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The decision of the Authority follows:
38 FLRA No. 81
FEDERAL LABOR RELATIONS AUTHORITY
FEDERAL DEPOSIT INSURANCE CORPORATION
NATIONAL TREASURY EMPLOYEES UNION
ORDER DENYING APPLICATION FOR REVIEW
December 14, 1990
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This case is before the Authority on an application for review filed by the Agency under section 2422.17(a) of the Authority's Rules and Regulations. The Petitioner (NTEU or Union) filed an opposition to the application for review.
A representational election was conducted among certain employees of the Agency in two voting groups. Of the 76 valid ballots counted in the voting group of professional employees, the employees voted, 45 to 31, not to be included in a mixed unit with nonprofessional employees. Of the 76 valid votes counted in the voting group of professional employees, 46 votes were cast for NTEU and 30 votes were cast against exclusive representation. Of the 1,848 valid ballots counted in the voting group of nonprofessional employees, 1,273 votes were cast for NTEU and 575 votes were cast against exclusive recognition. There were 53 challenged ballots, which were not sufficient in number to affect the outcome of the election. Thus, a majority of the valid votes were cast for NTEU in each of the voting groups.
Thereafter, the Agency filed two objections with the Regional Director (RD), alleging that NTEU had engaged in improper conduct affecting the election. In his Decision and Order on Objections to Election, the RD concluded that no objectionable conduct had occurred that warranted setting aside the election.
The Agency seeks review of the RD's decision. For the reasons set forth below, we deny the Agency's application for review.
II. Regional Director's Decision
A. Objection 1
The Agency contended that NTEU engaged in objectionable conduct affecting the election by promising temporary Liquidation Graded (LG) employees in the proposed unit(s), prior to the election, that it would file a class action lawsuit on their behalf to challenge their temporary status if NTEU were successful in the election.(1)
The Agency argued, citing NLRB v. Savair Manufacturing Company, 414 U.S. 270 (1973) (Savair), that NTEU's preelection promise to file a lawsuit if the employees opted for union representation interfered with the employees' free choice in two ways: (1) NTEU's promise to file a lawsuit, like the offer to waive initiation fees in Savair, permitted NTEU to create a false impression of employee support by improperly obtaining authorization cards based on its promise; and (2) the employees, like the employees in Savair, would feel compelled to vote for NTEU because they had earlier pledged their support by signing authorization cards based upon the improper promise by NTEU.
The RD noted that "[i]n Savair, the Supreme Court proscribed a union's offer to waive initiation fees only for those employees who signed union authorization cards prior to the election because this allowed the union to buy endorsements and paint a portrait of employee support. However, the National Labor Relations Board (NLRB) has consistently held that a union's offer to waive initiation fees during an election campaign is objectionable only if limited to the period prior to the election." RD's decision at 4, n. 1. The RD noted further that "[o]n June 17, 1988, [the RD] denied [the Agency's] challenge to the adequacy and validity of the showing of interest submitted by NTEU in the subject case, concluding, among other things, that the promise to undertake legal action contained in NTEU's campaign literature did not taint the showing of interest." Id. at 4, n. 2.
The RD found that in contrast to the union's conditional offer to waive initiation fees in Savair, NTEU's promise to undertake legal action on behalf of certain Agency employees was not limited only to those employees who demonstrated preelection support for NTEU. Rather, NTEU's promise applied to all LG employees irrespective of how they had voted in the election. Thus, finding that the employees had a freedom of choice in the election, the RD distinguished the facts of this case from Savair. In support of his finding, the RD cited Molded Acoustical Products, Inc. v. NLRB, 815 F.2d 934 (3d Cir. 1987) (a union does not endanger employees' freedom of choice if, prior to the representation election, it promises to waive initiation fees for all employees in the bargaining unit regardless of whether the employees signed union recognition slips before the election).
The RD found that the promise of legal action if NTEU won the election was not tantamount to offering employees a monetary inducement to vote for NTEU. The RD found that the private sector cases relied on by the Agency involve the direct conferring or promise of newly created, non-work related financial benefits to employees immediately prior to the election or as a result of the union winning the election. The RD found those cases distinguishable because the promise to file a lawsuit does not involve a direct or immediate economic inducement or actual payment to employees, but, at most, possibly allows employees to avoid the expense of personally instituting a lawsuit in the future. Further, the RD concluded that the promise to file a lawsuit was not made solely to employees joining the union prior to the election and the filing of such a lawsuit is typical of the representational benefits NTEU provides to its members.
Finally, the RD found that employees would understand that any benefits resulting from a lawsuit filed by NTEU on their behalf are speculative and dependent on contingencies beyond the control of NTEU. For this reason, in the RD's view, the promise to file a lawsuit if the Petitioner won the election is more akin to a permissible preelection promise of a wage increase that employees recognize as being subject to the collective bargaining process.
Accordingly, the RD overruled objection 1, concluding that NTEU's preelection promise to file a lawsuit if it won the election did not improperly interfere with the employees' freedom of choice in the election.
B. Objection 2
The Agency contended that NTEU's free legal assistance to five employees constituted objectionable conduct that warrants setting aside the election. Relying on private sector cases, the Agency argued that by granting such benefits to these employees, NTEU impermissibly sought to garner their votes and that, furthermore, other employees were induced to vote for NTEU after learning about NTEU's generosity.
The Petitioner admitted that prior to the election it provided free legal assistance to five employees terminated by the Agency.(2) The five were temporary LG employees whose employment contracts were not renewed. Prior to the election, NTEU appealed the terminations of four of the employees to the Merit Systems Protection Board (MSPB). The NTEU also filed an EEO complaint before the election on behalf of one of the terminated employees and represented her in that process.
The RD found that the Agency presented no evidence that NTEU conditioned its legal assistance to the terminated employees on their support for NTEU in the election or that prior to the election NTEU publicized its actions to the electorate.
The RD concluded that the legal assistance provided to the terminated employees was not the kind of tangible economic benefit that had been found improper in the cases cited by the Agency. Rather, he concluded that the filing of the MSPB appeals and the EEO complaint on behalf of the terminated employees who actively supported NTEU did not impair a free election. In this regard, he found that: (1) the terminated employees had supported NTEU before their discharges and before they received any legal assistance; (2) there was no evidence that the legal assistance provided was conditioned on a vote in favor of NTEU; and (3) because only one of the five terminated employees voted in the election, that ballot was not sufficient to affect the results of the election.
As to the possible influence of NTEU's actions on the other employees, the RD found there was no evidence that NTEU or the terminated employees publicized NTEU's representation of the employees in question during the election campaign. The RD further noted that even assuming the electorate was aware of NTEU's legal assistance prior to the election, the NLRB has determined that similar conduct would not warrant setting aside an election. Paolo's Continental Restaurant, Inc., 213 NLRB 557 (1974).
Accordingly, the RD overruled objection 2.
III. Positions of the Parties
A. The Agency's Application for Review
The Agency contends that the RD's decision on substantial factual issues is clearly erroneous and that such error prejudicially affects the rights of the Agency. Specifically, it contends the RD erred in finding that: (1) NTEU did not impermissibly promise temporary employees in the proposed units, prior to the election, that it would file a lawsuit on their behalf to challenge their temporary status if it were successful in the elections; and (2) the Union did not engage in objectionable conduct by providing free legal services to at least five employees prior to the election. The Agency requests that the Authority set aside the RD's Order, invalidate the results of the election and dismiss the petition supported by the showing of interest allegedly tainted by NTEU's promise.(3)
1. Objection 1
With regard to its first objection, the Agency argues that the legality of NTEU's preelection promise to file a lawsuit on behalf of temporary employees is clearly controlled by the Supreme Court's ruling in Savair. The Agency contends that the RD overlooked the fact that the NTEU's campaign promise differs substantially from the union's promise in Savair, and that this difference amounts to an even more egregious form of election interference. Specifically, it argues that while the employees in Savair had been coerced into signing authorization cards prior to the election in order to take advantage of the union's promise, they still had the right, in the privacy of the voting booth, to cast their ballots according to their true convictions. Conversely, the Agency claims, its employees experienced no such freedom of choice. According to the Agency, although overt NTEU preelection support was not a prerequisite to taking advantage of the Union's promise, the employees were restrained and coerced by the fact that eligible voters could cast their ballots for NTEU in order to have the lawsuit filed, or vote against the Union and lose an opportunity to have the temporary status of LG employees challenged free of charge.
The Agency challenges the RD's finding that NTEU's promise was not a tangible economic benefit that would corrupt employees in their choice in the same manner as a cash gift; and that Agency employees could easily recognize that no benefits would be obtained automatically if NTEU won the election. In this regard, the Agency notes that the money saved by employees who would not have to retain their own attorneys to challenge the LG status clearly constitutes a tangible economic benefit. Moreover, the Agency denies that a prudent employee would easily recognize the promise to be merely a future possibility and not a direct or immediate benefit and argues that it was not unreasonable for the employees to conclude from NTEU campaign literature that a sufficient number of votes for NTEU would result in the immediate filing of the lawsuit.
The Agency disagrees with the RD's analogy that NTEU's promise would be like a union's preelection promise of a wage increase. It argues, citing NLRB case law, that the economic benefit promised, the filing of the lawsuit, was within NTEU's control to implement and, therefore, that the promise was unlawful. The Agency contends that the failure of the RD to acknowledge this fact is a critical omission in that the NLRB has found that certain campaign promises may induce reasonable employees to vote for a union based upon the employees' belief that the union can fulfill the promise.
The Agency also disagrees with the RD's finding that NTEU's promise to file a lawsuit is an existing benefit of union representation. In this case, it contends, "NTEU improperly induced employee support with assurances that the legal papers for their case were already drawn up. It was also made perfectly clear that, despite these extensive and costly preparations, the NTEU would not set the legal machinery in motion until it won the election." Agency's Application for Review at 21-22 (emphasis in original). The Agency argues that such conduct is clearly distinguishable from the touting of free legal help, and is beyond the bounds of what the NLRB would consider to be descriptive information.(4)
2. Objection 2
The Agency argues that NTEU's direct conferral of substantial benefits adversely affected the results of the election. The Agency contends that there were at least five separate instances where NTEU provided free legal assistance to employees and that although only one of these individuals ultimately voted, NTEU's grant of benefits occurred at a time when there remained a possibility that the eligible unit employees might all be able to vote. The Agency claims that had NTEU been successful in its representation of these employees, they would have been entitled to vote and, as a result, there can be no doubt as to the impact the Petitioner's conduct would have had on these votes.
Further, the Agency argues that it is obvious that the publicity generated by word of mouth regarding the Union's conduct influenced the way other employees voted. The Agency contends that given the alleged active participation in the organizing drive of four of the five employees who received the free legal service, it is impossible to conclude that no one was aware these employees were receiving free legal services from NTEU. It contends that NTEU had never before provided any legal services to Agency employees whom it did not represent. The Agency argues that the only inference to be drawn from the sudden provision of the services of NTEU's legal department to non-members is that NTEU was providing such services in order to garner votes.
The Agency notes that the RD's decision relied heavily on the finding that there was a lack of material evidence as to whether NTEU's direct conferral of benefits was publicized to the employees. The Agency contends that this places too great an onus on the Agency, and requests that a hearing be held on the objection to provide it with an opportunity to explore the matter.
The Agency also disagrees with the RD's findings that: (1) the Petitioner's providing unemployed individuals with free legal services is not the kind of tangible economic benefit that would influence the recipients to vote in favor of the Union; (2) there was no evidence presented that the legal assistance provided was conditioned on a vote in favor of the Union; and (3) because only one of the five terminated employees voted in the election, that ballot was not considered sufficient to affect the results of the election.
As to the latter point, the Agency argues that the margin of the election results is not the conclusive factor for determining whether the NTEU restrained and coerced the employees in their free choice. The Agency contends that the proper time for evaluating whether election interference has occurred is during the critical preelection period, not when the ballots are counted. It asserts that the Authority's "standard for determining whether conduct is of an objectionable nature so as to require that an election be set aside is its potential for interfering with the free choice of the voters." Id. at 33, citing Marine Corps Logistics Base, Barstow, California, 9 FLRA 1046 (1982). Accordingly, it contends that the RD's analysis should have centered on whether the Union's conduct destroyed the "laboratory conditions" necessary for the holding of a fair and free election. Id.
B. Petitioner's Opposition
The Petitioner contends that the Agency's application does not set forth grounds for Authority review and should be dismissed. NTEU argues that: (1) the objecting party bears the burden of proof regarding all matters raised in its objections; (2) a finding that conduct is of an objectionable nature so as to require that an election be set aside must be based on that conduct's potential for interfering with the free choice of voters; (3) isolated improper conduct not affecting the election result is not grounds for setting an election aside; and (4) the Authority has adopted the "outcome determinative test" used by the NLRB to evaluate election objections in the private sector, which provides that objectionable activity must be shown to have had a material effect on voter free choice and the outcome of the election. NTEU contends that applying the above standards to the facts of this case "leads ineluctably to the conclusion that the FDIC's Application for Review falls woefully short of stating grounds for review, and should be denied." NTEU's Opposition at 4-5. In this regard, NTEU argues that the Agency's application fails to present a substantial question of law or policy, the RD's decision is in accordance with Authority precedent, and his findings of fact are correct and appropriate.
1. Objection 1
The Petitioner contends that the RD correctly ruled that its campaign promise to file a lawsuit on behalf of temporary workers if selected as the exclusive representative was not objectionable. NTEU argues that: (1) union promises are customarily considered part of the give-and-take of campaign propaganda and are not legally objectionable; (2) promises of future benefits are the essence of most union organizing drives; and (3) unions have a broad right to address the benefits of unionization during an organization drive.
The Petitioner maintains that the Agency's reasoning in this matter is faulty. NTEU admits that the filing of a lawsuit is within its control, but it argues that the promise to file a lawsuit is akin to a proposal to ask for a wage increase because, in both cases, the speculative nature of the undertaking is patently obvious to employees and does not contain the same degree of finality as benefits actually conferred. Under the Agency's reasoning, NTEU argues, it would be permissible to promise a wage increase, because the Union cannot unilaterally give employees a wage increase, but it would be impermissible to promise to ask for a wage increase, because effecting that promise would be within the Union's control. If it is well established that the Union can promise to obtain a wage increase, NTEU contends that it can promise to propose one. Similarly, as it could have promised the LG employees it would win the LG lawsuit, NTEU asserts that the mere promise to file the lawsuit is certainly within the ambit of the permissible.
NTEU further disagrees with the Agency's analysis that the Union's preelection promise is governed by the holding in Savair. It agrees with the RD that Savair is entirely distinguishable from this case. In this regard, it argues that NTEU's preelection promise, unlike the union's conditional offer in Savair, was not limited to those employees who demonstrated preelection support for NTEU. Rather, it was based solely upon NTEU being selected as bargaining representative and applied to all unit employees irrespective of how they voted in the election. The potential lawsuit was, it contends, a strategy for the Union to obtain job security for LG employees, a fundamental benefit of unionization.
NTEU also takes issue with the Agency's argument that NTEU's promise of legal action was tantamount to offering employees an economic inducement to vote for the Union. It agrees with the RD that NTEU's promise of legal action was nothing more than an existing Union benefit. It argues that there are costs associated with obtaining a wage increase through collective bargaining; that these costs are paid for with union dues, as the costs of the Union's lawsuit will be here. Thus, it contends, employees do not completely avoid the costs of the lawsuit or other benefits of unionization. It further contends that all the cases cited by the Agency in support of this objection are distinguishable from the matter here.
2. Objection 2
The Union contends that the RD's finding regarding NTEU's representation of certain discharged employee activists was proper. NTEU argues that its conduct was permissible; that it has "a moral obligation as well as a legal right to come to the aid of [its] supporters who have suffered the wrath of the employer because of Union activities." Id. at 14. In this regard, NTEU argues that the NLRB has upheld the conferring of benefits by a union where the purpose is to maintain the status quo, as opposed to a gift to compel the recipients to vote for the union.
NTEU further contends that even if its representation of the employees was improper, such conduct did not materially affect voter free choice. The Union agrees with the RD that its conduct did not impair a free election in that there was a complete absence of evidence that NTEU had publicized its efforts; the terminated employees supported NTEU prior to their discharges; and there was no evidence that legal assistance was conditioned on a vote in favor of NTEU. Moreover, NTEU agrees with the RD that as only one of the terminated employees voted in the election, that ballot could not have affected the results of the election.
NTEU contends, in the latter respect, that the RD's decision comports fully with Authority precedent, citing U.S. Army Engineer Activity, Capital Area, Ft. Myer, Virginia, 34 FLRA 38 (1989) where the Authority found that an "isolated incident" of objectionable conduct did not interfere with voter free choice. It argues that even assuming that NTEU representation was improper, it was isolated, unpublicized, and could not reasonably be found to have influenced voter free choice.
The Petitioner notes that it was selected in the election by an overwhelming margin. It argues that the test employed by the NLRB when determining whether misconduct warrants setting aside an election should be used, citing NLRB v. Golden Age Beverage Co., 415 F.2d 26 (5th Cir. 1969) (Golden Age). NTEU contends that potential misconduct affecting only a single or a few votes does not affect voter free choice where, as here, there were almost two thousand votes cast, the election was nationwide, any alleged misconduct was not publicized, and the margin of victory was decisive.
IV. Analysis and Conclusions
We conclude that no compelling reasons exist, within the meaning of section 2422.17(c) of the Authority's Rules and Regulations, for granting the Agency's application for review.
A. Objection 1
The Agency has not demonstrated that the RD's factual findings are clearly erroneous and that such error prejudicially affects its rights. We find the RD's analysis of the issue presented as it relates to the facts to be correct. We agree with the RD that this case is clearly distinguishable from Savair and the other cases cited by the Agency. In this regard, it is significant that NTEU's promise to undertake legal action was not limited only to those employees who demonstrated preelection support for NTEU but, rather, applied to all unit employees regardless of how the employees voted. See Molded Acoustical Products, Inc. v. NLRB, above. Further, in agreement with the RD, we find that NTEU's promise was not tantamount to offering employees a monetary inducement to vote for NTEU. Although the employees could benefit from the NTEU lawsuit, because the outcome could affect their job status and because NTEU saved them the costs of retaining their own attorneys, we find that this is a commonly recognized benefit of union representation. See Dart Container of California, 277 NLRB 1369 (1985). Therefore, we conclude that NTEU's preelection promise to file a lawsuit if it won the election did not improperly interfere with the employees' freedom of choice in the election.
Accordingly, we will deny the Agency's application for review with respect to objection 1.
B. Objection 2
The Agency has not demonstrated that the RD's factual findings concerning this objection are clearly erroneous and that such error prejudicially affects its rights. Without deciding whether NTEU's conduct of providing free legal assistance to five employees could have interfered with voter free choice, we conclude that the conduct did not, in the circumstances in this case, affect the results of, or warrant setting aside, the election.
As found by the RD, the Agency presented no evidence as to the possible influence of NTEU's conduct on other employees. No evidence was presented that NTEU or the terminated employees publicized NTEU's representation of the employees in question during the election campaign. The Agency argues that requiring it to present material evidence on this fact "places too great an onus on [the Agency]." Agency's Application for Review at 28, n. 18. We reject this contention. Section 2422.21(b) of our Rules and Regulations clearly provides that "[t]he objecting party shall bear the burden of proof at all stages of the proceeding regarding all matters raised in its objections." We note that the Agency was able to provide considerable evidence with regard to NTEU's publicizing of its promise to file a lawsuit if it won the election and became the employees' bargaining representative. Further, as to the Agency's request that a hearing be held on the objection in order to provide it with an opportunity to explore the matter, we find that the decision to hold a hearing is within the RD's discretion. See section 2422.21(g) of the Authority's Rules and Regulations. In reviewing the RD's decision here, we conclude that there was no abuse of that discretion and the decision was correct.
Only a small number of the eligible voters were directly affected by NTEU's preelection conduct. In our view, the assistance provided to five individuals would not affect the results of a nationwide election in which over 1,800 ballots are cast where there is a lack of evidence that anyone knew of the Petitioner's preelection conduct, and where the margin of victory is substantial. Moreover, of the four unit employees and one supervisor directly affected by the Petitioner's conduct, only one voted subject to challenge and it is clear that one vote could not be determinative of the election outcome. Therefore, we conclude that NTEU's preelection conduct of providing free legal assistance to five employees did not materially affect the results of the election nor warrant the setting aside of the election. See Golden Age, 415 F.2d at 30.
Accordingly, we will deny the Agency's application for review with respect to objection 2.
The application for review of the Regional Director's Decision and Order on Objections is denied.
(If blank, the decision does not have footnotes.)
1. The Agency stated that LG employees comprised approximately "80 percent of the voting unit." RD's decision at 3. Presumably, the Agency was referring to the total number of employees in the two units.
2. One of the individuals was a supervisor who was ineligible to vote in the election. The RD found that NTEU's conduct respecting this individual could not affect the results of the election.
3. A Regional Director's determination regarding the adequacy of a showing of interest is administrative in nature. Accordingly, a challenge to the showing of interest is authorized only under limited circumstances. See section 2422.2(f)(2) of the Authority's Rules and Regulations. An application for review of a determination regarding the showing of interest may be filed with the Authority only if a regional director dismisses a petition or denies intervention. U.S. Department of Transportation, U.S. Coast Guard Finance Center, Chesapeake, Virginia, 34 FLRA 946, 949 (1990). The RD took neither action in this case. Consequently, the Agency's challenge regarding the validity of the showing of interest is not authorized by our Regulations.
4. The Agency also contends that the NTEU's preelection pledge constituted "an implied threat" to the employees. Id. at 24-27. It appears that this is the first time the Agency has raised this argument. The RD does not address the issue of whether NTEU's conduct constituted an implied threat to Agency employees in his decision and the Agency does not object to the RD's failure to address this issue. Section 2429.5 of the Authority's Rules and Regulation provides that the Authority will not consider any issue which was not presented in the proceedings before the Regional Director. Accordingly, the Authority will not consider or address the Agency's arguments in this regard.