On Petition for Review and Cross-application for Enforcement of an Order of the National Labor Relations Board.
Before WILKINSON, Chief Judge, LUTTIG, Circuit Judge, and BLACK, Senior United States District Judge for the District of Maryland, sitting by designation.
Affirmed in part, reversed in part, and remanded by published opinion. Judge Luttig wrote the opinion, in which Chief Judge Wilkinson and Senior Judge Black joined.
Petitioner Performance Friction Corporation appeals from the judgment and order of respondent National Labor Relations Board finding that petitioner violated sections 8(a)(1) and (a)(3) of the National Labor Relations Act, 29 U.S.C. Section(s) 158(a)(1),(3), by instituting a new disciplinary system in order to discourage union activity and by discharging pro-union employees under that new system. For the reasons stated herein, we affirm the Board's conclusions of violation, but remand for the Board to fashion a more narrowly tailored remedy.
Performance Friction manufactures high-performance, non-asbestos automotive disk brake pads for major automotive manufacturers and for professional race car teams appearing in the Nascar Winston Cup and Indianapolis 500. J.A. at 859. Since 1986, when current owner and president Donald Burgoon acquired the company, Performance Friction's workforce has grown rapidly, from approximately 25 employees in 1986, to 100 employees in 1989, and to nearly 400 workers in 1994. J.A. at 731, 753, 859. Performance Friction attributes its growth to a commitment to quality which, according to former employee and union activist Susan Hudson, was almost fanatical, J.A. at 201; see also J.A. at 962. Over the course of this period of growth, Performance Friction's annual turnover rate has been high, the company discharging and replacing virtually its entire workforce annually. J.A. at 378, 881.
In November 1993, several months before union activity at the company began, Performance Friction put into place a new compensation plan designed to increase worker productivity. Under this plan, employees were assigned to one of seven pre-defined pay levels. From this pre-defined level, employees could advance by taking and passing, at their own pace, certain job-related tests, rather than await end-of-the-year evaluation. J.A. at 333-35, 452, 491-92. Shortly after this plan was instituted, Performance Friction's"scrap rate" (the monthly amount of scrap material as a percentage of total production, J.A. at 353-54), improved from 10.9% in December 1993 to 4.2% in April 1994, dropping to a low of 2.7% in October 1994. J.A. at 1055.
In early February 1994, the United Automobile, Aerospace, Agricultural Implement Workers of America (the "Union") began efforts to unionize Performance Friction's 400-member workforce. Burgoon, aided by Mike Ford, his assistant production manager and second-in-command of the company, opposed the Union through what it now concedes were unlawful labor practices. *fn1
Either shortly before or shortly after the unionization effort began, the company implemented a new and more strict disciplinary system which would make it easier for Performance Friction to discharge employees. J.A. at 864. Under the old disciplinary system, an employee would be suspended without pay for three days if he committed two major violations in 30 days, and would be discharged for a third violation within the 30-day period. J.A. at 864. The new system, which was designed to operate in tandem with the new pay level structure and advancement plan, eliminated the 3-day suspension and allowed Performance Friction to discipline employees for committing fewer violations over a longer period of time. Thus, an employee who committed either two major violations in 90 days or three major violations in six months would be demoted one pay level, or, if he was already at the lowest pay level, would be discharged. J.A. at 864.
It is not clear how many employees have been discharged under the new disciplinary system since its institution. However, Performance Friction had, between April 19, 1994, and the time this case was heard by the administrative law judge in December 1994, discharged a total of approximately 180 employees; and, according to its counsel, the company has now terminated over 300 employees total. J.A. at 1102-05; Petitioner's Reply Br. at 10 n.3. Among the first individuals discharged under the new disciplinary system were union activists Martha Hinson, Jerry Kennedy, Merrie Rowe, Hayward Steele, and Susan Hudson, and they were all discharged between April 19 and May 24 of 1994. J.A. at 1103. In addition, union supporter Manuel Mantecon was discharged on May 30 for not returning to work after having been on medical leave. J.A. at 1102.
In response to these discharges, the Union commenced this litigation on May 23, 1994, initially claiming only that the six union activists listed above had been illegally discharged. Later, however, after discovering that other employees also had been discharged under the new disciplinary system, the Union ...