Herman Loewenstein, Inc.

In the Matter Of HERMAN LOEWENSTEIN , INC., EMPLOYER AND PETI- TIONER and ADIRONDACK LEATHER WORKERS UNION and INTERNA- TIONAL FUR AND LEATHER WORKERS UNION OF THE-UNITED STATES AND CANADA, LOCAL 202, CIO Case No. 3-RM-1.Decided December 2, 1947 Mr. Lydon F. Maider, of Gloversville, N. Y., and Mr. Paul Abrams, of New York City, for the Employer. Mr. Harold W. Ward, of Gloversville, N. Y., for the Independent. Mr. Harry Poze f sky, of Gloversville, N. Y., for the CIO. DECISION AND DIRECTION OF ELECTION Upon a petition duly filed by Herman Loewenstein, Inc., herein called the Employer, alleging that Adirondack Leather Workers Union, herein called the Independent, and International Fur and Leather Workers Union, Local 202, CIO, herein called the CIO, had each demanded recognition as exclusive bargaining representative of the same group of employees of the Employer, hearing in this case was held at Gloversville, New York, before Arthur Leff, hearing officer. The hearing officer's rulings made at the hearing are free from preju- dicial error and are hereby affirmed. The CIO has requested oral argu- ment. This request is hereby denied, inasmuch as the record and briefs, in our opinion, adequately present the issues and positions of the parties. Upon the entire record in the case, the National Labor Relations Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE EMPLOYER Herman Loewenstein, Inc., a New York corporation with its prin- cipal office and place of business in New York City, is engaged as a 75 N. L. R. B., No. 47. 377 378 DECISIONS OF NATIONAL LABOR RELATIONS BOARD leather manufacturer and merchant in the importing and exporting of leather. Since July 1, 1947, the Employer has operated a plant at Gloversville, New York, for the nlannfacture of leather. The Glovers- ville plant alone is involved in this proceeding. Since the commence- ment of operations at its Gloversville plant, the Employer has pur- chased, for use at this plant, raw materials valued at approxunately $250,000, all of which were obtained from points outside the State of New York. During the same period, the Employer produced finished products valued in excess of $4,000, of which approximately 75 percent was shipped to points outside the State of New York. We find that the Employer is engaged in commerce within the mean- ing of the National Labor Relations Act. IT. TIIE ORGANIZATIONS INVOLVED Adirondack Leather Workers Union, unaffiliated, is a labor organi- zation, admitting to membership employees of the Employer. International Fur and Leather Workers Union of the United States and Canada, Local 202, is a labor organization, affiliated with the Con- gress of Industrial Organizations, admitting to membership employees of the Employer. III. TIIE QUESTION CONCERNING REPRESENTATION The Employer has been presented with opposing claims from rival labor organizations , each seeking recognition as the exclusive bargain- ing representative for the same group of the Employer's employees. The CIO contends that the present proceeding is barred by an agreement between the CIO and the Employer, and by assumption, express or implied, by the Employer of an existing bargaining agree- ment between the CIO and the prior owner of the plant herein con- cerned. Both the Employer and the Independent deny the existence of any contractual obligations, either direct or assumed, between the CIO and the Employer, sufficient to constitute a bar to the proceeding. The CIO's claim that there is an agreement between the CIO and the Employer rests upon an alleged agreement with the Employer in regard to retaining employees of the prior plant owner and with respect to rates of pay and other matters. The existence of such an agreement is disputed by the Employer. Moreover, the CIO admits that its alleged new agreement with the Employer was never reduced to writing or signed by the Employer. Inasmuch as the agreement, if it exists at all , is an oral one, we find that it cannot bar the instant proceeding? 1 See Matter of John Morrell & Co., 69 N. L R B 1446 ; Matter of E. L. Bruce Company, 74 N L. R B. 1354. HERMAN LOEWENSTEIN, INC. 379 There remains the further contention of the CIO that the Em- ployer is bound by an assumption on its part, express or implied, of a bargaining agreement between the CIO and the prior owner of the plant now owned and occupied by the Employer. In support of its position, the CIO maintains that the Employer, by virtue of its pur- chase of the plant herein concerned, is the successor in interest, and, therefore bound by the existing obligations, of the prior owner to the CIO. The record discloses, however, that while the present sale ad- mittedly covered part of the physical assets, including the plant and machinery formerly owned and operated by another concern, the sale, which was clearly in good faith and not for the purpose of evad- ing any obligations of the seller,2 did not include the good will, ac- counts receivable, or other general assets of the latter concern. More- over, the Employer made no arrangements as part of the purchase transaction to take over any employees of the seller,' or to assume any of the latter's obligations, either those of a business nature or those concerned with labor relations. While the Board has, on occa- sion, held that a purchaser is the successor of the seller and bound by the latter's obligations where the record discloses a continuity of interest and operations,' the Board has also held that the mere pur- chase of certain physical assets, without the assumption of any obli- gation with respect to the employees of the seller, does not constitute the purchaser a successor of the seller or render the purchaser liable under any existing agreement between the seller and a labor organi- zation.-' The evidence here does not warrant a finding that the Enl- ployer is a successor of the prior owner of the plant herein concerned.6 Therefore, in the absence of any evidence of an express agreement, either written or oral, by the Employer to assume the bargaining 2 This conclusion is supported by the fact that the Employer consummated the purchase of the plant herein concerned only after extended negotiations and the careful consideration of equal facilities offered for sale by other manufacturers; that the stockholders, corporate officers, and directors of the Employer are entirely different from those of the seller , and that neither the latter nor any person formerly connected therewith has any proprietary interest in the Employer. 3 The purchaser not only made no arrangements at the time of the sale to take over the employees of the seller, but has actually recruited the majority of its employees from outside sources, retaining from among the seller 's employees only such individuals as it considered qualified to do the different type of work required in its operations 4 See Matter of Syncro Mach-me Company, Inc., 62 N. L R. B. 985 ; Matter of Northwest Glove Co , Inc , 74 N L R. B 250 5 See Matter of Tampa Transit Lines, Inc, 71 N. L. R. B. 742, 744 ; Matter of Sescell Manufacturing Company, 72 N. L. R. B 85, 109. 6 The fact that the CIO has admittedly issued to employees of the former plant owner, passes through a picket line established by the CIO at the Employer's plant to enforce the alleged oral agreement between the Employer and the CIO, but has denied similar passes to employees of the Employer, indicates that the CIO has, itself , recognized the separate identity of these concerns , a fact inconsistent with its present position in this proceeding. 380 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreement between the CIO and the prior owner of the plant,' we find that the Employer is not bound by any existing bargaining agreement between the prior owner of the plant and the CIO. More- over, even assuming arguendo that the Employer were bound by such an agreement, we would find that, as the only existing written agree- ment between the CIO and the former owner of the plant will shortly expire," it would constitute no bar to the present proceeding." We find that a. question affecting commerce has arisen concerning the representation of employees of the Employer within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act. IV. THE APPROPRIATE UNIT The parties stipulated, and we find, that all production employees of the Employer at its Gloversville, New York, plant, excluding cleri- cal employees, maintenance employees, and supervisors within the meaning of the Act, constitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9 (b) of the Act. V. TILE DETERMINATION OF REPRESENTATIVES The CIO contends that an election would be inappropriate at the present time in view of a contemplated expansion in the Employer's operations. The contention of the CIO rests upon the assumption that a representative group of employees is not now employed by the Employer within the appropriate unit. However, the Employer's president testified that the Employer expects shortly to reach a maxi- mum employment peak, for a year or longer, of 37 production employees, from a present total of approximately 23 such employees.no While the Employer conceded that it had at one time considered manufacturing another product which would require a considerable increase in the number of its personnel, its present plans are at best indefinite and may be abandoned altogether. In the light of the 7 The CIO contends that the Employer, by the course of its negotiations with the CIO, orally agreed to assume the contractual obligations of the prior plant owner with the CIO, and is now estopped to deny the assumption of such obligations The record indicates, however, that the negotiations between the CIO and the Employer contemplated, not the assumption of any existing contract, but rather the execution of a separate contract applicable to the Employer's own operations. 8 The only written agreement between the CIO and the former owner of this plant is one which by its teams expires December 31, 1947. ° See Mattes of The IVheland Company, 72 N. L. It. B. 351 ; Matter of Knoxville Misasng Company, 73 N L. It. B 1321. 10 This estimate is based upon an expert study upon which the Employer is relying in planning its production requirements. In contrast therewith, a CIO official testified with- out direct contradiction that he was informed by a supervisory official of the Employer, shortly after the latter had taken over the plant, that the Employer expected to have about 60 or 70 production employees by the end of the present year. HERMAN LOEWENSTEIN, INC. 381 Employer's evidence, which must be considered the more reliable so far as our appraisal of its own plans is concerned, we find that the present group of employees is substantial and is representative of the total working force that may ultimately be employed.1' Li view of these facts, and the uncertainty of the rate of expansion and of the time at which a full complement will be reached, we shall adhere to the Board's usual policy in such circumstances by directing an immediate election. VI. THE FOE1i OF THE BALLOT There remains for consideration a question raised by the Independ- ent as to whether the CIO is entitled to a place on the ballot in the election. The Independent contends that the CIO shall be denied a place on the ballot upon the ground (1) that it is not qualified for certification, under Section 9 (f), (g), and (h) of the Act as amended, or upon general equitable considerations ; and (2) that it has not sub- mitted sufficient evidence of a representation interest. We are of the opinion that the Fur Workers, CIO, because it has not complied with Sections 9 (f) and (h) of the amended Act, should not appear on the ballot. The issue is not only one of law, but also one of policy. We construe the amended Act to provide, in essence, that a non-complying labor organization shall not be the beneficiary of any Board investigation of a question concerning representation. For this reason the Board has declined to proceed to hearing or election on a petition filed by a non-complying union; 12 it has declined to certify such a union since the effective date of the amendments to the Act, even though it won a victory at the polls before that date; 13 it has declined to place such a union on the ballot, as intervenor, in an election held at the instance of a petitioning labor organization that has complied with Sections 9 (f) and (h), even though its intervention at the hearing was other- wise proper; 14 and it has declined to order an employer to bargain collectively with a non-complying union, except upon compliance by the union within a specified period.15 Here the petitioner is not a complying labor organization, but the employer. The fact remains that the question concerning representa- tion, although brought to the Board's attention by the employer's own " See Matter of General Motors Corporation, Fisher-Body-Ternstedt Division, 74 N. L. R. B 18; Matter of Knox Metal Products ]no, 74 N. L. R. B 24. 12 Matter of Rite-Form Corset Company, Inc., 75 N. L. R. B. 174. 13 See Matter of Myrtle Desk Company, 75 N. L R. B. 226 ; Matter of Colonial Radio Corporation, 75 N. L R. B 228. 14 See Matter of S,gmund Cohn & Co., 75 N. L. R B. 177. 15 See Matter of Marshall and Bruce Company, 75 N. L. R. B. 90. 382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD petition, was "raised by a labor organization." 18 It was raised by the affirmative claim, here made both by the Fur Workers, CIO and by the Adirondack Workers, that a labor organization represented a majority of the employer's employees within an appropriate unit. Absent such a claim, the Board would be without jurisdiction to pro- ceed with its investigation under Section 9 (c) (1) (B) of the Act as amended 17 Although it is the employer's petition in such a case that sets the Board's machinery in motion, it is an individual's or a labor organization's initial claim for recognition that makes it possible for the employer to invoke that machinery. If, as here, a labor organi- zation that presented a claim for recognition has not complied with the provisions of Sections 9 (f) and (h), we would no more implement the policy of Congress if we placed it on the ballot than if we were to do so in a case in which it, or another labor organization, filed the formal papers with the Board. If a non-complying union were placed on the ballot and happened to win the election, no one could expect the Board under the amended Act to issue a certification that would run in its favor. But a victory at the polls, even without later formal certification, would confer certain moral and practical advantages on the non-complying union which the basic policy of Congress appears to discountenance. Such a result can be averted with certainty only by our declining to place a non-complying union on any ballot, unless there are absolutely compelling statutory or policy reasons for doing so. In our opinion, the fact that a petition has been filed by an employer rather than by a labor organization does not provide such compelling reasons. The question concerning representation remains a question "raised by a labor organization" which has made a claim for recog- nition as bargaining representative.18 An employer petition, like a union petition, seeks to resolve the question of who, if anyone, is the true bargaining representative of the employees. Either sets in motion the same investigative process; the same result, either of certification or of dismissal, may flow from either; and a Board election conducted on the basis of either will now preclude another Board election for 12 months. This similarity between employer and union petitions, both in purpose and in result, points strongly to the conclusion that a non-complying union should derive no more advantage from the one 16 Sections 9 (f) and (h) both open as follows : "No investigation shall be made by the Board of any question affecting commerce concerning the representation of employees, raised by a labor organization under subsection ( c) of this section . . ( Emphasis supplied) 11 The cited section of the amended Act prescribes that a petition filed with the Board by an employer shall allege "That one or more individuals or labor organizations have presented to him a claim to be recognized as the representative" of his employees "The cases in which the Board has refused to dismiss a union petition for lack of an antecedent request for recognition do not hold the contrary. HERMAN LOEWENSTEIN, INC. 383 than it does from the other.19 The statutory language supports the same conclusion. Sections 9 (f) and (h) speak in terms of questions raised, rather than of petitions filed, by labor organizations. An employer petition must allege that he has been presented with a claim by an individual or a labor organization for recognition as bargain- ing representative of his employees. The distinction which Congress intended to draw by the words "raised by a labor organization" is, we believe, between a claim for recognition made by a union and a similar claim made by an individual or individuals, not between a union peti- tion and an employer petition filed with the Board. The name of the . Fur Workers, CIO, will therefore not be placed on the ballot in this case. The Board recognizes, to be sure, that this conclusion may some- times result in depriving an employer of information which the. amended Act would permit him to secure if only a complying labor organization or organizations were affirmatively claiming representa- tive status. Conflicting policy considerations are before us; the amended Act and its legislative history provide no sure answer as to which should prevail. We believe, however, that the exclusion of non- complying unions from the ballot in cases where employers are the petitioners is more nearly consistent with the supervening policy of denying the imprimatur of Government to such labor organizations. DIRECTION OF ELECTION As part of the investigation to ascertain representatives for the pur- poses of collective bargaining with Herman Loewenstein, Inc., Glov- ersville, New York, an election by secret ballot shall be conducted as early as possible, but not later than thirty (30) days from the date of this Direction, under the direction and supervision of the Regional Director for the Third Region, and subject to Sections 203.61 and 203.62 of National Labor Relations Board Rules and Regulations- Series 5, among the employees in the unit found appropriate in Section IV, above, who were employed during the pay-roll period immediately preceding the date of this Direction, including employees who did not work during said pay-roll period because they were ill or on vacation or temporarily laid off, but excluding those employees who have since quit or been discharged for cause and have not been rehired or rein- stated prior to the date of the election, to determine whether or not they desire to be represented by Adirondack Leather Workers Union, unaffiliated, for the purposes of collective bargaining. 19 If employer petitions were processed so as to benefit non-complying unions, it is not difficult to foresee attempts by such unions to persuade employers, in the interest of industrial peace, to file petitions with the Board.