Unpublished Disposition, 931 F.2d 897 (9th Cir. 1989)

MEMORANDUM^* 

OVERVIEW

Macke Laundry West (Macke) refused to bargain with the Freight Checkers, Clerical Employees and Helpers, Local Union 856 because Macke objected to the practices of the union representatives during a union election. Macke contends that the Board should have set the election aside because its outcome was undermined by deceptive election eve propaganda. The Regional Director of the National Labor Relations Board (NLRB) refused to set aside the election because he determined that the union's conduct was allowed by current NLRB decisions.

PROCEDURAL AND FACTUAL BACKGROUND

In December, 1985, the NLRB filed a charge against Macke Laundry West alleging violations of Sections 8(a) (1) and 3 of the National Labor Relations Act. (NLRA) 29 U.S.C. §§ 151 et seq. (1975). On February 11, 1986, the Regional Director's office sent Macke a letter proposing that the company sign a settlement agreement and agree to post a notice to employees regarding the alleged unfair labor practices. The document contained no findings by the Board. A copy of both the letter and the proposed settlement agreement were sent to Mark Jones, a business agent for the union. On the night of February 11, the union held a meeting at their local office attended by fifteen to twenty employees. Jones announced to the group that the Board had ruled against the company on each of the charges. Jones maintained that the Board had determined Macke had violated the NLRA and began reading aloud from the settlement agreement. He then passed out this agreement to the employees. He did not, however, distribute the letter clarifying that this agreement was only a proposal. An election was held on February 13, 1986, resulting in a vote in the Union's favor.

The company filed objections based upon the union's conduct at the February 11 meeting. The Regional Director conducted an ex parte investigation and issued a report on March 28, 1986, rejecting the company's objections. The Regional Director found that even if what Macke alleged were true, the election should not be set aside. On August 19, 1986, the Board adopted the Regional Director's findings and recommendations and certified the union as the collective bargaining representative of a unit of the company's employees.

Following certification, the union requested that Macke bargain and the company refused. The Board issued a complaint alleging the company's refusal to bargain violated Section 8(a) (5) of the Act. 29 U.S.C. 158(a) (5). Macke admitted its refusal but it asserted there was no violation, contending that the union had been improperly certified. The general counsel filed a motion for summary judgment, alleging there were no issues of law or fact requiring a hearing. On June 30, 1989, the Board issued its decision and order granting the motion for summary judgment and finding that the company violated the above provisions.

STANDARD OF REVIEW

The Board has broad discretion to determine the propriety of the union representation election process. Micronesian Telecommunications Corp. v. NLRB, 820 F.2d 1097, 1101 (9th Cir. 1987). This court will not overturn a Board's decision to certify a union unless it has abused its discretion. Id. at 1102. The Board's order must be enforced if it correctly applied the law and if its findings of fact are supported by substantial evidence on the record as a whole. NLRB v. Cal-Western Transport, 870 F.2d 1481, 1484 (9th Cir. 1989). Lastly, the Board's denial of an evidentiary hearing will only be disturbed for an abuse of discretion. Bell Foundry v. NLRB, 827 F.2d 1340 (9th Cir. 1987).

BACKGROUND

The history behind Board action regarding election misrepresentations is muddled. We therefore indulge in a brief examination of the history of the Board's rulings culminating in the present day rule established in Midland National Life Insurance, 263 NLRB 127 (1982).

In Hollywood Ceramics, 140 NLRB 221, 224 (1962), the Board held that an election would be set aside where there had been "a substantial departure from the truth, at a time which prevents the other party or parties from making an effective reply...." The Board overruled Hollywood Ceramics in Shopping Kart Food Mart, 228 NLRB 1311 (1977). The Board declared that it would no longer set aside elections based solely on misleading campaign statements or misrepresentations. Instead, the Board would only act where deceptive campaign practices involved Board action or forged documents which prevented voters from recognizing propaganda. A year later, the Board returned to Hollywood Ceramics with its decision in General Knit, 239 NLRB 619 (1978). There is maintained that the Board could not tolerate "substantial and material misrepresentations made in the final hours of an election campaign." Id. at 623.

In 1982, the Board, finding this strict approach unworkable, returned to the Shopping Kart rule in Midland:

[W]e will no longer probe into the truth or falsity of parties' campaign statements ... no [r] set elections aside on the basis of misleading campaign statements. We will, however, intervene in cases where a party has used forged documents which render the voters unable to recognize propaganda for what it is.

Id. at 133 (footnotes omitted).

This court has followed the Midland rule and explicitly approved of its rationale. NLRB v. Best Products Co., 765 F.2d 903, 911 (9th Cir. 1985); NLRB v. Yellow Transportation Co., 709 F.2d 1342, 1343 (9th Cir. 1983).

In Best Products, the court reviewed ample evidence demonstrating that propaganda had far less impact on voter intent than initially perceived. Employees voted based on their general attitudes towards working conditions and the union. Id. at 912, 913. Therefore, the "hands off" policy in Shopping Kart was justified and comported with the Board's overall policy to avoid election intervention. Id.

THE MIDLAND RULE

In the present case, Macke first contends that the dissemination of the Settlement Agreement without the cover letter constituted a forged or altered document as defined in Midland. Consequently, Macke argues, the election should be set aside.

In support of its argument, Macke cites Mallory Capacitor, 161 NLRB 1510 (1966), where the union cut out the part of a distributed complaint that would have shown there was no final judgment. The Board found this physical alteration to have interfered with the fair election.

A misrepresentation, however, is not the same as a physical alteration. In Affiliated Midwest Hospital Inc. d/b/a Riveredge Hospital, 264 NLRB 1094 (1982) (Riveredge Hospital) the Board overruled such a favorable comparison:

We, however, are of the view that the Board's equation of a party's physical alteration of a board document with the misrepresentation of a settlement agreement was erroneous. The two situations are dissimilar. The physical alteration involves the misuse of the Board's documents to secure an advantage while the misrepresentation merely involves a party's allegation that the Board has taken an action against the other party and is essentially the same as any other misrepresentation.

Id. at 1095.

While Macke contends that distribution of the Settlement Agreement without the explanatory cover letter is a physical alteration, we find that it is simply a misrepresentation. There was no physical modification to the paper itself. This is merely an allegation that the Board has issued a complaint when it, in fact, has not. Midland expressly found such an action to be harmless.

Alternatively, Macke argues that even if this court determines that there was no physical alteration, the union's action was sufficiently misleading to be termed "deceptive campaign promises as improperly involving the Board and its processes." In support, Macke cites Dubie-Clark, Inc., 209 NLRB 217 (1974), where the Board found the dissemination of leaflets mischaracterizing Board action to be a serious violation of employee rights.

Dubie Clark is dubious authority, however. It quotes Rebmar, Inc., 173 NLRB 1434 (1968),¹  for the policy "our concern is not with the substance of the material ... but with the impact such a partisan message ... might have on the freedom of choice of the voter." Dubie-Clark at 218. Dubie-Clark goes further: "For this reason we must guard against any intrusion such as the physical alteration or substantial mischaracterization of a Board document, which might place the Board's neutrality in question during the pre-election campaign period." Id. at 218.

This is hardly the philosophy behind Midland and Riveredge Hospital which, although still forbidding forgery and gross misrepresentation, acknowledge voter autonomy:

The "protectionism" propounded by the Hollywood Ceramics rule is simply not warranted. On the contrary, as we found in Shopping Kart, "we believe that Board rules in this area must be based on a view of employees as mature individuals who are capable of recognizing campaign propaganda for what it is and discounting it' [Footnote omitted.]

Midland at 132.

The misrepresentation here is an implication that the Board had taken action against the Company unrelated to the election itself. Following Riveredge Hospital, we find that a misrepresentation that the Board has issued a complaint against the Employer does not imply Board bias in favor of one party in the election.

Midland indicated, in fact, that the only kind of misrepresentation it deemed egregious enough to set aside an election was where it appears that employees were deceived by trickery or fraud, such that they could neither recognize nor evaluate propaganda for what it was. Here it is clear that the employees were aware that the source of this propaganda was the union. The context of an election eve meeting was sufficient notice that this was an attempt to persuade employee opinion.

This court has approved of the Midland and Riveredge Hospital decisions. NLRB v. Best Products, 765 F.2d 903 (1985); U.S. Ecology v. NLRB, 772 F.2d 1478 (1985). Consistent with those opinions, this court holds that the NLRB correctly found that the union election should not have been set aside.

THE EVIDENTIARY HEARING

The Regional Director determined that even if the company's allegations were true, the union's conduct did not warrant the setting aside of the election. The Regional Director correctly applied the Midland rule and found Macke was not entitled to an evidentiary hearing because even if its allegations were true, it had not stated a claim upon which relief could be granted.

In any challenge to a representation election, the burden rests with the objecting party to make out a prima facie showing of a material factual issue that would, if true, warrant setting aside the election. Bell Foundry Co. v. NLRB, 827 F.2d 1340, 1344 (9th Cir. 1987). The Regional Director assumed the facts presented were true but nevertheless concluded that the union's conduct did not warrant setting aside the election. Therefore, nothing would be gained by granting Macke an evidentiary hearing.

THE SUPPLEMENTAL AFFIDAVITS

Finally, Macke argues that it was denied due process. Specifically, Macke complains that the Regional Director relied primarily on supplemental evidence gathered during the administrative investigation for its determination. More importantly, Macke contends that the Board affirmed without having access to the supplemental affidavits. Neither the Regional Director nor the Board gave any weight to the supplemental affidavits that contradicted Macke's allegations. While the Director did note the supplemental affidavits, he did not base his decision on them.

Macke cites three cases in support of its argument. Each is distinguishable from the present case. In NLRB v. Consolidated Liberty, 672 F.2d 788 (9th Cir. 1982), this Court remanded because the Board did not have access to the contested election ballots upon which the case hinged. Similarly, in NLRB v. Klingler Electric Corp., 656 F.2d 76, 82 (5th Cir. 1981), the affidavits were "the primary and almost exclusive evidentiary basis for his decisions." Here, however, the Regional Director stated that his decision was in no way based upon the supplemental affidavits. Moreover, the current Midland rule supports such an interpretation. Even if the Union misrepresented the Board's actions as Macke contends, Midland does not require setting the election aside.

Lastly, NLRB v. Advanced Systems, Inc., 681 F.2d 570 (9th Cir. 1982), is inapplicable because there the affidavits were the company's evidence specifically relied upon by the Regional Director. Without those documents, the Board could not determine if the Regional Director had construed all the evidence in favor of the contesting party. Here, the Regional Director stated that he only viewed the company's evidence which was in the Board's record.

The Regional Director stated that his decision was based in the light most favorable to Macke and did not rely upon the supplemental evidence. The Board, therefore, did not abuse its discretion.

CONCLUSION

Midland allows misrepresentations in the course of union elections as long as the employees are able to understand they are dealing with propaganda. The employees had that knowledge because the misrepresentations were made in the context of a union meeting held shortly before an election. Even if, as Macke contends, the union did make such misrepresentations, there was no harm. The Board order is ENFORCED.