Stanley Furniture Co.

National Labor Relations Board - Board Decisions

Jul 31, 1984

271 N.L.R.B. 702 (N.L.R.B. 1984)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Stanley Furniture Company and United Electrical,
Radio and Machine Workers of America (UE).
Case 5-CA-12451
31 July 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 2 February 1982 Administrative Law Judge
Wallace H. Nations issued the attached decision.
The Respondent filed exceptions and a supporting
brief, and the General Counsel filed cross-excep-
tions and a brief in support thereof and in response
to the Respondent's exceptions.
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 only to the extent consistent with this
Decision and Order.
The judge found that the Respondent violated
Section 8(a)(3) and (1) of the Act by discharging
employee Robert Koth for statements made by
Koth at a 10 March 19802 meeting of the Waynes-
boro, Virginia City Council and a 12 March bar-
gaining session between the Union and the Re-
spondent. The judge concluded that Koth's re-
marks were protected under the Act and that
under these circumstances the Respondent could
not lawfully discharge Koth pursuant to its pro-
gressive disciplinary system. We agree with the
judge's conclusion that Koth's statements at the 12
March bargaining session constituted protected ac-
' The General Counsel has excepted to some of the judge's credibility
findings. The Board's established policy is not to overrule an administra-
tive 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 re-
versing the findings.
Although not alleged in the complaint, the judge found that the Re-
spondent violated Sec. 8(a)(1) of the Act by Superintendent Mauzy's
statement concerning employee and union chief steward Koth to employ-
ee and union president Hewitt, "I think you're letting one man lead you
into a lot of serious trouble," following a lunchtime meeting of Hewitt,
Koth, and other employees which the judge found to be activity protect-
ed under the Act. Hewitt testified that this remark by Mauzy was made
immediately after Hewitt, Koth, and the other employees disregarded
Mauzy's instruction to adjourn the meeting and return to work when the
bell signaling the end of the lunch period sounded. Neither the General
Counsel nor the Respondent explored this aspect of the incident on the
record and the judge did not address Hewitt's testimony in reaching his
conclusion that Mauzy's statement was directed at the employees' pro-
tected activity and was violative of the Act. Under the circumstances, we
conclude that the issue was not fully litigated at the hearing and, accord-
ingly, we reverse the judge's finding of such a violation.
2 All dates are in 1980 unless otherwise indicated.
271 NLRB No. 112
tivity.3 However, for the reasons discussed below,
we find that the Respondent lawfully discharged
Koth because of his remarks before the Waynes-
boro City Council.
As found by the judge, the Respondent main-
tained a progressive disciplinary system under
which an employee was subject to discharge for re-
ceiving four warnings for minor disciplinary viola-
tions within a 12-month period. In applying this
system, a major disciplinary violation was consid-
ered to be the equivalent of two minor violations
and any combination of violations equaling four
minor violations was sufficient justification for dis-
charge.
The Respondent hired Koth 3 May 1979. In De-
cember 1979 Koth received a formal warning for
tardiness, a minor disciplinary violation. On 6 Feb-
ruary Koth received a formal warning for deliber-
ately falsifying his employment application with
the Respondent, a dischargeable offense which the
Respondent treated as a major disciplinary viola-
tion. There is no dispute that the Respondent legiti-
mately disciplined Koth for these infractions and
that thereafter the commission of another discipli-
nary violation by Koth would subject him to dis-
charge.
In January the Union and the Respondent began
negotiations for a new collective-bargaining agree-
ment. Koth participated in the negotiations as a
member of the Union's bargaining committee. As
found by the judge, these negotiations were pro-
tracted and difficult and, in early March, the
Union's executive board decided to bring pressure
on the Respondent by making a plea for assistance
to the Waynesboro City Council. Koth and union
vice president Calvin Johnson were selected by the
Union to address the city council. In a meeting of
the Union's executive board, Koth and Johnson
were each given a general topic to be discussed.
Koth was asked to cover the area of lost tax reve-
nues due to the low wages paid to the Respond-
ent's employees.
On 10 March Koth addressed the Waynesboro
City Council. In the course of his remarks Koth
discussed, among other matters, the low wages
paid by the Respondent and the employees' result-
ing dependence on the city's welfare and assistance
programs to make ends meet. Koth continued his
remarks, saying:
Also, there is the matter of the use of tax
money by Stanley Furniture-the number of
3 In so doing, we rely on Atfa Leisure, 251 NLRB 691 (1980), and
Bettcher Mfg. Corp., 76 NLRB 526 (1948), and find it unnecessary to pass
on his reliance on Korn Industries v. NLRB, 389 F.2d 117 (4th Cir. 1967),
and NLRB v Frontier Homes Corp., 371 F.2d 974 (8th Cir. 1967).
702
STANLEY FURNITURE CO.
times that the Company calls for the fire de-
partment to bring their equipment. People who
live around Stanley Furniture can bear witness
to the fact that the fire department is called in
there almost daily and nightly and we have,
members of the Union, looked into when the
last fire inspection was made and we get the
run-around. So again, this is use of tax money.
We are paying taxes out of one pocket and
that tax, I think, is being used, I think, more
than it should be used-is being used by the
Stanley Furniture [sic] for fire protection
when it could have a very thorough fire in-
spection and I would suggest with a represent-
ative of the Union to make sure that the haz-
ards are corrected so that this tax dollar was
protected.
As found by the judge, Koth's remarks "caused a
stir" in the Waynesboro area for several weeks
thereafter and resulted in a series of articles in the
local newspapers and several inquiries to the Re-
spondent from outsiders and other employers re-
garding Koth's statements and conditions in the
Respondent's plant.
Shortly after Koth made his remarks, the Re-
spondent contacted the Waynesboro fire chief and
requested information on the number of fire calls
made to the Respondent's plant. The fire chief re-
plied 12 March and indicated that there had been
six fire calls to the plant in the preceding 5-month
period. Of these calls only three involved actual
fires and these were minor fires in the sawdust han-
dling equipment of the Respondent's plant which
caused no property damage.
In the 12 March bargaining session mentioned
above, a representative of the Respondent asked
Koth if it were true that Koth attended the
Waynesboro City Council meeting and said that
the fire department was called to the Respondent's
plant once a day. Koth replied, "Sometimes 3 times
per day, at least once a day. Ask your neighbors."
On 14 March the Respondent issued a formal in-
cident report to Koth for his remarks before the
city council. Koth was charged with a major disci-
plinary violation for his failure to follow the Re-
spondent's Rule 18 which proscribed "making
false, vicious, or malicious statements about any
employee, the Company, or its products." This vio-
lation put Koth over the limit allowed by the Re-
spondent's progressive disciplinary system and he
was discharged the same day.
The judge acknowledged that Koth's statements
before the Waynesboro City Council were not di-
rectly related to the subjects about which the
Union and the Respondent were then bargaining. 4
Nevertheless, the judge concluded that, because
Koth's remarks were made in the context of an
effort to enhance the Union's bargaining position,
the Respondent could lawfully discharge Koth
only on showing that his statements were deliber-
ately and maliciously made, with knowledge of
their falsity or with reckless disregard for the truth.
The judge found that the Respondent had not met
its burden and had shown no more than that
Koth's statements were inaccurate. In reaching this
conclusion the judge noted that the Respondent
was itself uncertain as to the number of times the
fire department was called to the plant and found it
necessary to contact the fire chief for this informa-
tion. The judge also noted that Koth's remarks in
the 12 March bargaining session suggested that
Koth actually believed that his earlier statement to
the city council was true. The judge found there-
fore that Koth's remarks were made mistakenly
and not maliciously or recklessly and that the Re-
spondent's discipline of Koth was not justified
under the Act. We disagree.
Koth's remarks, as found by the judge, were
made in an effort to put public pressure on the Re-
spondent. Koth's statements concerning the fire
calls were only indirectly related to the subjects
about which the Union and the Respondent were
bargaining and clearly went beyond the scope of
the topic for discussion given Koth by the Union's
executive board. In addition, these statements of
purported fact were blatantly false and there is no
evidence that Koth made any attempt to determine
the actual number of fire calls to the Respondent's
plant before making his remarks. Further, the state-
ments made by Koth were of such a nature as to
be obviously damaging to the Respondent's reputa-
tion in the community and resulted in considerable
negative publicity for the Respondent for several
weeks after they were made. We are convinced
after examining all the relevant evidence and cir-
cumstances that Koth's remarks were made mali-
ciously, with deliberate intention to damage the
Respondent or with reckless disregard for the
truth. We reject the judge's conclusion that the Re-
spondent's request for information from the fire
chief and Koth's 12 March remark in the bargain-
ing session evidence the merely mistaken nature of
Koth's remarks. The record does not reveal that
the Respondent's request to the fire chief was other
than a prudent attempt to confirm information in
anticipation of disciplining Koth, and Koth's 12
4 At the time of Koth's statements the only issues remaining in the par-
ties' negotiations concerned wage rates, pension benefits, and a dues-with-
holding clause in their contract.
703
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
March statement may as easily be viewed as evi-
dence of Koth's tendency to disregard the truth as
evidence of his belief in the truth of his statements.
We conclude therefore that, even if Koth's initial
statements to the Waynesboro City Council were
protected, his remarks concerning the fire calls ex-
ceeded the bounds of protection of the Act and
that the Respondent's later discipline of Koth for
these remarks was lawful. Furthermore, it is clear
that the Respondent would have discharged Koth
under its progressive disciplinary system for his un-
protected statements before the city council, even
absent his other protected activity. Accordingly,
we conclude that the Respondent's discharge of
Koth was not violative of the Act. 5
ORDER
The National Labor Relations Board orders that
the Respondent, Stanley Furniture Company,
Waynesboro, Virginia, its officers, agents, succes-
sors, and assigns, shall
1. Cease and desist from
(a) Promulgating, maintaining, or enforcing an
impermissibly broad rule which proscribes employ-
ee activity protected by Section 7 of the National
Labor Relations Act.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Rescind the existing Rule 18 which pro-
scribes certain employee conduct.
(b) Post at its plant in Waynesboro, Virginia,
copies of the attached notice marked "Appendix." 6
Copies of the notice, on forms provided by the Re-
gional Director for Region 5, after being signed by
the Respondent's authorized representative, shall be
posted by the Respondent immediately upon re-
ceipt and maintained for 60 consecutive days in
conspicuous places including all places where no-
tices to employees are customarily posted. Reason-
able steps shall be taken by the Respondent to
ensure that the notices are not altered, defaced, or
covered by any other material.
i We agree with the judge's conclusion that the Respondent violated
Sec. 8(aXI) of the Act by maintaining its Rule 18. However, this finding
does not affect our determination with regard to the Respondent's dis-
charge of Koth pursuant to Rule 18, for there is no nexus between the
legal deficiency in the rule and the statements for which Koth was dis-
charged, which we have found to be malicious and within the scope of
conduct which lawfully could be proscribed by the Respondent.
6 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."
(c) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
MEMBER DENNIS, dissenting in part.
For the reasons set forth in the judge's decision,
I would find that the Respondent violated Section
8(a)(l) and (3) by discharging employee Robert
Koth. As the judge pointed out, the Respondent
has not met its burden of establishing that Koth's
remarks at the city council meeting were made ma-
liciously with a deliberate intention to damage the
Respondent or with reckless disregard for the
truth. At most, the Respondent has shown that
Koth's statements were inaccurate or exaggerated.
In all other respects I am in agreement with my
colleagues.
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.
WE WILL NOT promulgate, maintain, or enforce
an impermissibly broad proscribed activity rule
which interferes with employee rights protected by
Section 7 of the Act.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL rescind our present Rule 18.
STANLEY FURNITURE COMPANY
DECISION
STATEMENT OF THE CASE
WALLACE H. NATIONS, Administrative Law Judge.
On a charge filed on July 22, 1980, by United Electrical,
Radio, and Machine Workers of America (UE) (Union),
the complaint issued on September 12, 1980. The com-
plaint alleges that Stanley Furniture Company (Respond-
ent) has violated the Act because of statements made by
company officials in the presence of employees, which
statements constituted interference with and restraint and
coercion of the employees and by its discharge of Robert
Koth on March 14, 1980, for his membership in and ac-
tivities on behalf of the Union. The complaint further al-
leges that Respondent violated the Act by telling em-
ployees in the shaper operator classification that if they
did not drop their grievance with respect to their classifi-
cation their labor grade would be lowered, pay rate cut,
704
STANLEY FURNITURE CO.
and their job reclassified. By formal amendment issued
on June 17, 1981, it is alleged that the Respondent has
violated the Act by maintaining and enforcing a rule dis-
ciplining employees for "making false, vicious, or mali-
cious statements about any employee of the company or
its products." Respondent's answer and the motion to
dismiss denies these allegations. Respondent's motion to
dismiss the amendment to the original complaint is
denied as Respondent was given sufficient time to pre-
pare a defense to the allegation and the allegation is
closely tied to the ones made in the original complaint
relating to the discharge of employee Koth.
A hearing was held on August 5 and 6, 1981, at
Waynesboro, Virginia. Briefs were received from both
the General Counsel and Respondent about September
21, 1981. Respondent filed a reply brief and the General
Counsel filed a Motion to Strike in response thereto. The
reply brief is not allowed by the Board's rules and, ac-
cordingly, the motion to strike is granted.
On the entire record in this case and from my observa-
tion of the witnesses and their demeanor, I make the fol-
lowing
FINDINGS AND CONCLUSIONS
I. THE BUSINESS OF THE RESPONDENT
Respondent engages in the manufacture of furniture at
a factory located at Waynesboro, Virginia. Respondent
has annual gross revenues in excess of $250,000 and an-
nually purchases goods and supplies valued in excess of
S50,000 per year from points outside the State of Virgin-
ia. I find that Respondent is an employer within the
meaning of the Act and that it will effectuate the policies
of the Act to assert jurisdiction in this case.
II. THE LABOR ORGANIZATION INVOLVED
United Electrical, Radio, and Machine Workers of
America (UE), referred to as the Union, is a labor orga-
nization within the meaning of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Allegations Relating to Threatening Statements
Made By Company Officials to Employees and the
Discharge of Robert Koth
Robert D. Koth began his employment with Respond-
ent on May 3, 1979, as a general helper. At the conclu-
sion of his 60-day probationary period, he became an as-
sembler installing bracing blocks on furniture. He held
this position until his termination on March 14, 1980.
Also at the conclusion of his probationary period, Koth
became a member of Local 125 of the Union and pro-
gressed from shop steward to assistant chief steward by
February 1980. In that period of time, Koth was in-
volved in 13 grievances either as party or steward. In his
capacity as assistant chief steward Koth also sat on the
union executive board. The executive board functioned
in all matters involving Local 125 and served also as the
grievance committee, job evaluation committee, and ne-
gotiating committee. In this latter role as member of the
negotiating committee, Koth took part in the collective-
bargaining negotiations between Respondent and the
Union which began in January 1980.
Koth's employment proceeded without incident until
December 13, 1979, when he received a minor incident
report for tardiness. Under Respondent's rules four
formal warnings, minor in nature (within a 12-month
period), will result in discharge. In applying the warning
system, an incident that is classified as a major violation
will be considered the equivalent of two minor violations
and any combination of major and minor violations
equalling four minors will be sufficient justification for a
discharge.
In accordance with Respondent's normal procedures,
Koth's supervisor, L. C. Lambert Jr., signed the incident
report and administered the discipline. During the same
period of time, Lambert was shown to have issued inci-
dent reports to three other employees who violated a
tardiness rule.
In January 1980, Union Local President Sharon
Hewitt observed Koth not installing bracing blocks on
the furniture he was assembling at his station on the line.
Bracing blocks are vital to the structural integrity of the
furniture manufactured by Respondent and failure to in-
stall them results in a high incidence of future problems
with the furniture. Hewitt testified that she mentioned
this problem to Koth and was told by him that he was
not installing bracing blocks because he had run out of
such blocks and there were no more near his station. She
suggested that Koth bring his problems in this regard to
the attention of Supervisor Lambert. Hewitt testified that
she overheard Koth's comments with respect to obtain-
ing more blocks, to Lambert and another supervisor,
Charles Veney, as the two supervisors were near Hew-
itt's work station when Koth approached. She stated that
after telling Koth to return to his work station, Lambert
remarked to Veney, "That guy has to go. He just keeps
the place in a uproar all the time."
During February, Respondent's plant was the subject
of an OSHA inspection lasting 3 days. Two officials of
Respondent, Lou Spicer and an unnamed individual from
the Stanleytown facility of Respondent, accompanied the
OSHA inspector around the plant as well as Michael
Caudill, a union steward. As the inspection group
reached the cabinet room where Koth worked, he at-
tempted to speak with the inspector but was told by
Lambert to remain at his work station. Caudill testified
he overheard a conversation between Spicer and Lam-
bert in which Lambert said he would like to get rid of
him. Spicer further testified that Lambert did not identi-
fy about whom he was talking. Lambert denies making
any of the statements attributed to him.
In January Koth and Hewitt, along with chief steward
Randall Wade, called a meeting of employees during the
lunch hour in an attempt to solicit information concern-
ing the termination of another employee, Ricky Kline.
The meeting failed in its purpose and was dispersed by
Charles Mauzy, a superintendent of Respondent. After
the assembled employees returned to their respective
work stations, Mauzy followed Hewitt to her work sta-
tion and stated his displeasure with the entire matter.
Telling Hewitt that he wanted to warn her, Mauzy ob-
705
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
served, "I think you're letting one man lead you into a
lot of serious trouble." When Hewitt asked if Mauzy was
referring to Koth, Mauzy answered, "I think you know
who I mean."
It is contended that the remarks made by Lambert and
Mauzy constitute violations of Section 8(a)(l) of the Act
in that they tend to interfere with, restrain, or coerce
employees in the exercise of their rights guaranteed
under Section 7 of the Act. The General Counsel also
urges that if such violations do not constitute independ-
ent violations of Section 8(a)(l) they do, at least, indicate
an animosity toward employee Koth because of his union
activities.
I cannot find that the statements attributed to Lambert
constitute a violation of the Act. Lambert was the presi-
dent of UE Local 125 prior to becoming a supervisor.
He vigorously denies ever saying anything about Koth
being a troublemaker or that he kept things in an uproar
or that he would have to go. Other supervisors and rank-
and-file employees of the Company testified that they
had never heard Lambert make any such statements
about Koth. Based on the demeanor and testimony of
Lambert, the evidence introduced in the record as to the
physical layout of the plant, which bears on Hewitt's
ability to hear remarks made by Lambert, as well as the
testimony noted above of the other personnel in the
plant, I believe that Hewitt is mistaken and that Lambert
is correct in his denial. With respect to the remark sup-
posedly made about Koth on the day of the OSHA in-
spection, there is no showing whether the remark, if
made, was about Koth or about the OSHA inspector.
Again, I credit Lambert's denial that he ever made these
statements about Koth.
The remarks attributed to Supervisor Mauzy are un-
contradicted in the record, but again one must infer that
they are directed against Koth. I find that these remarks
do constitute a unfair labor practice, though one not re-
lated to the other alleged unfair labor practices at issue
herein. The employees in the delegation seeking informa-
tion about the firing of a fellow employee were engaged
in a concerted activity protected by Section 7 of the
Act. To threaten employees for engaging in such an ac-
tivity is improper. Respondent offered no explanation of
the actions of Supervisor Mauzy and thus it must be as-
sumed that Hewitt's recital of such remarks is accurate,
leading one to the conclusion that they were intended to
be a threat.
On February 6, 1980, a major incident report was filed
against Koth when Respondent discovered that he had
deliberately falsified his job application. Rule I under
"Intolerable Violations" proscribes "deliberate falsifica-
tion in the application for employment." The record
shows, and Koth admitted, that he deliberately falsified
his application by not identifying the Stewart Warner
Company in Chicago as his immediate prior employer.
Instead, Koth listed what was actually a part-time job
with another company. It is Koth's position that he
feared that he would not secure employment with Re-
spondent if he gave the true name of his previous em-
ployer and his salary at that place of employment. His
previous salary was substantially more than that offered
by Stanley.
Although this falsification clearly was deliberate, Stan-
ley took into account Koth's tenure and, instead of dis-
charging him as it had the right to do for this type of
violation, issued a major violation (two disciplinary
points).
As noted above, beginning in January, negotiations be-
tween Respondent and the Union were taking place.
These negotiations were protracted, lasting through the
period of Koth's discharge, and were evidently very dif-
ficult. The executive board of Local 125 determined var-
ious tactics to be used in an effort to bring pressure to
bear on Respondent's bargaining position. These includ-
ed lunchtime meetings, marches, and picketing outside
Respondent's plant. In early March, the executive board
decided to address a regular meeting of the Waynesboro
City Council to bring additional pressure to bear on Re-
spondent. The board generally discussed and identified
topics to be addressed and determined that Koth and
Calvin Johnson, the union vice president, both Waynes-
boro taxpayers, should speak at the meeting. Johnson
was to inquire as to any guidelines city had on wages to
assist the Union in its negotiations. Koth was to cover
the area of tax waste due to low wages paid to Respond-
ent's employees. Aside from the general discussion and
identification of topics, the executive board provided no
speeches or notes to either speaker. In the course of his
remarks, Koth addressed the drain on the tax revenues
and resources of Waynesboro citing examples such as the
need for welfare assistance as well as more direct refer-
ence to the cost of fee services provided to Respondent's
plant. Near the end of his presentation, evidently to im-
press the City Council about tax waste at the Stanley
Waynesboro facility, Koth publicly stated that "People
who live around Stanley Furniture can bear witness to
the fact that the fire department is called in there almost
daily and nightly . . ." A complete text of Koth's re-
marks in this regard follows:
Also there is the matter of the use of tax money
by Stanley Furniture-the number of times that the
Company calls for the fire department to bring their
equipment. People who live around Stanley Furni-
ture can bear witness to the fact that the fire depart-
ment is called in there almost daily and nightly and
we have, members of the Union, looked into when
the last fire inspection was made and we get the
run-around, so again, this is use of tax money. We
are paying taxes out of one pocket and that tax, I
think, is being used, I think, more than it shoud be
used-is being used by the Stanley Furniture for
fire protection when it could have a very thorough
fire inspection and I would suggest with a repre-
sentative of the Union to make sure that the hazards
are corrected so that this tax dollar is protected ...
[NOTE: The . . . indicate portion of the tape that
was not clearly audible.]
Rupert Thompson, Stanley's area vice president, im-
mediately contacted the Waynesboro fire chief in order
to determine precisely how many fire calls had been
made to the plant. Two days later the fire chief respond-
ed by pointing out that there had been only six fire calls
706
STANLEY FURNITURE CO.
to the plant in the preceding 5 months. Of those six calls,
the fire department was present only as a precautionary
measure on two occasions and all the fires were of minor
nature with no property damage. Koth's statement to the
City Council caused a stir in the Waynesboro area.
There were a series of articles in the local newspapers
and both outsiders and employers got in touch with
Thompson to inquire about conditions at the plant and to
question what Koth had said. The matter stayed in the
public eye for several weeks thereafter.
Two days later on March 12 the next bargaining ses-
sion occurred. In the course of this rather heated session,
a discussion of wages and wage related benefits took
place between Koth, bargaining on behalf of the Union,
and company representatives on behalf of the Company.
Based on the minutes of this meeting, which are relied
on by the parties as being reasonably accurate, Koth
urged that because of the low wage scale in the Waynes-
boro plant, employee morale was very poor. He further
argued that the employees need a wage increase in order
to have an incentive to raise production. One of the
company officials, evidently to make the point that em-
ployment at the plant was still attractive even at the ex-
isting wage scale, pointedly directed to Koth a comment
to the effect that Respondent had definite proof that
people had lied on their application in order to get the
job at the plant. This was obviously a personal reference
to Koth's falsification of his application form for which
he had received a major disciplinary report. The official
then mentioned production and quality at the plant to
which Koth replied, "Yes, I enjoy the fact that I leave a
few blocks off. You speed up the line, I can't do my
job." The company official then called the statement sab-
otage and shortly thereafter the negotiating session
ended.
On March 14, 1980, Koth was given two incident re-
ports, one for the remarks at the City Council meeting
and one for the comment at the bargaining session noted
above. As both reports were considered "major" pursu-
ant to Respondent's policy, Koth was informed that he
was fired. Either of the major violations, the city council
statement or the bargaining table statement, put Koth
over the limit at which the Company discharges its em-
ployees.
It is Respondent's position that its reaction to Koth's
bargaining table statement is based primarily on maintain-
ing its image as a high quality furniture manufacturer.
Stanley's success in the highly competitive market place
comes from making excellent furniture. Its marketing and
advertising efforts are all based on the fact that each
Stanley product is of high quality. In order to insure
quality day in and day out, Stanley has instilled in all of
its employees that each of them is, in effect, a quality
control inspector. Respondent contends that Koth's bar-
gaining session statement undermines Stanley's quality
control efforts, citing an increase in customer complaints
during the period in which Koth said he was not install-
ing blocks.
Although Koth's statement at the City Council meet-
ing is not directly related to the subjects about which
bargaining was taking place between the Company and
the Union, it was made in the context of an effort to en-
hance the Union's position in the negotiations. In this
context, it is not enough for Respondent to show that the
reference to the fire department calls was merely false.
Its burden is to establish that the statement was mali-
ciously and deliberately made with knowledge of the fal-
sity or at least reckless disregard therefor. I agree with
the position of the General Counsel that Respondent's
evidence of falsity indicates, at most, only an inaccuracy.
Respondent evidently was not certain as to the number
of times the fire department had called upon the plant, as
it found it necessary to check with the fire department
for this information. In fact, page 4 of the minutes of the
bargaining session at which Koth made the alleged "sab-
otage" statement, strongly indicates that Koth still be-
lieved that his statement was true some 2 days after he
made it. At that point in the bargaining session Koth was
asked, "Is it true that you attended the City Council
meeting and made the comment that the fire department
was called to our plant once per day?" Koth responded,
"Sometimes three times per day, at least once a day. Ask
your neighbors."
I find from the evidence that Koth's statement was
made mistakenly and not maliciously or recklessly. Thus,
I find that Respondent's issuance of a major disciplinary
violation to Koth for the City Council statement was not
lawfully justified. Tyler Business Services, 256 NLRB 567
(1981); American Hospital Assn., 230 NLRB 54 (1977);
Walls Mfg. Co., 137 NLRB 1317, 1319 (1962); The Marlin
Firearms Co., 116 NLRB 1834 (1956).
With respect to the so-called sabotage statement made
at the bargaining session of March 12, I believe that Re-
spondent has also failed to legally justify its issuance of a
major disciplinary violation to Koth. The Board has long
recognized that bargaining must be a frank exchange of
views and participants must be able to speak freely and
openly. Consequently, the Board and the courts have ex-
tended a high degree of privilege to statements made in
the heat of bargaining sessions. I find it highly significant
that Koth was issued the disciplinary report for making
the statement he did, and not for leaving blocks off the
Company's furniture in the manufacturing process. On
the one occasion, when it came to the attention of Re-
spondent's supervisor, Lambert, that Koth was not in-
stalling blocks as required by the Company's procedures,
Koth was not disciplined in any manner. If leaving
blocks off of furniture was as serious a violation of the
Company's rules as Respondent asserted after the March
12 negotiating session, one must assume that Koth would
have been severely disciplined or even terminated on the
date when it came to the knowledge of management that
he was violating company procedures in this regard.
Further, I cannot find that the statements made by
Koth at the bargaining table on March 12 could, in any
manner, damage Respondent's public reputation or its
image as a manufacturer of quality furniture. The state-
ment was made in a closed session and not given public
currency until this proceeding was initiated. Taken in
context of the bargaining session, Koth's statement,
though misguided, is at least an understandable response
to the argument taking place at the time of its utterence.
707
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Accordingly, for the reasons stated, I find that Koth's
remarks made at the bargaining session of March 12, are
privileged and cannot lawfully form the basis for a disci-
plinary action by Respondent. Korn Industries v. NLRB,
389 F.2d 117 (4th Cir. 1967); NLRB v. Frontier Homes
Corp., 371 F.2d 974 (8th Cir. 1967).
Having found that Koth's statement made at the City
Council meeting on March 10, 1980, and his statement
made at the bargaining session of March 12 cannot law-
fully provide the basis for the Company's discharge of
Koth, I find that Respondent has engaged in an unfair
labor practice and has violated Section 8(a)(3) of the
Act.
B. Allegations Relating to the Unlawfulness Per Se of
Respondent's Rule 18
Respondent's rule 18 under its "Major Violations" cat-
egory proscribes: "making false, vicious, or malicious
statements about any employee, the Company or its
products." The General Counsel submits that the rule is
invalid in two regards. On its face it makes no attempt to
define the area within which it seeks to regulate employ-
ee speech and further, by its own construction, the rule
does not distinguish between the false, the vicious, and
the malicious, thereby including within the reach of its
prohibition the merely false statement. The Board rule
enforced by the courts is that within the area of concert-
ed activity, false, and inaccurate employee statements are
protected, so long as they are not malicious. American
Cast Iron Pipe Co., 234 NLRB 1126, and cases cited
therein. In American Cast Iron, the Board found the em-
ployer's rule similar to rule 18 herein,' to be per se in-
valid, adopting without modification the decision of the
administrative law judge. In enforcing the Board's
Order, the Eighth Circuit stated,2 "We agree with the
Board that a major flaw in both rules is that they pro-
scribe 'false' as well as 'vicious or malicious' statements."
Punishing employees for distributing merely "false"
statements fails to define the area of permissible conduct
in a manner clear to employees and thus causes employ-
ees to refrain from engaging in protected activity.
If disloyalty is the problem the petitioner seeks to ad-
dress, it must do so directly rather than through an im-
permissibly broad rule.
I find that Respondent's rule is impermissibly broad,
and that it constitutes a per se violation of Section 8(a)(1)
of the Act, and must either be rescinded or rewritten to
conform to Board policy.
C. Allegations Relating to Downgrading the Pay
Grade of Shaper "A " Operator Employees
The contract between the Union and the Respondent
makes provisions for a joint committee to reevaluate jobs
and their pay scales. In the instant controversy, the
Union did not make use of these provisions but instead
filed a grievance in early 1980, in which it was alleged
The rule therein read, "making false, vicious, or malicious verbal
statements concerning any employee, the Company, or its products and
methods of manufacturing."
2 American Cast Iron Pipe Co. v. NLRB, 600 F.2d 132, 136 (8th Cir.
1979).
that the Shaper "A" jobs should carry a higher pay
grade. The grievance proceeded through the first and
second steps. Incident to the third step of this process,
Rupert Thompson and others in management met twice
with union steward Phil Allen and the shaper operators.
The first of such meetings occurred on March 6 and in-
cluded the grievance committee and two or three of the
shaper operators who would be involved in a grade
change. At this meeting, utilizing contractually estab-
lished criteria, the committee went through a test exer-
cise in reevaluating the job in question. The result of this
exercise was that the job would drop from a grade 10 to
a grade 8.
After the March 6 meeting, some of the shaper opera-
tors inquired of Thompson and one of his foreman as to
what was happening with the proposed job reclassifica-
tion. In response to these questions, Thompson got to-
gether certain of his management team, all the shaper op-
erators, and the union steward Phil Allen. According to
Thompson, whose testimony I find as being completely
credible, he asked the shaper operators to make up their
minds whether they wanted their job reclassified or not.
He further pointed out that the job had a chance of
going up in classification or going down in classification
and then informed employees that management was
going to leave the room and when the shaper operators
had made up their minds let him know of their decision.
Shortly thereafter, the union steward advised him that
the shaper operators did not want to reevaluate their job.
The next morning, however, Thompson was informed
that there had been a change in position and that the job
should be reevaluated. As a result of the reevaluation,
the job classification was reduced from grade 10 to grade
9. Also, according to the contract between the Union
and the Respondent, those employees presently em-
ployed as shaper operators were "red circled." Their pay
continued at the grade 10 level and no employees' pay
was cut as a result of the reevaluation.
There is no evidence in the record that the Union,
through its steward Phil Allen or otherwise, complained
about the meeting of management with Allen and the
entire shaper-operator crew.
Based on the evidence adduced in this record, I cannot
find that the meeting was an attempt to bypass the
Union, or to intimidate, or to threaten the affected em-
ployee. If anything, in light of the "exercise" in reevalua-
tion which occurred at the third-step grievance meeting,
it was merely an attempt to let all the affected employees
know that a real possibility existed that the ultimate
result of the grievance would be a reduction in the job
classification. I find that the Respondent did not violate
Section 8(a)(1) or (5) of the Act by virtue of its meeting
with the shaper operators or by its actions in regard to
the reclassification of the shaper operators' job.
THE REMEDY
As I have found that Respondent did engage in and is
engaging in unfair labor practices within the meaning of
Section 8(a)(l) of the Act by the threat of its supervisor
Mauzy in response to a protected concerted activity on
the part of certain of Respondent's employees, I shall
708
STANLEY FURNITURE CO.
recommend that it cease and desist therefrom. Addition-
ally, having found that Respondent has engaged in an
unfair labor practice by promulgating and enforcing an
impermissably broad proscribed activity rule, I shall rec-
ommend that the rule be rescinded.
I have found that by discharging employee Robert
Koth because of his protected activity during negotia-
tions between the Union and Respondent, Respondent
did engage in and is engagirig in unfair labor practices
within the meaning of Section 8(a)(1) and (3) of the Act.
I recommend that Respondent be required to offer
Robert Koth immediate and full reinstatement to his
former position, or if that job no longer exists, to a sub-
stantially equivalent position, without prejudice to his se-
niority or other rights and privileges and to make him
whole for any loss he may have suffered by reason of the
discrimination against him. All backpay due under the
terms of this order shall be computed, with interest, in
the manner prescribed in F. W. Woolworth Co., 90 NLRB
289 (1950), and Florida Steel Corp., 231 NLRB 651
(1977).3
On the basis of the above findings of fact and the
entire record in this case, I make the following
3 See generally Isis Plumbing d Heating Co., 138 NLRB 716 (1962).
CONCLUSIONS OF LAW
1. Stanley Furniture Company is an employer engaged
in commerce within the meaning of Section 2(5), (6), and
(7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. By the act of Supervisor Mauzy threatening certain
of Respondent's employees for engaging in protected
concerted activity, Respondent has engaged in unfair
labor practices affecting commerce within the meaning
of Sections 8(aXl) and 2(6) of the Act.
4. By promulgating and enforcing an impermissibly
broad proscribed activity rule, Respondent has engaged
in an unfair labor practice affecting commerce within the
meaning of Sections 8(a)(1) and 2(6) of the Act.
5. By discharging its employee Robert Koth, one of
the Union's bargaining agents in negotiations between
Respondent and the Union, for Koth's statements in the
course of negotiations, Respondent has engaged in and is
engaging in unfair labor practices within the meaning of
Sections 8(a)(1) and (3) and 2(6) of the Act.
6. Respondent did not engage in unfair labor practices
within the meaning of Section 8(a)(1) or (5) of the Act
by the statements and actions of its supervisor Lambert
nor by its action in regard to the reclassification of the
shaper operators position.
[Recommended Order omitted from publication.]
709