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04/25/79 Service Employees v. National Labor

April 25, 1979







Before WRIGHT, Chief Judge, MacKINNON, Circuit Judge, and HOFFMAN,* Senior District Judge.


Nos. 77-1165, 77-1630 1979.CDC.78

Rehearing Denied May 31, 1979.

Petitions for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.



Because "working time is for work," *fn1 we are here concerned with the issue of an employer discharging thirteen employees (essentially the entire production force) for leaving work during regular work hours, contrary to the express orders of the employer, for the purpose of attending En masse a representation hearing scheduled before the National Labor Relations Board (the Board), even though the employer had volunteered to permit one employee to attend the hearing in a representative capacity.

Notwithstanding the findings and conclusions of the administrative law judge that the employer acted lawfully in discharging the thirteen employees for acting contrary to the employer's orders, and with members Penello and Walther dissenting, the three-panel majority consisting of chairperson Murphy and members Fanning and Jenkins effectively reversed the ALJ by holding that the employer violated Section 8(a)(1) and (4) of the National Labor Relations Board Act, 29 U.S.C. § 158(a)(1) and (4),2 in discharging the employees. The Board also directed the issuance of a bargaining order to the employer for a violation of § 8(a)(5) of the Act "by refusing to recognize and bargain with the Union on or about August 1, 1974 (and thereafter)."3

The matter originated in San Francisco, California, where the employer conducts its place of business and the employees presumably reside. Following the filing of the charge against the employer on August 9, 1974, two amendments were permitted and the parties were at issue on January 24, 1975. Hearings before the ALJ were conducted on February 6-7, 1975. On April 3, 1975 the ALJ rendered his decision. The union, the employer and the Board's general counsel each filed exceptions. The Board, holding the case until January 17, 1977, finally issued its order. The union, in No. 77-1165, sought review of a portion of the order in this court under § 10(f) of the Act, 29 U.S.C. § 160(f).4 In No. 77-1630, the employer filed a petition to review with the United States Court of Appeals for the Ninth Circuit, and the Board filed a cross-application to enforce the Board's order of January 17, 1977. The United States Court of Appeals for the Ninth Circuit transferred the employer's petition to this court pursuant to 28 U.S.C. § 2112(a). By order dated June 27, 1977 in this court the two cases were consolidated for all purposes, with the employer being granted leave to intervene in No. 77-1165, and the union being accorded the same right in No. 77-1630.

There is no material dispute as to the facts although, by reason of the language used in the majority and dissenting opinions, it would appear that there were varying inferences to be drawn from the evidence without specific findings as to credibility, thus making it necessary to elaborate in detail the pertinent evidence.

For reasons stated herein, we disagree with the Board majority, substantially agreeing with the dissenting opinion, and grant the petition to review, set aside the order, and deny enforcement. I

Petitioner, E. H., Limited d/b/a Earringhouse Imports, is a California corporation with its principal place of business in San Francisco. It is engaged in the wholesale and retail sale of earrings and other custom jewelry items. It conducts its wholesale business from a warehouse where goods are received, packaged, and prepared for sale to stores.

Nancy Pellerito, the petitioner's vice-president and treasurer, maintains an office in the warehouse where the thirteen affected employees were engaged in production work. The bargaining unit is defined as all warehouse employees at the San Francisco distribution center, excluding office (clerical), guards and supervisors as defined by the Act.

During the month of July, 1974, Pellerito was on vacation and did not return to work until July 29. By letter dated July 11, received by petitioner on July 15, Local 250 demanded recognition as the bargaining agent for the warehouse employees in the described unit.5 On the same day the letter was received (July 15), the union filed a representation petition with the Board for an election. The Board scheduled a hearing for August 8, 1974 in San Francisco.6

The letter to Pellerito was brought to the attention of petitioner's president, Ben Lloyd, and its vice-president and secretary, Margaret Mahoma, neither of whom maintains an office at the warehouse nor takes any active part in the operation of the warehouse. On July 16, upon noting the contents of the letter, Lloyd telephoned the union and arranged a meeting for the following day, July 17.7 At that meeting the union again stated its claim of majority representation and suggested several methods for third-party resolution of that issue. Lloyd replied that the union would be advised of petitioner's position but petitioner did not thereafter advise the union of its position with respect to the matter of recognition. In the interim, of course, the representation petition had been filed on July 15. The record is silent as to when petitioner received notice of the filing of the petition and Jacobs, the union's business agent and organizer, did not testify that he advised Lloyd as to the filing of the petition.

When Pellerito returned on July 29, she immediately convened a meeting of the warehouse employees. While there were apparently nineteen employees in the warehouse, the record is also silent as to how many were to be included in the bargaining unit although there are indications that sixteen would comprise the unit. It appears that at least three such employees were in a supervisory capacity.

The Board, crediting Pellerito's testimony,8 found that Pellerito told the assembled employees that she was aware of the union's activities, asked them if they were sure that this particular union was the right union for them, added that she welcomed employees presenting their problems to her, and that she knew a hearing was scheduled. In response to a question as to whether the employees should attend the hearing, she replied that she "did not know." She admits that she thereafter heard some employees discussing car pools for the purpose of attending the hearing but said nothing at that time.

On August 2, 1974, Pellerito conducted a second meeting with the employees. She advised that she had learned that it was not necessary for all the employees to attend the hearing, thereby stopping production, and she preferred to keep the business running. She told the employees that they were not to go to the hearing even though several remonstrated that they wanted to go as the hearing concerned them.9

At the request of two employees another meeting was convened during the afternoon of August 6. Certain employees repeated their prior request to be permitted to attend the hearing En masse. Pellerito again stated that they could not go and she wanted production to continue. The employees replied that "it concerned them."10

The following day, August 7 and one day prior to the scheduled representation hearing Pellerito again convened the employees and read to them this statement:

Yesterday you said that you were all going to leave work to attend the NLRB hearing. I cannot allow all of the employees to go to the hearing since it will interrupt our production. Neither is it necessary for all of you to attend. We do have to continue business in this warehouse. I will agree to allow you to choose one representative from among you to attend the hearing. Please let me know your choice. If all of you attend without our permission, you will be considered as having quit or will be considered for discharge.

Likewise, Pellerito advised the employees that she wanted their breaks to remain normal and that they could have a few minutes to choose a representative to attend the hearing. Wendy Ball replied that it would take longer than five minutes. Pellerito responded by saying that the employees could choose a representative after work, and she urged them to return to work.11 One employee raised a question about making up ...

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