Lumbard Chief Judge, Waterman and Hays, Circuit Judges.
The National Labor Relations Board seeks enforcement of two orders. In the first proceeding (No. 29186) the Board found that respondent violated Sections 8(a)(1) and (2) of the National Labor Relations Act*fn1 by coercing its employees in their exercise of their rights under Section 7 and by interfering with the formation of a shop committee. 146 N.L.R.B. No. 39 (1964). In the second proceeding (No. 29296) the Board held that respondents' no-solicitation rule was invalid and that the discharge of an employee for distributing union literature during nonworking hours in an area that the Board found was a nonworking area constituted a violation of Section 8(a)(3) and (1) of the Act.*fn2 We enforce both orders.
I. During the spring of 1963 a representative of Local 463, International Union of Electrical, Radio and Machine Workers, AFL-CIO, attempted to organize the employees of the respondent. By the end of May he had succeeded in getting authorization cards from seventeen of twenty-nine production department employees. On May 31 Stewart, general manager of respondent, addressed the employees of the department. In the course of his speech he said that if the employees chose an outside union to represent them "according to his knowledge of the financial status of the company, an outside union in his belief would make such outrageous demands that the company would not be able to afford it" and "would probably have to cut down the hours of the shop to about 40 hours a week and the shop would probably have to close completely in about a hundred and twenty days." He added that if the employees "wanted an inside union, * * * that he was willing to talk to any representative body of the employees." Later that day Stewart met with five employees to discuss improvements in working conditions and he promised to work out a contract on the following Monday, if he was satisfied that a majority of the employees wished an inside union to represent them.
That same afternoon Caputo, the business representative of Local 463 requested recognition of Local 463, Stewart disputed the validity of the Local's authorization cards and refused it recognition.
The following Monday, June 3, Stewart's assistant brought a petition for representation by an employees' committee to the production department employees. They signed the petition in Stewart's presence. He then met with a four-man committee named in the petition as representatives and negotiated a contract with them recognizing the employees' committee and granting an immediate five cent an hour wage increase and other benefits.
While Stewart on the advice of a Board agent did not sign the contract with the committee, he did grant the wage increases and met with the committee to discuss grievances. Later in June Stewart spoke to shipping department employees in the same vein as he had spoken to the first group. With Stewart's assistance they also petitioned for representation by the employees' committee.
The Board ordered the employer to cease violating Section 8(a)(1) and (2) of the Act, to withdraw and withhold recognition from the employees' committee unless the committee is certified as bargaining agent, and to post the usual notices.
The respondents contend that the Board erred in finding Stewart's speech coercive under Section 8(a)(1), because his statements were merely predictions and contained "no threat of reprisal or force or promise of benefit" within the meaning of Section 8(c) of the Act.*fn3
It was within the power of the Board to find that, in the context into which Stewart's speech was fitted, his statement that representation by an outside union would probably lead first to a reduction in overtime and within 120 days to a complete shutdown, but that the Company would consider negotiating with an independent shop committee, was not protected by Section 8(c) of the Act and was violative of Section 8(a)(1).
The conclusion that Stewart's statements were a threat disguised as a prediction derives support from the fact that they were clearly not made in good faith. Stewart had no reason whatsoever to believe that negotiations with an outside union would result in a financial burden which his company could not sustain. "It seems clear that Congress did not intend to protect an unqualified assertion of such importance unless the utterer can show that he had some reasonable ...