National Labor Relations Board, Petitioner, v. Mts Incorporated D/b/a Tower Records and Video Store No.126, Respondent.national Labor Relations Board, Petitioner, v. Mts Incorporated D/b/a Tower Records and Video Store No.126, Respondent, 141 F.3d 1177 (9th Cir. 1998)

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US Court of Appeals for the Ninth Circuit - 141 F.3d 1177 (9th Cir. 1998) Argued and Submitted Dec. 11, 1997. Decided Mar. 11, 1998

On Application for Enforcement of an Order of the National Labor Relations Board.

Before FLETCHER and T.G. NELSON, Circuit Judges, and WHALEY, District Judge.** 


Petitioner ("the Board") seeks enforcement of two orders that direct Respondent ("MTS") to stop refusing to bargain with, or provide required information to, the union that won a representation election at an MTS store ("Store No. 126") in Mountain View, California. MTS admits it has refused to bargain and provide information, but contends that it has no duty to do so because the Board improperly certified the Union. Both of these cases, therefore, hinge on the viability of MTS's challenges to the Board's union certification decision.

The parties are familiar with the facts and prior proceedings; thus, they need not be summarized here. We have jurisdiction under 29 U.S.C. § 160(e), and we grant the Board's applications because the challenged decisions all fall within the broad range of discretion to which the Board is entitled in overseeing the union certification process. See Napili Shores Condominium Homeowners' Ass'n v. NLRB, 939 F.2d 717, 718 (9th Cir. 1991).

* Before reaching MTS's challenges to the certification decision, it is necessary to address MTS's contention that the Board erroneously determined that former Store No. 126 employee Shawn Love ("Love") was not an agent of the Union. Because MTS's certification challenge relies heavily on allegations that Love engaged in pre-election misconduct, the proper framework for considering MTS's larger challenge depends on the nature of Love's relationship to the Union. See, e.g., May Dep't Stores Co. v. NLRB, 707 F.2d 430, 432-33 (9th Cir. 1983) ("Third party misconduct must be a great deal more aggravated than union or employer misconduct before we deem it sufficient to overturn an election.").

MTS contends the Board was required, at minimum, to hold an evidentiary hearing on MTS's assertion that Love had apparent authority to act on the Union's behalf. To be entitled to such a hearing, however, MTS was first required to allege facts that, if true, would demonstrate that "substantial and material issues of fact" existed as to whether Love had apparent authority to act on the Union's behalf.1  NLRB v. Advanced Sys. Inc., 681 F.2d 570, 572 (9th Cir. 1982).

MTS failed to carry this burden. An agency relationship is created by conduct of the principal, not the purported agent. See DID Bldg. Serv. v. NLRB, 915 F.2d 490, 496 n. 5 (9th Cir. 1990) (citing Restatement (Second) of Agency §§ 26-27 (1958)). MTS's allegations, however, focus almost entirely on Love's conduct. Barring some nexus to conduct of the Union or its recognized agents, these allegations are insufficient to demonstrate that Love had apparent authority to act on behalf of the Union. See, e.g., NLRB v. Belcor, 652 F.2d 856, 860 (9th Cir. 1981) (activities in support of union campaign "are ordinarily, by themselves, inadequate to prove agency status"). The relevant question is whether the Union, not Love, acted in manner that employees reasonably could have interpreted as indicating the Union consented to have Love act on its behalf.

The only affirmative Union conduct alleged by MTS is occasional contact between Love and the Union's organizer at a coffee shop near Store No. 126, where Love apparently was given pro-Union literature. It could not reasonably be inferred from these meetings alone that the Union authorized Love to do anything but hand out literature. Moreover, Love's recent discharge and pending Union-filed grievance related to that discharge provided a readily apparent additional explanation for his meetings with the Union's organizer representatives. Equally unpersuasive is MTS's contention that the Union failed to maintain a presence at the store, thereby suggesting that the Union consented to have Love act on its behalf. MTS's own affidavits rebut this contention, demonstrating that store personnel were sufficiently familiar with the Union's organizer to recognize him by appearance, and that the organizer was seen near the store on numerous occasions prior to the election.

In sum, MTS's allegations and evidence failed to create substantial and material issues of fact on the question of Love's agency status. The Board, therefore, did not abuse its discretion by deciding without an evidentiary hearing that Love's conduct was not attributable to the Union.


MTS also challenges both the Board's underlying certification decision and its failure to hold an evidentiary hearing on MTS's election objections and exceptions. Specifically, MTS contends that: 1) employees who did not favor union representation were coerced by threats and acts of vandalism that occurred before the election; and, 2) employees were coerced into voting for the Union by an improper waiver of union initiation fees prior to the election.

The Board did not abuse its discretion in determining that MTS's allegations and evidence regarding threats and vandalism did not warrant either setting aside the representation election or holding an evidentiary hearing. To prevail on either of these contentions, MTS was required to make "a prima facie showing of substantial and material factual issues that would, if true, warrant setting aside the election." NLRB v. Advanced Sys. Inc., 681 F.2d 570, 572 (9th Cir. 1982); see also 29 C.F.R. § 102.69(d). MTS's allegations, accepted as true, failed to establish substantial and material issues of fact as to whether any of the conduct at issue was properly attributable to the Union. Thus, MTS was required to allege conduct that "was so aggravated that it made a free choice impossible." Advanced Sys. Inc., 681 F.2d at 575. Because the conduct alleged by MTS falls short of this threshold, the Board did not abuse its discretion in rejecting this aspect of MTS's challenge to the election without an evidentiary hearing.

The Union's pre-election offer to waive its initiation fee also was not unduly coercive, either on its own, or when viewed in connection with the threats and acts of vandalism described by MTS. MTS's reliance on the Supreme Court's decision in NLRB v. Savair Mfg. is unpersuasive because MTS has presented no allegation or evidence that indicates eligibility for the fee waiver was contingent on a pre-election signing of the union authorization card that accompanied the fee waiver. 414 U.S. 270, 277-78, 94 S. Ct. 495, 38 L. Ed. 2d 495 (1973) (waivers contingent on pre-election signing of authorization cards are unduly coercive); see also NLRB v. Aaron Bros. Corp., 563 F.2d 409, 412 (9th Cir. 1977) (union "promises to waive initiation fees are improper ... only if they are conditioned upon a showing of pre-election support for the union") (emphasis in original). To the contrary, the fee waiver certificate expressly stated that it was valid until 30 days after approval of a union agreement, an event that necessarily would occur after the election. Nor is it significant that the fee waiver offer may not have been sent to all employees, given MTS's failure to establish that such a failure was likely to coerce the omitted employees into voting for the union.

Because MTS failed to present allegations or evidence creating substantial and material issues of fact that, if true, would warrant setting aside the representation election, the Board did not abuse its discretion by rejecting MTS's objections and exceptions without an evidentiary hearing.


Finally, none of MTS's alternative challenges to the Board's decision not to hold an evidentiary hearing demonstrate the Board abused its discretion. The Board is not obligated to hold an evidentiary hearing simply because such a hearing might prove a useful means of discovering information relevant to election objections or exceptions. See Vari-Tronics Co. v. NLRB, 589 F.2d 991, 993 (9th Cir. 1979); Natter Mfg. Corp. v. NLRB, 580 F.2d 948, 952 n. 4 (9th Cir. 1978). Rather, MTS was required to come forward with allegations or evidence that would create substantial and material issues of fact that, if true, would warrant setting aside the election. Additionally, while the question of whether a vote was close is relevant to whether an evidentiary hearing should be conducted, the mere fact that a vote was close does not relieve the objecting party of its burden of stating a prima facie case for setting aside the election. Similarly, it is not an abuse of discretion not to conduct a comprehensive administrative investigation if the objecting party does not first carry its burden of presenting objections and supporting allegations or evidence that, if true, would warrant setting aside an election. Cf. NLRB v. Hudson Oxygen Therapy Sales, 764 F.2d 729, 733-34 (9th Cir. 1985).


In sum, none of the decisions challenged by Respondent constituted an abuse of the Board's discretion to determine whether a representation election and union certification were conducted properly. Therefore, the Board's applications are granted, and its orders are enforced in their entirety.



The Honorable Robert H. Whaley, United States District Judge, Eastern District of Washington, sitting by designation


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit, except as provided by Ninth Cir. R. 36-3


This standard also requires that the substantial and material issues of fact be sufficient, if true, to warrant setting aside the representation election. Because MTS's allegations are insufficient to create a substantial and material issue of fact on the question of whether Love had apparent authority, it is not necessary to reach the question of whether his conduct would warrant setting aside the election if it were attributable to the Union