D.R. NO. 81-1

STATE OF NEW JERSEY

PUBLIC EMPLOYMENT RELATIONS COMMISSION

BEFORE THE DIRECTOR OF REPRESENTATION

In the Matter of

PASSAIC VALLEY SEWERAGE

COMMISSION,

Public Employer,

-and-	Docket No. RO-80-23

LOCAL 1158, INTERNATIONAL

BROTHERHOOD OF ELECTRICAL

WORKERS,

Petitioner.

Appearances:

For the Public Employer,

Ambrosio & Ambrosio, attorneys

(Gabriel Ambrosio of counsel)

For the Petitioner,

Robert Sarcone, attorney

(Gerald E. Fusella of counsel)

DECISION AND DIRECTION OF ELECTION

Pursuant to an agreement for consent election dated September 17, 1979, entered into between Passaic Valley Sewerage Commission (the "Sewerage Commission") and Local 1158, International Brotherhood of Electrical Workers ("Local 1158"), secret ballot elections were conducted by the Public Employment Relations Commission (the "Commission") on October 16, 1979, in a unit comprised of all blue collar employees and in a unit consisting of craft employees of the Sewerage Commission. The tally of ballots revealed that Local 1158 did not receive a majority of the valid ballots cast.

By letter dated October 18, 1979, Local 1158 filed post-
election objections, supported by documentation. Local 1158 alleged that, through the dissemination of these documents during the pre-election period, the Sewerage Commission unlawfully interfered with employee free choice.

Based on the October 18, 1979 submission, the undersigned in accordance with N.J.A.C. 19:11-9.2(h) and (i), concluded that Local 1158 had met its burden of providing sufficient evidence of objectionable conduct to support a prima facie case. Further, under N.J.A.C. 19:11-9.2(j), the undersigned, after a preliminary investigation, concluded that there were substantial and material factual issues in dispute which would more appropriately be resolved after a hearing. Accordingly pursuant to a Notice of Hearing dated November 13, 1979, a hearing was held on December 127, 1979 before Arnold H. Zudick, a Hearing Officer of the Commission. At this hearing, all parties were given an opportunity to examine and cross examine witnesses, to present evidence and to argue orally. Subsequent to the close of hearing, Local 1158 filed a brief on February 13, 1980. The Sewerage Commission did not file a post-hearing brief.

On March 25, 1980, the Hearing Officer issued his Report and Recommendations. The Hearing Officer found that Local 1158 had not satisfied its burden of proving, as required by N.J.A.C. 19:11-9.2(h), that certain documents disseminated by the Sewerage Commission during the pre-election period interfered with the employees' freedom of choice. Therefore, the Hearing Officer recommended that the objections be dismissed and that an appropriate certification be issued based upon the tally of ballots.

Although neither party has filed objections to the Hearing Officer's Report and Recommendations, the undersigned has undertaken a review of this matter in order to determine whether he shall adopt, reject or modify the Hearing Officer's Report and Recommendations, pursuant to N.J.A.C. 19:11-7.4. The undersigned has carefully considered the entire record in this proceeding including the Hearing Officer's Report and Recommendations and determines as follows:

1.	The Passaic Valley Sewerage Commission is a public employer within the meaning of the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 et seq. (the "Act"), is the employer of the employees who are the subject of this proceeding and is subject to the provisions of the Act.

2.	Local 1158, International Brotherhood of Electrical Workers is an employee representative within the meaning of the Act and is subject to its provisions.

3.	On August 15, 1979, Local 1158 filed a Petition for Certification of Public Employee Representative with the Commission seeking to represent a unit of employees employed by the Sewerage Commission. On September 17, 1979, the Sewerage Commission and Local 1158 executed a consent election agreement for elections in a unit of blue collar employees and another unit of craft employees employed by the Sewerage Commission.

4.	On October 16, 1979, elections were held in both units of employees and the tally of ballots for each unit revealed that the majority of employees who voted in each unit did not wish to be represented by Local 1158. By letter dated October 18, 1979, Local 1158 advised the undersigned that it objected to the Sewerage Commission's circulation of certain pre-election campaign materials to the employees. Local 1158 alleged that these actions by the Sewerage Commission were unfair and prejudicial and directly affected the results of the election. Accordingly, Local 1158 requested that the results of the election be set aside and a new election be ordered. The alleged unfair and prejudicial campaign literature cited by Local 1158 in its October 18, 1979 submission and subsequently submitted as evidence at the hearing, is as follows: (1) A Sewerage Commission resolution, dated September 12, 1979, hand-delivered to all employees, which stated that, effective January 1, 1980, the salary scale of all employees would be increased and that before November 14, 1979, individual consideration would be given to certain other employees for increases in their salaries (Exhibit J-15); (2) An October 9, 1979 handbill circulated to the employees which stated that all salary increases in the future would be effectuated by increasing the salary guide as it was done for 1980, and that all employees would receive this increase plus any step increment that they were entitled to in accordance with their position on the salary guide (Exhibit J-16); and (3) An October 12, 1979 Sewerage Commission handbill circulated tot he employees, which allegedly intentionally misled the employees by stating that if Local 1158 were successful in the pending election all employees would have to join and pay dues (Exhibit J-17).

5.	In considering these three objections the Hearing Officer found that: (1) Local 1158 failed to meet its burden of proving that any employees were improperly interfered with as the result of the Sewerage Commission's September 12, 1979 resolution and October 9, 1979 handbill circular; and (2) Any inaccuracies contained in the Sewerage Commission's October 12, 1979 handbill circular did not improperly interfere with the employees' free choice because it was in reply to a handbill previously circulated by Local 1158, which was also inaccurate.

Prior to reviewing the Hearing Officer's specific findings and recommendations, the undersigned must take note of several relevant principals of labor law. Under a longstanding policy of the National Labor Relations Board1 the critical period to be examined in determining whether an employer's conduct has improperly interfered with the election process begins with the date of the filing of a representation petition rather than the date of the execution of the consent election agreement. The Board in Goodyear Tire & Rubber Co., 51 LRRM 1071 (1952):

Where such conduct occurs after the filing of a representation petition, therefore, there is no sound reason for ignoring it or immunizing it simply because it occurs before a consent agreement or stipulation is signed by the parties. The filing of the petition should be clear notice in all cases that objectionable conduct is thereafter taboo.2

See also, Teamsters Local 796 v. NLRB, 92 LRRM 2077 (1976).

In evaluating objections to an election the NLRB has stated: "The test is whether the employer engaged in conduct which, it may reasonably be said, tends to interfere with the free exercise of employee rights under the Act." American Freightways Co., Inc., 44 LRRM 1302 (1959). In effect, the Board has held that in order to prevail the union is not required to prove that the objectionable conduct was specifically intended to influence the voters or to demonstrate that it actually had the effect of restraining the voters' free choice. El Rancho Markets, 98 LRRM 1153 (1978). Accordingly, an employer is held to have those consequences that naturally and logically flow from his conduct. As a result, it is sufficient to show that the employer engaged in certain actions which could reasonably be calculated as having the nature tendency of interfering with the voter's free choice. As the United States Supreme Court stated in NLRB v. Exchange Parts, which coincidentally involves the subject matter of the objections herein:

The danger inherent in well timed increases in benefits is the suggestion of a fist inside the velvet glove. Employees are not likely to miss the inference that the course of benefits now conferred is also the source from which may dry up if it is not obliged. 55 LRRM 2098, 2100 (1964).

Although previous Commission decisions have tended to emphasize the need for direct evidence of actual interference with employee free choice, In re Jersey City Dept. of Public Works, P.E.R.C. No. 43 (1970); In re Jersey City Medical Center, P.E.R.C. NO. 49 (1970); In re Ocean Cty., D.R. No. 79-34 5 NJPER 200 (¶10121 1979), these decisions do not establish a subjective standard of actual interference as the only basis on which objectionable pre-election conduct would be found. In fact, they confirm the Commission's adoption of the concept that a finding of objectionable conduct can be based one either direct evidence of employer interference or reasonable inferences of interference which may be drawn from the facts. For example, in In re Jersey City Dept. of Public Works, supra, the Commission stated that there must be evidence of conduct which interferes with or has the reasonable tendency of interfering with the employees' free choice. Further, in In re Jersey City Medical Center, supra, the Commission in considering the alleged employer misrepresentation, stated that an election would be set aside only where the misrepresentation was such that it could reasonably be expected to have a significant impact on the election. Finally, in In re Tp. of East Windsor, D.R. NO. 79-13, 5 NJPER 445 (¶4202 1978), the undersigned specifically adopted the NLRB's objective standard that any meeting with employees conducted by either an employer or an employee organization within 24 hours of an election and occurring on "company time" constitutes a "per se" interference with the employees' free choice. Accordingly, the undersigned now reaffirms that the commission has indeed adopted a two tier standard for reviewing election objections. While direct evidence of actual interference with employee free choice is a preferred type of evidence, an objecting party will prevail where such interference can reasonably be inferred from an objective analysis of the circumstances surrounding the election.3

The National Labor Relations Act, 24 U.S.C. §151 et seq. protects the right of employees to select a majority representative of their own choice free from employer interference. Both the NLRB and the federal courts have concluded that an employer's bestowing of benefits on his employees during ane election campaign can reasonably be calculated as having an inhibiting effect on the employees' freedom of choice and the propriety of the election process. Medo Photo Supply Corp. v. NLRB, 14 LRRM 581 (1944); NLRB v. Exchange Parts Co., supra. The Board will find employer interference where it can reasonably be concluded that the union's filing of a representation petition and its campaign motivated the employer to grant an increase in benefits which he would not have otherwise granted at that time. Ayr-Way Stores, 84 LRRM 1127 (1973); Dynatronics Inc., 75 LRRM 1568 (1970).

The Board presumes that the granting of benefits during an election campaign is causally related to a union's presence and is calculated to affect the outcome of an election. Once the objecting party demonstrates that such benefits have been bestowed during the critical period, the burden is then shifted to the employer to prove the existence of legitimate and sound business considerations which justified the granting of benefit increases during the time of the election process.4 Accordingly, when it has been established that the timing of benefit increases coincided with the filing of a representation petition and there has not been an affirmative showing by the employer that its conduct was governed by factors unrelated tot he representation proceeding, it is then reasonable to draw the inference if improper employer motivation and improper interference with the employees' freedom of choice.5

In evaluating an employer's proffered reasons for increasing employee benefits during the critical period, the Board has considered whether: (1) the increase in benefits was under consideration prio to the onset of the union's organizational activities; (2) there was any credible explanation for delaying the announcement of a final decision to grant increases, which was made prior to the union's appearance, until after the representation petition had been filed; (3) the final decision to grant the benefit and the announcement of that decision during the ordinary and normal course of business only incidentally coincided with the representation petition and election process; (4) there was an established past practice of granting this type of benefit at this time of the year; (5) there were legitimate tax considerations, market or economic conditions or matters of business competition beyond the employer's control which justified such an increase during the critical period; (6) the dictates of the industry as a whole, and corporate policies with regard to those dictates, served as a basis for the increase; (7) the requirement of or approval by state or federal regulatory agencies delayed the granting of any benefit until after the election process had begun.6

These same factors have also been considered by other state public employment relations agencies. In Matter of A.F.S.C.M.E., Wisconsin Council #40, P.B.C. ¶40,780 (1978), the Wisconsin Employment Relations Commission found that the employer had an established practice of simultaneously granting unrepresented employees a salary increase roughly equivalent to that received by represented employees. Since the employer was committed to granting a wage increase prior to the union's organizational activities and the increase reflected customary actions, no improper motivation to influence the election was inferred. Similarly, where an employer's decision to grant benefits occurs in the ordinary and normal course of business or is governed by factors not related to the union's organizational activities, no improper motivation will be inferred simply because such actions coincided with the election process. Matter of A.F.S.C.M.E., Illinois Office of Collective Bargaining, P.B.C. ¶40,850 (1979); A.F.S.C.M.E., Council 74 v. State of Maine, Maine Labor Relations Board, P.B.C. ¶40,361 (1977); cf: Polk Cty. P.B.A. v. City of Lake Alfred, Fla P.E.R.C., P.B.C. ¶40,186 (1977).

The Board, the federal courts, and at least one state employment relations commission have also held that an employer's promise of future benefits made during the election process can also be reasonably calculated as having an inhibiting effect on the employees' freedom of choice and the propriety of the election process.7 The Board's treatment of cases involving promises of future benefits parallels its approach to situations where benefits have actually been granted during the election process. Accordingly, the burden is upon the employer to prove that such promises were made pursuant to: (1) past practices; or (2) prior deliberations resulting in decisions made prior to the filing of the representation petition; or (3) legitimate business purposes unrelated to the election process.8

An employer's promise of a future benefit does not have to be expressly contingent upon the outcome of the election to be found objectionable. The Board will set aside an election where, from the circumstances surrounding the employer's ostensibly unconditioned promise, it can reasonably be concluded that the employees would have good cause to believe that the promise resulted from the union's organizational activity and, therefore, was impliedly conditioned on the results of the election.9 For example, in El Rancho Market, supra, the employer stated two days before the election that he was in the process of preparing changes in an existing profit sharing plan under which a large number of employees would begin to participate in the plan for the first time. The Board found that these statements constituted a veiled promise of future benefits calculated to dissuade employees from supporting the union.

There are several factors which the Board will consider in determining whether it is reasonable to infer from the employee's conduct that the promise of future benefits was conditional: (1) the timing of the promise; (2) the absence of a legitimate business justification; (3) promises made in conjunction with either overt solicitations to vote against the union or other employer communications concerning the probable negative impact or effect of unionization; and (4) promises made in conjunction with a pattern of coercive conduct by the employer – e.g. threats interrogation, solicitation of grievances.10 In summary, the juxtaposition of negative statements by the employer concerning unionization and promises of benefits emphasizes to the employees that they would benefit from rejecting the union.

Where an employer has made a material misrepresentation of facts, the Board, in evaluating post-election objections, will consider whether the union had an opportunity to effectively reply to the misrepresentation, thereby dissipating its impact on the election. General Knit of California, 99 LRRM 1687 (1978). However, where the employer has granted a benefit and made promises of future benefits during the election process, the Board will not consider whether or not the union has had an opportunity to respond. Under these circumstances, the union's response cannot effectively negate the improper influence on employee free choice which results from the employer's "first inside the velvet glove" conduct. Accordingly, Local 1158's response to Exhibit J-15 does not negate the objectionable character of that document.11 However, with regard to Exhibit J-
1712 the undersigned adopts the Hearing Officers's analysis that any misrepresentation in that document regarding the payment of monthly union dues did not constitute interference with the election process. Further, the undersigned notes that the remaining portions of J-17 are unobjectionable since they constitute an accurate statement of the realities of the collective bargaining process and the possible results of lawful negotiations with the union. Ludwig Motor Corp., 91 LRRM 1199 (1976); Computer-Peripherals, Inc., 88 LRRM 1027 (1974).

After a careful review and analysis of the record, the undersigned declines to adopt certain of the Hearing Officer's findings of fact and conclusions of law with regard to Exhibits J-15 and J-16. Specifically, an analysis of the testimony of Carmine Perrapato, the Sewerage Commission's Executive Director, leads the undersigned to conclude that the sequence of events leading up to the October 16, 1979 election was as follows:

Since 1978, the Sewerage Commission has been in the process of expanding the nature and scope of its operations. This expansion has resulted in a significant influx of additional personnel. Prior to 1978, the Sewerage Commission did not have a written set of rules and regulations, specific job descriptions or classifications, or a salary scale based on job classifications. Employee relations were informally governed by established practices. Accordingly, in 1978, the Sewerage Commission undertook a major overhaul of its employment practices and policies with the intent of upgrading and formalizing them. A management study team was selected as a labor relations consultant. This consultant initially prepared a management study which recommended the adoption of job classifications, salary scales based on classification and a manual of rules and regulations. The Sewerage Commission adopted these recommendations and retained the study team to further prepare specific proposals for implementing the study in several steps.

The Study team formulated a proposed Personnel Policy and Procedure Handbook which was adopted by the Sewerage Commission effective February 1 1979. Article (E)(3) of the Handbook, entitled Job Specifications, provided for further establishment of job specific descriptions, classifications, and salary schedules based on classifications. Pursuant to this article the study team subsequently proceeded to audit the various duties of both the professional and nonprofessional employees. From this investigation the study team prepared a survey of job classifications with an attached salary guide for each classification organized into ranges and steps. This recommendation was completed by the study team prior to August 1979 and was adopted by the Sewerage Commission sometime in August.

The salary guide, as initially adopted, called for the "red circling" of approximately 54 employees. For some employees "red circling" meant that they would not receive any salary increases for 1980. The 1979 salaries for these employees were already beyond the projected 1980 salary schedule for their positions. Accordingly, the study team had recommended that these employees be completed bypassed for 1980 so that by the next year their salaries would be in line with the salary guide. For other employees, "red circling" meant that they would receive less than the 7% increase which the study team had recommended as the generally prevailing increase for 1980. The 1979 salaries for this second group of employees were such that their initial placement on the salary guide would result in less than a 7% increase for 1980.13 From its investigation of the Sewerage Commission's employees, the study team had concluded that the professional employees were underpaid in comparison with comparable civil service employment and private industries in the area. However, the nonprofessional employees were comparably overpaid. Accordingly, the "red circling" of some of these 54 employees was intended to correct this imbalance.

The adoption of the August 1979 salary guide had a significant impact on the employees. Many of them, particularly in the lower echelons, were disgruntled by the lower than expected salaries. Immediately after the guide's adoption, in early August 1979, there was a definite upsurge in union organizational activity. Director Perrapato stated that employees at that time advised him that the adoption fo the guide had resulted in a significant increase in the signing of union authorization cards. This organizational activity led to the filing of the representation petition by Local 1158 on August 15, 1979.

In response to the negative employee reaction, management personnel met with the various classifications of employees during the period between late August 1979 and September 12, 1979. At these meetings management attempted to respond to the employees' complaints by explaining how the salary guide had been formulated and emphasizing that in the future all salary increases would be in accordance with the guide. However, at its September 12, 1979 meeting, the Sewerage Commission adopted a second resolution (Exhibit J-15) relating to salaries for 1980. This resolution initially noted that under the salary schedule previously adopted in August 1979 for 1980 some employees would receive less than the generally prevailing 7% increase for 1980. The resolution then grants the formerly "red circled" employees a bonus for 1980 which amounted to the difference between 7% of their present salary and the cash increase they would have received under the August 1979 salary guide. In regard to those employees who would receive no increase for 1980, the resolution stated that the Sewerage Commission would examine each case on an individual basis and decide on a final course of action for each employee prior to its November 14, 1979 meeting.

On September 17, 1979, the parties entered into a consent election agreement which scheduled an election for October 16, 1979. Just prior to this election, on October 9, 1979, the Sewerage Commission distributed a circular (Exhibit J-16) to its employees which noted that all the employees, with one exception, who were eligible to vote in the election had received a salary increase for 1980. The circular also notes that all previous "red circles" had been eliminated and further promises that: (1) employees would never be "red circled" in the future; (2) all salary increases in the future would be accomplished by increasing the salary guide; (3) all employees would receive the 1980 salary increase plus any salary step they would have coming according to the salary guide.

Executive Director Perrapato admitted on direct examination that after the September 12 1979 an October 9, 1979 circulars were issued there was a noticeable change in the attitude of the employees toward the union. Employees stated to Perrapato that through August 1979 they had been dissatisfied with the Sewerage Commission's decision regarding salaries but by September they were satisfied. Employees who had signed union authorization cards in August 1979 stated that as a result of the Sewerage Commission's decision on September 12, 1979, they had changed their minds about voting for a union.

From this summary of the facts its is clear that long before the appearance of Local 1158 the Sewerage Commission, through its labor consultant, began a major overhaul of its labor relations policies and practices due to its expansion and increase in personnel. The preparation of job classifications and a salary guide with ranges and steps according to classifications was a significant aspect of this long term process which was completed by the Sewerage Commission just prior to the filing of the representation petition on August 15, 1979. It is obvious then that there was a legitimate business justification for the adoption of the salary guide in August 1979 which was unrelated to the union's organization activity. This guide was adopted in the ordinary and normal course of business which only incidentally coincided with the union's organizational activities. Therefore, those actions which the Sewerage Commission took in accordance with the management study team's recommendations by adopting a salary guide in August 1979 did not constitute objectionable conduct.

However, the guide adopted in August 1979 initially called for the "red circling" of 54 employees. Only after there was evidence of employee discontent, an upsurge in union organizational activity, an increase in the number of employees signing union authorization cards, the filing of the representation petition, and the effort by management to calm employee discontent, did the Sewerage Commission, on September 12, 1979, adopt a second resolution regarding salaries for 1980.

It is clear from the very language of the September 12 resolution that it constituted a significant deviation from the salary guide recommended by the management study team and adopted in August 1979. The state purpose of the recommended "red circling" was to bring overpaid employees in line with the guide and to insure that employees with comparable job classifications and years of service would receive the same salary. The Sewerage Commission initially accepted this concept when it adopted a salary guide in August 1979 but then acted inconsistently by adopting the September 12, 1979 salary resolution which resulted in the granting of bonuses in excess of the guide.

It is obvious from these facts that the September 12, 1979 supplemental salary resolution was not under consideration prior to the filing of the representation petition by Local 1158. It is equally clear that the resolution was not adopted by the Sewerage Commission in the ordinary and normal course of business as pat of the management study team's long term recommendations for the overhaul of the Sewerage Commission's labor relations. Nor did the resolution merely coincide with the election process. Finally, there is no evidence in the record to establish any legitimate business considerations which explains why the Sewerage Commission decided to deviate from the recommended salary guide only a few weeks after its initial adoption. Accordingly, it is reasonable to conclude that the September 12, 1979 supplemental salary resolution constituted an increased benefit which the Sewerage Commission would not have otherwise granted at that time but for the union's organizational activities and filing of a representation petition. Considering the nature and chronology of the events which occurred between the adoption of the salary guide in August 1979 and the supplemental salary resolution adopted on September 12, 1979, the timing and substantive provisions of the resolution itself, the presumption in favor of finding employer interference when a benefit is granted during the election process, and the absence of any affirmative showing by the Sewerage Commission that its conduct was governed by legitimate factors unrelated to the election process, it is reasonable to conclude that the Sewerage Commission's adoption fo the resolution was causally related to the filing of the representation petition and was motivated by a calculated desire to improperly interfere with the employees' free choice. Moreover, inasmuch as Executive Director Perrapato forthrightly stated that this bonus actually influenced the potential voters there is direct evidence that the granting of the bonus inhibited the employees' free choice.

While the September 12, 1979 supplemental salary resolution dealt with the Sewerage Commission's decision not to red circle employees for 1980, the October 9, 1979 handbill circular further pledged not to red circle employees in the future. Therefore, the above analysis is equally applicable to the promises contained in this handbill. Accordingly, it is reasonable to conclude that the promises contained in the handbill would not have been made but for the presence of Local 1158, were causally related to the filing of the representation petition and were motivated by a deliberate desire to improperly interfere with the employees' free choice. Moreover, this handbill was circulated just seven days prior to the election and emphasized several times that the promises contained therein were not conditioned on the outcome of the election. However, considering these references to the union in conjunction with the substantive provisions of the handbill, the timing of the handbill, the supplemental salary resolution, and the circumstances surrounding the issuing of these two communications, it is reasonable to conclude that the employees would not miss the inference that these ostensibly unconditioned promises were a response to the union's presence and were conditioned on the results of the election.

Accordingly, the undersigned hereby sets aside the election and pursuant to N.J.A.C. 19:ll-9.2(j), directs a second election among the employees herein in the units described below.14 The election shall be conducted no later than thirty (30) days from the date set forth below.

Those eligible to vote are employees set forth below who were employed during the payroll period ending September 14, 1979, including employees who did not work during that period because they were ill, on vacation or temporarily laid off, including those in military service. Employees must appear in person at the polls in order to be eligible to vote. Ineligible to vote are employees who resigned or were discharged for cause since the designated payroll period and who have not been rehired or reinstated before the election date.15

Those eligible to vote shall vote whether or not they desire to be represented for the purpose of collective negotiations by Local 1158, International Brotherhood of Electrical Workers.

A majority of valid ballots cast shall determine the results of the election. The election directed herein shall be conducted in accordance with the Commission's rules.

BY ORDER OF THE DIRECTOR

OF REPRESENTATION

________________________

Carl Kurtzman, Director

DATED:	July 30, 1980

Trenton, New Jersey