. my
observations of the witnesses and their demeanor, I make
the following
FINDINGS OF FACT
1. JURISDICTION
The Company is a Michigan corporation having its
principal place of business in the city of Warren, Michi-
gan, where it is engaged in the manufacture and sale of
pneumatic and hydraulic seals and related products.
During the year ending December 31, 1983, the Compa-
ny manufactured and sold products valued in excess of
359
$1 million of which products valued in excess of $50,000
were shipped from the Company's plant directly to
points outside the State of Michigan The Company is
engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act.
II. THE -LABOR ORGANIZATION INVOLVED
The parties stipulated and agreed that the Union is a
labor organization within the meaning of Section 2(5) of
the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
The Company, Power-Seal Corporation, was founded
12 years before the hearing in this case by its current
president, George Vegella, and Tony Pappas, who
served as vice president until December 31, 1983. Both
Vegella and Pappas worked full time at the Company,
the former in the office, and the latter in the plant. The
corporation was and is privately held and, during the
time of the events which gave rise to this case, was
owned by Vegella and Pappas in respective shares of 75
percent for Vegella and 25 percent for Pappas.
In the summer of ' 1983, Pappas became interested in
purchasing a company identified in the record only as
"Bland" which was in the plastic bag, or garbage bag,
business.' In connection with these negotiations, Tony
Pappas asked Vegalla if he ,could use the services of the
Company's accountants and attorney. Vegella did not
like this idea , but told Pappas he could hire whatever at-
torneys or accountants he chose.
In July or August 1983 Vegella, his attorney, Freder-
ick K. Plumb, and Pappas sat down at a luncheon meet-
ing to discuss the acquisition of the bag business. Pappas
told the others that he was going to pledge his 25-per-
cent-stock interest as security to borrow the money to
buy the bag business . Vegella objected to this as it was
putting the stock of ,this closely held company at risk in
another venture when Pappas should be devoting full
time to the job at Power-Seal. Vegella indicated in his
testimony that he did not think that the purchase of the
bag business was a good idea.
Vegella suggested as an alternative that Pappas sell his
shares back to the corporation and offered to purchase
those shares for 20 percent of the value which the Com-
pany's accountant had put on the business This appar-
ently was not satisfactory, so Vegella and Pappas agreed
to wait for a new valuation to be 'made by the account-
ant, at which time they would continue to discuss the
sale.
In December, the accountant came up with a new
value for the business . In accordance with that, Vegella
had his lawyer, Plumb, draw up an agreement for the
sale of the stock from Pappas to the Company for
$225,000; of which 20 percent was to be paid in cash,
and the remaining 80 percent at 10-percent interest over
i According to the testimony of Michael Pappas (Tony's son), Jackie
Pappas (Tony's wife), and Vegella, the bag business was to be operated
initially by Michael, with Tony coming in at a later time Both Michael
and Jackie , along with another Pappas son , Scott, were employees in the
Company's shipping department.
360 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
a 5-year period. Vegella apparently thought they had a
deal, but in the event Pappas rejected the proposal and,
without making a counterproposal of his own, indicated
that he wanted more money. There had been some fur-
ther negotiations down to the time of the hearing, but
there had been no agreement up to that point in time.
In the meantime it was mutually determined that
Pappas would resign his position as vice president, and
would leave his full-time job at the Company December
31, 1983.
According to the testimony of employees Faye Rich-
ards and Debra Verougstraete, they were aware that ne-
gotiations were going on between Pappas and Vegella,
although they did not know the details, or even that the
negotiations concerned Pappas' stock interest. In mid-
December, Verougstraete, working in shipping with the
two Pappas sons, Michael and Scott, and Mrs. Jackie
Pappas, approached Richards, who, while she worked as
a punch-press operator at a different location in the plant
was friendly with Verougstraete and the Pappases. Ver-
ougstraete told Richards that since Tony Pappas was
leaving the employees needed to start a union. She asked
Richards if she knew how to organize a-union. Richards
replied that she knew about the UAW. She called the
UAW and was referred to International Representative
Tony Martini. They set up a meeting for December 21' at
the Union's regional office in Warren, Michigan.
Richards, Verougstraete, and an employee named Sue
Rapin attended the meeting on December 21 with Marti-
ni. Martini suggested they either hand out union-authori-
zation cards in the shop to obtain a showing of support,
or the Union would send' the cards out by mail to em-
ployees. It was decided that they would use the mailing
method, and the women at the meeting supplied Martini
with a company Christmas card list to use for the ad-
dresses.
Both Richards and Verougstraete agreed that there
was talk about the' Union with other employees both
before and after the December 21 meeting. Veroug-
straete indicated* further that she' had specifically men-
tioned the December 21 meeting to Michael Pappas on
the day before, and he advised her to be sure she knew
what she was doing. She also. told Scott Pappas that
some of the employees were going to talk with Martini,
but he did not reply.
Richards went on vacation the next day, December 22,
and returned to work on January 2, 1984. The union au-
thorization cards were - apparently mailed out early in
January because Richards testified that she received a
card in the mail on January 7, 1984, and she signed it
and mailed it back to the Union on that same day. Her
testimony on this is corroborated,by the'card itself, bear-,
Richards' signature and the date, and the envelope,
supplied by the Union, which bears the postmark of Jan-
uary 7, 1984.2 Both the card and the envelope were in-
troduced into evidence.
2 Contrary to the assertion in Respondent's brief, it is possible that the
copy of the exhibit which Respondent 's counsel received did not include
a copy of the envelope, but-I had the original , and the envelope was in-
cluded
On January 9, Richards testified that she was at work
at 6:45 in the morning when another employee, identified
in the record only as "Evelyn," asked Richards if she
had received a union card. Richards asked Evelyn what
she was talking about, and the latter "went into a rage"
about the Union, saying, among other things, that the
plant would close. Paul King, a foreman and admitted
company supervisor, as well as George Vegella's son-in-
law, was present and within earshot of this conversation.
Neither Evelyn nor King appeared as-witnesses to rebut
this testimony.
Debra Verougstraete had gone on vacation on Decem-
ber 27 and did not return until January 16. On that day
she signed a union-authorization card and sent it in to the
Union.
In the meantime, other events had intervened. Early in
January, Vegella continued to withhold about $70,000 in
accumulated profit sharing which was owed to Pappas.
Vegella had indicated that Pappas had asked that the
money be held by the Company until _ after the first of
the year for tax purposes but, as the month of January
wore on, Pappas engaged the services of a lawyer who
wrote Vegella on January 10, 1984, demanding payment
of the profit-sharing money "forthwith" and threatening
a lawsuit based on several issues. About the same, time,
according 'to Vegella, Jackie Pappas spoke to Mrs. Ve-
gella. Jackie explained that Tony really needed the
profit-sharing money to complete the transaction on the
bag business. Mrs. Vegella asked, her husband to give
Tony the money, and he agreed to do so. This all oc-
curred on January 13.
Also on January 13, according to the testimony of
John Whitefoot, he had a conversation with Vegella in
the office3 about 1 p.m. Vegella asked Whitefoot =if he
knew that the Union was organizing company employ-
ees. Whitefoot had heard about the organizing, but ad-
vised Vegella not to take any action about it because
there were not enough votes to get the Union in. Vegella
replied that he wished he could be as confident about
this as Whitefoot was, and the conversation ended. Whi-
tefoot later saw the office manager, Rose Ponke,4 re-
moving timecards from the rack and assumed the people
whose cards were being removed would be discharged.
Later that afternoon, Jackie Pappas was summoned
into Vegella's office. Vegella said to her that he had-
some good news and bad news. The good news was that
he was going to give Tony his profit-sharing money, but
the bad news was that he was going to discharge Jackie,
Michael, and Scott Pappas because with the union talk
so strong right then, "he couldn't take a chance with us
3 Whitefoot placed this conversation on January 14, but in all the cir-
cumstances it must have occurred on January 13
4 The General Counsel has alleged that Ponke was a supervisor and, at
a farewell party held on December 22 for Tony Pappas, made a remark
to employees , reported by Verougstraete , that if the Union came in, Ve-
gella would shut the Company down Michael Pappas, a witness for the
General Counsel , stated that he was somewhat "under the influence" at
the party, that he assumed Rose Ponke was similarly under the influence,
and that he thought everybody was just joking and having a good time
Under these circumstances , I cannot find Ponke 's alleged remarks to be a
threat to close the plant, or a violation of the law, even if the evidence
convinced me that she was in fact a supervisor within the meaning of the
Act
POWER-SEAL CORP
-being there." Jackie remonstrated with Vegella, but he
replied that "Michael had so much seniority there that
he couldn't take a chance with us there." When Jackie
protested that she herself did not have much seniority,
Vegella merely said that he was sorry and repeated his
statement that • he "couldn't take a chance" with the
Pappas family in the plant. When Jackie asked if she
could work until the end of the month, Vegella refused.
He then asked Jackie to inform her two stepsons of their
discharge and, with that, she left the office.
In the outer office, Jackie stopped to talk to Marge
Vegella, George's wife, and a secretary named Jeanette
Morris both of whom, according to Jackie, were upset.
Mrs. Vegella, indeed, was crying, and Jackie tried to
comfort her by telling her that it was "okay," and "don't
worry about it," before leaving the area.
Jackie then returned to the shipping department where
she told Michael and Scott that they were being dis-
charged. The testimony of Jackie, Scott, and Michael is
consistent that Jackie told her sons that "they were out
of there today." Scott then walked away, and Jackie'
then told Michael the reason Vegella had given her for
the actions. Michael in turn said that he was going to
talk to Vegella. Jackie did not disagree with this, but
warned him that he should be careful when talking to
Vegella because' Tony did not have the profit-sharing
money in his possession -yet, and she did not want to
"mess it up or cause'problems."
Michael then went to see Vegella in the latter's office.
Again, the conversation was ostensibly friendly, but Ve-
gella repeated that he just couldn't take the risk of
having the Pappas family around with "all this union
business going on ." Michael told Vegella that he was
making a big mistake, but he replied, as before, that he
could not "take the chance."
Faye Richards, who did not work in the shipping area,
found out about her discharge when she went to get her
timecard at the end, of the day on January 13 and found
it was missing . At that point Paul King, the shop fore-
man (and son-in-law of George Vegella), handed her an
envelope containing her final paycheck and a letter iden-
tical to those received by Jackie, Michael, and Scott
Pappas.5 The substance of these letters read as follows:
The reorganization of Power Seals manufacturing
processes and controls which have been undertaken
as of the first of the year, has brought the light to
many in-efficiencies in our methods. The need to re-
evaluate and re-classify many of our jobs has been
evident.
Therefore, at the end of your shift today, January
f3, 1984, your services will no longer be required
by Power Seal Corporation.
You may use 'Power Seal as a reference in the
future if you wish.
The letters were addressed to the' individual employees,
and all were signed by George Vegella. There was no
further incidents on January 13, and the discharged em-
5 Debra Verougstraete was sent an identical - letter of discharge but, be-.
cause she was on vacation , she did not actually receive it until she re-
turned to the Detroit area on January 16, 1984
361
ployees left the plant without any additional conversa-
tion.
The principal theme of Respondent's defense, as set
out by counsel during the hearing, and reiterated in his
posthearing brief, is that the whole case, as testified to by
the General Counsel's witnesses, is that "the Pappases
are only on this case for anticompetitive reasons to
knock Power-Seal out of business." This theory is based
on the fact that Tony Pappas, on leaving Power-Seal, es-
tablished a new company, Precision Packing, Inc.,
which, it is undenied, is in the same business as Power-
Seal, and intends to compete directly with Power-Seal
from a location just a short distance away.
The - undisputed evidence further shows that Michael
Pappas joined his father as a part owner of Precision
Packing, Inc. after his discharge by Respondent, and was
working at Precision Packing at the time of this hearing.
Michael testified that his brother Scott was also working,
at least on a part-time basis, at Precision at the time of
the hearing, but there is no indication of any participa-
tion by Jackie Pappas either as an employee, or in the
management of Precision.
In line with this theory of the case, Respondent chal-
lenges the objectivity and credibility of the General
Counsel' s witnesses , John Whitefoot, Faye Richards, and
Debra Verougstraete. These people are not members of
the Pappas family, but Richards and Verougstraete both
testified, willingly and without reservation, about their
close personal friendship with the Pappases. Indeed they
considered themselves as "family" to Tony Pappas.6
The other witness in this proceeding who was not re-
lated to the Pappas family was John Whitefoot, who
served as Respondent's plant engineer until Tony Pappas
left in December 1983, then assumed duties as plant man-
ager. Whitefoot testified that he was not happy with his
salary as plant manager , and in April or May he left Re-
spondent's employ, after refusing to come to a new
agreement on money which agreement also involved a
proposal to Whitefoot that he agree not to compete with
Respondent. Whitefoot then almost immediately turned
up as a partial owner of Precision. At the time he testi-
fied here, Whitefoot was still connected with Precision.7
6 Both of these witnesses testified that they did not work for Precision
at the time of this hearing. Respondent has, however , filed a posthearing
motion requesting that the hearing be reopened , and that counsel for Re-
spondent be permitted to question Richards and Verougstraete further on
the subject of their employment by Precision in order to establish "that
the witnesses were testifying to assist the competition and not to protect
any. rights under the Act." This motion is denied for the following rea-
sons: First there is no allegation in the motion itself that information on
the employment of these witnesses by Precision was unavailable, or could
not have been learned by Respondent at the time of the hearing, second
Respondent was not unduly or prejudicially restricted in his examination
or cross-examination of Richards or Verougstraete on the subject of their
employment , or any other subject, and, third , I have taken into consider-
ation the close "family" relationship between Richards and Verougstraete
and the Pappases in evaluating credibility Indeed , the almost familial
nature of this relationship required even more careful analysis than a case
where witnesses were merely employed by a competing business
' Respondent objected to Wbitefoot's testimony not only on the
ground that his departure from Power -Seal and his joining Precision
made him a part of the pro-Pappas conspiracy against Respondent, but on
the further ground that the Regional Office had never contacted White-
foot, or asked to interview him during the investigation of the case, at
Continued
362 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Looking at the entire record, there certainly are rea-
sons to suspect that many of the facts were manipulated
by Tony Pappas, or his family, Jackie, Michael, and
Scott, or others who considered themselves like family,
Richards and Verougstraete; or a business partner,
Whitefoot; with a view to discomfit, embarrass, or even
to ruin Vegella and his Company. As I have indicated at
the hearing, I could, and can, understand Respondent's
concern at these events, and its suspicion that the Union
was brought onto the scene as the result of the failure to
agree on the price for Tony Pappas' stock. However,
more than- concern, suspicion, or even understanding is
required to establish as fact a conspiracy by the Pappas
family, its friends, and associates, if not to damage Re-
spondent, at least to explain its motivations in the dis-
charges of the five employees on January 13. Respond-
ent's theory must, then, be supported by record evi-
dence, as well as by suspicion, or even logic. 8
The record evidence in this case tends not to support
Respondent's theory but rather supports the General
Counsel's allegations that the January 13 discharges were
effected by Respondent's perception of union activity
within the shop. I have reached this conclusion from my
evaluation of the testimony, and- my careful observation
of the witnesses who testified on the issues here.
I found the testimony of Faye Richards and Debra
Verougstraete to be candid and open, and whether they
felt that Tony Pappas was "family" to them, or whether
they went to work for Precision at some time after this
hearing, their story of their approach to the Union struck
me as entirely logical and credible. Moreover, the enve-
lope which Faye Richards used to return her card to the
Union's office, postmarked January 7, 1984, firmly cor-
roborates the testimony about the onset of union activity.
This evidence establishes that there was some activity
on behalf of the Union before January 13,-in which Re-
spondent and Verougstraete were engaged. That activity
commenced with a conversation between Richards and
Verougstraete in which the latter expressed her view
that they needed a union because Tony Pappas was leav-
ing. There is no indication in the reports of this conver-
sation that Tony was in any way responsible for the in-
terest of these employees in the Union. Rather, the evi-
dence shows that Verougstraete and Richards were con-
cerned about their own employment conditions after
Tony's departure,- and the approach to the Union was
made, not in furtherance of any scheme of Tony's, but of
their own interests.
As far as Jackie, Mike, and Scott Pappas were con-
cerned, there is no evidence that they engaged in any
union activity before they were discharged. Debra Ver-
times when counsel would have been entitled to be present In regard to
the latter argument , I note that Whitefoot was not named as a witness or
participant in any allegations of threats to employees , nor in connection
with the discharges of January 13 There would have been no reason,
then, for the Regional Office to have requested to interview him I see no
prejudice or lack of due process to Respondent in these circumstances
On the question of Whitefoot's bias, I have considered his testimony very
carefully, with just that question in my mind, in evaluating his credibility
8 Although there is a flaw in Respondent 's theory in that Tony Pappas
was not apt to attempt to bung Power -Seal to financial ruin since that
ruin would encompass the estimated $225,000 value of his own Power-
Seal stock.
ougstraete testified that she told Mike Pappas that she
was going to talk to representatives of the Union, but he
did not participate in that activity. Jackie Pappas also
stated that she had heard about the Union in "mid-De-
cember" from other employees. The Pappases, then, did
not engage in any union activities before their dis-
charges.
The credible evidence here shows, however, that
George Vegella was aware of the union activity in the
plant,, and his statements, as reported by Michael and
Jackie Pappas, and by John Whitefoot, all show that the
discharges of January 13 were motivated by Vegella's
conviction that the Pappases and their friends would
choose to support the Union over the Company.
In coming to this conclusion, I have carefully ob-
served the demeanor of these witnesses, Jackie Pappas,
Michael Pappas, John Whitefoot, and George Vegella.
All, of course, are vitally interested in the outcome of
this case. The existence of Precision and the connection
with its welfare of the Pappases and Whitefoot adds an
additional incentive to exaggerate or even fabricate a
story for my benefit. Thus I made every effort to take
these things into account in his- decision. In-so doing, I
found the demeanor of Jackie Pappas, Michael Pappas,
and John Whitefoot to be candid and open and worthy
of belief. Particularly, I credit their mutually corrobora-
tive testimony that Vegella had stated that, with all the
union talk around, he could not - take a chance on the
Pappases and this was the reason they were being dis-
charged. Vegella denied that he had said this, and denied
that union activity had anything to do with the dis-
charges. His' own testimony, however, was self-contra-
dictory and shifting, leading me to the conclusion that
the real reason for the discharges was -not contained in
the identical letters given or sent to all of those dis-
charged, that they were being let go due to a reorganiza-
tion'of Power-Seal's operations. Vegella's own testimony
is clear that there was no reorganization underway, or
even contemplated in January. Vegella admitted as
much, noting at one point that these letters were not
true, but avoiding the term "fictional" to describe them.
Vegella at another point claimed that the Pappases were
fired because of his problems with Tony and the stock,
then he shifted, maintaining that there was a lack of co-
ordination in shipping, an excessive amount of leave used
by employees, or there was a lot of horseplay, and "inci-
dents" of harassment and practical jokes directed against
supervisors and Vegella's family.
All of these reasons advanced by Vegella may or may
not have been true, but his entire testimony and his de-
meanor convinced me that the union activity in the plant
convinced him that he had to get rid of those who, in his
opinion, would exercise their rights to choose or reject
the Union in a manner contrary to what Vegella took to
be the best interests of Power-Seal. There is no indica-
tion here and no clear evidence that Vegella knew about
the specific activities of Richards, Verougstraete, or
anyone else. Therefore his actions in discharging the
Pappases, Richards, and Verougstraete were directed, as
he admitted to Jackie and Michael, at their right to exer-
cise the rights given them by law.
POWER-SEAL CORP.
I find, therefore, that the discharges of Jackie, Michael
and Scott Pappas, Faye Richards, and Debra Veroug-
straete violate Section 8(a)(1) and (3) of the Act.
IV. THE REMEDY
Having found that the Respondent has violated the
law,- I shall recommend that it cease and desist there-
from, and that it take the following affirmative action de-
signed to effectuate the policies of the Act. Having
found the Respondent violated Section 8(a)(1) and (3) of
the Act by discharging Faye Richards and Debra Ver-
ougstraete, I shall recommend that the Respondent offer
them full reinstatement to the positions from which they
were discharged, or, if such positions no longer exist, to
substantially equivalent positions, together with backpay
computed in accordance with F W. Woolworth Co., 90
NLRB 289 (1950), to which shall be added interest com-
puted in the manner prescribed in Florida Steel Corp.; 231
NLRB 651 (1977).9
I have also found that Respondent has discriminated
against Jackie, Michael, and Scott Pappas by discharging
them on January 13, 1982. Their situations with regard
to reinstatement differ somewhat from those of Richards
and Verougstraete, and less so among themselves. 110
Michael Pappas' position is the clearest. He testified,
and I believe, that he was employed by Precision Prod-
ucts Inc., and. that he was and is a part-owner of that
business. With respect to Michael, I shall recommend
that he not be offered reinstatement by Respondent
unless and until he divests himself of whatever owner-
ship he has in Precision, and severs his employment-,rela-
tionship with that company. I shall not in these circum-
stances recommend that any backpay be paid to Michael
Pappas since it appears that he went to work for Preci-
sion immediately on his discharge by Respondent.
With respect to Tony's wife Jackie, and Tony's son
Scott, who continues to-live ;in the family home, I will =
not recommend their reinstatement unless Tony Pappas
discontinues his connection with Precision, or under the.
same circumstances so long as Precision continues- in
direct competition with Power-Seal. Further, I will rec-
ommend no backpay for Jackie or Scott because of their
relationship with Tony Pappas. -See Rex Printing Co., 227
NLRB 1144 (1977); Marshall -Maintenance Corp., 145
NLRB-538 (1963). -
9 See Isis Plumbing Co, 138 NLRB 716 (1962).
10 I have considered the status of the Pappases before their discharge
and I find that , at the time they were discharged , they enjoyed no special
status which would leave them outside the protection of Sec 8 of the '
Act At the time of the discharges, Tony Pappas had left the employment
of Respondent and, while he remained a 25-percent stockholder , he was
engaged in negotiations for the sale of that stock In these circumstances,'
the familial relationship between Jackie, Michael, Scott, and Tony was
the reason why they were selected for discriminatory treatment . I cannot
find the existence here of the kind of special status noted by the Board in
Foam Rubber City #2 of Florida, 167 NLRB 623 See also Chernn Corp.
v. NLRB, 349 F 2d 101 (6th Cir 1968); NLRB Y. Caravelle Wood Prod-
ucts, 466 F 2d 675 (7th Cir. 1977)
363 :
CONCLUSIONS OF LAW
1. Power-Seal Corporation is an employer within the
meaning of Section 2(6) and (7) of the Act.
2. International Union, United Automobile, Aerospace
& Agricultural Implement Workers of America U.A.W.
is a labor organization within the meaning of Section
2(5) of the Act.
3. The Respondent Power-Seal Corporation has violat-
ed Section 8(a)(1) and (3) of the Act.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
edit
ORDER
The. Respondent, Power-Seal - Corporation, Warren,
Michigan,` its officers, agents , successors, and assigns,
shall
1. Cease and desist from
(a) Discharging its employees in order to discourage
their participation in the choice of a collective-bargain-
ing representative.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2.' Take the following affirmative action designed to of--'
fectuate the policies of the Act. -
(a) Offer Faye Richards and Debra Verougstraete im-
mediate and full reinstatement to their former jobs or, if
those jobs no longer exist, to substantially equivalent po-
sitions; without prejudice to their seniority or any other
rights or privileges previously enjoyed, and make them
whole-for any loss of earnings and other benefits suffered
as a result of the discrimination against them, in the
manner set forth,in the remedy section of the decision.
(b) Post at its Warren,- Michigan place of business
copies of the attached notice marked "Appendix.""
Copies of the notice, on forms provided by the Regional
Director for Region 7, after being signed by the Re-
spondent's authorized representative, shall be posted by
the Respondent immediately upon receipt and maintained
for 60 consecutive days iri conspicuous places including
all places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respond-
ent to ensure that the notices are not altered, defaced, or
covered byany other material.
(c) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re- '
spondent has taken to comply. '
i i 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 pur-
poses.
12 If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board." .