413 F.

2d 445

CONE MILLS CORPORATION, Petitioner,

v.
NATIONAL LABOR RELATIONS BOARD, Respondent.
No. 12094.

United States Court of Appeals Fourth Circuit.

Argued October 11, 1968.
Decided July 16, 1969.

Thornton H. Brooks, Greensboro, N. C., (Thomas C. Cartwright, and

McLendon, Brim, Brooks, Pierce & Daniels, Greensboro, N. C., on brief)
for petitioner.
John S. Irving, Atty., N. L. R. B. (Arnold Ordman, Gen. Counsel,
Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost,
Asst. Gen. Counsel, and Lawrence M. Joseph, Atty., N. L. R. B., on brief)
for respondent.
Before BOREMAN, BRYAN and BUTZNER, Circuit Judges.
BOREMAN, Circuit Judge:

Cone Mills Corporation (hereafter Company) seeks review of an order of the

National Labor Relations Board (hereafter Board) directing the Company to
cease and desist from unfair labor practices found to be in violation of sections
8(a) (5) and (1) of the National Labor Relations Act (hereafter Act); to furnish
specific information to the collective bargaining representative of the
company's employees (hereafter Union) on pension plans; to rescind a
unilaterally instituted pension plan; and to reinstate eight discharged employees
to their former positions with backpay, and without prejudice to their seniority
or other rights and privileges.

The Board adopted the Trial Examiner's recommendations in part, finding that
the Company had violated section 8(a) (5) of the Act by withholding relevant
information from the Union with respect to a pension plan proposed by the
Company and by unilaterally putting the plan in operation, and had violated

section 8(a) (1) of the Act by discharging eight employees who were protesting
the discharge of another employee. The Board expressly disagreed with the
Examiner's findings of a section 8(a) (3) and (1) violation in the discharge of
employee Ralph Johnson and of a section 8(a) (5) violation allegedly resulting
from bad faith bargaining with respect to union security. The Board also found,
as did the Examiner, that the Company had not interfered with, restrained and
coerced its employees in the exercise of rights guaranteed in section 7 of the
Act by statements made by company supervisors and agents at three of the
plants.1 We uphold the board's determination that the Company unlawfully
refused to provide information requested by the Union but deny enforcement of
the order requiring reinstatement of the eight discharged employees.
3

Cone Mills Corporation owns and operates seven textile processing, printing
and finishing plants in the area of Greensboro, North Carolina. Separate locals
of the Textile Workers Union of America, AFL-CIO, have been the collective
bargaining agents of the employees for many years. The union contracts at
these seven plants terminated and were inoperative between October 1962 and
October 1965. During this three-year period the parties continued their
relationship without the benefit of a written contract. Bargaining on a new
contract separately for each plant began during the period from May to
November 1965.

During these negotiations the Union sought a pension plan for all production
employees. When the first negotiations began at the Edna Plant in Reidsville,
the Union presented its first pension plan proposal. This proposal was received
for study by the Company but was not accepted. In place thereof, the Company,
on September 29, 1965, submitted a counter-proposal for a company-wide
pension plan.2

At a bargaining session on October 4, 1965, the Union criticized the company

plan based on the level of benefits provided thereby and in turn submitted
another proposal. The Company, however, rejected the criticisms of its plan
offered by the Union, insisting that the company plan was a good one and that
there was not a better noncontributory plan provided by any of its competitors.

After six additional bargaining sessions in October in which the Union sought
adoption of various other pension plans, the differences between the parties
over pension benefits narrowed. Consequently, on November 9, 1965, the
union's expert on pension plans accompanied the union's Regional Director to
the negotiations. It was at this session that the Union first requested
information as to the costs of the company plan and the actuarial assumptions
upon which it was based. The Company refused this request stating that the

cost of its plan was estimated to be about $.05 per hour and that the Union did
not need the actuarial assumptions since the employee benefits were the only
matters of concern. At subsequent bargaining sessions this request for specific
information was renewed by the Union and each time it was denied.
7

On November 15, 1965, the Company advised the Union that it needed prompt
approval of its proposed pension plan since it intended to put the plan into
effect on January 1, 1966, and desired to first obtain the approval of Internal
Revenue Service. At this time the Union's Regional Director wrote to the
Company and requested specific information concerning the cost of the plan so
that a counter-proposal could be formulated and submitted. Having received no
reply to this letter by December 3, 1965, the Regional Director again, by letter,
requested the actuarial information and advised the Company that its actions
amounted to a refusal to bargain, in violation of the Act. On January 1, 1966,
the company's plan was put into effect and it has remained unchanged. The
Union filed the refusal to bargain charge on June 2, 1966.

The Board's finding that the company's refusal to furnish specific information
on the proposed pension plan was a violation of 8(a) (1) and (5) is amply
supported by the record as a whole. It appears that the Union initially requested
the actuarial information on November 9, 1965, one month after the first
negotiating session on the company's proposed plan and within a reasonable
time after it appeared that the Company would consider no proposals which
were based on data other than that upon which its plan was based.3 The Union
continued its requests for information at subsequent bargaining sessions on
November 10 and 11 and by letters dated November 15 and December 3, 1965,
after its initial request had been denied. When the Company unilaterally put its
plan into operation it was still the subject of negotiation.

The Company initially contends that consideration of the alleged 8(a) (1) and
(5) violation is barred by section 10(b) of the Act since the charge was not filed
until June 2, 1966, and the initial request for information was made on
November 9, 1965, more than six months prior to the date the charge was filed.
We find no merit in this contention since the Company disregards the fact that
the same request was repeated from time to time after November 9, 1965, and
within the period of six months prior to the charging date. Unlike the case of
Local Lodge No. 1424 I. A. M. v. N. L. R. B., 362 U.S. 411, 80 S. Ct. 822, 4
L.Ed.2d 832 (1960), where there was only one event relied upon to support a
charged violation occurring outside the six-month limitation period, and where
the Court rejected the "continuing violation" theory, the instant case involves a
repetitive succession of events occurring within a period of six months prior to
the filing of the charge.

10

The Company further argues that the information requested by the Union was
not needed and that this lack of need was shown by the fact that proposals from
the Union were forthcoming after September 29, 1965, the date when the
Company first presented its proposed pension plan; that the request, even if it
were valid, was made only to "hinder and impede the process of collective
bargaining" since it was made late in the year and with the knowledge that the
Company desired to put the plan into operation on January 1, 1966, after first
submitting it to Internal Revenue Service for approval.

11

In contending that the union's submission of plans after September 29 shows a

lack of need for the requested information the Company overlooks the fact that
the union proposals were not based on the company's proposal. The union
proposal which was submitted on October 4, 1965, was in the process of being
drafted prior to the submission of the company's plan and obviously could not
have been based upon it. The other union proposals which were discussed on
October 12, 13, 19, and 27 were assertedly based on pension plans which had
been negotiated by the Union at plants of other employers and which were
more favorable to the employees than the plan proposed by the Company. It
was after these negotiating sessions in October that the Union concluded that
meaningful negotiations could proceed only after an examination of the
actuarial data upon which the company plan was based. These subsequent
proposals by the Union of plans which were unrelated to the proposed plan
submitted by the Company did not necessarily indicate a lack of need for the
requested actuarial information.

12

The Union, in its representative capacity, has an affirmative duty to intelligently

evaluate all employee benefits for which it is negotiating. Consequently, it is an
unfair labor practice within the meaning of the Act for an employer to refuse to
furnish such information as is necessary to the proper discharge of this duty.
See N. L. R. B. v. Truitt Mfg. Co., 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027
(1956); and N. L. R. B. v. Whitin Machine Works, 217 F.2d 593 (4 Cir.1954),
cert. denied, 349 U.S. 905, 75 S.Ct. 583, 99 L.Ed. 1242 (1955). When the
Company takes a firm and inflexible stand with respect to such a proposal, and
is attempting to force the acceptance of that proposal by the Union, this "need"
for pertinent information becomes even more apparent.

13

We cannot agree with the company's contention that the Union's request for
information was made to "hinder and impede the collective bargaining
process." As the Board correctly noted, the urgency surrounding the need for
approval of this plan by the Union obviously was created by the Company
itself, so as to pressure acceptance. The plan did not have to be made effective
on January 1, 1966, for any special reason, and the prior approval of the plan

by the Internal Revenue Service was not a requirement (or otherwise needed to
gain any tax advantages). Indeed, as the evidence reveals, this plan was not
approved by Internal Revenue Service until late May 1966. In addition, this
asserted need for approval was not brought to the attention of the Union until
November 15, 1965, several days after the date of the union's first request for
information. Consequently, we find no merit in the company's charge of bad
faith bargaining tactics by the Union.
14

In these circumstances the unilateral imposition of the plan while negotiations

were still being conducted was a violation of section 8(a) (5) of the Act. N. L.
R. B. v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). If, as
the Company claims, an impasse with respect to this proposal had been
reached, it would have been entitled to institute the plan without the approval
of the Union, N. L. R. B. v. Crompton Highland Mills, 337 U.S. 217, 225,
69 S.Ct. 960, 93 L.Ed. 1320 (1949). However, as Crompton emphasizes, there
can only be an impasse after there has been good faith bargaining on behalf of
the Company. Because the Company refused to furnish requested relevant
information, a reasonable opportunity to bargain by the Union, as required
before a legally cognizable impasse can be reached and unilateral action taken,
was not presented. See Industrial Union of Marine & Shipbuilding Wkrs. of
America, AFL-CIO v. N. L. R. B., 320 F.2d 615, 621 (3 Cir.1963), where the
court stated, "it is manifest that there can be no legally cognizable impasse, i. e.,
a deadlock in negotiations which justifies unilateral action, if a cause of the
deadlock is the failure of one of the parties to bargain in good faith." See also
N. L. R. B. v. Herman Sausage Co., 275 F. 2d 229, 234 (5 Cir.1960). The duty
to bargain in good faith encompasses the duty to furnish information. N. L. R.
B. v. Item Company, 220 F.2d 956 (5 Cir.1955); N. L. R. B. v. Whitin Machine
Works, 217 F.2d 593 (4 Cir.1954).

DISCHARGE OF EMPLOYEES
15

We next consider the discharge of the eight employees at the Proximity plant
who stopped work and refused to return to their jobs, assertedly protesting the
previous discharge of a fellow employee.

16

At this plant a dispute had arisen among the three-man crews of the printing
machines. Each machine was operated by a crew of two tenders and one printer
and the tenders were complaining that the printers were not performing their
work properly which resulted in an increased workload for the tenders. This
culminated in the filing of a grievance and in a called one-day "holiday" in
April 1966. Thereafter, meetings were held by company representatives with
these teams on May 11, 1966, and it was agreed that a greater effort would be

made by all concerned to keep busy during the color and roller changes on
these machines. On the following day, May 12, 1966, Ralph Johnson, a tender
on machine No. 3, was discharged for conduct which was considered by the
Company as hindering the resolution of this longstanding dispute. 4 As Johnson
left the plant, other employees learned of his discharge. At a designated hour,
by prearrangement, a number of employees, found by the trial examiner to be
fifteen or twenty, called a work stoppage.
17

Assistant manager Wright was promptly informed of the work stoppage and
went to the scene. Wright first spoke to employee Noah Lewis, the union's
steward, because, as Wright expressed it, he figured the union steward would
know what was going on. The Trial Examiner found that, in answer to Wright's
inquiry if the men were on strike, Lewis said that they were "protesting the
firing of Ralph [Johnson] * * *. We want you to put him back to work right
now," and suggested further, "Now Joe, why don't you talk to some of the boys
in here, and we can get this thing settled right off, and talk to the management
just a little bit." As further found by the Examiner, Wright answered "I ain't got
no time for that now," and added, "We have a regular grievance procedure to
handle this sort of thing and we will not put him [Johnson] back to work right
now." Wright requested Lewis to get the men back to work. Wright then asked,
"Noah, are you on strike? If you are on strike, you have to leave the plant and if
you don't leave the plant or go back to your job, then I'll have to discharge you."
Lewis again stated that the men were protesting the discharge of Johnson.
Lewis was thereupon discharged by Wright.

18

Employee Tingen heard Wright discharge Lewis and promptly stated "If you
fire Noah, you're going to have to fire me too." Tingen was then discharged and
the two discharged employees were escorted out of the plant. Some of the group
then returned to work while others remained standing in the corridor between
machines, some of which were stopped and some of which were still running.
Further, according to the Trial Examiner, Wright then spoke individually with
each of the following employees: Eugene Henley, Edward Dick, Ronald
Gardner, Lester Flippin, Alfred Walker, and Jack Wells. The Board argues that
these conversations were all similar and about as described by employee
Gardner as shown below. 5 When Wright told Henley to "go back to work"
Henley responded, "Well, I'm protesting. I'll go back to work as soon as this
wrong that I feel has been committed is right." Wright then ordered Henley to
leave the premises and, in Henley's words, he replied "I told him I would have
to be evicted." When Wright asked employee Gardner to leave Gardner told
Wright that he "was going to stay until 3 o'clock, at the regular quitting time." It
was following this response that Gardner was discharged. When Wright told
employee Dick to go back to his job or he would have to discharge him, Dick

replied, "I couldn't go back after they had fired all my friends." Wright then
discharged him.
19

Actually, Henley, Gardner and Dick, after they were discharged, undertook to
return to their machines but just about the time they reached their machines
police officers, who had been called, arrived in the plant. Ben Thornburg,
superintendent of the plant, pointed out Henley, Gardner and Dick and said he
wanted them arrested for "trespassing." The officers arrested the three upon
Thornburg's assurance that he would appear at the police station to sign
warrants for the arrests. The trespassing charges which were filed against these
employees were later dropped, assertedly because the warrants were improperly
drawn.

20

While it is true that the contract between the Company and the Union had
expired prior to these occurrences, it appears that the parties continued their
relationship without the benefit of a written contract. As hereinbefore shown,
the start of this trouble which led to the discharge of Johnson was a dispute
which had arisen among crews of the printing machines. Despite the absence of
a formal contract, a grievance was filed and it is clear that the regular grievance
procedure was then being recognized as in effect except the final step which
provided for submission to arbitration. The filing of this grievance in April of
1966 culminated in an agreement which appeared to satisfy the parties
involved. On the very day of these discharges, shop steward Lewis had a
dispute with Wright as to whether Lewis should carry out instructions to wash
rollers which he claimed was not part of his job, and yet Lewis agreed to carry
out his supervisor's orders, saying, "Okay, I'll do this until we can file a
grievance and get this thing settled, * * *." Lewis testified that as shop steward
he had handled grievances during the existence of the contract and after its
termination.

21

Neither the Board nor the Examiner made a finding that a grievance procedure
did not exist because such a finding would have been contrary to the record.
The most that the Examiner found in this respect was that "Wright was highly
indefinite as to whether Respondent still honored the arbitration provision of
that prior contract." In its brief, the Company admits that there was no
arbitration provision in effect in May of 1966 because there was no contract in
existence which an arbitrator could interpret and apply. However, the record
shows that a "grievance procedure" was recognized by the parties as then in
effect. The employees here involved had a right and an opportunity to have
their protest or grievance heard and considered by top management through
orderly channels at a later time. But they were not interested in being heard.
They had planned in advance to stop production for thirty minutes in protest of

the discharge of Johnson, according to their own testimony.

22

On this aspect of the case the Board presents its arguments by the device of
setting out the testimony of one employee (Gardner) and then characterizing
the same as "essentially the same conversation [by assistant manager Wright]
with each" of the protesting employees. However, the unequivocal testimony of
two discharged employees corroborated the testimony of Wright. 6

23

In its Decision and Order, the Board treated the discharges of the eight
employees in one paragraph as follows:

24

Finally, the Trial Examiner found that Respondent violated the Act by
discharging eight employees for participating in a one-half hour, in-plant
"protest" of Ralph Johnson's discharge. Concerted action to protest the
discharge of a fellow employee is, of course, a protected activity. Hence, we
adopt the Trial Examiner's finding that Respondent's discharge of the eight
protesters violated Section 8(a) (1) of the Act.

25

In its contentions before this court the Board claims that, with respect to
employees Gardner, Henley, Dick, Walker, Wells, and Flippin, the record does
not support the company's contention that these employees were afforded an
opportunity to return to work or carry on their protest outside the plant. On the
contrary, board's counsel argues, the Board adopted the Trial Examiner's
finding that these employees were discharged immediately after Wright asked
each why he did not go back to work. The Board made no analysis of the
Examiner's decision or findings on this point, merely stating in two sentences its
adoption of a conclusory finding. The statement of this court in N. L. R. B. v.
Stevenson Brick & Block Company, 393 F.2d 234, 237 (1968), is pertinent
here:

26

While the Board, failing to exercise its independent reviewing power, was
content to accept this conclusion of the Trial Examiner, we are unable to do so
because it was derived in part from a palpable misinterpretation of certain
testimony and a disregard of other evidence directly bearing thereon.

27

Board counsel attempts to supply findings which the Examiner and the Board
failed to make. But courts may not accept appellate counsel's post hoc
rationalizations for agency action and an agency's discretionary order will be
upheld, if at all, on the same bases articulated in the order by the agency itself.
To be sustained on judicial review, administrative action must contain both
adequate findings and substantial evidence to support them. Burlington Truck

Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207
(1962). The Board and the Examiner have misinterpreted the testimony of some
board witnesses and have disregarded the testimony of others. The Examiner
did not reject the testimony of Wright but, at times, rather relied on it. The
testimony of employees Wells and Flippin corroborates Wright as to the
instructions he gave the protesting employees. Wright testified that he told all
of these involved employees, collectively and individually, that they should
either go back to work or leave the plant and that they would be discharged if
they did neither. Some of the employees testified that Wright told them exactly
what Wright claimed they were told. The Trial Examiner found that two of
them were, indeed, told that they should leave the plant or suffer discharge. But
two others admitted that they were so instructed and any finding to the contrary
is clearly erroneous. As to the others involved it appears that they were all in
one group, Wright spoke to them collectively and then individually, and the
record clearly reflects that the remarks addressed to certain individuals were
overheard by others.
28

Lewis was the department shop steward and was acting as the representative of
the employees when the trouble started. It was known to Lewis and also to
assistant manager Wright that a formal grievance procedure was available to
the employees. Wright first contacted Lewis as the representative of and the
spokesman for the group. In its brief, the Board states "In the circumstances of
this case, any refusal by these employees to leave the plant was not so
indefensible as to remove them from the protection of section 7." It has been
held that concerted action to protest the discharge of a fellow employee is a
protected activity and it has been held in cases where the strike activity did not
occur on the premises of the employer that protesting employees cannot be
discharged for engaging in such concerted activities. In its formal decision the
only case cited by the Board to support its statement that "concerted action to
protest the discharge of a fellow employee is, of course, a protected activity" is
Summit Mining Corp. v. N. L. R. B., 260 F.2d 894, 897 (3 Cir.1958). But there
the employees who were held to be protected left the plant to conduct the
protest.

29

The Examiner, in support of his conclusions, cited Golay & Co. v. N. L. R. B.,
371 F.2d 259 (7 Cir.1966), and in argument before this court on appeal board
counsel seeks support from that decision to sustain the board's position here. It
is contended that the court in Golay held that, when employees are striking on
company property, it is unlawful to instruct them to resume work or be
discharged, but lawful to instruct them to resume work or leave the plant and
engage in the strike activity off of company property; and, if neither of these
lawful alternatives is acceptable the employees will be subject to discharge.

However, from a careful reading of Golay, the review of the findings of fact by
the Examiner, the disposition of the case by the Board, and from the court's
opinion it appears that the court, in fact, upheld the discharge of several
employees who had been engaged in an in-plant "work stoppage" for more than
a minimal time prior to their discharge; and it does not appear that each of these
discharges was preceded by a warning to the employee to either strike off of
company property or be discharged. 7 Many employees were merely asked to
return to work and upon refusing to do so or standing mute they were released.
30

Recently this court, in LTV Electrosystems, Inc. v. N. L. R. B., 408 F.2d 1122
(4 Cir.1969), recognized the principle that concerted activity in protest of the
discharge of fellow employees is protected, citing N. L. R. B. v. Mackay Radio
& Telegraph Co., 304 U.S. 333, 345, 58 S.Ct. 904, 82 L.Ed. 1381 (1938). But
in LTV Electrosystems, supra, the majority held that the protesters, who left
the plant, voluntarily quit their employment and were not discharged.

31

In the instant case all of the protesting employees indicated their objection to
the discharge of their fellow employee, Johnson, and their sympathy for him, by
engaging in a planned work stoppage. Their union representative and
spokesman demanded that Johnson be immediately reinstated which demand
was rejected. They had thus made their point and had registered their
complaint. The Company was not informed as to the proposed duration of the
work stoppage; in fact, Henley stated that he would go back to work when the
wrong which he felt had been committed was righted and that he would not
leave the plant, as ordered, unless evicted.

32

The record is clear that a number of the protesting employees returned to their
machines when requested to do so. They were not discharged for participating
in the protest. Those who remained away from their work exhibited a defiant
and rebellious attitude. Substantial evidence indicates that they were told to
return to work or leave the premises and they refused to do either. We think
management made a reasonable distinction between protesters who abandoned
their work stoppage and returned to their machines and those who defiantly
insisted upon carrying on and prolonging the work stoppage on company
property during working hours.

33

Few rights, including the right to strike in protest, exist without corresponding
duties and obligations to those against whom the right is being asserted. When
one attempts to exercise a claimed right he cannot, in all fairness, disregard his
corresponding duty and obligation with impunity. We conclude that the
Company was not in violation of section 8(a) (1) of the Act in discharging the
eight employees and we deny enforcement of the board's order to reinstate

them.
34

Enforcement granted in part and denied in part.

Notes:
1

The determinations of the Board as to the discharge of Ralph Johnson, union

security, and interfering with, restraining and coercing employees are not before
this court for review

The Union did not learn until mid-November 1965 that this proposed plan was
to become effective on January 1, 1966

The Union attempted to make additional proposals without requesting such

information on October 4 and 12, 1965, but both of them were rejected. On
October 12 the Union began to bargain for any of three other pension plans
with which the company's plan had been unfavorably compared. The Company,
in rejecting these plans, reiterated that its plan "was a good one" and that "there
was not a better non-contributory plan among any of the competitors."

The Board, in overruling the Examiner, found that there was "an insufficient
showing that the Respondent, in discharging Johnson, was unlawfully
motivated * * *. Johnson's flippant `prove it' response [to the Company's
accusation that he was coming in early and stirring up `trouble' with employees
working on the third shift] * * * offered ample legitimate reason for discharge *
* *."

[Wright] said, "What's going on?" and I said, "We are protesting Ralph
Johnson's job" and he said "Well, is this a strike?" and I said, "No." He said,
"What are you doing?" and I said, "I'm protesting." He said, "Why don't you go
back to work?" and I said, "I will when the rest of the fellows does," and he
said, "You are terminated."

From the testimony of employee Wells:

Q. What all did you and Mr. Wright have to say to one another then?
A. Well, he wanted to know if we were on strike and I said, "no, we are
protesting." And he said, "If you are on strike go on outside," and I said, "No
we are just protesting."

From testimony of employee Flippin:

Q. I understood you to testify a minute ago that when Mr. Wright came up to
the protest group and talked with you individually he said to you about the
same type of things that Mr. Wells has just testified. Is that correct?
A. That's correct.
7

See the intermediate report and recommended order of the Examiner, 156
NLRB 1252