Local One, Amalgamated Lithographers v. National Labor Relations Board

GEORGE C. PRATT, Circuit Judge: Petitioner Local One, Amalgamated Lithographers of America, pursuant to § 10(f) of the National Labor Relations Act, 29 U.S.C. 160(f) (1976), seeks to review an order of the National Labor Relations Board that dismissed an unfair labor practice complaint against employer-intervenor Howard Press, Inc., a commercial printing business that employs approximately 125 workers. Local One’s complaints to the board, later consolidated, alleged various unfair labor practices under §§ 8(a)(1) and (a)(3) of the NLRA, 29 U.S.C. § 158(a)(1) and (3), in connection with an election for union representation held on November 2, 1979, which the union lost by a vote of 15 to 6. In the consolidated complaint the union presented two significant issues. It claimed first that by warnings of economic reprisals and other activities directed at its — 174 — employees as a group, Howard Press had interfered with, restrained, and coerced its employees in the exercise of their rights guaranteed in § 7 of the NLRA, 29 U.S.C. § 157. On this issue the AU’s findings and recommendation in favor of the union were accepted by the board, which implemented the recommendation with an order that requires Howard Press to cease and desist from threatening employees, from creating the impression that employees’ union activities are under surveillance, or from otherwise interfering with, restraining, or coercing employees in the exercise of their rights under § 7. Neither side has sought review of that part of the order. The union’s second claim raised the issue that is now before us. The union claimed that Howard Press had discharged Michael Doklia, Judith Blechar, and Leann Moss, who had been members of the union’s organizing committee, because they were engaging in a protected activity, union organizing. Howard Press contended that it discharged the employees not because of their union activity, but because they had used marijuana on company premises and had been arrested as a result. After hearing evidence on the union’s charges of unfair labor practices, and after making certain findings of fact, the ALJ concluded that Howard Press, by discharging Doklia, Blechar, and Moss, had “discouraged membership in a labor organization by discriminating in regard to tenure of employment, thereby engaging in unfair labor practices in violation of § 8(a)(3) and (1) of the Act.” He based this conclusion on the facts that Howard Press knew of the three employees’ union activity at the time of their suspensions and that Howard Press had exhibited “animus toward the union”. As to the reason proferred by Howard Press for the discharges, the ALJ found that the past practice of Howard Press revealed that employees had been discharged for drug use only when it affected their faculties or work performance. He particularly noted the company’s failure to suspend or terminate two other employees, discussed below, when it became aware that they had been smoking marijuana during a break. As to the three subject employees the AU found that there was no evidence they “were under the influence of drugs or that their work was affected at any time while such employees were at work”, and he concluded that the discharges were because of anti-union animus. Based on his finding that the unfair labor practices were pervasive, the AU recommended that, despite the union’s loss of the representation election, the board should issue a bargaining order under the Supreme Court’s decision in NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969). On administrative appeal, the board disagreed, finding that Howard Press had “discharged Doklia, Blechar, and Moss because of the information conveyed to [Howard Press] that those employees had used marijuana on company premises and were arrested at said premises for that reason.” The board therefore overruled the union’s objections based on retaliatory discharges, certified the election’s result, and refused to issue a bargaining order. The union seeks review. ' DISCUSSION The central issue is whether Howard Press violated §§ 8(a)(1) and 8(a)(3) of the NLRA, 29 U.S.C. §§ 158(a)(1) and (a)(3), when it discharged Doklia, Blechar, and Moss. More specifically, the question is whether the employees were discharged for their union activity or for their use of drugs on company premises. The governing substantive rules were summarized by Justice White in NLRB v. Transportation Management Corp., — U.S.-, 103 S.Ct. 2469, 2472, 76 L.Ed.2d 667 (1983): Employees of an employer covered by the NLRA have the right to form, join, or assist labor organizations. NLRA § 7, 29 U.S.C. § 157. It is an unfair labor practice to interfere with, restrain, or coerce the exercise of those rights, NLRA § 8(a)(1), 29 U.S.C. § 158(a)(1), or by discrimination in hire or tenure ‘to — 175 — encourage or discourage membership in any labor organization,’ NLRA § 8(a)(3), 29 U.S.C. § 158(a)(3). Under these provisions it is undisputed that if the employer fires an employee for having engaged in union activities and has no other basis for the discharge, or if the reasons that he proffers are pretextual, the employer commits an unfair labor practice. He does not violate the NLRA, however, if any anti-union animus that he might have entertained did not contribute at all to an otherwise lawful discharge for good cause.” Because the ambiguities in situations involving dual or mixed motives for an employer’s conduct repeatedly caused the board difficulty, it eventually adopted, in Wright Line, 251 N.L.R.B. 1083 (1980), enforced, 662 F.2d 899 (1st Cir.1981), cert. denied, 455 U.S. 989, 102 S.Ct. 1612, 71 L.Ed.2d 848 (1982), what has become known as the Wright Line test, approved by the Supreme Court in NLRB v. Transportation Management Corp., supra. Under that test, in proceedings before the AU and the board, the burden initially is on general counsel to prove by a preponderance of the evidence that the employee’s conduct protected by § 7 of the act “was a substantial or a motivating factor in the discharge.” Even if it is established, however, that “a desire to frustrate union activity” is a motivating factor in the discharge, the employer can still avoid being held by the board to be in violation of the act by proving by a preponderance of the evidence “that the discharge would have occurred in any event and for valid reasons * * 103 S.Ct. at 2473. In this case the board did not specifically articulate a Wright Line analysis. It made no mention of Howard Press’s anti-union animus as found by the AU, but instead simply found that Doklia, Blechar, and Moss were discharged “because of the information conveyed to [Howard Press] that those employees had used marijuana on company premises, and were arrested at said premises for that reason.” The board’s decision, therefore, could be interpreted as treating this as a pretext case, i.e., one where “the issue is whether either illegal or legal motives, but not both, were the ‘true’ motives behind the decision.” NLRB v. Transportation Management, 103 S.Ct. at 2473 n. 5. Under that interpretation the board has found that the discharge was because of drug use, not union activity. Alternatively, the administrative proceedings as a whole could be viewed as a dual motive case, calling for application of the Wright Line test. In that perspective the AU’s finding of anti-union animus would constitute the first determination, and the board’s finding of a valid reason for the discharges would constitute an acceptance of the employer’s “affirmative defense” under the Wright Line analysis. See 103 S.Ct. at 2473. The particular mode of analysis is unimportant in this case, however, because whichever approach is taken, pretext or dual motive, the result before the board would be the same as long as Howard Press proved by a preponderance of the evidence that the discharge was because of drug use. Of course, on reviewing the board’s decision, this court need not find that Howard Press proved its case by a preponderance; rather, the standard for review of the agency’s decision limits our inquiry to one issue — whether there is substantial evidence to support the board’s finding that the discharge was because of drug usage. 29 U.S.C. § 160(e). Substantial evidence “means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938). It is “more than a mere scintilla.” Id.; see also Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971). Substantial evidence on the record as a whole includes that evidence opposed to the board’s view. Universal Camera Corp. v. NLRB, 340 U.S. 474, 485-488, 71 S.Ct. 456, 463-64, 95 L.Ed. 456 (1951). Further, even if this court could draw different conclusions from those drawn by the agency, that — 176 — would not prevent the agency’s decision from being supported by substantial evidence. City of Oakland v. Donovan, 703 F.2d 1104, 1106 (9th Cir.), modified, 707 F.2d 1013 (1983). The union makes much of the fact that initially the ALJ ruled in its favor. While the ALJ’s decision is part of the record and his findings on credibility are entitled to some deference, our task is to determine whether the board’s decision, not the AU’s, is supported by substantial evidence. Universal Camera Corp. v. NLRB, 340 U.S. at 492-96, 71 S.Ct. at 466-68; see also NLRB v. Donald E. Hernly, Inc., 613 F.2d 457, 461-62 (2d Cir.1980); Kopack v. NLRB, 668 F.2d 946, 956 (7th Cir.), cert. denied, 456 U.S. 994, 102 S.Ct. 2278, 73 L.Ed.2d 1290 (1982); NLRB v. W.R. Grace & Co., 571 F.2d 279, 282 (5th Cir.1978); see generally 3 K. Davis, Administrative Law Treatise § 17.16 (2d ed. 1980). Applying these principles, we are satisfied that the board’s decision in favor of Howard Press on the retaliatory discharge claim is supported by substantial evidence. As the ALJ found, Howard Press had a long-standing policy against using drugs or alcohol at work. A number of employees testified that they understood from the time they were hired that if they violated this policy they would be fired. Warvel, Moss, and DeLuea all admitted they knew of the policy. Over the years, the company had discharged employees it knew used drugs or alcohol at work. In February 1979, B.K. was dismissed after he had been using drugs at work. During the spring of 1979, the company also threatened to discharge three other employees, M.L., J.R., and O.R., who were suspected of using drugs on the company property, but all three denied the charge. J.R. and O.R. were given warnings and were told if they were ever suspected of using drugs on their break they would be fired. M.L. was subsequently forced to resign when he was denied an expected wage increase. Throughout early 1979, company officials had received reports that employees at the plant were using drugs, predominantly marijuana. Drug related graffiti appeared daily on the restroom walls. In the spring of 1979, when Herbert Porter, president of Howard Press, came to realize there was a widespread and growing drug problem in the plant, he contacted the police department, as he had in the past when he had other problems such as vandalism, traffic, and parking. Porter told the chief that because there was dangerous equipment in the plant, he was concerned that someone could be injured or killed if they were to operate it while high. At the request of the officer assigned to the problem by the chief, Porter prepared a list of names and addresses of all the company’s employees. On reviewing the list the officer commented that a few of the names were familiar to him and that he had previously arrested Doklia on a drug charge. Later, the police put Doklia’s van, parked in the plant’s parking lot, under surveillance. Photographs of various employees smoking marijuana inside the van led to the arrest on June 1 of Doklia, Blechar, Moss, and Sharon DeLuea, Mark Perlach, and James Warvel. All six were suspended the following day. Ultimately, Warvel and Perlach were reinstated, DeLuea resigned, and Doklia, Blechar, and Moss were discharged. Substantial evidence supports the board’s conclusion that the differing treatments of the six arrested employees did not show that the employer acted with unlawful motivation. There were strong indications that Warvel and Perlach, who were not discharged, were not guilty of using drugs on company premises, while Moss, Doklia, and Blechar, who were discharged, were guilty of doing so. Moreover, both Warvel and Perlach had returned immediately to the plant to profess their innocence, and Moss and DeLuea corroborated their claims. In contrast, Doklia and Blechar never claimed to the employer that they were innocent; they merely sent identical letters a week later asking why they were suspended and when they could come back to work. — 177 — Porter later obtained a police report which noted that certain evidence, including marijuana cigarettes, had been taken from Moss, and that marijuana and drug paraphernalia had been confiscated from Doklia’s van and his residence. In addition, Moss admitted that she, Doklia, Blechar, and DeLuca had smoked pot regularly in Doklia’s van. A few days later DeLuca pled guilty to the marijuana charge and resigned her job. We recognize that the evidence is susceptible of conflicting inferences, but where different inferences from the evidence are possible, an administrative agency may draw an inference inconsistent with that drawn by the AU, and we will not reverse as long as its inference is supported by substantial evidence. Adolf Coors Co. v. FTC, 497 F.2d 1178, 1184 (10th Cir.1974), cert. denied, 419 U.S. 1105, 95 S.Ct. 775, 42 L.Ed.2d 801 (1975). Although the board’s final result was contrary to that reached by the AU, the board’s findings and conclusions regarding drug use by Howard Press employees differ from the AU’s in only two material respects. First, the AU concluded that the past practice of Howard Press was to discharge employees only when drug use “affected their work performance * * *.” The board disagreed, referring to discharges of other individuals in the spring of 1979 and pointing out the absence of any prior incident comparable to the arrests of Doklia, Blechar and Moss. There is substantial evidence to support the board’s view, most notably the testimony of Porter. The other material difference between the board and the AU involves the incident regarding employees J.R. and O.R. The board disagreed with the AU’s conclusion that Howard Press had permitted these two to continue working after it was aware they had smoked marijuana on the company premises. Again, the evidence presented on this incident is susceptible to different inferences. However, the facts that neither J.R. nor O.R. was actually caught smoking on company premises and that both denied doing so, sufficiently differentiates them from Doklia, Blechar, and Moss. Moreover, neither J.R. nor O.R. was arrested for drug use on company premises. In short, substantial evidence supports the board’s determination that Howard Press fired Doklia, Blechar, and Moss not to discourage union activity but for smoking marijuana on company property. The petition for review is therefore denied.