On May 27, 1997, the Office and Professional Employees International Union (OPEIU), filed an application pursuant to the Railway Labor Act, as amended, 45 U.S.C. § 152, Ninth, alleging a representation dispute among Flight Deck Crew Members, employees of Petroleum Helicopters, Inc. (PHI).

At the time this application was received, these individuals were unrepresented.

The Board assigned Mediator Laurette Piculin to investigate. As a result of the investigation, the Board found a dispute to exist, authorized, and conducted an election. The September 4, 1997 ballot count resulted in less than the majority of valid votes required for Board certification.

On September 5, 1997, the OPEIU filed allegations of carrier interference, and after an investigation of those allegations, the Board, on January 30, 1998, found that PHI had interfered with the election and ordered a re-run election using a "Laker"⁽¹⁾ ballot. Petroleum Helicopters, Inc., 25 NMB 197 (1998). The case was reassigned to Mediator Patricia Sims to conduct the re-run election.

On March 31, 1998, the Board counted the ballots in the re-run election. In that election, out of 537 eligible voters, 248 voted for OPEIU, and 254 voted for no representation. Before the ballot count commenced, Mediator Sims issued status change rulings.⁽²⁾ On April 2, 1998, OPEIU filed new allegations of election interference. OPEIU supplemented its filings on April 17, 1998, and PHI filed a response on May 1, 1998. On May 8, 1998, OPEIU filed a rebuttal submission and, on May 15, 1998, PHI filed surrebuttal.

The Board assigned Senior Hearing Officer Joyce Klein and Mediator Patricia Sims to continue the investigation. During May and June of 1998, they interviewed and took sworn statements from several individuals including employees and carrier officials and collected additional documentary evidence. This determination is based upon the entire record in this case including the submissions of the participants as well as the Board's subsequent investigation.

ISSUE

Did PHI interfere with, influence, or coerce employees in their selection of a representative?

CONTENTIONS

OPEIU

OPEIU asserts that PHI interfered with the laboratory conditions when it instituted a new pay scale providing increased wages and benefits to its pilots during a re-run election held to address election interference. OPEIU asserts that PHI's restructuring of its salary scale in the midst of a re-run election should be viewed in light of the Board's initial finding of carrier interference. Specifically, OPEIU notes that the timing of the announcement and implementation of the new wage scale coincided with announcement of the re-run election and the ballot mailing. For example, OPEIU notes that PHI sent each employee a letter detailing the exact amount of their wage and benefit increase on the day before the ballots were mailed.

Further, OPEIU asserts that the Carrier interfered with the election by improperly posting the Board's Notice and Sample Ballot, and by including a cover sheet stating its belief that "remaining union free" is in its employees' and customers' best interests.

OPEIU urges the Board to issue a certification based upon a check of authorization cards because the Carrier's "brazen conduct" in increasing wages during the re-run election will have a long lasting impact on the voters.

In addressing PHI's appeal of Mediator Sims' status change rulings, OPEIU asserts that the Representation Manual has no provision for the appeal of such rulings. If an appeal is permitted, OPEIU argues that it should be rejected on its merits because the six individuals at issue are management officials who campaigned against OPEIU at the behest of PHI.

PHI

PHI asserts that it created, announced, and implemented a new pilot compensation system as part of a comprehensive compensation plan restructuring. PHI maintains that the new compensation plan was created and implemented "for reasons having nothing to do with the OPEIU or the March 31 election and it did so before the election was ordered." Specifically, PHI maintains that the new pay plan was created, announced, and implemented "solely to respond to and remedy a critical business problem it was experiencing in retaining and attracting pilots and mechanics."

PHI also asserts that its communications during the re-run election were permissible carrier speech. It also asserts that no captive audience meetings or briefings regarding OPEIU's Constitution were conducted at the Venice base, and the individuals who held meetings were eligible voters at that time. Finally, PHI asserts that it properly posted the Board's Notice of Election and Sample Ballot at the Venice base, and when it heard that the Notice was partially obscured, corrective action was taken.

PHI asks that the Board dismiss OPEIU's application.

PHI also appeals Mediator Sims' status change rulings asserting that her rulings are contrary to the Board's determination in Petroleum Helicopters, Inc., 25 NMB 652(1997) and that the individuals at issue are not management officials.⁽³⁾

FINDINGS OF LAW

Determination of the issues in this case is governed by the Railway Labor Act, as amended, 45 U.S.C. §§ 151-188. Accordingly, the Board finds as follows:

I.Petroleum Helicopters, Inc., is a common carrier by air as defined in 45 U.S.C. § 151, First, and § 181 of the Act.

II.OPEIU is a labor organization and/or representative as provided by 45 U.S.C. § 152, Ninth of the Act.

III.45 U.S.C. § 152, Third, provides in part that "[r]epresentatives . . . shall be designated . . . without interference, influence or coercion."

IV.45 U.S.C. § 152, Fourth, gives employees subject to its provisions, "the right to organize and bargain collectively through representatives of their own choosing. The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class for the purposes of this chapter." This section also provides as follows:

No carrier, its officers or agents, shall deny or in any way question the right of its employees to join, organize, or assist in organizing the labor organization of their choice, and it shall be unlawful for any carrier to interfere in any way with the organization of its employees . . . or to influence or coerce employees in an effort to induce them to join or remain or not to join or remain members of any labor organization.

V.45 U.S.C. § 152, Ninth, provides that the Board has the duty to investigate representation disputes and to designate who may participate as eligible voters in the event an election is required. In determining the choice of the majority of employees, the Board is:

[A]uthorized to take a secret ballot of the employees involved, or to utilize any other appropriate method of ascertaining the names of their duly designated and authorized representatives in such manner as shall insure the choice of representatives by the employees without interference, influence, or coercion exercised by the carrier. In the conduct of any election . . . the Board shall designate who may participate in the election and establish the rules to govern the election.

STATEMENT OF FACTS

I. Background

After the first election, OPEIU filed allegations of election interference which the Board investigated. On January 31, 1998, the Board issued its Findings Upon Investigation, finding that PHI had interfered with the election process and ordering a re-run election using a "Laker" ballot. Petroleum Helicopters, Inc., 25 NMB 197 (1998). The Board based its determination on its findings that:

PHI promised wage and benefit increases during the election period, made announcements about those benefits on the day before the ballots were mailed and on the day the ballots were mailed, collected ballots, distributed apparel with an anti-union message to all employees who agreed to wear it, held meetings and issued communications suggesting that oil and gas companies would not do business with a unionized company and PHI would lose business and jobs, and held one on one small group meetings to interrogate employees.

II.According to James McFarland, a member of PHI's Board of Directors, PHI's senior management discussed its compensation policies as early as the Summer of 1996 when McFarland joined PHI's Board of Directors. At a meeting during that summer, the Board of Directors asked PHI's senior management to prepare a compensation study. Later that year, at the October Board of Directors meeting, turnover rates and attrition, as well as the idea of hiring a compensation specialist, were discussed. Ed Gatza, PHI's Director of Employee Relations, was asked for a proposal as to what portions of a comprehensive compensation study could be done by PHI, and how much PHI would need the services of a compensation specialist. After a review of the cost of retaining a compensation specialist, the Board of Directors directed Gatza to conduct the desired compensation study.

By the Spring of 1997, according to McFarland, due to other pressing issues, a human resources report was presented to the Board of Directors, but the compensation study was not completed. According to McFarland, during the Spring of 1997, PHI was able to recruit enough pilots to meet its needs, but attrition was increasing, and new pilots could not be retained.

Based upon the record, it appears that PHI's management was not considering use of an outside consultant to conduct a compensation study during the Spring of 1997. During 1996 and 1997, Chief Pilot Michael Hurst had been tracking attrition and making reports to the Board of Directors, beginning with a report at a strategic planning meeting in October of 1996.

According to Ed Gatza, 38 pilots left PHI in 1995, and 58 left in 1996. PHI's attrition rate climbed to 76 pilots in the first nine months of 1997, and 130 pilots had left PHI by the close of 1997. Hurst estimates that attrition rates climbed from 8.25% in 1995 to 11.6% in 1996, and 17.65% in 1997. In contrast, Hurst estimated that normal attrition levels should be five or six percent. According to PHI's Director of Operations, Virgil Russell, increases in attrition during 1997 caused aircraft to sit idle for lack of pilots. This situation resulted in unsatisfied customers, "because they could see the aircraft and know it could fly out to get their people, but no pilot" was available.

Additionally, the attrition problem resulted in increased costs for training and overtime. Since turnover was high, PHI was investing in training new pilots only to see them leave within a year or two. According to Russell, overtime costs had increased from $3.6 million in 1995 to $4.6 million in 1996 and to $5.7 million in 1997. According to Gatza, as a result of attrition, training costs jumped from $500,000 in 1995 to $750,000 in 1996 and to $1.5 million in 1997. Additionally, PHI was concerned because accidents are most likely to occur in a pilot's first year, and the turnover resulted in a continuing influx of inexperienced pilots.

III. The New Compensation Plan

A.In September of 1997, Carroll Suggs was discussing various projects with James Sowers from Towers Perrin. Sowers had conducted management training for PHI in the past. On September 22, 1997, Sowers and Allan Brown, also from Towers Perrin, met with Suggs and McFarland, and were retained to conduct a comprehensive compensation study broken down into five employee categories, and to create a compensation plan. Those categories included pilots, mechanics, hourly employees, exempt employees and executives. According to McFarland, at that meeting, the arrangements for the study were finalized. According to Gatza, Suggs told management that she "wanted the pay situation fixed as quickly as possible."

Towers Perrin assigned Jeffrey Hyler, a compensation consultant, to work with PHI to gather information necessary to complete the comprehensive compensation study. On September 30, 1997, Sowers and Hyler met with Suggs and McFarland. According to Hyler, the purpose of that meeting was to determine what was to be included in the project. Hyler characterized the project as a "three phase project looking first at the total rewards for pilots and mechanics, then for exempt employees" and finally, executive compensation. Hyler stated that it was premature to set an "accurate timetable" at that point but that Towers Perrin got "the message . . . that they were bleeding from attrition." The primary topic of the September 30 meeting with Towers Perrin was the methodology best used to gather the necessary information at PHI.

During October, Towers Perrin collected raw data for its study. According to Russell, in October, the time frame to complete the compensation review and make recommendations was December. However, it was not completed in time, and the project ran over into January. The data collected included information about the salaries paid by PHI's competitors. According to Russell, he collected that information and was surprised to find that "PHI was very far behind the pilots' wages, especially in the new hire group." Specifically, PHI paid new hire helicopter pilots $26,000 per year and its two main competitors paid $31,000 per year. One of the competitors paid an additional $3,000 to $5,000 flight time bonus. Russell also noted that, historically, PHI had paid the top wage, and 1997 was the first time there was a big gap in wages between PHI and its main competitors. According to Gatza, by 1997, PHI was the biggest helicopter operator in the Gulf of Mexico with the lowest starting salary.

On November 11 and 12, 1997, Towers Perrin interviewed nine management officials. Some of the interviews were one on one, and others were in small groups. On the same days, Towers Perrin conducted employee focus groups with pilots and mechanics. The pilot focus group was conducted with a group of pilots that happened to be in a recurrent training class. Hyler summed up what he heard from the pilots' focus group as follows:

The pilots told us that pay was way too low. Pilots would join PHI to get the training and then punch out and work somewhere else for $5,000 more. It was such a big issue with the guys in the focus group that half the guys in the room were actively looking for other jobs.

Hyler learned of OPEIU's organizing drive at the pilots' focus group meeting. According to Hyler, OPEIU's organizing efforts were not discussed at any other meetings he attended.

On November 20, 1998, Towers Perrin held a meeting with PHI's management group. In addition to Suggs and McFarland, the group included PHI's General Manager Ben Schrick, Director of Operations Virgil Russell, Ed Gatza, and Chief Pilot Michael Hurst. According to Hyler, the purpose of that meeting was to explain Towers Perrin's perceptions of the key issues and to discuss strategies for resolving the issues identified by Towers Perrin. Hyler described those issues as:

(1) Starting pay was below market for pilots and mechanics. They could not attract or retain pilots or mechanics. We received copies of exit interviews as well as data from competitors showing pay was $5000 low.

(2) The early top out provided no incentive for the senior people. They had been frozen in pay for 10 years. We wanted to give the senior folks reason to perform and advance. PHI needed to extend the pay scale to accommodate that.

(3) PHI needed to create internal equity based upon skills.

(4) Fixed costs needed to be minimized. PHI needed to get people away from an entitlement mentality and toward pay for performance.

According to McFarland, Towers Perrin provided an interim report to PHI at that meeting. McFarland characterized PHI's reaction to the interim report as "shock" at the total cost. According to McFarland, in addition to shock, the "reaction was we can't afford to do all of this." According to McFarland, the management group determined that it needed some time to absorb the report, to understand and digest the report, and to determine how to proceed.

Also at that meeting, managers for the mechanics were directed to come up with solutions to mechanic issues, and the pilot managers were assigned the task of arriving at solutions to pilot issues. The pilot management work group included Virgil Russell, Mike Hurst (Chief Pilot), Ken Townsend (Oil & Gas), Pete Sorenson (EMS), Gary Weber(International) and Geoff Stanford, the Controller.

According to McFarland, by December of 1997, PHI had decided to implement a new compensation plan but had not worked out the details of the new plan. Towers Perrin was pushing PHI to implement all of the recommendations it made at the November 20 meeting, but PHI determined that it could not implement the full plan immediately, so it stretched the timing of the implementation of Towers Perrin's recommendations and did not implement all of its recommendations. Specifically, PHI determined to stretch out raises for senior employees over several years and to implement raises for newer employees more immediately. However, according to McFarland, the pay scales recommended by Towers Perrin were "pretty much what was implemented."

The pilot work group met with Hyler on December 9, 10, and 16, 1997. According to Hyler, the group discussed the historic basis for pilot wages and made recommendations for increasing pilot wages to market rates. The pilot and mechanics management work groups met again on December 29 and 30, 1997, to "crunch numbers" and to finalize recommendations.⁽⁴⁾
Hyler then met with Stanford on January 5, 1998 to discuss costs and implementation of the new plan. The senior managers met with Towers Perrin on January 12, 1998, to finalize the plan and the new plan was presented to Suggs on January 13. Towers Perrin submitted the final report on January 16, 1998.

The new pay plan reduced the number of pay scales to two and provided bonuses for extra qualifications, such as a pilot mechanic or a check airman. The new scales increased salaries for new hires approximately 18.3% and for the most senior employees an average of 2.9%. The pay scales are to be phased in over a three year period, and future movement on the pay scale is to be based upon performance.⁽⁵⁾

Addressing the timing of PHI's implementation of its new pay plan, McFarland stated that,

[E]verybody knew that there was a[n] [NMB] ruling coming forth and there was a lot of speculation about what was going to happen, but the feeling was that we had to make a business decision regardless of what was going to happen. The competition was not waiting for us to get a ruling. The feeling was that we did not have a choice.

B.In both the Fall and Winter 1997 issues of Flight Line, PHI's monthly newsletter, Suggs mentioned that PHI was working with Towers Perrin on a new compensation plan. Suggs' message in the Fall 1997 issue included the following:

We are proceeding with addressing a number of human resource issues, including strengthening the department's access to technical resources in such areas as benefits (Johnson and Higgins) and compensation (Towers Perrin). We have initiated comprehensive reviews of several critical human resources programs, and I look forward to announcing improvements and new initiatives in the near future.

The Winter issue of Flight Lines, which was issued in December 1997, included the following references to the new compensation plan:

The initial draft or our business plan for the next three fiscal years will be completed by January. A major component of our business plan is a compensation plan. I reviewed the compensation plan this week, and I am quite pleased with the current version. We have a few areas, however, that still need to be refined. Many of you have provided useful imput and the Towers-Perrin people have done a commendable job in coordinating this effort. I should be able to provide you with an overview of the business plan and the compensation plan very soon. For us to be able to implement these plans, we will need a strong team effort.

Employees remember hearing about a new compensation plan in the late fall of 1997. One employee remembered hearing about a new compensation plan between the first and second elections and stated that, "the initial rumors and in-house scuttlebut dated back to before Thanksgiving."

C.According to Gatza, employees were told on January 28, 1998 that the new plan would be effective on February 16, 1998. Gatza stated that Suggs wanted the plan to be put in place as soon as possible. February 16, 1998 was the beginning of the pay period when all of the work necessary to retool the payroll system and computers in order to implement the new compensation could be completed.

PHI and Towers Perrin created "train the trainer" manuals to help PHI's management team explain the new compensation plan to PHI employees. Several members of PHI management visited the bases on January 28 and 30, 1998 to introduce the new compensation plan to employees. Russell, Hurst, Townsend, Gatza and a few other managers, including the mechanics' management team, conducted meetings at each base. According to Hurst, January 28 and 30, 1998 were chosen because shifts change on Thursday, and by holding meetings on Wednesday and Friday, they would be able to include all pilots and mechanics in the meetings.

Russell conducted meetings involving about 40 employees. He described the January 28 and 30, 1998 meetings as beginning with a video presentation from Carroll Suggs and an overview of the 1999 compensation plan. Then Russell broke employees into pilot groups and mechanic groups, and as they started to ask questions, they were split into smaller groups, based upon seniority. Russell showed pilots the pay scale and explained how it would work. According to Russell, pilots questioned why they were not placed at higher steps, and Russell explained the reasons for placement on the pay plan, including balancing between maintaining a cost structure that PHI's customers would support and reducing attrition and accounting for training costs. Pilots also asked questions about bonuses available for flying larger aircraft and about the elimination of bonuses for flying medium sized aircraft. At the meetings Russell conducted on January 28 and 30, 1998, he does not recall mention of the OPEIU campaign or the Board's investigation.

According to one employee, Russell gave a presentation of the new pay scale at Houma in early 1998. That employee described Russell as stating that the pay scale had to be implemented and that "no one would stop PHI from conducting their business whether it was right or wrong, they were going to implement the pay scale."

Gatza conducted similar meetings at Venice. He began by showing the videotape of Suggs and then talked about the commitment PHI had made to its employees, explained the new plan, and discussed the

$21 million cost of the plan over the next three years. Gatza discussed employee questions about how PHI could afford to implement the new compensation plan, employee involvement in cost savings and new performance appraisals for employees. Gatza met with employees in small groups to explain where they fell on the new pay scale. According to Gatza, pilots did not ask questions about unionization.

Pilots reported that Sector Managers provided briefings on the new compensation plan at some stations. One pilot attended a meeting a Galveston conducted by Sector Manager Jim Rogers. That pilot stated that Rogers showed the videotape and then explained the new compensation system. According to that pilot, Rogers "had a great degree of difficulty explaining it" and "did not understand the plan." The pilot elaborated that "Rogers was unable to answer a lot of questions" and gave the pilot incorrect information as to where he would fall on the new pay scale.

After the initial meetings engendered confusion among employees, additional meetings to explain the new compensation plan were conducted in February as well. According to Russell, at one of those meetings at Sabine Pass, an employee asked whether the new compensation plan was a result of the unionization attempt. According to Russell, he replied by holding up his hands "in the time out signal and said we are here to discuss the FY 1999 plan and compensation plan." He continued by stating that he "wouldn't answer those types of questions at this meeting. If they wanted to talk about . . . [unionization], I would talk to them on an individual basis." After the meeting was over, "no one wanted to talk about the union. They wanted to talk about compensation or operational issues," according to Russell.

A similar meeting was held, on or around February 20, 1998, at the Venice base. Russell noted that a similar question was raised at the Sabine Pass base and he responded in a similar fashion.

A pilot who attended the Sabine Pass meeting characterized the exchange about the union as follows:

The meeting was held to determine where pilots would fit into the pay scale and to address issues raised by pilots who felt they had been unfairly discriminated against and had their salaries boosted. The meeting became contentious when one pilot repeatedly questioned Mr. Russell by mentioning that AirLog, who had voted in a union, had not lost any customers. The pilot and Mr. Russell had a heated exchange about why PHI had said that we would lose customers if we got a union, when in fact Air Log had not lost any customers. Mr. Russell was pretty angry, but I would not characterize him as losing his temper. Mr. Russell was evasive and did not directly answer that question. He indicated that there were certain things he could not discuss. The conversation concluded with Mr. Russell becoming flustered and saying I know where you're going with this, and then the subject was dropped.

D.The new pay plan was effective February 16, 1998, which was the start of a pay period, and employees received the increase in their pay checks for the first time on March 6, 1998.

By letters dated and mailed on February 16, 1998, each pilot received a personal letter from Suggs which provided notice that the new pay plan was effective on February 16, 1998, each pilot's grade and step on the new pay scale, the percentage increase this represented for the pilot, and a reminder that, "other benefits, including long term disability, 401(k) and life insurance, which are based on . . . compensation, have also increased by this percentage."

According to Hurst, seven pilots left in January 1998, four in February, and two in March, and based upon these numbers, he views the trend as "good." However, one pilot thought that attrition had decreased because drilling was down in the Gulf of Mexico and "there is no place to go."

IV. The Re-Run Election

On January 30, 1998, the Board issued its Findings Upon Investigation finding that PHI had interfered with the election and ordering a re-run election using a special ballot. On February 3, 1998, Mediator Sims informed the participants in writing that ballots would be mailed on February 17, 1998, and the ballot count was scheduled for March 31, 1998.

A.According to one pilot, on or before February 22, 1998, he observed that the Board's Notice and Sample Ballot were obscured at the Venice base. According to that pilot:

The NMB postings . . . are NOT posted as per NMB directives here at the Venice base. The whole thing is on the Board as a single page and there is a PHI letterhead cover sheet over the whole thing except for the sample ballot. On the cover sheet is the statement, "We believe that remaining union free is in the best interest of you, our business, and our customers. . . ." Granted, the sample ballot is displayed in its entirety, but in my opinion, too high, and on a board that [was] behind a desk so that no one can stand any closer than 3.5 feet to it.

On March 7, 1998, that pilot reported that page one of the Notice to Employees was visible at the Venice base, but page two remained obscured.

The PHI letterhead cover sheet referred to in the above statement was titled "Voting Procedures" and stated that the Board had "authorized that an additional election be held." Following the text, boxes providing the choice of OPEIU or no representation were reproduced exactly as provided on the Board's sample ballots. Then, the document stated,

The outcome of the election is determined by the number of the votes cast. If you do not wish to be represented by OPEIU, you should mark your ballot with an "X" in the second square and mail it back to the NMB. When you mark your ballot - just put an "X" in the box. Do not sign or put any other marks on the ballot.

If you are in the bargaining unit of the pilots and the OPEIU should win the election, you will be subject to the terms and conditions of any negotiated contract, whether or not you voted. Your vote counts and we encourage all eligible pilots to vote.

This is a secret ballot election and you have the right to vote for or against union representation. We believe that remaining union free is in the best interest of you, our business, or our customers.

B.Also at the Venice base, pilots reported that a few pilots were called in to discuss the membership oath that, under OPEIU's Constitution, new members of OPEIU sign. When taking the oath, new OPEIU members pledge to "faithfully comply" with OPEIU's constitution and by-laws.

PHI operates approximately 40 bases in the United States.

DISCUSSION

I.Under Section 2, Ninth, of the Act, the Board is charged with the responsibility of assuring that employees are provided the opportunity to make a choice concerning representation free of interference, influence, or coercion by the carrier. This duty requires that, where there are allegations of carrier interference, the Board has the responsibility to investigate such claims. Metroflight, 13 NMB 284 (1986); Key Airlines, 13 NMB 153 (1986).

When considering whether employees' freedom of choice of a collective bargaining representative has been impaired, the Board examines the totality of the circumstances as revealed through its investigation. The Board makes an evaluation of the facts developed from its investigation including submissions provided by the organization and the carrier and past Board experience. Evergreen International Airlines, 20 NMB 675 (1993); America West Airlines, Inc., 17 NMB 79 (1990).

II.The Carrier is under an obligation imposed by the Railway Labor Act to act in a manner which does not influence, interfere, or coerce the employees' selection of a collective bargaining representative. Metroflight, supra. As cited in the Board's initial determination of carrier interference in this case, the Supreme Court has stated:

'Interference' with freedom of action and 'coercion' . . . in this clause may be gathered from the context . . . . The use of the word is not to be taken as interdicting the normal relations and innocent communications which are a part of all friendly intercourse, albeit between employer and employee. 'Influence' in this context plainly means pressure, the use of the authority or power of either party to induce action by the other in derogation of what the statute calls 'self-organization.' The phrase covers the abuse of relation or opportunity so as to corrupt or override the will, and it is no more difficult to appraise conduct of this sort in connection with the selection of representatives for the purposes of this Act than in relation to well-known applications of the law with respect to fraud, duress and undue influence.

Petroleum Helicopters, Inc., supra, at 225, citing, Texas & New Orleans Railway v. Brotherhood of Railway and Steamship Clerks, 281 U.S. 548, 567 (1930).

Under Section 2, Ninth of the Act, the Board has broad discretion to tailor its investigation to the facts and circumstances of each case. Evergreen International Airlines, supra; Florida East Coast Railway, 17 NMB 177 (1990); Key Airlines, 16 NMB 296 (1989). When the Board has found carrier interference, it has employed a variety of special ballots and notices intended to eliminate the taint of interference on the employees' freedom of choice of representative. The Board's methods of determining the employees' choice of representative vary on a continuum determined by the extent of the carrier interference found. The continuum begins with a finding that the carrier had not interfered with the employees' choice of representative. The continuum ends with interference so outrageous that, in the Board's judgment, alternate means of gauging employee sentiment other than a secret ballot election are appropriate. Petroleum Helicopters, Inc., 25 NMB at 226-228. Sky Valet d/b/a Commercial Aviation Services of Boston, Inc., 23 NMB 276, 298-299 (1996).

III.In Key Airlines, 16 NMB 296, 310 (1989), the Board held that the laboratory conditions must be maintained from the date that the carrier becomes aware of the organizing drive. The issue of whether laboratory conditions extend beyond the election in cases where continued investigation is necessary is one of first impression.

In the first election in this case, the Board found that the laboratory conditions attached in early to mid-May 1997, at the time when PHI received OPEIU's May 7, 1997 letter stating that it was collecting authorization cards from PHI employees. Petroleum Helicopters, Inc., 25 NMB at 228-229. The ballots in the first election were counted on September 4, 1997. After an extensive investigation, including the exchange of several submissions throughout the fall of 1997 and interviews throughout December of 1997, on January 30, 1998 the Board found interference and ordered a re-run election. Petroleum Helicopters, Inc., supra. On February 3, 1998, Mediator Sims announced that ballots would be mailed on February 17, and counted on March 31, 1998. Now the Board must address whether the laboratory conditions continued through its investigation including the re-run election.

That question must be answered affirmatively. The purpose of requiring that laboratory conditions be maintained is to permit an election to take place free from interference, influence, or coercion. In the event that impermissible interference, influence, or coercion is alleged, a new election may be necessary to determine the choice of employees. That election too must be free from interference, influence, or coercion. Therefore, the laboratory conditions must extend through that election and any subsequent investigation.

Having found that the laboratory conditions in this case continued through the investigation of OPEIU's initial allegations of election interference, and through the re-run election, the Board analyzes whether PHI's conduct during that period constituted interference. For the reasons discussed below, the Board finds that PHI did not interfere with the re-run election.

IV.In this case, the Board finds that PHI did not improperly interfere with, influence, or coerce its Flight Deck Crew Members when it implemented a new pay system around the same time that the Board announced and conducted a re-run election. Specifically, the new compensation plan was developed to address a serious attrition problem. The timing of its implementation was coincidental. The campaign communication from PHI, issues surrounding the posting of the Board's Notice and individual meetings concerning OPEIU's Constitution did not, under the totality of the circumstances of this case, taint the laboratory conditions.

A.Normally, the announcement or institution of changes in wages or other terms and conditions of employment during the pendency of the laboratory conditions is carrier interference. Petroleum Helicopters, Inc., supra. Changes to terms and conditions of employment beyond those implemented in order to maintain the status quo are not permitted during the period when laboratory conditions must be maintained unless, the carrier demonstrates clear and convincing evidence of a compelling business justification (i.e., attrition rates almost three times the normal rate and salaries well below market levels).

B.The record in this case demonstrates that PHI's attrition rate began increasing in 1996 and early 1997, and by September of 1997, had become a serious problem for the Carrier. Specifically, the attrition rate had risen to almost triple its normal level and resulted in loss of business, dissatisfied customers, increased hiring and training costs, and heightened safety risks from less experience pilots.

Soon after the conclusion of the first election, PHI began to take steps to address its attrition problem with pilots and mechanics. By the end of September 1997, PHI had contracted with and begun to work with Towers Perrin. The record reflects that Towers Perrin was not given an absolute deadline, but understood that PHI viewed the problem as critical and sought a solution as soon as possible.

Towers Perrin worked with PHI throughout the Fall of 1997 to identify the causes of the increasing attrition rate and to develop a new compensation plan designed to stop the increasingly high rate of turnover among its pilots and mechanics. In the Fall and Winter issues of "Flightlines," PHI's newsletter, Suggs announced to employees that PHI's compensation system was under review and that a new compensation plan would be forthcoming.

Employees interviewed in the investigation in this case remember hearing about the new compensation plan in late November of 1997. By early January of 1998, PHI employees were aware that a new compensation program was imminent. In particular, PHI management was using the promise of the new compensation program to prevent mechanics from leaving PHI for larger salaries at PHI's competitors. The Board finds that PHI employees were aware that PHI was developing a new compensation plan well before the Board issued its January 30, 1998 determination, effectively negating any inference that the plan was developed in anticipation of a re-run election.

When the new compensation plan was approved on January 16, 1998, PHI and Towers Perrin immediately developed tools to train managers to explain the plan to employees and scheduled meetings for January 28 and 30, 1998, for that purpose. Those meetings were scheduled before PHI became aware of the Board's January 30, 1998 determination. After it became apparent that the first set of meetings failed to explain the new compensation plan adequately, Russell and a few other managers conducted subsequent meetings to clear up confusion surrounding the new pay system. The record in this case demonstrates that, after the first meeting, pilots had been misinformed in some meetings and were dissatisfied with the initial explanations they had received. The record also demonstrates that during these meetings, PHI managers refused to answer questions about OPEIU's campaign.

When the plan was approved on January 16, PHI decided to implement the plan on February 16, 1998, and in the meetings conducted on January 28 and 30, employees were told that the plan would be effective with that pay period. Also on February 16, PHI sent individual letters to each employee providing details of their new salary. That date was chosen because it was the beginning of the first pay period when PHI could retool its payroll function to reflect the new compensation system for pilots and mechanics. The February 16 implementation date was chosen before the Board ordered a re-run election on January 30, and before February 3, when Mediator Sims announced the election dates. That the Board selected February 17 as the date to mail ballots in the re-run election is coincidental.

The timing of the new compensation plan vis a vis the re-run election is of some concern to the Board, but coincidental timing of a previously planned change in compensation is not, by itself, sufficient grounds for finding interference. Compare Egyptair, 19 NMB 166, 175-176; USAir, Inc., 18 NMB 290, 325-326 (1991).

B.The Board is cognizant of PHI's previous campaign against OPEIU. However, the record in this case demonstrates that PHI did not conduct a similar campaign in the second election. Rather, the allegations concerning PHI's efforts to defeat OPEIU in the re-run election are limited.

First, OPEIU alleges that the Board's Notice and Sample Ballot was partially obscured at the Venice base. The Board does not condone any obstruction or failure to post its Notice of Election and Sample Ballot. However, the evidence in this case suggests that a portion of the Notice was obscured by a PHI memo at only one of approximately 40 bases. A portion of the Notice was covered by a PHI document to employees explaining election procedures and informing employees that PHI would prefer that they vote against representation. The employee reporting the problem noted that the sample ballot was visible. Under the circumstances of this case, the Board finds the obstruction to be an isolated occurrence.

OPEIU also alleges that the PHI document used to obstruct a portion of the Notice constitutes election interference. As noted above, the document on PHI letterhead explained the election procedures and conveyed PHI's preference that employees vote against representation. As such, the Board finds the document did not taint the laboratory conditions.

Finally, the Board finds that at the Venice base, some employees were called into meetings and told about OPEIU's constitution and membership oath. Those meetings were isolated discussions conveying the views of individuals about the terms of OPEIU's constitution and membership oath. Under the facts and circumstances of this case, the meetings did not taint the laboratory conditions.

CONCLUSION

Under the totality of the circumstances of this case, the Board finds that PHI did not interfere with, influence or coerce employees during the course of the re-run election.

On the basis of the investigation and report of election results which establishes that less than a majority of eligible voters cast valid votes for representation in the election, the National Mediation

Board finds no basis for Certification and the application is, therefore, dismissed subject to Part 1206.4 of the NMB Rules.

By direction of the NATIONAL MEDIATION BOARD.

Stephen E. Crable

Chief of Staff

1. In a "Laker" ballot election, voters may vote for or against representation by a labor organization, and the majority of valid votes cast determines the outcome of the election.

2. On April 10, 1998, PHI, noting that there is no provision for the appeal of status change rulings, appealed Mediator Sims' ruling that six individuals should be removed from the eligibility list because they were promoted to managerial positions.

3. The Board finds PHI's appeal of Mediator Sims' status changes moot. Since this case is dismissed, the Board need not resolve status change issues pertinent to an election which has been completed. Should a new application be filed, the issues raised by PHI may be investigated and addressed as appropriate at that time.

4. On January 1, 1998, the 4% across the board increase, which was announced during the Summer of 1997, went into effect. According to Gatza, pilots told him that the 4% "was not good enough . . . it was not enough to stem attrition." In its previous determination, the Board found that the promise of this increase and, implicitly, its implementation constituted interference. Petroleum Helicopters, Inc., supra.

5. PHI has guaranteed its employees that if it does not implement a performance plan by March 1999, everyone would automatically move up the pay scale two steps.

25 NMB No. 121

September 22, 1998

Mr. John E. Higgins, Jr.

Solicitor

National Labor Relations Board

1099 14^th Street, N.W.

Washington, DC 20570

Re: NMB File No. CJ-6634

Evergreen Aviation Ground

Logistics Enterprises, Inc.

Dear Mr. Higgins:

This responds to your April 27, 1998, request for the National Mediation Board's opinion regarding whether Evergreen Aviation Ground Logistics Enterprises, Inc. (EAGLE) is subject to the Railway Labor Act, 45 U.S.C. §§ 151-188.

I.This case arose as a result of a representation petition filed by the Transport Workers Union of America (TWU) with the National Labor Relations Board (NLRB). In the petition, TWU seeks to represent EAGLE's maintenance employees which include service mechanics, fuelers, painters, mechanic helpers, ramp service agents, and aircraft cleaners employed at Miami International Airport. The NLRB held hearings on March 12 and 13, 1998, at which EAGLE took the position that it is subject to the Railway Labor Act. TWU asserted that EAGLE falls within the jurisdiction of the National Labor Relations Act.

The Board bases its opinion in this case upon the information provided by the NLRB, which includes the evidence and arguments presented by EAGLE and TWU.

II.The record establishes that EAGLE provides ground service support at twenty domestic airports, including Miami. EAGLE employees perform aircraft loading and unloading, aircraft cleaning, passenger service, and aircraft/airport ground equipment maintenance for Evergreen International Airlines, MartinAir Holland, Virgin Atlantic, Ecuatoriana and other airlines. EAGLE also employs licensed dispatchers who compute, compile, and prepare flight information for aircraft crews. EAGLE is a wholly-owned subsidiary of Evergreen International Aviation, which is also the parent company of Evergreen Helicopters and Evergreen International Airlines.

III.For the reasons set forth below, the Board is of the opinion that EAGLE and its employees are subject to the Railway Labor Act.

A.Where the company at issue is a separate corporate entity that does not fly aircraft for the public transportation of freight or passengers, the National Mediation Board applies a two-part test in determining whether an employer and its employees are subject to the Railway Labor Act, 45 U.S.C. § 181. Quality Aircraft Services, Inc., 24 NMB 286 (1997); Federal Express, 23 NMB 32 (1995). First, it determines whether the nature of the work performed is that traditionally performed by employees of rail or air carriers. Second, it determines whether the employer is directly or indirectly owned or controlled by, or under common control with, a carrier or carriers. Both parts of this test must be satisfied for the Board to assert jurisdiction.

TWU argues that ramp services, cleaning, and ground handling is work traditionally performed by "independent contractor permittees that provide ground service to certain air carriers." However, the Board finds that loading and unloading cargo and baggage to and from aircraft, cleaning aircraft cabins, ticketing and assigning seating, maintenance of ground equipment, and dispatch functions are functions traditionally performed by employees in the airline industry. Quality, supra; Service Master Aviation Services, 24 NMB 181 (1997); Sky Valet, 23 NMB 155 (1996); Federal Express, supra; AMR Combs Memphis, Inc., 18 NMB 380 (1991); Ground Handling, 13 NMB 116 (1986).

B.An examination of the record before the Board leads to the conclusion that EAGLE is controlled by a carrier or carriers.

TWU argues that EAGLE is not owned or controlled by carriers. According to the organization, EAGLE management at Miami makes all personnel decisions. In addition, TWU asserts that EAGLE employees are paid in checks drawn from EAGLE funds, and are supervised by EAGLE employees. In addition TWU maintains that EAGLE's predecessor at Miami was subject to the jurisdiction of the NLRR.

The record establishes that the degree of control exercised by common carriers over EAGLE employees varies from carrier to carrier. EAGLE ramp employees working with Evergreen International Airlines are subject to Evergreen's standards and the direct control of an Evergreen loadmaster. EAGLE ramp personnel also receive training from carriers, and certain carriers monitor EAGLE's on-time performance. Carrier employees supervise and direct EAGLE employees performing cabin cleaning duties, sometimes directing that the work be re-done. EAGLE's passenger service employees work directly with MartinAir managers at the carrier's Miami ticket counters and gates, use MartinAir equipment, and wear uniforms required by MartinAir.

EAGLE's Vice President of Operations, Kevin Roundtree, testified that the type of work performed by EAGLE employees at Miami is substantially similar to the work performed by EAGLE employees in Indianapolis, Dallas, JFK, and other airports.

Evergreen International Aviation provides centralized payroll services and a central human resources department for all its subsidiaries. Personnel functions for EAGLE employees are centralized in McMinnville, Oregon, the headquarters of Evergreen International Aviation. Personnel files for all the Evergreen companies are consolidated in McMinnville. Payroll checks for EAGLE employees are signed by Delford M. Smith, Chairman of Evergreen International Aviation, Evergreen International Airlines, Evergreen Helicopters, and EAGLE. The President of EAGLE, Brian Bauer, is in daily contact with Smith

EAGLE employees share the same benefits as other Evergreen employees, with the exception of health benefits.

C.If an airline makes a complaint or recommendation regarding assignment, transfer, promotion, discipline or firing, EAGLE conducts an investigation and ultimately decides the course of action. Recommendations by airlines have resulted in reassignment, further training and/or discharge of EAGLE employees. EAGLE Vice President Roundtree testified at the hearing that there are no instances of EAGLE not discharging an employee when a carrier demands it. The carriers with which EAGLE contracts also are consulted and approve of promotions of EAGLE ramp or cabin cleaning employees to supervisor positions.

D.When the Board examines whether an entity is controlled by a carrier or carriers, it focuses on inter alia, the carriers' role in the entity's daily operations, and the entity's employees' performance of services for the carriers. Sky Valet, Commercial Aviation Services of Boston, 22 NMB 230 (1995). The Board also examines, inter alia, the carriers' role in employing and terminating employees; the degree to which the carriers supervise the entity's employees; the degree to which the carriers affect other conditions of employment; whether employees are held out to the public as carrier employees; and the degree of carrier control over employee training. Quality, supra; Ogden Aviation Services, 23 NMB 98 (1996).

An analysis of the record in light of the foregoing leads to the conclusion that EAGLE and its employees are subject to control by air carriers. Although EAGLE hires and fires its employees, carriers have effectively recommended termination of employees and play a significant role in EAGLE's promotion practices. Airline personnel monitor the work of EAGLE's employees on a regular basis. EAGLE's ramp employees at Miami work under the direction of Evergreen International Airlines employees. The Miami-based passenger service employees who work for MartinAir are held out to the public as MartinAir employees.

Based upon the record in this case, the Board is of the opinion that EAGLE and its employees are subject to the Railway Labor Act. This decision may

be cited as Evergreen Aviation Ground Logistics Enterprises, Inc., 25 NMB (1998).

By direction of the NATIONAL MEDIATION BOARD.

Stephen E. Crable

Chief of Staff

Copy to:

Peter J. Petesch, Esq.

Mark Richard, Esq.