Ishikawa Gasket America, Inc. v. National Labor Relations Board

*The Honorable R ichard M ills, United States District Judge for the
Central District of Illinois, sitting by designation.
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0007P (6th Cir.)
File Name: 04a0007p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
ISHIKAWA GASKET AMERICA,
INC.,
Petitioner/
Cross-Respondent,
v.
NATIONAL LABOR RELATIONS
BOARD,
Respondent/
Cross-Petitioner.
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Nos. 02-1167/1310
On Petition for Review and Cross-Application
for Enforcement of an Order of the
National Labor Relations Board.
No. 8-CA-31292.
Argued: October 21, 2003
Decided and Filed: January 7, 2004
Before: MARTIN and SUTTON, Circuit Judges; MILLS,
District Judge.*
2 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310
_________________
COUNSEL
ARGUED: Maurice G. Jenkins, DICKINSON, WRIGHT,
PLLC, Detroit, Michigan, for Petitioner. David Seid,
NATIONAL LABOR RELATIONS BOARD, Washington,
D.C., for Respondent. ON BRIEF: Maurice G. Jenkins,
Jennifer K. Nowaczok, Paul R. Bernard, DICKINSON,
WRIGHT, PLLC, Detroit, Michigan, for Petitioner. David
Seid, Aileen A. Armstrong, Frederick C. Havard,
NATIONAL LABOR RELATIONS BOARD, Washington,
D.C., for Respondent.
_________________
OPINION
_________________
BOYCE F. MARTIN, JR., Circuit Judge. Ishikawa Gasket
America, Inc. seeks review of the National Labor Relations
Board’s decision that it violated section 8(a)(1) and (3) of the
National Labor Relations Act (29 U.S.C. § 158(a)(1) and (3)),
by reducing its annual bonus for hourly production employees
during a union organization effort. The Board cross-applies
to enforce its order. For the following reasons, we affirm.
I.
The facts are well documented in the administrative law
judge’s report, which was adopted and incorporated in the
Board’s order. The facts relevant to this Court’s review,
however, are summarized as follows.
Ishikawa Gasket America, Inc., a wholly-owned subsidiary
of Ishikawa Gasket of Japan, Inc., manufactures head and
manifold gaskets for the automotive industry at its production
facility located in Bowling Green, Ohio. Ishikawa’s
administrative offices are located in Farmington Hills,
Michigan. The Bowling Green facility began operations with

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Nos. 02-1167/1310 Ishikawa Gasket Am. v. NLRB 3
only twelve employees, but has since grown to more than two
hundred employees. Prior to the acquisition by the
International Association of Machinists and Aerospace
Workers, AFL-CIO, of an interest in Ishikawa’s employees,
an attempt to organize the employees occurred in October
1997, and a second attempt occurred approximately a year
later.
In 1999, Ishikawa employees began another attempt to
organize and Ishikawa’s reaction to this campaign gave rise
to this litigation. Apparently, the organization attempt
coincided with internal management disputes and the
development of two management factions, which were chief
among the employees’ complaints. The campaign against the
union organization started at the top with President
Tsunekazu Udagawa’s command that the supervisors “must
not let this drive[] succeed at any cost. You must stop it,
period.” Many of the supervisors shared President
Udagawa’s distaste for unions and began a relentless
campaign against the union and those who supported the
cause.
Examples of Ishikawa’s repeated attempts to dissuade
union supporters are well preserved in the record, but a few
bear mention. Notably, supervisor Dave Kendrick convinced
employees to surveil the union activities that were occurring
and promised them compensation in return. Joe Makowski,
Vice President of Manufacturing in charge of the Bowling
Green facility, compiled a list of pro-union and anti-union
employees and later looked to it to develop ways to “put a
stop to the Union.” Much of the surveillance focused on
employee Julie Wilson, the person who spearheaded the
campaign for union representation or, as Makowski called
her, the “pain in the [expletive]”or the “Union antagonist.”
Upon Ishikawa’s direction, the supervisors removed union
literature located in the production facility. Indeed, Kendrick
and other managers began making a “morning walk-through”
to discover and remove any union paraphernalia.
4 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310
Additionally, Makowski and Kendrick created a racist
leaflet and constructed it so that it appeared to be authored by
the union with the intention that it would dissuade employees
from organizing. The document referred to the “Japs
bomb[ing] Pearl Harbor” and stated that, “We give you your
own bomb to drop on the sneaky BASTARDS!!!” Finally,
the supervisors began an unprecedented practice of soliciting
the employees’ complaints and after discovering that the
employees’ chief complaint was the management, Vice
President Masanori Yamanami fired several supervisors
including Kendrick and Makowski.
On November 30, the Union filed a petition to represent
Ishikawa’s employees. Two days prior to the election to
determine whether the union would represent the employees,
President Udagawa reminded the employees that their
complaints were taken care of and there was no reason for a
union. A stipulated election was held on January 21, 2000
and the employees overwhelmingly voted against the union.
A consolidated complaint alleging various violations of the
National Labor Relations Act was filed on October 30, 2000.
Relevant to this appeal, the complaint specifically alleged that
Ishikawa reduced its annual Christmas bonus from fifteen
cents per hour worked in a forty-hour work week to thirteen
cents per hour worked in a forty-hour work week and that the
reduction was based upon and in retaliation for the
employees’ organization attempt.
The administrative law judge found that Ishikawa had
violated section 8(a)(1) of the National Labor Relations Act
(29 U.S.C. § 158(a)(1)) by chilling the efforts to organize,
soliciting employee grievances in an attempt to persuade
employees that a union was unneeded, surveilling the
employees’ union activities, distributing inflammatory
literature, and discriminatorily warning and suspending
Wilson and terminating her employment because of her union
activities and because she had previously filed charges with
the Board. Finally, the administrate law judge found that

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Ishikawa violated section 8(a)(1) and (3) of the Act by
reducing the employees’ bonuses because of their union
activities.
With slight modifications, the Board adopted the
administrative law judge’s findings. The Board issued an
order which required Ishikawa to cease and desist its unfair
labor practices and to post a remedial notice that stated that it
had violated the Act and explained the rights of the
employees. Additionally, the Board required that Ishikawa
reinstate Wilson and make her whole for any losses she
suffered, and to make the production employees whole for the
unlawful reduction in the Christmas bonus. Ishikawa appeals
only the Board’s decision that Ishikawa’s reduction of the
employees’ bonuses violated the Act. The National Labor
Relations Board cross-applies to enforce its order issued
against Ishikawa. Because Ishikawa failed to challenge the
Board’s findings with respect to all other violations of the Act
beside the bonus issue, we conclude that the Board is entitled
to summary enforcement of the Board’s findings that went
unchallenged. See N.L.R.B. v. Gen. Fabrications Corp., 222
F.3d 218, 231-32 (6th Cir. 2000).
II.
A.
This Court’s review of the Board’s decision is limited. The
Board’s findings of facts are conclusive unless they are
unsupported by substantial evidence. Id. at 225. Substantial
evidence exists when the evidence is “adequate, in a
reasonable mind, to uphold the [Board’s] decision.” Id.
(internal quotations and citations omitted). When presented
with conflicting factual inferences, this Court is not at liberty
to draw an inference different from the inference drawn by the
Board. Stark Ceramics, Inc. v. N.L.R.B., 375 F.2d 202, 205
(6th Cir. 1967). The Board’s determination that Ishikawa was
motivated by an improper purpose in its decision to reduce
the Christmas bonus is a question of fact that may be
6 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310
overturned only if it is unsupported by substantial evidence,
even if this Court were to draw a contrary conclusion had it
engaged in de novo review. See id.; Gen. Fabrications Corp.,
222 F.3d at 225.
An employer runs afoul of 29 U.S.C. § 158(a)(1) when it
engages in conduct that is designed to “interfere with,
restrain, or coerce employees in the exercise” of their right to
organize. Relatedly, an employer commits a violation of 29
U.S.C. § 158(a)(3) when it discriminates in the terms or
conditions of employment as a means of discouraging union
membership. This Court has adopted a burden-shifting
approach to determine whether anti-union animus motivated
an employer’s decision. See Gen. Fabrications, 222 F.3d at
226. First, the Board must establish a prima facie case by
demonstrating that “the employee’s protected activities were
a motivating factor in the employer’s decision.” Id. Second,
the burden shifts to the employer to demonstrate by a
preponderance of the evidence that it would have made the
same decision regardless of the fact that the employees
engaged in protected activity. Id.
B.
Ishikawa argues that it made its decision to reduce the
annual bonus before it was aware of the organization attempt
and, therefore, its decision could not have been motivated by
anti-union animus. In support of this assertion, Ishikawa
points to an electronic message dated November 16, 1999, in
which President Udagawa and Vice President Yamanami
discussed decreasing the amount of the bonuses. The record,
however, belies this argument. We find that there is
substantial evidence in the record which demonstrates that
Ishikawa made its decision fully aware that its employees
were attempting to organize.
As an initial matter, Ishikawa makes no attempt to
overcome Yamanami’s testimony that when considering
whether to reduce the bonuses he considered the union

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activity “very seriously.” This statement alone demonstrates
that Ishikawa was clearly aware of the ongoing union
organization attempt when it made its decision. Additionally,
when asked whether at “the time you made the decision to
reduce the bonuses, [was he] aware that there was a Union
organizing drive going on at the Bowling Green plant,”
Yamanami replied: “Yes, I do.”
Moreover, Yamanami testified that he had not made his
final decision to reduce the bonuses until late November. At
that time, Ishikawa was not only aware of the union activity,
but had launched the campaign against the union. Indeed, by
late November, Wilson had conducted two union meetings
from her home that Ishikawa’s supervisors had instructed
anti-union employees to monitor. Additionally, by late-
November the supervisors had begun to take down union
literature located in the Bowling Green facility.
Furthermore, the record demonstrates that as early as
November 2 the management knew of the union organization
attempt. On that date, Kendrick had confirmed his suspicions
that the employees were attempting to organize and in a
meeting shortly after this confirmation, President Udagawa
made his statement that the supervisors “must not let this
drive[] succeed at any cost. You must stop it, period.” Thus,
we find Ishikawa’s argument that it made its decision to
reduce the bonus without knowledge that the employees were
attempting to organize unpersuasive in light of the substantial
evidence in the record to the contrary.
C.
Ishikawa also argues that the fact that it also reduced the
managers’ bonuses and at a much higher rate, fifty percent,
negates the Board’s conclusion that the decision to reduce the
employees’ bonuses was based upon an anti-union
motivation. Further, Ishikawa argues that because the Board
accepted the conclusion that the decision to reduce the
managers’ bonuses was because of the management factions,
8 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310
then this Court must find that Ishikawa’s decision to reduce
the employees’ bonuses was motivated by that same concern.
As Ishikawa argues, “[g]iven the pervasive affect [sic] of
factionalism throughout the Bowling Green facility, there is
no way to separate the decision to reduce the managers’
bonuses from the decision to reduce employee bonuses.”
Additionally, Ishikawa argues that if the factions were the real
reason to reduce the managers’ bonuses then there would be
no reason to also reduce the managers’ bonuses at the
Farmington Hills, Michigan, facility because the factionalism
was only a problem at the Bowling Green facility. Again, we
find Ishikawa’s arguments unpersuasive.
First, we note that regardless of Ishikawa’s motivation for
reducing the managers’ bonuses, there was substantial
evidence in the record that demonstrates that the decision to
reduce the employees’ bonuses was motivated by Ishikawa’s
desire to chill protected activity. Stated differently,
Ishikawa’s motivation for reducing the managers’ bonuses is
simply irrelevant to its motivation for reducing the
employees’ bonuses. With that said, however, the record
demonstrates that the decision to reduce the managers’
bonuses was made because of the factionalism and
performance related reasons, which are legitimate reasons to
reduce the bonus. Yamanami himself testified that when
determining whether to pay bonuses to its management, it
considered the managers’ performance. Specifically,
Yamanami stated: “for the managers, we determine the bonus
by the performance.” As the Board noted, the management
was “the area where Yamanami had his main problem,”
whereas there was no such legitimate explanation to reduce
the employees’ bonuses. Second, Ishikawa presents no
evidence to demonstrate that Ishikawa had ever before treated
its management and production employees differently
determined by whether they worked at the production facility
or the administrative facility. Instead, the only evidence we
have before us suggests that Ishikawa was group-minded, as
opposed to facility-minded.

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In sum, we find that substantial evidence supports the
Board’s finding that Ishikawa’s anti-union animus motivated
its decision to reduce the employees’ bonuses. Indeed, the
most crucial piece of evidence demonstrating Ishikawa’s
motivation in reducing the bonus went uncontradicted by
Ishikawa in its brief presented to this Court. That is, Ishikawa
announced its decision to reduce the employees’ bonuses, on
the heels of its statement that “the Japanese take the posting
of flyers for a Union as threat [sic] and they wouldn’t tolerate
any third party coming into their plant.” At oral argument,
however, Ishikawa suggested that the statement that it was
going to reduce the employees’ bonuses actually came before
the statement regarding the posting of union flyers.
Regardless of which statement preceded the other, Ishikawa
has made no effort to explain the linking of these two
statements and how this Court could construe their linking as
anything other than that Ishikawa made its 1999 bonus
reduction decision because of the union organization events.
Ishikawa’s silence on this issue is deafening and we conclude
that Ishikawa’s decision to reduce the employees’ bonuses
was unlawfully motivated.
III.
Ishikawa has presented the defense that it had a legitimate
business reason for its decision, and thus, it would have made
its decision to reduce the employees’ bonuses even absent any
anti-union motivation. Ishikawa argues that its deteriorating
financial condition motivated its decision to reduce the
employees’ bonuses. Ishikawa relies on National Labor
Relations Board v. Citizens Hotel Company, 326 F.2d 501
(5th Cir. 1964), in support of this argument. In Citizens
Hotel, the Fifth Circuit found that even though the Hotel had
established a practice of paying its employees a Christmas
bonus, its decision to end the practice did not establish an
anti-union motivation in light of the Hotel’s financial
situation. Id. at 506. We find Ishikawa’s reliance on Citizens
Hotel misplaced.
10 Ishikawa Gasket Am. v. NLRB Nos. 02-1167/1310
First, in Citizens Hotel the Board found no direct evidence
of anti-union motivation, whereas in this case there was
abundant evidence of anti-union motivation. Id. Second, in
Citizens Hotel the court described the evidence of the Hotel’s
deteriorating financial condition as “overwhelming” evidence
that “the hotel was suffering great and increasing losses.” Id.
In this case, however, the Board found that Ishikawa was less
than forthcoming about its financial situation and what little
financial information that Ishikawa had presented actually
showed an improvement in productivity and profitability.
Indeed, the sparse financial information that Ishikawa
provided showed increased sales from $26,205,587 in 1998
to $28,948,426 in 1999. Also, the net losses decreased from
$4,495,729 in 1998 to $2,019,904 in 1999. Although the
financial information demonstrated that the accumulated
deficit continued to grow, the minimal information that
Ishikawa provided left the Board without an explanation or a
way in which the Board could distinguish “how and why
[Ishikawa] established its bonus in past years as compared
with 1999 and [how] it established that it would have
decreased an admitted incentive based bonus when in fact the
financial results for 1999 show apparent success in that it had
a major profit gain over the previous year.”
We find that Ishikawa has not met its burden of establishing
by a preponderance of the evidence that it would have made
the same decision regardless of the fact that its employees
were engaged in protected activity. Gen. Fabrications Corp.,
222 F.3d at 226. Ishikawa’s asserted business justification is
simply unpersuasive in light of its increased productivity and
profitability and because even the sparse financial information
that Ishikawa had provided warned of its lack of reliability.
Indeed, the letter introducing the financial information warns
that “[w]e have not audited or reviewed the accompanying
financial statements and, according[ly], do not express an
opinion or any other form of assurance on them.”

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Based on the foregoing, we AFFIRM the decision of the
Board and GRANT the Board’s petition for enforcement of its
order.

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