In the
United States Court of Appeals
For the Seventh Circuit

Nos. 00-3595 and 00-3861

MULTI-AD SERVICES, INCORPORATED,

Petitioner-Cross-Respondent,

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent-Cross-Petitioner.

Petition for Review and Cross-Application for Enforcement
of an Order of the National Labor Relations Board.

ARGUED APRIL 5, 2001--DECIDED June 21, 2001



  Before BAUER, RIPPLE and EVANS, Circuit
Judges.

  RIPPLE, Circuit Judge. This petition
asks us to review whether Multi-Ad
Services, Incorporated ("Multi-Ad")
violated the National Labor Relations
Act, 29 U.S.C. sec. 151 et seq., ("Act")
by interfering with its employees’
efforts to form a union. The National
Labor Relations Board ("Board") concluded
that Multi-Ad violated sec. 8(a)(1) of
the Act, 29 U.S.C. sec. 158(a)(1), by (1)
coercively interrogating employee Ted
Steele about his interest in forming a
union; (2) impliedly promising to help
Mr. Steele improve his employment
situation without the need for union
representation; and (3) threatening to
close one of its departments if that
department’s employees unionized. The
Board also concluded that Multi-Ad
violated sec.sec. 8(a)(1) and (3) of the
Act, 29 U.S.C. sec.sec. 158(a)(1) and
(3), by discharging Mr. Steele because it
believed that he might contact a union to
organize employees. Multi-Ad now
petitions for review of the Board’s
order; the Board has filed a cross-
application for enforcement of its order.
For the reasons set forth in this
opinion, we deny the petition for review
and grant enforcement of the Board’s
order.

I
BACKGROUND

A.   Facts

  Multi-Ad employs 450 workers at its
full-service advertising art production
facility in Peoria, Illinois. Multi-Ad
hired Mr. Steele in 1989 to work in the
bindery department. Fifteen employees
work in the department, which
manufactures looseleaf, three-ring
binders. The bindery department is a
small operation, accounting for a limited
percentage of the company’s sales and
profits. Mr. Steele’s performance
evaluations were above average throughout
his tenure at the company.

  Multi-Ad became an employee stock
ownership company in 1986. Multi-Ad holds
quarterly meetings in which management
discusses the company’s financial
performance and work-related issues. At
these meetings, employees often air their
concerns and ask management questions re
garding the direction of the company.
Typically, these meetings break down into
smaller, departmental meetings.
Management encourages, but does not
require, attendance at these quarterly
meetings.

  On July 29, 1996, Multi-Ad held a
quarterly meeting for employees of the
bindery, press, and finishing
departments. After discussing the
company’s financial performance, plant
production manager Jerry Ireland
announced the company’s plan to implement
a new drug-testing policy. Following this
announcement, Mr. Steele spoke up and
openly criticized the policy, contending
in a loud and persistent manner that such
testing violated employees’ right to
privacy. Other employees also voiced
their displeasure with the policy. Mr.
Steele and Larry Clore, Multi-Ad’s
president, then began to argue about the
policy’s legality. At the end of this
exchange, Mr. Steele requested a copy of
Multi-Ad’s laws and bylaws. Clore told
Mr. Steele that he could have these
materials after the meeting.

  Later that day, the quarterly meeting
split into separate departmental
meetings. The bindery department meeting
commenced around 3:00 p.m., the normal
quitting time for day-shift employees. At
this meeting, Clore gave Mr. Steele a
summary plan description of Multi-Ad’s
corporate structure. After Mr. Steele
pointed out that he wanted the complete
bylaws and not a summary, Clore
responded, "[H]ave your lawyer get them."
Tr. at 33. Clore then told Mr. Steele
that if he did not like the company’s
drug policy, "[W]hy don’t you think about
leaving the company?" 

Mr.
Steele responded that he would not give
Clore the pleasure of quitting. After
Clore departed, Ireland tried to continue
with the meeting, but Mr. Steele
announced that he was leaving because "he
was on his own time now." 

Mr.
Steele testified that Ireland said,
"[O]kay." 

Ireland, however,
testified that Mr. Steele’s remark had
shocked him and that he had said nothing
in response. Ireland also testified that
he had apologized to the group for Mr.
Steele’s behavior. Mr. Steele, however,
was not ordered to remain for the rest of
the meeting, which ended shortly after
his exit.

  Two days later, Mr. Steele and Ireland
met at Mr. Steele’s request. Mr. Steele
apologized for his conduct at the depart
ment meeting and then told Ireland that
hourly shop workers were dissatisfied
with company policies. Mr. Steele told
Ireland that "management needed to just
sit down with the hourly employees and
work some things out." 

Ireland replied, "[T]hat could not be
done." 

Mr. Steele then told
Ireland that, if they could not sit down
and discuss these problems, he would
organize a union. Ireland asked Mr.
Steele to wait until Ireland returned
from his vacation to discuss the issue
further. Mr. Steele agreed and made no
effort to contact a union while Ireland
was away.

  On August 16, 1996, Mr. Steele met with
Ireland and bindery department manager
Marty Heathcoat in Heathcoat’s office.
During this meeting, the two managers
asked Mr. Steele why he would want to
bring a union into the company. Mr.
Steele told them that it would be nice to
have seniority rights, better working
conditions, and raises when possible.
Ireland then asked what Mr. Steele could
do to improve Mr. Steele’s own situation
at the company and pointed out that
Multi-Ad posted job openings. After Mr.
Steele expressed interest in a
maintenance position, Ireland told him
that he would set up an interview, even
though the company did not have an
opening for a maintenance position. At
the end of the meeting, Ireland asked Mr.
Steele "what it would take to satisfy
him." 

Mr. Steele replied that
it would satisfy him if management "would
sit down with the hourly employees and
work something out." 

After
Ireland responded that he could not do
that, Mr. Steele informed the two
managers that he was leaving the meeting
and was going to attempt to organize a
union. Ireland asked Mr. Steele to come
back and talk some more, but Mr. Steele
responded that there was nothing left to
talk about. Mr. Steele left at 3:30 p.m.,
30 minutes after his shift had ended. No
one told Mr. Steele to stay nor was he
reprimanded for having left the meeting.
The next day, Mr. Steele interviewed for
a maintenance position, but the interview
revealed that he lacked the necessary
qualifications. In any event, Mr. Steele
said that he did not want the job.

  Mr. Steele twice met with union
officials in late August. During this
time, employees began to talk about Mr.
Steele’s efforts at organizing a union.
At a meeting of bindery department
employees in late August, Heathcoat
addressed rumors about a union and asked
employees why they wanted a union. In
response, Mr. Steele stated that everyone
knew that Heathcoat was referring to Mr.
Steele’s desire to look into
unionization. Ted DeRossett, Mr. Steele’s
supervisor, then warned that the bindery
department would be the "first to go" if
the company unionized. 

Mr.
Steele immediately challenged the
legality of closing the bindery
department in such a fashion. After Mr.
Steele and DeRossett began to argue
heatedly, Heathcoat ended the meeting.

  At another bindery department meeting in
late August, management informed
employees that they would be working
mandatory 10-hour shifts. Mr. Steele
protested that it was unfair to require
employees to work overtime when in the
past they had been able to decline
overtime. Mr. Steele also stated that it
was decisions like this that caused him
to explore bringing in a union.
  Shortly after the meeting, Multi-Ad
announced that it was adding a second
shift in the bindery department and that
Mr. Steele would be the lead man. On
August 29, 1996, Heathcoat and DeRossett
asked Mr. Steele if he would work the
second shift with a positive attitude.
The two assured Mr. Steele that he could
still take his scheduled vacation days
from August 30 through September 3. Mr.
Steele told them that he would go to the
second shift, do the job, and represent
the company as was expected of him.

   The next day, while Mr. Steele was on
vacation, Multi-Ad received a letter from
Mr. Steele requesting copies of the
company’s policies and bylaws. When Mr.
Steele returned from his vacation on
September 4, Heathcoat and DeRossett were
waiting for him at the plant’s garage
door. The two asked Mr. Steele if he
still wanted to see the materials that he
had requested in the letter. Mr. Steele
said yes, and the two told him that he
could pick up the materials in the office
of Bruce Taylor, Multi-Ad’s vice
president of finance. Mr. Steele punched
the time clock and, as he started to walk
toward Taylor’s office, noticed DeRossett
and Heathcoat accompanying him. Mr.
Steele told them that he did not need
them to pick up the papers. The two
replied that they were tagging along in
case he had any questions. Mr. Steele
told them that he could not possibly have
any questions because he had not yet read
the materials. Nevertheless, both
managers followed Mr. Steele into
Taylor’s office. Ireland entered the
office shortly thereafter.

  Mr. Steele first asked Taylor for the
documents. Taylor replied that Mr. Steele
already had been given the summary
statement at the quarterly meeting. Mr.
Steele responded that he was not asking
for a summary but for complete documents.
After again requesting the documents and
receiving no response, Mr. Steele
announced that he would no longer
participate in the meeting and walked
out. Heathcoat ordered him to remain or
be fired. Mr. Steele ignored this command
and walked back to the plant, pursued by
Heathcoat and Ireland. Heathcoat repeated
his order that Mr. Steele return to the
office or be fired. Mr. Steele, again,
refused. Ireland then told Mr. Steele
that "this is the third meeting you have
walked out of, you are gone." 

Mr. Steele immediately demanded a
termination letter.

  Even though Ireland had made the
decision to fire Mr. Steele, Heathcoat
prepared the letter. The letter spells
out the purported reasons for Mr.
Steele’s termination:

He [Mr. Steele] said that he didn’t come
here for a meeting., [sic] and then
walked out of the room. I told him to get
back in Bruce’s [Taylor’s] office to
discuss this with us. He repeated himself
again saying that he didn’t want a
meeting. Jerry Ireland then Fired [sic]
him.

Ted Steele has walked out of three
meetings within a month because he didn’t
feel like hearing what was being said to
him. He has said that he does not agree
with corporate policies set for all the
employees of Multi[-]Ad. He has
interrupted the work flow of the Bindery
Department by persuading it’s [sic]
employees that this is not a good place
to work. Ted will never see eye to eye
with Multi[-]Ad’s policies and goals for
it’s [sic] employees and will not even
conduct himself in a professional manner
when talking to management about his
concerns. Ted is terminated on 9-4-96
because of his unwillingness to abide to
[sic] corporate policies.

Vol. 3, Ex.GC-2. Ireland testified that
he fired Mr. Steele because he was
totally disrespectful to management. Ire
land also testified that Mr. Steele’s
exit from the meeting on September 4 was
an act of insubordination, particularly
after he ignored Heathcoat’s order to
return.

B.   The Administrative Proceedings

  On September 26, 1996, Graphic
Communications Union, Local 68C, and
Graphic Communications International
Union, AFL-CIO, filed an unfair labor
charge against Multi-Ad on behalf of its
employees, including Mr. Steele. Soon
thereafter, the Board’s General Counsel
issued a complaint and a notice of
hearing under 29 U.S.C. sec. 160(b).
Thecomplaint alleged that Multi-Ad
violated sec. 8(a)(1) of the Act by (1)
coercively interrogating Mr. Steele about
his interest in forming a union during
the August 16 meeting with Heathcoat and
Ireland; (2) impliedly promising at the
August 16 meeting to help Mr. Steele
improve his employment situation without
the need for representation; and (3)
threatening to close the bindery
department if its employees unionized.
The complaint also alleges that Multi-Ad
violated sec.sec. 8(a)(1) and (3) of the
Act by discharging Mr. Steele because it
believed that he might contact a union to
organize employees.

  On May 29, 1997, the Administrative Law
Judge (ALJ) conducted a hearing on the
Board’s complaint. Based on the evidence
presented at the hearing, the ALJ issued
his decision on December 2, 1997, and
found that Multi-Ad had committed the
charged unfair labor practices. On August
25, 2000, the Board, after reviewing
exceptions filed by Multi-Ad, issued a
decision and order affirming the ALJ’s
rulings, findings, and conclusions. One
member of the panel, however, dissented
in part, concluding that Multi-Ad did not
coercively interrogate Mr. Steele and did
not make an implied promise in violation
of sec. 8(a)(1). The Board’s order
requires Multi-Ad to cease and desist
from these unfair labor practices, to
offer Mr. Steele reinstatement with back
pay, to remove all references to the
discharge from its records, and to post a
remedial notice.

  On October 10, 2000, Multi-Ad filed this
petition for review under 29 U.S.C.
sec.sec. 160(e) and (f), which confer
jurisdiction upon this court. On November
1, 2000, the Board filed a cross-
application for enforcement of its order.

II

DISCUSSION

A. The Board’s Motion to Strike Portions
of Multi-Ad’s Reply Brief

  As a preliminary matter, we first
address the Board’s request to strike
portions of Multi-Ad’s reply brief.
Multi-Ad contends for the first time in
its reply brief that the ALJ made three
errors: (1) he made improper witness
credibility determinations; (2) he
demonstrated bias and hostility against
Multi-Ad; and (3) he made improper
inferences based on witnesses’ failure to
testify regarding the meetings held on
July 29 and August 16. It is well-settled
that parties may not raise new arguments
or present new facts for the first time
in reply. See Fed. R. App. P. 28(c); Sims
v. Mulcahy, 

, 536 n.5 (7th
Cir. 1990). Multi-Ad did not make these
specific arguments in its opening brief,
and, therefore, these claims are not
properly before this court. Consequently,
the Board’s motion to strike is granted.

B.   Standard of Review

  The standard governing our review of
unfair labor practice proceedings before
the Board is well-established. We shall
affirm the Board’s decision if its
factual findings are supported by
substantial evidence and its legal
conclusions have a reasonable basis in
law. See 29 U.S.C. sec. 160(e); Great
Lakes Warehouse Corp. v. NLRB, 

, 889 (7th Cir. 2001). Substantial
evidence in this context means such
relevant evidence that a reasonable mind
might accept as adequate to support the
Board’s conclusion. See Beverly Cal.
Corp. v. NLRB, 

, 829 (7th
Cir. 2000), petition for cert. filed, 

(U.S. Apr. 9, 2001) (No.
00-1563). Consequently, as long as
substantial evidence in the record
supports the Board’s opinion, it is
irrelevant if evidence also exists in the
record supporting Multi-Ad’s view of the
case. See 

This court defers
particularly to the Board’s findings
regarding the witnesses’ credibility,
which cannot be disturbed absent
extraordinary circumstances, such as
clear bias by the ALJ, utter disregard of
sworn testimony, or acceptance of
testimony that on its face is incredible.
See NLRB v. Gerig’s Dump Trucking, Inc.,

, 941 (7th Cir. 1998).
Moreover, where two versions of the same
incident materially conflict, an ALJ’s
credibility determinations are entitled
to deference. See Van Vlerah Mech., Inc.
v. NLRB, 

, 1263 (7th Cir.
1997). This deferential standard of
review is appropriate in light of
Congress’ intent to confer upon the Board
broad authority to develop and oversee
national labor policy. See Uniroyal Tech.
Corp., Royalite Div. v. NLRB, 

, 998 (7th Cir. 1996). Thus, Multi-Ad
faces a difficult task in seeking to
overturn the Board’s decision.

C.   Applicable Legal Standards

  Section 7 of the Act, 29 U.S.C. sec.
157, guarantees employees the right to
self-organization by forming, joining, or
assisting labor organizations. See Van

. The Board
concluded that Multi-Ad’s actions
violated sec.sec. 8(a)(1) and (a)(3) of
the Act. Section 8(a)(1) protects the
right to self-organization by prohibiting
employers from interfering with,
restraining, or coercing employees in the
exercise of their right to form a union.
See Great Lakes 

. It is therefore an unfair labor
practice to threaten an employee with
shop closure or discharge or to
interrogate coercively an employee in
order to discourage union activities. See
Van 

. An employer
also violates sec. 8(a)(1) by offering
benefits to potential union supporters to
prevent them from exercising the right to
unionize. See Great Lakes 

. In deciding whether an
employer’s conduct is forbidden by the
Act, we must determine whether that
conduct reasonably tended to interfere
with or coerce employees exercising their
protected rights. See Van 

. The words used by the
employer, as well as the context in which
they were conveyed, must be examined. See

In determining what an
employee reasonably might have inferred
from a communication, the Board must
consider the employee’s economic
dependence on the employer and that
employee’s concomitant tendency to pick
up intended implications that might be
more readily dismissed by a more
disinterested ear. See 

  Section 8(a)(3) makes it an unfair labor
practice for an employer to discourage
union activity by discriminating against
employees with regard to hire or tenure
of employment. See 

an
allegation under sec. 8(a)(3), the Board
must ascertain the employer’s motivation
in taking a particular action. See 

often must be based on
circumstantial evidence. See 

employee’s statutorily protected activity
motivated a discharge, a violation has
been established unless the employer
demonstrates that it would have taken the
same action in the absence of the
employee’s protected activity. See 

not displace the Board’s choice
between two permissible views of the
evidence, even though we may have decided
differently had the matter been before us
de novo. See 

Evidence

  Multi-Ad argues that the Board’s
conclusions are not supported by
substantial evidence./1 Multi-Ad,
however, cannot overcome the deferential
standard of review that we must afford
the Board’s conclusions. Multi-Ad first
challenges the Board’s determination that
Multi-Ad coercively interrogated Mr.
Steele on August 16 in violation of sec.
8(a)(1) of the Act. Whether an employer’s
questioning of an employee is coercive
depends on the factual context in which
the questioning occurs. See NLRB v. Joy
Recovery Tech. Corp., 

, 1313
(7th Cir. 1998). The test is not whether
coercion actually occurred, but only
whether the employee perceived the
employer’s actions to be coercive. See
Great Lakes 

.
Factors that ought to be considered in
deciding whether a particular inquiry is
coercive include the tone, duration, and
purpose of the questioning, whether it is
repeated, how many workers are involved,
the setting, the authority of the person
asking the question, and whether the
company otherwise had shown hostility to
the union. See NLRB v. Champion Labs.,
Inc., 

, 227 (7th Cir. 1996).
We also consider whether questions about
protected activity are accompanied by
assurances against reprisal and whether
the interrogated worker feels constrained
to lie or give noncommittal answers
rather than answering truthfully. See 

supports the
Board’s conclusion that management
coercively interrogated Mr. Steele on
August 16. The closed-door meeting was
conducted in a manager’s office by
Heathcoat and Ireland, two people who had
authority to fire Mr. Steele. The two
managers questioned Mr. Steele regarding
why he would want to bring a union into
the company. See Beverly Cal. 

(holding that an employer may
not probe directly or indirectly into an
employee’s reasons for supporting a
union). Moreover, Ireland immediately
thereafter asked Mr. Steele about his own
career advancement and arranged an
interview for a maintenance position,
even though no such opening existed. The
managers did not assure Mr. Steele that
reprisals would not be taken against him
for his answers, adding to the
potentially coercive nature of the
inquiry. Further, this meeting was
conducted after company managers had
expressed uneasiness over union activity.
These circumstances are more than enough
evidence to sustain the Board’s findings.

  Multi-Ad next challenges the Board’s
finding that it made an implied promise
of benefits by asking Mr. Steele how he
could help his own situation and by
arranging the job interview. An employer
violates the Act when it interferes with
the employees’ exercise of their rights
to organize by soliciting grievances when
such solicitation is accompanied by
implied promises of benefits specifically
aimed at deterring union activity. See 6
West Ltd. v. NLRB, 

, 782 (7th
Cir. 2001). Here, Ireland asked Mr.
Steele why he wanted to form a union and
then asked Mr. Steele how Mr. Steele
could improve his own situation. Mr.
Steele expressed an interest in a
maintenance position, and Ireland
arranged for an interview immediately,
even though there were no such openings.
The context in which this occurred is
significant. Because the managers made
this overture during a conversation about
the need for a union, the Board
reasonably could have concluded that the
company was willing to confer a benefit
to deter Mr. Steele from contacting a
union. Thus, given the circumstances in
which the managers discussed Mr. Steele’s
career advancement, substantial evidence
supports the Board’s conclusion that Ire
land’s remarks constituted an implied
promise of benefits to dissuade Mr.
Steele from contacting a union.

  Next, Multi-Ad argues that substantial
evidence does not support the Board’s
conclusion that Multi-Ad threatened to
close the bindery department. Unlike an
interrogation, which is coercive only if
reasonable employees would perceive it as
such, a threat of plant closure is per se
a violation of sec. 8(a)(1). See Champion

. In this case,
three employees testified unequivocally
that DeRossett said that the bindery
department would be the "first to go" if
they brought in a union, and this
evidence is more than sufficient to
establish a violation.

  Finally, Multi-Ad disputes the Board’s
conclusion that Mr. Steele’s discharge
violates sec.sec. 8(a)(1) and (3). An
employer violates sec.sec. 8(a)(1) or (3)
of the Act by firing employees because of
their union activities. See 

. To prove a violation, the
Board must prove that anti-union animus
was a substantial or motivating factor in
the employer’s decision to make the
adverse employment decision. See 

Board proves such a motivation by a
preponderance of the evidence, the
employer can avoid a finding of an unfair
labor practice by showing that it would
have taken the action regardless of the
employee’s union activities. See 

employer need not establish this
affirmative defense until the Board has
met its burden. See 

that anti-union animus was
a substantial or motivating factor in a
discharge, the Board must demonstrate
that (1) the employee engaged in union
activities; (2) the employer knew of the
employee’s involvement in protected
activities; (3) the employer harbored
animus toward those activities; and (4)
there was a causal connection between the
employer’s animus and its decision to
discharge. See 

may rely
upon direct or circumstantial evidence.
See 

only the third
element, but substantial evidence
supports a finding that the company
harbored animus, including (1) the timing
of Mr. Steele’s firing, which coincided
with his increased efforts to organize a
union, see Great Lakes 

(timing of discharge is
appropriate factor to consider in
determining whether there was a
violation); (2) the coercive
interrogation of Mr. Steele regarding his
interest in forming a union; (3)
management’s questioning of other
employees about their interest in forming
a union; and (4) DeRossett’s warning that
the bindery department would close if
employees unionized. Thus, the Board met
its burden of establishing anti-union
animus.

  Multi-Ad claims as an affirmative
defense that it fired Mr. Steele for
leaving three meetings without
permission. The Board concluded, however,
that Multi-Ad’s proffered reason was
pretextual and that the company fired Mr.
Steele because of his efforts to
unionize. That conclusion is supported by
substantial evidence, including (1)
Multi-Ad’s written explanation of
termination stating a different reason--
that he was discharged because he refused
to abide by corporate policies; (2) the
September 4 encounter was not a
"meeting"--Mr. Steele entered the office
to pick up materials to which he was
legally entitled and twice denied access;
and (3) no manager instructed Mr. Steele
to remain at the previous two meetings,
both of which occurred after shift hours.
Thus, substantial evidence supports the
Board’s conclusion that Multi-Ad fired
Mr. Steele because of his union activity
and that its stated reasons for doing so
were pretextual.

Conclusion

  Because the determination of the Board
is supported by substantial evidence, the
petition for review is denied, and the
order of the Board is enforced.

PETITION FOR REVIEW DENIED;
ORDER ENFORCED

FOOTNOTE

/1 Multi-Ad is correct that the ALJ at times relied
on the "missing witness" rule in evaluating the
credibility of witnesses. The rule provides that
when a party can call a witness to shed light on
an event, but chooses not to, an inference arises
that the witness’ testimony, if produced, would
be unfavorable. See Chicago College of Osteopath-
ic Med. v. George A. Fuller Co., 

,
1353 (7th Cir. 1983). This court is skeptical of
the rule and will not accept assumptions made by
the ALJ based on a witness’ failure to testify.
See Vulcan Basement Waterproofing of Ill., Inc.
v. NLRB, 

, 681 n.5 (7th Cir. 2000);
see also NLRB v. Louis A. Weiss Mem’l Hosp., 

, 445-46 (7th Cir. 1999). This skepticism
is based on this court’s observation that an
absence of evidence does not necessarily favor
the party bearing the burden of proof on an
issue. See Weiss Mem’l 

.
Here, the ALJ’s reliance on the absence of wit-
ness corroboration is harmless error. There is
clearly sufficient evidence to support the ALJ’s
conclusions without considering the lack of
witness corroboration. Moreover, the Board, in
reaching its decision, did not explicitly refer
to the failure of available witnesses to testify.