[1982] OLRB Rep. August 1162
0314-82-R Joseph Appleman, Applicant, v. Shopmen's Local Union No. 834 of the International Association of Bridge, Structural and Ornamental Iron Workers, Respondent, v. Empco-Fab Ltd., Intervener
BEFORE: M. G. Picher, Vice-Chairman, and Board Members J. A. Ronson and W. F. Rutherford
APPEARANCES: J. P. Wearing, J. App leman and E. Rho den for the applicant; M. Zigler and S. Perri/or the respondent; C. F. Humphrey, F. Wunsche and C. Myers for the intervener.
DECISION OF M. G. PICHER, VICE-CHAIRMAN AND BOARD MEMBER W. F. RUTHERFORD; August 17, 1982
I. This is an application for the termination of bargaining rights under section 57(1) of the Labour Relations Act. It raises, apparently for the first time, the special problems of a petition sponsored by an employee on whose behalf of the employer had paid legal fees for a similar petition in the past.
The applicant, Joseph Appleman, gave evidence of the circumstances surrounding the origination and circulation of the petition which he sponsored in support of this application. There are seven employees in the bargaining unit. Five of them signed Mr. Appleman's petition, all in the parking lot of the employer's premises after work, at or about 3:30 p.m. on May 10, 1982. There is nothing unusual or irregular about the circumstances of the petition save Mr. Appleman's involvement in a similar petition in a previous application before the Board.
The evidence establishes that Mr. Appleman previously sponsored a petition against another union at the time of its attempted certification. The applicant was then the United Steelworkers of America (Board File No. 0072-80-R). At that time Mr. Appleman was represented before the Board by Mr. Michael Gordon of the Toronto law firm of Beard, Winter, Gordon, the firm which represents him in the instant application. It appears from the record in the earlier Board file that Mr. Appleman was the only witness heard on the petition. The Board conducted its normal inquiry to satisfy itself that the petition was not management inspired or supported and that it was voluntarily signed by the employees. In its decision dated May 14, 1980, the panel, composed of chairman Adams and members Bell and Rutherford, noted that it was satisfied with the evidence relating to the origination and circulation of the petition. It therefore ordered the taking of a representation vote, notwithstanding that more than 55 per cent of the employees in the bargaining unit were members of the applicant union on the terminal date.
The Board accepted Mr. Appleman's evidence and ordered a vote. The union lost the vote, and on November 21, 1980 the panel dismissed the application and imposed a six month bar against any further application by the Steelworkers. Shortly thereafter Mr. Appleman received Mr. Gordon's account. He apparently did not attempt to pay it himself or seek contributions from his fellow employees. Rather, by his own admission in cross-examination, he took Mr. Gordon's account to the Secretary Treasurer of the company, Mrs. Cynthia Myers. The record shows that Mrs. Myers had appeared as a representative of the company at the certification hearing which heard Mr. Appleman's petition. According to Mr. Appleman's evidence Mrs. Myers told him that she would take care of Mr. Gordon's account, and it was then paid directly by the company.
The Board can have no doubt that the company underwrote the legal services that led to the dismissal of the Steelworkers' application in 1980. Mr. Edgar Wuncshe, president of the employer, was called as a witness, principally to give evidence respecting a meeting with employees. When asked whether he had knowledge of the company having paid for the legal services of the petitioning employees in the Steelworkers application Mr. Wunsche stated:
I don't know. It is possible the company paid Mr. Gordon's account. I don't sign every cheque.
Mrs. Myers, who was again present at the hearing as a representative of the employer was not called to testify. In these circumstances the inference that the employer paid Mr. Gordon's account is irresistible. We find that it did. It should be noted that counsel for both Mr. Appleman and counsel for the respondent subsequently made no attempt to advance argument on any basis other than the company having directly paid Mr. Gordon for his services rendered to Mr. Appleman in the previous certification application. It should be stressed, however, that there is no evidence or suggestion before the Board that the payment was prearranged. The evidence before the Board is entirely to the contrary.
- It apparently became known among the employees that Mr. Gordon's services in the Steelworkers' application had been paid for by the company. Mr. Appleman confirmed that the employee who had shared the cost of the initial $50.00 retainer paid to Mr. Gordon was aware that the company had paid the balance of the account. At one point in his evidence he stated:
I may have told other employees that the employer paid for the legal fees. I really don't remember how many I would have told.
When asked later whether the long term employees who were in the bargaining unit both then and now would know about it he stated:
None of them know the company paid. I don't think I'd have told them.
In light of that evidence, and particularly in light of the fact that counsel for the union had sufficient sources of information to cross-examine Mr. Appleman rather authoritatively on the issue of the prior payment of the legal fee, we must conclude that employee knowledge that Mr. Appleman's legal account in the Steelworkers case was paid by the company is more widespread than Mr. Appleman is prepared to concede. Information of that kind, once released in a workplace, is seldom contained. We are satisfied, on the balance of probabilities, that employee knowledge of the company's payment extended beyond Mr. Appleman and the one employee he can recall telling. Without necessarily concluding that the payment of Mr. Gordon by the company was common knowledge among the employees, it is a cause of concern that the extent of employee knowledge in this area is indeterminate.
It is against that background that the evidence in this application is to be assessed. Before turning to the merits of the petition in the instant case, however, the Board feels compelled to comment on the evidence before it to this point, if only because counsel for Mr. Appleman seemed not to appreciate the seriousness of what has been disclosed. He submits that there was no impropriety in Mr. Appleman submitting Mr. Gordon's account in the Steelworkers application to his employer, nor in the employer paying it directly to Mr. Appleman's counsel.
In support of that position counsel for Mr. Appleman stressed that there is no evidence of any undertaking by the company to pay Mr. Gordon's fee prior to his having been retained by Mr. Appleman. While he concedes that a prior arrangement by an employer to defray the legal costs of employees seeking to oppose a union's certification or to terminate its bargaining rights would constitute unlawful interference with a trade union, he maintains that there is nothing improper or unlawful where the payment or undertaking takes place entirely after the fact, once the proceedings before the Board are entirely disposed of. In his submission there can be nothing objectionable so long as it is not the employer who, in his words, "lights the fire". That submission raises some fundamental questions about the boundary of employer interference under the Act.
It is central to the Labour Relations Act that an employer is not to interfere with the administration of a trade union or in the matter of representation of his employees by a union. Section 64 of the Act provides:
No employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall participate in or interfere with the formation, selection or administration of a trade union or the representation of employees by a trade union or contribute financial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of his freedom to express his views so long as he does not use coercion, intimidation, threats, promises or undue influence.
II. The right of an employee to freely choose or not to be represented by a trade union is protected under the Act. It is specifically protected from interference by the employer, whether by coercion or bribery. Section 66(c) of the Act provides:
- No employer, employers' organization or person acting on behalf of an employer or an employers' organization,
(c) shall seek by threat of dismissal, or by any other kind of threat, or by the imposition of a pecuniary or other penalty, or by any other means to compel an employee to become or refrain from becoming or to continue to be or to cease to be a member or officer or representative of a trade union or to cease to exercise any other rights under this Act.
(emphasis added)
The Act contemplates that apart from the reasonable exercise of his freedom to lawfully express his views an employer should be uninvolved in any exercise of rights by employees under the Act. That is so whether his interference takes the form of threats or intimidation aimed at union supporters or favours or financial support given either to union supporters or to union opponents among his employees.
The most common form of employer financial support proscribed by the Act relates to the employer dominated union. The Act contemplates that as a precondition to certification, the union and employer must be in a clearly arm's length relationship. (Dr. George A. Morgan Dental Centre [1977] OLRB Rep. Jan. 1). Section 13 of the Act bars the certification of the "sweetheart" union in the following terms:
The Board shall not certify a trade union if any employer or any employers' organization has participated in its formation or administration or has contributed financial or other support to it or if it discriminates against any person because of his race, creed, colour, nationality, ancestry, age, sex or place of origin.
The Act goes further to provide that an agreement between an employer dominated organization and the employer is not a collective agreement for the purposes of the Act. Section 48(a) provides:
An agreement between an employer or an employers' organization and a trade union shall be deemed not to be a collective agreement for the purposes of this Act,
(a) if an employer or an employers' organization participated in the formation or administration of the trade union or if an employer or an employers' organization contributed financial or other support to the trade union;
The Board has in the past not only found that a sweetheart agreement is not a collective agreement for the purposes of the Act, but has concluded that a trade union purporting to be party to such an agreement has relinquished its status as a trade union under the Act. (See, Norfish Ltd. [1965] OLRB Rep. Sept. 414 at 416). An employer dominated body is not a union within the meaning of the Act.
It is no less improper for an employer to support employees opposed to a union than it is for an employer to support a union itself. The cases are legion in which the Board has found that granting favours to employees who oppose a union and the encouragement of such employees, is contrary to the Act. That is so whether the employer assistance is in the form of a promise to pay the legal fees of employees opposing a union (e.g., Selinger Wood Ltd., [1979] OLRB Rep. May 434) or providing employees time and facilities to organize and conduct antiunion meetings (e.g., Skyline Hotels Limited, [1979] OLRB Rep. Dec. 1811 at 1820-21). The Board has also found that repeated company sponsored meetings aimed at exhorting antiunion employees to organize are employer interference with employees' rights contrary to the Act, (K. Mart Canada Ltd., [1981] OLRB Rep. Jan. 60 at 72, 80-81).
An employer can align himself neither with the employees who favour a union nor with those who are opposed. Doing so distorts the balance of choice and frustrates the free exercise of employees' rights under the Act. Support to either camp, whether open or covert, amounts to interference contrary to the Act. While it may be impossible in the real world to expect employees to make their choice for or against a union in "laboratory conditions" unaffected by any outside influences, the Act strives insofar as possible to insulate the process by which employees select or reject union representation. Apart from the right to express his views, a right whose exercise requires some care, the Act imposes a simple rule for the employer: "Do not interfere". That rule, it should be stressed, is generally accepted and observed by the vast majority of employers who appear before the Board in applications relating to the representation of their employees by a union.
Interference can take many forms. The most obvious form of employer interference in opposition to a union is the threat or imposition of lay-offs or discharges, perhaps the largest single source of section 89 complaints under the Act. More subtle forms of employer intervention have included the surveillance of employees (e.g., K Mart, supra) and their transfer within the employer's operations contrary to a reinstatement order of the Board (Radio Shack [1978] OLRB Rep. Dec. 1128). Interference has involved the adverse treatment of supervisors who are openly sympathetic to a union (A.A.S. Telecommunications Ltd., [1976] OLRB Rep. Dec. 751); transferring control over employment to a related subcontractor who refuses to hire union members (Culverhouse Foods Inc., [1977] OLRB Rep. Jan. 16) and transferring union activists to a separate part of the employer's operations that is peculiarly susceptible to layoffs (Consumers Distributing Co. Ltd., [1977] OLRB Rep. Aug. 491). A more overt form of interference was found when an employer closed the unionized part of its operations, eliminating the union and chilling the prospect of union activity among its remaining employees (Academy of Medicine, [1978] OLRB Rep. Apr. 375). Interference with a trade union has also been found after bargaining rights have been established, notably where an employer has hired agents to infiltrate a union (Radio Shack, [1979] OLRB Rep. Dec. 1220) or has impounded union dues (Truck Engineering Ltd., [1978] OLRB Rep. Jan. 70). These examples are by no means exhaustive but serve merely to show the variegated forms employer interference can take.
Is unlawful interference with the selection or administration of a trade union or with the rights of employees made out in this case? In the instant case an employee succeeded in defeating an application for certification. It would surely be unlawful for his employer to have rewarded him for his efforts, ex post facto, by giving him a promotion or granting him a raise purely for defeating the union, just as it would be unlawful to penalize an employee who worked for the union's cause. Either act would be in violation of section 66 of the Act, no matter when it occurred. The 'hands off' rule knows no time limitation: it binds the employer before, during and after an application for certification.
The evidence establishes that the employer paid the cost of the employee's legal representation at a Board hearing. There is no evidence that the respondent has paid other legal accounts for this or any other employee or that it has otherwise made a practice of volunteering financial assistance to needy workers. The payment of the legal account can only be characterized as a financial subsidy or reward to an employee related specifically to his antiunion efforts.
The fact that the payment was not pre-arranged can in no way change the quality of the employer's action insofar as the Labour Relations Act is concerned. It is plainly contrary to the Act for an employer ever to financially reward an employee, whether it be for starting a union or for stopping one. The reason for the prohibition is obvious since rewards in such circumstances poison the workplace in a number of ways.
Firstly, they have an obvious impact on the ongoing relationship between the employer and the employee upon whom the benefit is conferred. Expectations are created and an unspoken understanding runs between the employer and employee. Each knows where the other stands and knows that their ad hoc partnership can be revived as needed in the future.
The taint of such a transaction, however, extends beyond the employer and employee concerned when knowledge of their accommodation reaches other employees. They will have reason to believe, as a general matter that anti-union activity on the part of employees will be rewarded. They will also have every reason to assume that a bond exists between the rewarded employee and their employer where the issue of trade union representation is concerned. If the employee in question was once known to his fellow employees to be acting independently, they cannot from that time forward have other than reasonable suspicions that his activities in relation to union representation have the approval and support of their employer.
When legal representation is involved there is a further mischief. Being unfamiliar with the canons of legal ethics, rank and file employees may not have full confidence about what facts a solicitor is at liberty to disclose to the party that pays directly for his services to another. They may have a natural concern that the names of those who sign the employee petition will become known to the source that appears to pay for it.
In this case the wording of the document makes it plain that it originates with the law firm previously paid by the employer. It provides:
We, the undersigned employees of Empco-Fab Ltd., no longer wish to be represented by the Shopmen's Local Union 834 of the International Association of Bridge, Structural and Ornamental Iron Workers, and wish to have its right to bargain on our behalf with our employer, EmpcoFab Ltd., terminated.
For the purpose of any hearing before the Ontario Labour Relations Board, we appoint the firm of:
Beard, Winter, Gordon
Barristers and Solicitors
200 University Avenue
Toronto, Ontario
M5H 2K4
to appear on our behalf.
The issue to be resolved is whether in these circumstances the Board can be satisfied that the petition sponsored by Mr. Appleman was signed by the employees voluntarily and without fear of employer involvement in the petition. We do not see how it can. Any employee who knew, as an indefinite number of employees did, that Mr. Appleman's solicitor was previously paid by the employer, must have natural concern about the consequences of refusing to sign the petition.
In this regard it is noteworthy that when the respondent union made its application for certification in 1981 (Board File No. 01 12-80-R) Mr. Appleman again sponsored an anti-union petition. On that occasion he did not retain legal counsel and his petition was a handwritten draft on a piece of paper in his own handwriting. Not a single employee signed it. Counsel for Mr. Appleman submits that that is evidence that the applicant is not viewed by fellow employees as being in league with the employer. In our view, that evidence establishes only that when Mr. Appleman acted without the solicitor known to have previously acted for him no one signed his petition. In this case, one year later, all but two of the employees in the bargaining unit signed the petition. We cannot be satisfied that in the instant case the petition did not raise concerns among the employees about the employer's previous financial link with Mr. Appleman. In our view the inference to be drawn from the evidence is that a reasonable employee had grounds for concern. Having regard to the totality of the evidence the Board cannot conclude that more than 45% of the employees in the bargaining unit have voluntarily signified their desire in writing to no longer be represented by the respondent.
The application is therefore dismissed.
DECISION OF J.A. RONSON, BOARD MEMBER;
Decision of Board Member J.A. Ronson will follow.