Hendrickson USA, LLC v. NLRB , 932 F.3d 465 ( 2019 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 19a0177p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
HENDRICKSON USA, LLC., ┐
Petitioner/Cross-Respondent, │
│
> Nos. 18-1144/1315
v. │
│
│
NATIONAL LABOR RELATIONS BOARD, │
Respondent/Cross-Petitioner. │
┘
On Petition for Review and Cross-Application for Enforcement
of an Order of the National Labor Relations Board;
No. 09-CA-159641.
Argued: May 2, 2019
Decided and Filed: August 1, 2019
Before: COOK, McKEAGUE, and WHITE, Circuit Judges.
_________________
COUNSEL
ARGUED: Keith L. Pryatel, KASTNER WESTMAN & WILKINS, LLC, Akron, Ohio, for
Petitioner/Cross-Respondent. Samuel Cretcher, NATIONAL LABOR RELATIONS BOARD,
Washington, D.C., for Respondent/Cross-Petitioner. ON BRIEF: Keith L. Pryatel, KASTNER
WESTMAN & WILKINS, LLC, Akron, Ohio, for Petitioner/Cross-Respondent. Samuel
Cretcher, Linda Dreeben, Kira Dellinger Vol, NATIONAL LABOR RELATIONS BOARD,
Washington, D.C., for Respondent/Cross-Petitioner.
McKEAGUE, J., delivered the opinion of the court in which COOK, J., joined. WHITE,
J. (pp. 15–19), delivered a separate dissenting opinion.
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 2
_________________
OPINION
_________________
McKEAGUE, Circuit Judge. When Hendrickson USA, LLC learned that employees
were attempting to unionize one of its manufacturing plants, it began advocating against
unionization. A plant-wide letter cautioned employees that contract negotiations would begin
“from scratch,” and a PowerPoint shown to employees stated that “relationships suffer” in a
union shop. The National Labor Relations Board found that the company’s statements
constituted unfair labor practices because they coerced employees in the exercise of their rights
under the National Labor Relations Act (NLRA) and ordered Hendrickson to post remedial
notices around its plant. Hendrickson petitioned this court for review, and the Board cross-
appealed for enforcement of its order. Because the Board’s opinion is not supported by
substantial evidence, we GRANT Hendrickson’s petition and DENY the Board’s cross-appeal.
I
Hendrickson owns an industrial plant in Lebanon, Kentucky, that produces truck
suspension and axle systems. On August 21, 2015, Hendrickson received a letter from a group
of employees informing the company about the formation of a union organizing committee on
behalf of United Steel Workers of America. The company quickly responded with a campaign
against unionization. The same day the company received the letter, H.R. director Marlin Smith
called a meeting to emphasize the company’s “direct employee relationship strategy” and
advised employees to read carefully any union-related documents before signing them. A few
days later, on August 24, plant manager Randy Lawless circulated a letter touting the company’s
current compensation package and taking issue with the idea that involving a third party would
improve the relationship between the company and employees. The letter cautioned employees
that union representation would not guarantee an increase in compensation, stating that “[t]he
Company and any recognized Union would begin the negotiation process from scratch.” Then,
on August 25 and again on August 26, the company played a PowerPoint slideshow for all
employees. Over the course of forty slides, the presentation explained Hendrickson’s negative
view of unionization and strongly urged employees not to vote for unionization. One of the
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 3
concluding slides opined that, when a plant unionizes, “the culture will definitely change,”
“relationships suffer,” and “flexibility is replaced by inefficiency.”
In September, a Hendrickson employee filed a charge with the Board, and the Board’s
General Counsel issued a complaint against Hendrickson, alleging that the company violated
Section 8(a)(1) of the NLRA by threatening employees that authorization of a union would lead
to loss of access to management and a more onerous work environment. The case went to a
Board administrative law judge (ALJ), where the General Counsel added another claim, arguing
that Hendrickson threatened employees with the loss of wages and benefits if they unionized.
The ALJ rejected the General Counsel’s allegation regarding statements about the loss of access
to management but accepted the allegations regarding threats of an onerous work environment
and threats of lower wages and benefits. The ALJ then ordered Hendrickson to cease
communication in violation of the NLRA and post public notices about employees’ rights under
the NLRA.
Both Hendrickson and the General Counsel filed exceptions to the ALJ’s opinion with
the Board. The Board adopted the ALJ’s opinion in full and added a footnote expressing the
majority and dissenting statements of the three participating Members. Hendrickson has filed an
appeal with this court, challenging the holdings that it unlawfully threatened employees with a
more onerous work environment and lower wages and benefits. The Board has filed a cross-
appeal asking for enforcement of its order.
II
Our role in reviewing the Board’s findings is limited. See Vencare Ancillary Servs., Inc.
v. NLRB, 352 F.3d 318, 321 (6th Cir. 2003) (citation omitted). We must defer to the Board’s
findings of fact, reasonable inferences from the facts, and applications of law to the facts if they
are supported by substantial evidence on the record considered as a whole. Beverly Health and
Rehab. Servs., Inc. v. NLRB, 297 F.3d 468, 476, 478 (6th Cir. 2002) (citing 29 U.S.C. § 160(e)).
Despite its name, “substantial evidence” is not an exacting standard—it means “more than a
mere scintilla” and “only such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion.” Biestek v. Berryhill, 139 S. Ct. 1148, 1154 (2019) (quotations omitted).
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 4
The deference of the substantial evidence standard is rooted in “the Board’s competence in the
first instance to judge the impact of utterances made in the context of the employer-employee
relationship.” NLRB v. Gissel Packing Co., 395 U.S. 575, 620 (1969) (citation omitted). On the
other hand, “a reviewing court is not barred from setting aside a Board decision when it cannot
conscientiously find that the evidence supporting that decision is substantial, when viewed in the
light that the record in its entirety furnishes, including the body of evidence opposed to the
Board’s view.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).
III
Section 7 of the NLRA guarantees employees the right “to self-organization, to form,
join, or assist labor organizations, to bargain collectively through representatives of their own
choosing,” and the right to refrain from those activities. 29 U.S.C. § 157. Under Section 8(a), it
is an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the
exercise of rights guaranteed in [Section 7].” 29 U.S.C. § 158(a)(1). On the other hand, under
Section 8(c), “[t]he expressing of any views, argument, or opinion” by an employer is not an
unfair labor practice as long as the expression “contains no threat of reprisal or force or promise
of benefit.” 29 U.S.C. § 158(c). This last section recognizes both the existence of and limits to
an employer’s right of free speech under the First Amendment. See Gissel, 395 U.S. at 617.
The enactment of Section 8(c) in 1947 “manifested a congressional intent to encourage
free debate on issues dividing labor and management,” and that policy judgment “favor[s]
uninhibited, robust, and wide-open debate in labor disputes.” Chamber of Commerce of the U.S.
v. Brown, 554 U.S. 60, 67–68 (2008) (quotations omitted). Thus, in a labor dispute, both the
employer and employees may “express themselves on the merits of the dispute in order to
influence its outcome.” Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc.,
425 U.S. 748, 762 (1976) (citing Gissel, 395 U.S. at 617–18). On the other hand, the employer’s
right of free speech must be balanced with employees’ right of free association, as “embodied in
Section 7 and protected by Section 8(a)(1).” Gissel, 395 U.S. at 617. And a court’s assessment
of that balance “must be made in the context of [the] labor relations setting,” where, because of
employees’ economic dependence on an employer, they may be more likely to sense intended
threats than a disinterested observer. Id.
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 5
Distinguishing protected speech from unprotected threats can be difficult because “the
only effective way of arguing against the union is for the company to point out to the workers the
adverse consequences of unionization.” ITT Auto. v. NLRB, 188 F.3d 375, 393 (6th Cir. 1999)
(Kennedy, J., concurring in part and dissenting in part) (quoting NLRB v. Village IX, Inc., 723
F.2d 1360, 1367 (7th Cir. 1983)). The Supreme Court has explained that the distinction between
lawful advocacy and coercive threat turns on whether the employer communicates that predicted
adverse consequences of unionization are “outside [the employer’s] control” or instead “taken
solely on [the employer’s] own volition.” Gissel, 395 U.S. at 619 (quotation omitted). In order
to qualify as lawful advocacy, a prediction that adverse consequences will result “must be
carefully phrased on the basis of objective fact.” Id. at 618.
IV
A
The Board found that two of Hendrickson’s statements constituted threats rather than
lawful advocacy. The first statement at issue in this case is the comment in Hendrickson’s letter
that, if the plant were unionized, contract negotiations would begin “from scratch.” The Board
concluded that the statement was coercive, in violation of Section 8(a), because it threatened
employees with the loss of wages and benefits if they authorized the union. We disagree.
Although the text of Section 8 and the Supreme Court’s decision in Gissel provide the
broader context for our analysis, the specific phrase “bargain from scratch” has been the subject
of much litigation, and our analysis benefits from well-established precedent. We have held that
the phrase is not a per se violation of the NLRA but that it “can be coercive, and therefore a
violation of [Section 8], depending on the context of the statement.” NLRB v. Gen’l Fabs. Corp.,
222 F.3d 218, 231 (6th Cir. 2000) (citing TRW-United Greenfield Div. v. NLRB, 637 F.2d 410,
420 (5th Cir. 1981)). The phrase is coercive if used to “indicate that the employer will adopt a
regressive bargaining stance or lowered benefits to penalize workers for unionization,” and it
must be “viewed in the context of other statements or actions by the employer.” Id. Thus, when
an employer told employees that, “whenever you bargain with the Union, you start at zero, you
don’t start where you’re at right now, you don’t start with your existing wages, you don’t start
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 6
with your existing benefits, you start at zero,” we held that the statements were coercive in light
of “the atmosphere of anti-union animus,” which included other unfair labor practices such as
termination of pro-union employees and threats to close the plant. Id. at 226–31.
On the other hand, we have also held that it is not unlawful for an employer to “adopt a
hard bargaining posture if a union is elected” or to inform employees that it will do so, and that
communicating an intent to start “from zero” or “from scratch” was a “permissible prediction of
a hard bargaining posture.” NLRB v. St. Francis Healthcare Centre, 212 F.3d 945, 956–57 (6th
Cir. 2000) (citing NLRB v. Gibraltar Indus., Inc., 653 F.2d 1091, 1096 (6th Cir. 1981)). But
such a statement is coercive if it implies that the company will “reduce or eliminate benefits
before bargaining beg[ins].” Id. at 957 (emphasis omitted). And whether the statement carries
that implication depends in part on “the timing of the statement, the opportunity of the union to
respond, and the content of the union’s responses.” Id. at 956 (citing Automation &
Measurement Div., Bendix Corp. v. NLRB, 400 F.2d 141, 146 (6th Cir. 1968)). The statement
must also be read in the context of other statements by the company, which may “remed[y] any
possible coercive effect.” Id. at 957. Thus, in St. Francis we determined that the Board’s
finding of coercion based on the phrase “start from scratch” was not supported by substantial
evidence because the statements were made two months before the election and because
pamphlets later distributed by the company explained that, while wages and benefits would
remain the same during the bargaining process, employees could gain or lose as a result of the
process. Id. at 957.
The Board has likewise held that, while “bargaining from scratch” is not a per se
violation of the NLRA, it “is a dangerous phrase which carries within it the seed of a threat that
the employer will become punitively intransigent in the event the union wins the election.”
Coach & Equip. Sales Corp., 228 N.L.R.B. 440, 440–41 (1977). In general, the phrase is lawful
when the company makes clear that it is warning employees about the natural give and take of
the bargaining process, in order to counter the idea that unionization will automatically increase
compensation. Id. On the other hand, the phrase is coercive when it indicates that the employer
will retaliate against employees by adopting a “regressive bargaining posture” during
negotiations or by “unilaterally discontinu[ing] existing benefits prior to negotiations,” so that
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 7
employees receive only what the union can induce the company to restore. Id.; see also Stabilus,
Inc. & UAW, 355 N.L.R.B. 836, 855–56 (2010); BP Amoco Chemicalfchocolate Bayou and Paper,
351 N.L.R.B. 614, 617 (2007); Wild Oats Markets, Inc. & Local 371, 344 N.L.R.B. 717, 717–18
(2005); In re Dillon Cos., Inc., 340 N.L.R.B. 1260, 1272 (2003); Wagner Indus. Prods. Co., 170
N.L.R.B. 1413, 1413 (1968). When the question is close, a “critical factor” in determining whether
the statement has a “threatening color” is whether the context of the statement includes
“contemporaneous threats or unfair labor practices.” Coach & Equip. Sales Corp., 228 N.L.R.B. at
440–41; see also BP Amoco, 351 N.L.R.B. at 617; In re Dillon Cos., Inc., 340 N.L.R.B. at 1272.
The Board concluded that Hendrickson’s statement that contract negotiations would
begin “from scratch” was coercive. The August 24 letter in which the phrase appears first
describes and praises the company’s current benefits package, including healthcare and
retirement benefits. The following excerpt then appears:
Some of you may feel, or have been told that Union representation will preserve
job security, lead to greater benefits, or enhance compensation. We have studied
this issue closely and we respectfully disagree. The fact of the matter is that a
Union cannot promise you, as a valued employee of Hendrickson, anything. IF
our plant were to be unionized, and the collective bargaining process to begin,
none of the benefits, compensation, or job security that you currently enjoy would
be guaranteed. The Company and any recognized Union would begin the
negotiating process from scratch. Which means all of the wages, benefits, and
terms and conditions of employment that you currently enjoy at our plant would
not be the starting point for negotiations toward a Union contract.
App’x at 45–46. The record also shows that the slideshow Hendrickson presented to employees
a few days later contained information about Hendrickson’s Kendallville plant, which was
already unionized, stating that news about wage and benefit increases after union negotiations
“were only half the story” and pointing out that workers at the Lebanon location enjoyed benefits
the Kendallville workers did not, such as 401(k) matching and higher life insurance coverage.
App’x at 82–84.
The Board’s opinion finds that the letter “conveyed that if employees authorized a union
at [the] facility, they would lose their current wages and benefits.” 366 NLRB No. 7, *8. In
order to support its interpretation, the Board’s opinion highlights the following facts. First, the
letter lists the current benefits package (presumably to show workers what they stand to lose).
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 8
Second, the letter “disagrees” that unionization will increase compensation. Third, the letter fails
to clarify that the ultimate contract will be the product of the give and take of good-faith
negotiations, a point that the Board presses in earnest on appeal. Therefore, the Board’s opinion
concludes that the letter “assured employees that they would begin bargaining with nothing” and
“essentially promised that employees would lose some of their benefits and earnings as a result
of any bargaining.” Id. To restate the Board’s conclusion in terms used by precedent, the Board
found that Hendrickson was threatening employees that the company would retaliate by adopting
a “regressive” bargaining posture during contract negotiations, so that employees would receive
lower compensation than would result through good-faith negotiations. See Gen’l Fabs. Corp.,
222 F.3d at 231; Coach & Equip Sales Corp., 228 N.L.R.B. at 441.
Despite the deference we owe to the Board’s expertise in labor matters, we find that the
Board’s conclusion is not supported even by substantial evidence. While Hendrickson’s letter
does emphasize the inherent risks of contract negotiations, it does not “essentially promise” that
employees will end up with less. The company makes clear that its statement is meant to counter
any ideas that union representation would automatically lead to an increase in compensation, and
that purpose is explicitly allowed under Board precedent. See Coach & Equip Sales Corp., 228
N.L.R.B. at 441. As Hendrickson indicates in its letter, it “respectfully disagrees” that unionization
would “preserve job security, lead to greater benefits, or enhance compensation.” And the
timing of the company’s statement was not problematically close to any election—indeed, no
election was ever scheduled—so the union would have had time to respond. See St. Frances
Healthcare Centre, 212 F.3d at 957 (“The statement was made . . . almost two months before the
election, giving the Union ample opportunity to respond.”).
The Board’s opinion and its brief on appeal make much of the fact that Hendrickson
failed to explain that compensation would ultimately be determined based on the natural give and
take of good-faith negotiations. But the lack of these specific phrases fails to provide substantial
evidence that the company was threatening to adopt a regressive bargaining posture. The letter
does make clear that employees are taking a risk in entering collective bargaining and that “all of
the wages, benefits, and terms and conditions of employment” could be adversely affected. But
the phrasing of the letter does not evince any intent on the part of company officials to adopt a
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 9
regressive bargaining posture in response to unionization. For comparison’s sake, in Coach
& Equip. Sales Corp., a case on which the Board’s opinion relies, a company official indicated
that “he would start bargaining at the minimum wage level, that he might go up from that . . . but
that he would not in any event go above what the employees were presently earning,” which the
Board concluded went beyond a description of the hazards of collective bargaining and indicated
a determination to ensure that collective bargaining would definitely result in worse benefits.
228 N.L.R.B. at 441 (emphasis in original). In contrast, the letter in this case “respectfully
disagree[s]” that union representation will necessarily increase compensation, but it does not
evince a punitive determination to ensure a negative result. Furthermore, slides in the company’s
later presentation regarding its Kendallville location suggest that a union contract might improve
some benefits while failing to sustain others—exactly the notion of “give and take” that the
Board found was missing from the letter. This later PowerPoint material is relevant to show that
employees would understand that negotiations involve a give-and-take process. C.f. St. Frances
Healthcare Centre, 212 F.3d at 957 (observing that an employer’s “own campaign literature
distributed after August 6 obviated any threat to reduce or eliminate benefits before bargaining
began”).
Perhaps most importantly, the Board’s conclusion is unsupported because, where the
question is close, the presence of other threats and unfair labor practices is “critical” to
determining whether the company’s statements exude a “threatening color.” Coach & Equip.
Sales Corp., 228 N.L.R.B. at 441; see also Gen’l Fabs. Corp., 222 F.3d at 230–31; In re Dillon
Companies, Inc., 340 N.L.R.B. at 1272. The other facts of this case do not provide evidence of any
such coercive environment. Far from punitive terminations of pro-union employees or threats of
plant closure, see, e.g., Gen’l Fabs. Corp., 222 F.3d at 226–30, the only other potentially unfair
labor practice in this case is a PowerPoint slide on which the company opined that, should
employees authorize a union, “relationships suffer” and “flexibility is replaced by inefficiency.”
As we discuss below, we find these statements were likewise protected speech. Therefore, there
was no record of unfair labor practices at Hendrickson’s plant that would cast Hendrickson’s
letter in a threatening light.
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 10
B
The second issue in this case is whether Hendrickson violated the NLRA by stating on a
PowerPoint slide that, should a union be authorized, “the culture will definitely change,”
“relationships suffer,” and “flexibility is replaced by inefficiency.” Two out of three Members
agreed with the ALJ’s opinion that these statements represented threats that the company would
respond to union representation by changing management style and inflicting a more onerous
work environment on employees. One Board Member dissented, arguing that the company’s
statements were protected speech.
Per the Supreme Court decision in Gissel, the main question is whether Hendrickson’s
statements about changing company culture were projections of consequences beyond its control
or threats to retaliate against employees for authorizing union representation. See Gissel, 395
U.S. at 619. Hendrickson relies on the Board’s decision in Tri-Cast, Inc., 274 N.L.R.B. 377
(1985), to support its contention that the PowerPoint statements were describing consequences
beyond its control. In Tri-Cast, an employer sent a letter to employees stating:
We have been able to work on an informal and person-to-person basis. If the
union comes in this will change. We will have to run things by the book, with a
stranger, and will not be able to handle personal requests as we have been doing.
Id. at 377. The employer in Tri-Cast defended its letter by citing Section 9(a) of the NLRA,
which states that union representatives are the exclusive representatives for bargaining over
terms and conditions of employment and that, while individuals still have the right to
individually present grievances to their employer, union representatives have the right to attend
any such presentation. See id. at 377; 29 U.S.C. § 159(a). The Board concluded that the letter
was not threatening, explaining:
Section 9(a) thus contemplates a change in the manner in which employer and
employee deal with each other. For an employer to tell its employees about this
change during the course of an election campaign cannot be characterized as an
objectionable retaliatory threat to deprive employees of their rights, but rather is
nothing more or less than permissible campaign conduct. As the Ninth Circuit
has observed, “[I]t is a ‘fact of industrial life’ that when a union represents
employees they will deal with the employer indirectly, through a shop steward.”
NLRB v. Sacramento Clinical Laboratory, 623 F.2d 110, 112 (9th Cir. 1980).
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 11
Tri-Cast, Inc., 274 N.L.R.B. at 377. The employer also told employees that the company might
“lose business” because “union restrictions” would cause the company to “lose the flexibility we
need to ship [products].” Id. at 378. The Board again held that the company was entitled to
“mention [the] possible effects of unionization,” based on the fact that the union might bargain
for restrictions on the “amount and types of work done by unit members.” Id.
Turning to the PowerPoint at issue, the title slide of the presentation indicated that the
presentation would cover “Hendrickson’s Direct Employee Relationship.” App’x at 48. The
next slide defines “direct employee relationship” as “working with our employees so that we are
aware of, and responsive to, their ideas, issues and concerns.” App’x at 49. The presentation
also opined that direct relationships made sense to “achieve higher levels of employee morale,
productivity, and efficiency” by eliminating “the need for employees to turn to a third party.”
App’x at 50. The company also claimed that employees say they like to work at Hendrickson
because of its “open door policy,” “easy-going atmosphere,” “freedom to do [the] job,” and
“reward/advancement for those that work hard and produce.” App’x at 53. The company then
points out that, per the text on an authorization card, workers would “lose the right to represent
[themselves],” app’x at 64, which in turn would lead to the “loss of our direct employee
relationship.” App’x at 65. Finally, the statements at issue in this section were contained in one
of the concluding slides:
The culture will definitely change!
• You’ll be giving up your right to speak for and represent yourself.
• Every change to wages, hours, and working conditions requires
negotiations controlled by the union—not you.
• Relationships suffer.
• Flexibility is replaced by inefficiency.
• It will cost you money.
App’x at 86.
The company also emphasized the effect of unionization on the employer-employee
relationship in interactions outside the PowerPoint. In the August 21 meeting with employees,
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H.R. director Marlin Smith emphasized that the intervention of a third party would interfere with
Hendrickson’s relationship with its employees:
[W]e want to make sure you guys know that we are here to support our employees
and the best way for us to do that is without a third-party coming in and
intervening. So it’s difficult to have that conversation when you’re bringing in a
third-party that doesn’t know Hendrickson, doesn’t know you, doesn’t know your
families, doesn’t know our culture, and our history, because really they’re coming
in with their own self-interest in a lot of cases in that point. So we want to work
directly with the folks that we know, you know us, we’ve worked together for a
long time.
App’x at 38. Smith reemphasized the point when he warned that, after signing an authorization
card:
So at that point you no longer have a voice, you’ve signed that away to some
third- party, and that’s what Gary’s talking about, where we don’t want [a] third
party to have to intervene, we want to talk directly to our employees.1
App’x at 41. And in the August 24 letter from Randy Lawless, the company included the
following, similar language:
Under current law, your signature on a card forfeits your right to represent
yourself. . . . We believe our employees are entitled to the right to represent
themselves without third party interference.
App’x at 46.
The ALJ’s opinion, which the Board adopted in full, concluded that three of the
statements on the PowerPoint slide violated Section 8: “the culture will definitely change,”
“relationships suffer,” and “flexibility is replaced by inefficiency.” The opinion held that these
statements “indicate[d] with certainty that [Hendrickson] would no longer respond to employee
concerns or issues, no matter what they might be, and that employees would lose control over
every aspect of their work lives.” 366 NLRB No. 7, *9. According to the opinion, such
statements were “beyond the permissible communication that unionization will bring about a
1This statement was also charged as an unfair labor practice in the complaint, but the ALJ found—and the
Board agreed—that the statement was protected under Tri-Cast. 366 NLRB No. 7, *6–7.
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 13
change in the direct relationship between management and employees” because they were not
“carefully phrased on the basis of objective fact.” Id. (citing Gissel, 395 U.S. at 618).
Only two of the three Board Members supported this portion of the opinion, however.
These two Members defend the ALJ’s opinion by pointing to other statements in the slideshow,
such as the company’s promotion of its “easy-going atmosphere,” employees’ “freedom to do
[their] job,” and the company policy of “reward/advancement for those who work hard and
produce.” 366 NLRB No. 7, *1 n.2. These Members then assume that “atmosphere” and
“freedom” are within Hendrickson’s control, and therefore a change to these features involves
“retaliat[ion].” Id. One Member dissented from this part of the opinion, however, arguing that
the slide merely described a “fact of industrial life” after unionization and was therefore
protected by Section 8(c) and the Board’s decision in Tri-Cast. Id. The dissenting Member
points to statements on the same slide that were certainly protected by Tri-Cast, such as “you’ll
be giving up your right to speak for and represent yourself” and “every change to wages, hours,
and working conditions requires negotiations controlled by the union—not you.” Id. According
to the dissenting Member, these statements show that the company was discussing changes
beyond its control, not methods of retaliation. Id.
In our view, the Board’s opinion on this issue is inconsistent with Tri-Cast, and therefore
its application of the law to the facts of this case does not meet the substantial evidence standard.
The statements singled out from the PowerPoint slide can only be reasonably understood as
elaborating upon and summarizing the company’s position on the ineffectiveness of third-party
representation, which was a lawful argument for the company to make. The first statement—
“the culture will definitely change”—does not have negative connotations in isolation and can
only take meaning from the surrounding statements. The statements that “relationships suffer”
and “flexibility is replaced by inefficiency” are certainly negative, but context shows that they
are protected predictions of the consequences of unionization. The slides at appendix 64 and 65
together show that the “loss of our direct employee relationship” (emphasis added) directly
stems from the fact that the employees “lose the right to represent themselves.” The comments
at the August 21 meeting likewise tie interference in the employer-employee relationship to the
union’s right to intervene: “we don’t want [a] third party to have to intervene, we want to talk
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 14
directly to our employees.” And the August 24 letter similarly emphasizes the company’s belief
that “employees are entitled to represent themselves without third party interference.” (emphasis
added). Taken together, these remarks show that the only reasonable way to interpret the brief
statements at issue is that Hendrickson believes that a union’s formal right under Section 9(c) to
intervene in the adjustment of grievances renders untenable the casual, efficient communication
of the company’s “open door policy” and “easy-going atmosphere,” and the slide at issue
“simply explicates” that position “in layman’s terms.” Tri-Cast, Inc., 274 N.L.R.B. at 377.
Finally, the Board’s opinion erroneously suggests that Hendrickson had a duty to present
both the pros and cons of union representation. The opinion faults the company’s presentation
for suggesting that employees would have a more difficult time influencing their working
conditions while “ignoring the fact that, although they may not be at the negotiating table, union
members most often have a say in developing bargaining proposals concerning their wages and
benefits and other working conditions.” 366 NLRB No. 7, *9. But Hendrickson had the right to
emphasize the negative aspects of the loss of “direct” relationship, as the Board found in the first
portion of its opinion, and Supreme Court precedent does not require Hendrickson to provide the
counterargument to its own argument. This language in the Board’s opinion is inconsistent with
the NLRA’s policy of “uninhibited, robust, and wide-open debate in labor disputes,” Chamber of
Commerce, 554 U.S. at 68, in which both sides may “express themselves on the merits of the
dispute in order to influence its outcome,” Va. State Bd. of Pharmacy, 425 U.S. at 762 (citing
Gissel, 395 U.S. at 617–18). Therefore, the Board’s conclusion is not supported even by
substantial evidence.
VI
For these reasons, we GRANT Hendrickson’s petition for review and DENY the Board’s
application for enforcement of its order.
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 15
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DISSENT
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HELENE N. WHITE, Circuit Judge, dissenting. The majority acknowledges the
deference we give to the Board’s findings of fact, inferences drawn from those facts, and
applications of law to the facts, but the majority then substitutes its own judgment for that of the
Board’s, giving no deference at all. Because reasonable minds might accept the evidence in this
case as adequate to support the Board’s conclusion, see Vanguard Fire & Supply Co. v. NLRB,
468 F.3d 952, 957 (6th Cir. 2006) (quoting Lee v. NLRB, 325 F.3d 749, 754 (6th Cir. 2003)),
I would deny Hendrickson’s petition and enforce the Board’s order.
Bargain from scratch. The majority does not take issue with the Board’s established
principle that although an employer’s statement that it will “bargain from scratch” with union
representatives is not a per se violation of the NLRA, it “is a dangerous phrase which carries
within it the seed of a threat that the employer will become punitively intransigent in the event
the union wins the election.” (Maj. Op. at 6 (quoting Coach & Equip. Sales Corp., 228 N.L.R.B.
440, 440–41 (1977)); see also App’x at 204.) Such a statement can be coercive and violate the
NRLA if, when viewed in context, it reasonably conveys that an employer will either
“unilaterally discontinue existing benefits prior to negotiations, or [] adopt a regressive
bargaining posture designed to force a reduction of existing benefits for the purpose of
penalizing the employees for choosing collective representation.” Coach & Equip. Sales Corp.,
228 N.L.R.B. at 440–41; see also NLRB. v. Gen. Fabrications Corp., 222 F.3d 218, 231 (6th Cir.
2000).
In reaching their decisions the ALJ and the Board set forth these legal principles and
applied them to the facts of this case, concluding that Hendrickson’s statement that “[t]he
Company and any recognized Union would begin the negotiating process from scratch” could, in
context, be reasonably “understood by employees to be a threat of loss of their existing wages
and benefits.” (App’x at 205). Although this case by no means presents a flagrant violation of
the NLRA, the Board’s determination was reasonable and supported by substantial evidence.
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 16
As the unanimous Board explained, Hendrickson’s letter first reminded employees of the
various benefits upon which they relied—a fact the Board found “particularly telling” (id.)—and
then asserted that union representation would not “preserve job security, lead to greater benefits,
or enhance compensation” (id. at 45). The letter continued, stating that a union could not
promise employees “anything” (id.); that “none of the benefits, compensation, or job security
that [employees] currently enjoy would be guaranteed” (id.); and that bargaining would begin
“from scratch” (id.), a phrase the Board and this court have recognized as “dangerous.” As is
often found important in the Board’s precedents, Hendrickson’s letter did not refute the
reasonable inference that it was threatening to retaliate for union activity, such as by indicating
that it would bargain with the union in good faith, see, e.g., Stabilus, Inc. & UAW, 355 N.L.R.B.
836, 855–56 (2010), or by explaining that benefits may go up or down through give-and-take
negotiations, see Shaw’s Supermarkets, Inc. v. NLRB, 884 F.2d 34, 41 (1st Cir. 1989).
Although the majority concludes that the letter “does not evince any intent on the part of
company officials to adopt a regressive bargaining posture in response to unionization” (Maj.
Op. at 8–9), and that Hendrickson “makes clear that its statement is meant to counter any ideas
that union representation would automatically lead to an increase in compensation” (id. at 8),
nothing in the letter compels those conclusions, and the Board explained why it found that a
reasonable employee might perceive the letter as an unlawful threat. We are obliged to defer to
the Board’s judgment and expertise in this area. See Dayton Newspapers, Inc. v. NLRB,
402 F.3d 651, 660 (6th Cir. 2005) (“In assessing the coercive impact of the employer’s
statements, we defer to the NLRB’s judgment and expertise.” (citations omitted)).
The majority also suggests that a PowerPoint presentation Hendrickson showed its
employees the day after the letter dispelled any threat to reduce or eliminate benefits. The slides
began with a news article about Hendrickson’s Kendalville plant entitled, “Hendrickson workers
increase wages, benefits in early contract settlement.” (App’x at 82.) That slide has “Only half
the story!” superimposed over the news article in large font, and subsequent slides argued that
Kendalville employees were actually worse off as a result of unionization. Thus, reasonable
employees may not have interpreted these slides as clarifying that their benefits would be the
result of a good-faith, give-and-take negotiation.
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 17
Finally, the majority faults the Board for, “[p]erhaps most importantly,” failing to
consider whether there were other threats or unfair labor practices in determining whether this
particular statement was coercive, suggesting that the Board departed from its precedent. (Maj.
Op. at 9.) Nothing in the Board’s precedent or our caselaw prohibits the inferences the Board
made here. The primary case the majority cites states that “[a] close question sometimes exists
whether bargaining-from-scratch statements constitute a threat of economic reprisal” and thus
“[t]he presence of contemporaneous threats or unfair labor practices is often a critical factor in
determining whether there is a threatening color to the employer’s remarks.” Coach & Equip.
Sales Corp., 228 N.L.R.B. at 441 (emphasis added). Rather than require the presence of other
contemporaneous threats or unfair labor practices, the Board’s and our own precedent simply
require that the Board evaluate the challenged statement in context. The Board did that here.
More onerous working conditions. I would also defer to the Board’s finding that the
following statements in the PowerPoint presentation, purporting to describe the “[b]ottom [l]ine”
about unionization, violated Section 8: “the culture will definitely change,” “relationships
suffer,” and “flexibility is replaced by inefficiency.” According to the majority, the Board’s
decision lacked substantial evidence because those statements “can only be reasonably
understood as elaborating upon and summarizing the company’s position on the ineffectiveness
of third-party representation”; i.e., “Hendrickson believes that a union’s formal right under
Section 9(c) to intervene in the adjustment of grievances renders untenable the casual, efficient
communication of the company’s ‘open door policy’ and ‘easy-going atmosphere,’ and the slide
at issue ‘simply explicates’ that position ‘in layman’s terms.’” (Maj. Op. at 13–14 (quoting Tri-
Cast, Inc., 274 N.L.R.B. 377, 377 (1985)).)
I do not agree that the majority’s interpretation is the only reasonable one. In fact,
Hendrickson itself offers alternative interpretations on appeal. (Reply at 22–23 (arguing that
“flexibility is replaced by inefficiency” referred to Hendrickson’s “internal flexibility to maintain
its corporate efficiency,” including “flexibility to protect employee jobs during a downturn”); id.
at 26 (arguing that “relationships suffer” referred to employees’ relationships with their
coworkers suffering).) The Board saw things differently, concluding that the statements
“convey[ed] a threat that, if the employees elect the Union, [Hendrickson] would retaliate by
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 18
changing the easy-going culture and adopting a less flexible managerial approach in its
workplace relationships.” (App’x at 198 n.2.) Although the majority’s and Hendrickson’s
interpretations are plausible, so are the Board’s, especially when “tak[ing] into account the
economic dependence of the employees on their employers, and the necessary tendency of the
former, because of that relationship, to pick up intended implications of the latter that might be
more readily dismissed by a more disinterested ear.” NLRB v. Gissel Packing Co., 395 U.S. 575,
617 (1969). Under these circumstances, “we may not ‘displace the Board’s choice
between two fairly conflicting views, even though the court would justifiably have made a
different choice had the matter been before it de novo.’” Henry Ford Health Sys. v. NLRB,
105 F.3d 1139, 1143 (6th Cir. 1997) (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474,
488 (1951)).
As the Board explained, a reasonable employee could interpret Hendrickson’s challenged
statements as threats to retaliate by creating a more onerous work environment. This is
particularly true because, as the Board described, the presentation began by describing positively
Hendrickson’s culture and management’s relationship with employees. Thus, the subsequent
slide promising a loss of flexibility, change in culture, and deterioration of relationships could be
interpreted by a reasonable employee to mean that Hendrickson would retaliate by making the
environment less “[e]asy-going” where employees would not have the “[f]reedom to do [their]
job” or opportunity for “[r]eward/advancement.” (App’x at 53.) See Gen. Fabrications Corp.,
222 F.3d at 231 (“[A] simple threat to diminish, however slightly, the quality of employee
working conditions should the employees select the Union . . . cannot but effect employee
sentiment regarding the decision to support or oppose the Union.” (citation omitted)). This goes
beyond lawfully commenting about the impact unionization may have on the direct relationship
between management and employees. Further, as the Board noted, its conclusion is bolstered by
Hendrickson’s prior unlawful statement that it would begin the negotiation process from scratch.
Finally, the majority faults the Board for “suggest[ing] that Hendrickson had a duty to
present both the pros and cons of union representation” when the Board stated that Hendrickson
was “ignoring the fact that, although they may not be at the negotiating table, union members
most often have a say in developing bargaining proposals concerning their wages and benefits
Nos. 18-1144/1315 Hendrickson USA, LLC v. NLRB Page 19
and other working conditions.” (Maj. Op. at 14.) But this portion of the Board’s opinion was
not mandating that Hendrickson say anything; rather, the Board was explaining why it rejected
Hendrickson’s argument that these statements were lawful as statements of objective fact about
probable consequences of unionization beyond Hendrickson’s control. (App’x at 206 (citing
Gissel Packing Co., 395 U.S. at 618).) Accordingly, this critique by the majority is misplaced.
In sum, because the Board’s decision is supported by substantial evidence, I respectfully
dissent.