143 F3d 181 National Labor Relations Board v. Thermon Heat Tracing Services Inc

143 F.3d 181

158 L.R.R.M. (BNA) 2474, 135 Lab.Cas. P 10,174,
18 O.S.H. Cas. (BNA) 1483


No. 97-60114.

United States Court of Appeals,
Fifth Circuit.

June 3, 1998.

Aileen A. Armstrong, Deputy Assoc. General Counsel, Frederick C. Havard, Ana Luisa Avendano, N.L.R.B., Washington, DC, Michael Dunn, Director, N.L.R.B., Fort Worth, TX, for Petitioner.

Judith Batson Sadler, Charles Edward Sykes, Bruckner & Sykes, Houston, TX, for Respondent.

On Application for Enforcement of an Order of the National Labor Relations Board.

Before EMILIO M. GARZA, STEWART and DENNIS, Circuit Judges.

CARL E. STEWART, Circuit Judge:

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This case is before us on the application of the National Labor Relations Board ("NLRB") for the enforcement of an order issued against Thermon Heat Tracing Services, Inc. ("Thermon").1 The NLRB held that Thermon engaged in an unfair labor practice by using the guise of workplace safety to thwart union activity at one of its job sites. The NLRB found that the safety rule itself did not violate the National Labor Relations Act ("the Act"),2 but that the discriminatory manner in which it was enforced against union members was in violation of the Act. For the following reasons we enforce the NLRB's order.BACKGROUND


In 1993, Brown and Root Braun ("Brown and Root") was selected as the general contractor for the expansion of Texaco's gasoline additive plant in Port Neches, Texas. Respondent Thermon, an electrical contractor, was chosen as one of Brown and Root's subcontractors. Thermon, which was responsible for installing the electrical heat tracing system, employed about 100 of the approximately 3000 workers at the Texaco site.3 Thermon's employees at the facility were represented by Local 479 of the International Brotherhood of Electrical Workers ("Local 479").


On March 2, 1995, Local 479 initiated a recognitional strike among Thermon's craft employees. Fifty-two (52) of the 57 craft employees went on strike for recognition.


On March 10, while the strike was in progress, Brown and Root issued a directive to all of its subcontractors at the Texaco project, which stated:


With the impending opening of B and C Streets in the East plant, as well as future early turnover of Blocks 5-8, it is requested that each subcontractor require their employees to remain in their designated work areas and not travel around in other areas of the project. These particular areas are permit areas and require special training to enter. Your cooperation is appreciated.


On March 12, Thermon's Safety Director, Paul Wagstaff, responded to this directive by issuing the following safety rule to its employees:


In order to maintain a safe, continual and productive work force, it is necessary that all craft personnel remain in their assigned work areas.

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This mandate will commence this date and shall include all breaks and on the job lunch periods.


This program will assist foremen as to the whereabouts of their employees should an emergency arise now that Brown & Root Braun is beginning to utilize corrosives with the flushing of pipelines.


We all should realize that additional changes may occur as our project changes from a "grass root" job to a gradual "live unit".


As always your continued support is appreciated.


Under the new safety rule, an employee could visit another work area if he had permission from his foreman and if the foreman of the other work area knew that the employee would be visiting. Employees who violated this rule were to be issued a written warning in the first instance. A second violation would result in termination. Thermon eventually terminated fifteen (15) employees for violating the safety rule.


During the strike, Walter McNeely, a paid union informant, was hired by Thermon.4 Thermon was unaware of McNeely's membership in the union. McNeely testified that he frequently left his work area during lunch without seeking his foreman's permission. Moreover, McNeely told the NLRB of four occasions on which he was seen outside of his work area by those that the NLRB found to be supervisors on the site or agents of Thermon. On the first occasion, McNeely encountered Safety Director Paul Wagstaff. They spoke, but nothing was said about the fact that McNeely was out of his work area. On the second occasion, McNeely saw and spoke with Doug Brookshire, the site Superintendent while McNeely was outside of his work area. Again, McNeely was not challenged about his failure to comply with the safety rule. McNeely also encountered another Superintendent, Todd McMain, while he was outside of his work area. Again, no action was taken against McNeely for violating the safety rule. Finally, McNeely encountered Thermon's General Foreman, Tom Maydian while McNeely was away from his assigned work area. Just as before, McNeely was not disciplined for failing to comply with the safety rule.5


In addition to never having been disciplined for violating the safety rule, McNeely testified that, before the strike ended, he overheard Wagstaff saying that he intended to use the new safety rule to discipline union members who were distributing union literature outside of their assigned work areas. He also testified that, while seated near a Thermon foreman at lunch, he heard Thermon foremen talking on walkie-talkies and warning each other that "union people" had left their assigned blocks and were on their way.


On March 17, the strike was called off and Local 479 made an unconditional offer for the strikers to return to their jobs. When the strikers returned to work in April, Wagstaff gave them a safety briefing and a copy of the new safety rule.


Between April 11 and April 27, Thermon issued warnings to fifteen employees who violated the new safety rule. These fifteen employees had all previously been on strike. Each of these employees claims to have been engaged in union activities when he was cited for violating the safety rule. All fifteen were discharged shortly after receiving the initial warning for violating the rule a second time. The NLRB found that Thermon was aware of the union affiliation of the fifteen employees who were fired for violating the safety rule and that, therefore, these fifteen terminations resulted from the rule's being enforced in a discriminatory manner against union activists.



We will uphold the NLRB's decision if it is reasonable and supported by substantial evidence. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951); Trencor, Inc. v. NLRB, 110 F.3d 268 (5th Cir.1997). The Supreme Court has defined substantial evidence as "more than a scintilla.... [S]uch relevant evidence as a reasonable mind would accept to support a conclusion." Universal Camera, 340 U.S. at 477, 71 S.Ct. at 459. In determining whether the NLRB's factual findings are supported by the record, we do not make credibility determinations or reweigh the evidence. NLRB v. Cal-Maine Farms, 998 F.2d 1336, 1339-40 (5th Cir.1993) (citing cases). " 'Recognizing the Board's expertise in labor law, we will defer to plausible inferences it draws from the evidence, even if we might reach a contrary result were we deciding the case de novo.' " NLRB v. Turner Tool & Joint Rebuilders Corp., 670 F.2d 637, 641 (5th Cir.1982) (quoting TRW, Inc. v. NLRB, 654 F.2d 307, 310 (5th Cir. Unit A Aug.1981)); see also NLRB v. Great Western Coca-Cola Bottling Co., 740 F.2d 398, 404 (5th Cir.1984) (on review, this Court accords "great deference" to the NLRB's findings of fact). However, in assessing whether the evidence in the record is substantial we must consider the facts that militate or detract from the NLRB's decision as well as those that support it. TRW, 654 F.2d at 310. The NLRB's legal conclusions are reviewed de novo.



Thermon argues that there is insufficient evidence supporting the NLRB's findings in this matter. In particular, Thermon urges the following: (1) that Tom Maydian and Paul Wagstaff were not "supervisors" under the Act and, therefore, their actions cannot be imputed to Thermon, (2) that Thermon did not apply its safety rule in a discriminatory manner, and (3) that Thermon had no knowledge of the union activities of the dismissed employees.I. Tom Maydian and Paul Wagstaff


McNeely testified that both General Foreman Tom Maydian and Safety Director Paul Wagstaff observed and acknowledged him during periods when he had, without permission, left his work area during his lunch break and visited other areas. Thermon contends that while Maydian and Wagstaff may have observed McNeely violating the safety rule, their observations are immaterial because they were not supervisors under the meaning imputed to this term by Section 2(11) of the Act, which defines "supervisor" as follows:


any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them, or adjust their grievances, or effectively recommend such action, if in connection with the foregoing exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.


Superintendent Brookshire, testified that Maydian was "an electrical supervisor" who had authority to run crews, and to direct and reprimand employees. This testimony supports the NLRB's finding that Maydian was a "supervisor" under the Act.


The NLRB found that Wagstaff, on the other hand, was not a supervisor. Rather, the NLRB held that he was an agent of Thermon. It is, however, unnecessary for Wagstaff to have been a supervisor in order for his knowledge to have been imputed to Thermon. Rather, an agent's violation of the Act is sufficient for said violation to be imputed to the employer. See Atlas Minerals, 256 NLRB 91, 96 (1981); Uniontown Hosp. Ass'n, 277 NLRB 1298, 1303 (1985). Moreover, as the NLRB points out, Wagstaff testified that he was "the safety professional" for Thermon and that his "duty was to assist in promoting, providing, and maintaining a safe work environment" at the company. Given these functions, Wagstaff was reasonably seen as Thermon's agent, and thus, Thermon was responsible for his actions.


Given Maydian's and Wagstaff's status as supervisor and agent respectively, it was reasonable and proper for the NLRB to impute knowledge of McNeely's activities to Thermon.


II. Discriminatory Application of the Safety Rule


Under Section 8(a)(3) of the Act, it is an unfair labor practice for an employer to discriminate against employees with regard to terms or tenure of employment for the purpose of discouraging membership in a labor organization. When an employer has no legitimate reason to discharge an employee and employs a pretextual reason, we use a very lax standard to determine whether the employer has violated § 8(a)(3). See NLRB v. Adco Elec., Inc., 6 F.3d 1110, 1116 (5th Cir.1993) ("Where it is shown via direct or circumstantial evidence that anti-union considerations were a 'motivating factor' in an employer's decision to discharge an employee, the employer has violated the Act."). Thus, an employer violates section 8(a)(3) by discharging employees because of their union activity. See id.; NLRB v. Transp. Management Corp., 462 U.S. 393, 397-98, 103 S.Ct. 2469, 2472, 76 L.Ed.2d 667 (1983); NLRB v. Delta Gas, Inc., 840 F.2d 309, 313 (5th Cir.1988). The critical inquiry in these cases is the employer's motive. Id.


In this case, however, the NLRB found that Thermon's safety rule was legitimate rather than merely pretextual. Therefore, rather than falling under the above-described "pretextual reason doctrine," this case falls under the "dual-motive doctrine," which this Court described in TRW, Inc. v. NLRB, 654 F.2d 307, 311 (5th Cir. Unit A Aug.1981). In TRW, we stated that "when the employer advances a legitimate reason for the discharge, and it is not shown that this reason is untrue, the case cannot be characterized as a pretext case but must be considered as a 'dual-motive' case." Id. at 311-12; see also Roscello v. Southwest Airlines Co., 726 F.2d 217, 222 (5th Cir.1984); Marathon LeTourneau Co. v. NLRB, 699 F.2d 248, 252 (5th Cir.1983).


The required analysis for dual-motive cases was set forth in Wright Line, a Division of Wright Line, Inc., 251 N.L.R.B. 1083 (1980), enf'd 662 F.2d 899 (1st Cir.1981), cert. denied, 455 U.S. 989, 102 S.Ct. 1612, 71 L.Ed.2d 848 (1982), approved in Transp. Management Corp., 462 U.S. at 393, 103 S.Ct. at 2470 and adopted by this Court in our decision in NLRB v. Ryder/P.I.E. Nationwide, Inc., 810 F.2d 502, 507 (5th Cir.1987). Under this analysis, the General Counsel bears the initial burden of proving that an activity protected under the Act was a substantial factor in the employer's decision to discipline or terminate the employee or employees in question. If this burden is met, the burden shifts to the employer to prove affirmatively that the disciplinary or termination decision would have been the same in the absence of the protected conduct. Id.


Applying the foregoing law, McNeely testified that he overheard Wagstaff saying that he intended to use the new safety restriction against employees who were distributing union literature. Moreover, McNeely heard various foremen warning each other to keep track of "union people" who were visiting other blocks during breaks. McNeely's testimony is supported by the Administrative Law Judge's ("ALJ") evaluation of Superintendent Brookshire, who he noted "seemed reluctant to explain how supervisors enforced Thermon's restriction on employee movement between blocks." The ALJ found this reluctance to be especially damaging because Brookshire had signed many warning and discharge slips for union employees who were subsequently fired. This reluctance to explain how the rule was applied and inability to explain whether the rule was applied to non-union employees also created the impression that the rule was "more honored in the breach than in the observance." See NLRB v. Turner Tool & Joint Rebuilders, 670 F.2d 637, 639 (5th Cir.1982) (finding a violation of the Act where evidence has indicated that the workplace rule, though legitimate, was "more honored in the breach than in the observance"). In contrast to Brookshire's demeanor, the ALJ explicitly found McNeely to be a frank witness, thereby leading him to credit McNeely's testimony over Brookshire's testimony.


Other evidence is more mixed. Thermon argues that it also enforced the safety rule against employees Ronnie Bell and Clay Marshall, who were not distributing union materials, although the ALJ found that it was unclear whether they had been on strike. Thermon also argues, and the ALJ specifically found that Thermon granted one worker permission to go to another work block to distribute union materials. Both parties stipulated, however, that on at least one other occasion, Thermon specifically denied a worker permission to go to another work block to distribute union materials.


Careful examination of the record is all the more called for when resolution of the case depends on witness credibility. In such cases, special deference must be paid to the ALJ's conclusion. See e.g., Centre Property Management v. NLRB, 807 F.2d 1264, 1269 (5th Cir.1987) (giving great deference to the ALJ's credibility assessments of witness testimony in the presence of substantial circumstantial evidence and the absence of direct evidence of anti-union animus). The ALJ's resolution of the credibility findings adverse to Thermon coupled with strong evidence of anti-union animus by Thermon convinces us that substantial evidence supported the ALJ and the Board's determination that Thermon discriminatorily applied its safety rule against union employees.


III. Thermon's Knowledge of Dismissed Employees' Union Activities


In his decision, the ALJ noted that the parties had stipulated to the fact that the fifteen employees who were terminated for violating the safety rule were all engaged in union activity at the time of the violations. Thus, there is no question of Thermon's knowledge of the dismissed employees' union activities. However, as the NLRB noted in its decision and order, the ALJ erred in including five of the fifteen dismissed employees in the stipulation. These five employees--Joe Duhon, Jason Carr, Ken Tyson, Randy Garner, and Rodney Bernard--though dismissed for violating the safety rule, were not part of the stipulation. We must, therefore, determine whether our analysis in Part II of this opinion applies to the five dismissed employees who were not included in the stipulation.

Despite the ALJ's error, the NLRB held:


Although the stipulation does not include these names [Duhon, Carr, Tyson, Garner, and Bernard], the record established that they were former strikers who engaged in union activity, that the Respondent [Thermon] was aware of this, and that the Respondent issued warnings to them and discharged them because of that activity.


McNeely testified that a number of the dismissed employees distributed union literature during their lunch breaks. He did not mention each of the fifteen dismissed employees by name. Rather, he named seven employees and then stated that he could not remember the names of the others.6 Thermon argues that because such testimony was not presented for each dismissed employee, those employees not included in the stipulation cannot be considered discriminatees in this case.


Thermon's argument must fail because this Court has held that where a discharge is motivated by antiunion animus, the union sympathies of each affected employee need not be shown. See Dillingham Marine & Manufacturing Co. v. NLRB, 610 F.2d 319, 321 (5th Cir.1980) (a finding by the NLRB that a mass layoff decision itself is motivated by union activity "necessarily constitutes a finding that each individual discharge was caused by union activity"). As we have noted above, an employer can be in violation of the Act even where the work rule in question is valid, if said work rule is applied in a discriminatory manner. See Turner Tool and Joint Rebuilders Corp., 670 F.2d at 641. We have established that there is substantial evidence that Thermon, through its appointed supervisors and agents, discriminatorily applied its safety rule against union activists. We agree with the NLRB that the record establishes Duhon, Carr, Tyson, Garner, and Bernard's status as "former strikers who engaged in union activity." Circumstantial evidence is sufficient in satisfying the General Counsel's burden in dual-motive cases. See e.g., Centre Property Management, 807 F.2d at 1269. In light of Thermon's apparent awareness of the five employees' union activities, and in light of Thermon's policy of discriminatorily applying its legitimate safety rule to union activists, we agree with the NLRB's conclusion regarding the firing of the five employees not included in the stipulation. Accordingly, we enforce the NLRB's order as to all fifteen terminated employees.

EMILIO M. GARZA, Circuit Judge, dissenting:


The majority opinion fails to discuss McNeely's status as a paid informant. Because his testimony is the crux of this case, I respectfully dissent.


Ours is but a limited role when called upon to enforce an order of the National Labor Relations Board (the "Board"): we will sustain an order that is supported by substantial evidence on the record considered as a whole. See 29 U.S.C. § 160(e); Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951); TRW, Inc. v. NLRB, 654 F.2d 307, 310 (5th Cir.1981). Though we might reach a contrary result if we were to decide an issue de novo, we defer to plausible inferences drawn by the Board from the evidence in the record. See NLRB v. United Ins. Co. of Am., 390 U.S. 254, 260, 88 S.Ct. 988, 991, 19 L.Ed.2d 1083 (1968); TRW, 654 F.2d at 310. "In assessing the substantiality of the evidence, however, we must consider not only those facts that support the Board's decision, but also those facts and inferences that militate against it." TRW, 654 F.2d at 310.


Although our ability to reevaluate McNeely's credibility is limited, we can evaluate whether McNeely's status as a paid informant precludes the Board from relying on his testimony. Our resolution of this issue is important because the Board and its ALJs recently have heard a spate of cases involving witnesses paid by unions.1 See Contractor Servs., Inc., 324 N.L.R.B. No. 189, 1997 WL 724879 (N.L.R.B. Nov. 8, 1997); M.J. Mechanical Servs., Inc., 324 N.L.R.B. No. 130, 1997 WL 667581 (N.L.R.B. Oct. 24, 1997); Industrial Constr. Servs., Inc., 323 N.L.R.B. No. 179, 1997 WL 345616 (N.L.R.B. June 19, 1997) (involving McNeely in a similar undercover role). The ALJs and the Board in these cases have allowed the introduction of testimony of these witnesses without any discussion as to whether such testimony is admissible under the Federal Rules of Evidence. See Contractor Servs., 1997 WL 724879, at * 1, * 6; M.J. Mechanical Servs., 1997 WL 667581, at * 2-* 3; Industrial Constr. Servs., 1997 WL 345616, at * 2. Moreover, in none of the above cases has a court of appeals yet issued a decision enforcing the order. Therefore, as the first court to decide this issue and because we are called upon to enforce the Board's orders, we must be satisfied that it is proper to allow such testimony. See NLRB v. Houston Distrib. Serv., Inc., 573 F.2d 260, 265 (5th Cir.1978) (reviewing ALJ's evaluation of a witness's competency to testify in a hearing under FED.R.EVID. 601).


Our duty to evaluate the admissibility of a witness's testimony arises from § 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b), which provides that "[a]ny such proceeding shall, so far as practicable, be conducted in accordance with the rules of evidence applicable in the district courts of the United States."2 Id. In NLRB v. Capitol Fish Co., 294 F.2d 868, 872 (5th Cir.1961), we stated that although the rules of evidence "are considerably relaxed in such hearings, on the theory that the examiner is more sophisticated than a juror and will not attach improper weight to such testimony," we will reverse and remand an order that relies upon evidence of a type that would mandate reversal if relied upon by a district court. Id. More recently, we stated that "[t]here is no conceivable reason why NLRB proceedings should not be conducted under the accepted rules of competency." Houston Distrib. Serv., 573 F.2d at 265.


Although Thermon bitterly assails the Board's reliance on McNeely's testimony, it has not assisted this court in formulating a principled framework for analyzing paid informant cases.3 The parties agree that McNeely was a fact witness and that the union compensated him to gather information. McNeely testified before the ALJ that the union paid him two dollars per hour to do so. After Thermon Heat Tracing drew out this fact, however, it ceased this line of questioning; accordingly, the record is silent as to whether his compensation continued during the period in which he testified or whether his payments were contingent upon the information that he gathered.


There are, however, three possible ways in which the union's payments to McNeely could appropriately be characterized as payments for McNeely's testimony. First, the union put McNeely in a position not only where he could gather information, but which would enable him to testify as well. McNeely testified as to conversations among Thermon foremen on walkie-talkies and to his trips outside his work area to see if Thermon would apply the rule to him. McNeely's testimony was essential for the union: he was the only one who could have testified to many of these events. Without his testimony, this evidence could not have been introduced. Thus, although the union may have formally paid McNeely only for gathering information, in reality, the union's payments to McNeely may reflect both a component for gathering information and for testifying. Second, McNeely may have received an additional "payment" from the union in the form of potential employment in the future as a paid informant; that this potential employment benefit is tangible is reflected in the fact that the very next year after McNeely worked as a paid informant for the union in this case, he worked for the union as a paid informant in another case. See Industrial Constr. Servs., 1997 WL 345616, at * 4-* 5. Finally, McNeely's compensation format--payment on an hourly basis--may have given him an incentive to attempt to create evidence favorable to the union because his continued employment as a paid informant may have depended upon the information he gathered.


Thus, McNeely may have been a fact witness compensated for his testimony. The common law rule in civil cases in most jurisdictions prohibited the compensation of fact witnesses.4 See 14 WILLISTON ON CONTRACTS § 1716 (3rd ed. MODEL RULES OF PROFESSIONAL CONDUCT RULE 3.4(b) cmt. 3 (1983)). As one court has stated:


[P]ayment ... to a witness to testify in a particular way, payment of money to prevent a witness's attendance at a trial and the payment ... to make him "sympathetic" ... are all payments which are absolutely indefensible ... The payment of a sum of money to a witness to "to tell the truth" is as clearly subversive of the proper administration of justice as to pay him to testify to what is not true.


In re Robinson, 151 A.D. 589, 136 N.Y.S. 548, 556 (N.Y.App.Div.1912), aff'd 209 N.Y. 354, 103 N.E. 160 (1913). The policy motivations lying behind this rule apply to both the contingent and noncontingent compensation of fact witnesses, see Hamilton v. General Motors Corp., 490 F.2d 223, 228 (7th Cir.1973); Hare v. McGue, 178 Cal. 740, 174 P. 663, 664 (1918), and have led courts to hold that an agreement between a party and a fact witness to compensate the witness for her testimony is unenforceable on public policy grounds. See Hamilton, 490 F.2d at 228; Alexander v. Watson, 128 F.2d 627, 630 (4th Cir.1942); see also 81 Am.Jur.2d, Witnesses § 69 (1992). With several statutory exceptions, the common law rule has been partially enacted into federal law in 18 U.S.C. § 201, which makes it a felony to compensate or to offer to compensate a fact witness for testimony given at trial, although at least in dicta the Eleventh Circuit has limited this statute to the procurement of false testimony. See United States v. Moody, 977 F.2d 1420, 1425 (11th Cir.1992). The rule also exists as an ethical rule for attorneys in MODEL RULES OF PROFESSIONAL CONDUCT Rule 3.4(b). See MODEL RULES OF PROFESSIONAL CONDUCT Rule 3.4(b); MODEL CODE OF PROFESSIONAL RESPONSIBILITY DR 7-109(c) (1980); see also Rentclub, Inc. v. Transamerica Rental Fin. Corp., 811 F.Supp. 651, 654-55 (M.D.Fla.1992), aff'd 43 F.3d 1439, 1440 (11th Cir.1995) (disqualifying attorney for compensating a fact witness); ABA Comm. on Professional Ethics and Grievances, Formal Op. 402 (1996) (holding that payments by an attorney to compensate a witness for losses due to time spent preparing for testimony at trial do not violate MODEL RULES OF PROFESSIONAL CONDUCT Rule 3.4(b)).


If the union violated the common law rule by compensating McNeely for his testimony, we must next consider the appropriate remedy. In one of the reward cases discussed ante at n. 4, for example, a circuit held that in a civil case, a compensated fact witness is competent to testify as long as the fact that payments were made to that witness is disclosed to the trier of fact. See Jamaica Time Petroleum, 366 F.2d at 158; Goldstein v. Exxon Research and Eng'g Co., No. 95-2410, 1997 WL 580599, * 6 (D.N.J. Feb. 28, 1997); New York v. Solvent Chem. Co., 166 F.R.D. 284, 291 (W.D.N.Y.1996). In another reward case, by contrast, another circuit held that disclosure is not a sufficient remedy, and that payments by a party to a witness render that witness incompetent to testify.5 See Golden Door Jewelry Creations, Inc., 865 F.Supp. at 1524-26, aff'd in relevant part 117 F.3d 1328, 1335 n. 2 (11th Cir.1997) (barring party from introducing testimony of a fact witness as a sanction for compensating that witness). Still other courts reprimand or disqualify attorneys who pay or attempt to pay witnesses for factual testimony, even if true. See Rentclub, 811 F.Supp. at 654-55; Wagner v. Lehman Bros. Kuhn Loeb, Inc., 646 F.Supp. 643, 659-60 (N.D.Ill.1986).


The task before us is difficult, as the differences between the Tenth and Eleventh Circuits on the appropriate remedy to adopt with regard to paid witness testimony illustrate. I believe, however, that we should retain the common law approach and hold that paid fact witnesses are presumptively incompetent to testify. This approach sweeps broader than reliance upon MODEL RULES OF PROFESSIONAL CONDUCT Rule 3.4(b), which the Eleventh Circuit relied upon in Golden Door Jewelry. See Golden Door Jewelry, 865 F.Supp. at 1524-26. As the case here suggests, reliance upon Rule 3.4(b) would not solve the problem where a non-attorney procures the paid witness's testimony because that rule applies only to attorneys. Moreover, the approach that I suggest would prevent the possible corrosive effects of a perception among the public that justice can be bought and sold. See United States v. Cervantes-Pacheco, 826 F.2d 310, 316 (5th Cir.1987) (en banc) (Goldberg, J., dissenting). Accordingly, I believe that paid fact witnesses should presumptively be incompetent to testify.


Because the Board's order did not address this issue, however, I would remand to the Board for a factual determination as to McNeely's competence to testify. See Teamsters Local Union 769, 532 F.2d at 1392 (vacating and remanding a Board order because the Board failed to address evidentiary questions and articulate a reason for allowing the introduction of certain evidence). In accepting the testimony of McNeely without comment, I believe that the Board erred. The majority opinion's unquestioning acceptance of McNeely's testimony duplicates the Board's error.


Accordingly, I respectfully dissent.


The NLRB's order is reported at 320 NLRB 1035 (1996)


29 U.S.C. § 151 et seq


These workers included employees of the general contractor, Brown and Root, and the other subcontractors on the site


The union paid McNeely $2 per hour for up to 40 hours per week to keep it informed of happenings on Thermon's Texaco job site. McNeely testified that this was his first paid informant assignment for the union and that he kept a log and twenty pages of notes of his observations through the end of the construction. He reported his observations to union organizers Chris Kibbe and Larry Moore on a weekly basis. Thermon did not object to McNeely's competency to testify before the Administrative Law Judge nor has it raised his competency as an issue on appeal


McNeely was terminated approximately two weeks after he was hired by Thermon. However, his firing was not because he violated the safety rule by leaving his work area without permission to visit other work areas but because he had left the job site altogether to go fishing according to his unrebutted testimony. He was rehired by Thermon shortly thereafter


Of the seven names that McNeely could remember, one was that of Ken Tyson, a dismissed employee who was not included in the stipulation


Paid union witnesses come in many variants. One type of paid union witness is a "salt." Salts are union organizers (who may or may not disclose their union affiliation) who aim to organize non-unionized employers by getting themselves hired by non-unionized employers and then talking to other employees, emphasizing the benefits of unionization, and keeping the union abreast of their progress. Because prevailing wage rates are often less at nonunionized employers, the unions may subsidize the salts by paying them the difference between the rate that their employer pays them and the rate that they would be making if they worked at a unionized employer. See M.J. Mechanical Servs., Inc., 324 N.L.R.B. No. 130, 1997 WL 667581, at * 1 (N.L.R.B. Oct. 24, 1997); see also NLRB v. Town & Country Elec., Inc., 516 U.S. 85, 87-88, 116 S.Ct. 450, 452-53, 133 L.Ed.2d 371 (1995) (discussing salting activities of unions and holding that salts are "employees" as defined in the National Labor Relations Act, 29 U.S.C. § 152(3)). By contrast, in this case, the Union used McNeely to gather information. McNeely thus received a payment for his information gathering services, rather than a subsidy to offset a possible lower wage rate at Thermon


Prior to 1947, § 10(b) provided that "the rules of evidence prevailing in courts of law or equity shall not be controlling." See Universal Camera Corp., 340 U.S. at 477, 71 S.Ct. at 456. Congress amended § 10(b) in 1947, stating its reasons for doing so as

[T]he [unamended] act gives the Board great latitude in choosing the evidence that it will believe and gives great effect to findings that rest on that evidence.... These clauses of the act have resulted in what the courts have described as "shocking injustices" in the Board's rulings.... The bill does this, by providing in section 10(b) of the amended Labor Act that "so far as practicable," the new Board's proceedings shall be conducted "in accordance with the rules of evidence applicable in the district courts of the United States under the rules of civil procedure."

H.R.Rep. No. 80-245, at 41 (1947). Both the Supreme Court and this circuit have held that Congress intended to strengthen judicial oversight and control of Board proceedings when it enacted the 1947 amendments to § 10(b). See Universal Camera Corp., 340 U.S. at 487-88, 71 S.Ct. at 464-65; NLRB v. Capital Fish Co., 294 F.2d 868, 872 (5th Cir.1961).


Thermon has argued to this court that McNeely's testimony is not substantial evidence supporting the Board's order because he is a paid informant. This argument presupposes that McNeely is competent to testify


"Compensation" has usually been defined so as to exclude: (1) reasonable expenses that a witness incurs in attending or testifying at a legal proceeding; (2) reasonable compensation for losses due to a witness's attendance or testimony at a legal proceeding; or (3) reasonable payments to an expert witness. 33A FED.PROC., L.ED. § 80.364 (1995); see also 18 U.S.C. § 201(d) (setting forth exceptions from bribery statute). In other respects, exactly who is a "compensated fact witness" for purposes of the common law rule is sometimes unclear. The rule clearly covers the payment of money to witnesses for their testimony during trial. Less clear is whether the rule covers payments to persons made prior to the commencement of litigation. For example, the circuits have split on the admissibility of testimony by a witness who has been paid a reward prior to the commencement of trial by a party. Compare Jamaica Time Petroleum v. Federal Ins. Co., 366 F.2d 156, 158 (10th Cir.1966) with Golden Door Jewelry Creations, Inc. v. Lloyd's Underwriters Non-Marine Ass'n, 865 F.Supp. 1516, 1524-26 (S.D.Fla.1994), aff'd in relevant part, 117 F.3d 1328, 1335 n. 2 (11th Cir.1997). The rule does not appear to cover situations where a party's payment to a witness is unrelated to the witness's testimony or the fact that they are testifying (i.e., an employee who testifies at a trial yet who continues to be paid a salary in his or her unrelated capacity as an employee)


This case relied upon MODEL RULES OF PROFESSIONAL CONDUCT Rule 3.4(b). As the union is not an attorney, this rule presumably would not apply. I express no opinion as to whether this rule would prevent attorneys employed by the Board from using testimony procured in this manner by a union