Auto Ventshade, Inc.

AUTO VENTSHADE, INC. 451 Connecticut, excluding all guards, watchmen, all office clerical em- ployees, and supervisors as defined in the Act constitute a unit ap- propriate for the purposes of collective bargaining within the mean- ing of Section 9(b) of the Act." [The Board dismissed the petition in Case No. 2-RC-9623; granted the Petitioner's appeal from the dismissal by the Regional Director of the petition in Case No. 2-RC-9667; reinstated the peti- tion in said case; and incorporated the record made at the hearing held in Case No. 2-RC-9623 as the record in Case No. 2-RC-9667.] [Text of Direction of Election omitted from publication.] >s The unit was stipulated by the parties. Auto Ventshade, Inc. and International Union, United Auto- mobile, Aircraft & Agricultural Implement Workers of America, UAW-AFL-CIO, and its Local 472. Cases Nos. 10- CA-2954 and 10-CA-3062. March 30, 1959 DECISION AND ORDER On January 26,1959, Trial Examiner George A. Downing issued his Intermediate Report in the above-entitled proceedings, finding that the Respondent had engaged in and was engaging in unfair labor practices within the meaning of Section 8(a) (5) and (1) of the Act and recommending that it cease and desist therefrom and take certain action, as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report with a supporting brief.' Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three-member panel [Chairman Leedom and Members Bean and Jenkins]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the In- termediate Report, the exceptions and the brief filed by the Respond- ent, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the modifications indicated in the Order. ' As the record, exceptions, and briefs adequately present the issues and positions of the parties, the Respondent 's request for oral argument is hereby denied. 123 NLRB No. 54. 452 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ORDER Upon the entire record in this case and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board orders that the Respondent, Auto Ventshade, Inc., Atlanta, Georgia, its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Refusing to bargain with International Union, United Auto- mobile, Aircraft & Agricultural Implement Workers of America, UAW-AFL-CIO, and its Local 472, as the exclusive representative of all Respondent's production and maintenance employees at its Atlanta, Georgia, plant, excluding office clerical employees, profes- sional employees, guards or watchmen, and supervisors as defined in the Act, with respect to rates of pay, wages, hours of employment, and other conditions of employment. (b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of their rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action, which the Board ..finds will effectuate the policies of the Act : (a) Upon request, bargain with the above-named Union as the exclusive representative of the employees in the aforesaid appropriate unit with respect to rates of pay, wages, hours of employment, and other conditions of employment, and, if an agreement is reached, embody such understanding in a signed contract. (b) Post in its plant at Atlanta, Georgia, copies of the notice at- tached hereto marked "Appendix A." 2 Copies of said notice, to be furnished by the Regional Director for the Tenth Region, shall, after being signed by Respondent's representative, be posted by Respond- ent immediately upon receipt thereof and maintained by it for 60 consecutive days thereafter in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for the Tenth Region in writing, within 10 days from the date of this Order, as to what steps Respond- ent has taken to comply herewith. 2 In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order." AUTO VENTSHADE, INC. APPENDIX NOTICE TO ALL EMPLOYEES 453 Pursuant to a Decision and Order of the National Labor Relations Board; and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL bargain collectively, upon request, with International Union, .United Automobile, Aircraft '& Agricultural Implement Workers of America, UAW-AFL-CIO, and its Local 472, as the exclusive representative of all our employees in the bargaining unit described below, with respect to rates of pay, wages, hours of employment, and other conditions of employment, and if an agreement is reached, embody such understanding in a signed contract. The bargaining unit is : All our production and maintenance employees, excluding office clerical employees, professional employees, guards or watchman, and supervisors as defined in the Act. WE WILL NOT interfere with, restrain, or coerce our employees in the exercise of their rights guaranteed in Section 7 of the Act by refusing to bargain with the above-named Union or by engaging in like or related conduct. AUTO `TENTSIIADE, INC., Employer. Dated---------------- By------------------------------------- (Representative ) (Title) This notice must remain posted- for 60 -days from the date hereof, and must not be altered, defaced, or covered by any other material. INTERMEDIATE REPORT STATEMENT OF THE CASE This proceeding, brought under Section 10(b) of the National Labor Relations Act, as amended (61 Stat. 136), was heard at Atlanta , Georgia, on November 18, 1958, pursuant to due notice and with all parties represented by counsel. The complaint, issued on September 10, 1958, by the General Counsel of the National Labor Relations Board and based on charges duly filed and served, alleged that Respondent (the alleged successor to Auto Ventshade Company) had since May 22, 1957, refused to bargain with the Union as the exclusive representative of its employees in an appropriate unit in violation of Section 8(a)(5) and ( 1) of the Act. Respondent answered, denying that it had engaged in unfair labor practices as alleged . It admitted that it had purchased certain of the assets of Auto Ventshade Company, but denied that the prior certification of the Union as the bargaining agent of that Company's employees in any way bound or obligated Respondent. Respondent's motion to dismiss, made at the close of the General Counsel 's case, is denied for reasons hereinafter stated. Upon the entire record in the case and from my observation of the witnesses, I make the following: 454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT 1. RESPONDENT'S BUSINESS; THE UNION AS A LABOR ORGANIZATION The complaint alleges and the answer admits facts which establish that Re- spondent, a Georgia corporation, is engaged in commerce within the meaning of the Act (i.e. annual extrastates sales and shipments in excess of $50,000) and that the Union is a labor organization within the meaning of the Act. H. THE UNFAIR LABOR PRACTICES The central issue in this case is whether Respondent was such a successor to Auto Ventshade Company (herein called Ventshade) as to require it to bargain with the Union, the certified representative of Ventshade's employees. Practically all the facts were contained in a formal written stipulation which was received as an exhibit subject to certain objections by Respondents as to the materiality and relevancy of certain facts. Said objections are hereby overruled. The stipu- lated facts, plus certain supplemental testimony offered by Respondent, may be summarized as follows: Ventshade was a Georgia corporation which was engaged from about 1947 to about May 10, 1957, in the manufacture and sale of auto ventshades. On May 24, 1950, in an election by secret ballot conducted under the supervision of the Regional Director for the Tenth Region, 35 votes were cast for the Union and 3 against it, and there was 1 void ballot and 1 challenged ballot. On April 6, the Board issued its certification of the Union as the exclusive representative of Vent- shade's employees in a production and maintenance unit therein found to be appropriate (see "Conclusions of Law," paragraph 2, infra). From May 4, 1950, to about May 3, 1957, a series of collective-bargaining agreements was entered into, the last of which was extended to March 1, 1958. On or about May 3, 1957, Ventshade ceased the manufacturing operations which it had previously conducted. Asa R. Phillips, Sr., its president, then informed the employees that: The volume of the Company's business had been decreasing,. and he had been trying for some time to sell the business; the Company was dis- continuing operations and his son, Asa R. (Dick) Phillips, Jr., and his son-in-law,. H. W. Goodman, were trying to raise money to buy the business; he (Phillips, Sr.) did not know whether or not the deal would go through, and if such deal was consummated it would be up to Phillips, Jr., and Goodman to hire their own employees. At that time Ventshade's officers were Phillips, Sr., as president, Phillips, Jr., as. vice president, and Goodman, as secretary-treasurer. Phillips, Sr., and his wife owned approximately 99 percent of 4,800 shares of the corporate stock, and Phillips, Jr., Goodman's wife (daughter of Phillips, Sr.), and Mrs. Alice H. Albert (mother of Phillips, Sr.) owned the remainder. Phillips, Sr., owned the entire voting stock of the Company. Goodman had held his office for at least 3 years. and Phillips, Jr., for at least 3 months. Other than its officers, Ventshade had a single supervisor, Carl Meade, and 13 , employees (T. C. Smith, C. W. Whitehead, C. J. Blackwell, Cecil Rogers, H. G. Braselton, F. H. Hammond, R. B. Blake, Maxie Gardner, J. W. Mitchell, B. W. McElvaine, J. O. Giles, J. L. Hambrick, and L. B. Shirley). Pursuant to a check- off clause in the contract and signed authorizations from the union members, Ventshade deducted union dues from the wages of the above employees and transmitted them to the Union, including checkoffs for the months of April and May 1957. On or about May 10, 1957, Ventshade's name was changed to "The Phillips Company," with Phillips, Sr., as president, and since that date it has been engaged in the investment business. Respondent, Auto Ventshade, Inc., was chartered on or about May 13, 1957, with the stockholders being Phillips, Jr., and Goodman and his wife, and its officers since that date have been Phillips, Jr., as president and Goodman as secretary-treasurer. Phillips, Sr., has had no ownership, control, or interest in Respondent, though he guaranteed the payment of one of its accounts payable, i.e., Atlantic Steel Co. On or about May 13 Respondent purchased from The Phillips Company the trade name and trademark of "Ventshade," Ventshade's accounts receivable, and substantially all machinery, equipment, and furniture and fixtures previously used by Ventshade in its manufacturing operations. Respondent also leased from The Phillips Company a portion of the premises previously occupied by Ventshade. AUTO VENTSHADE, INC. 455 On or about May 10, Ventshade sent to certain of its former customers and to the trade in general an announcement of discontinuance of its operations, and on or about May 17, Respondent sent similarly an announcement of its opening for business. The latter announcement stated in part that "The new corporation will continue to manufacture Ventshades at the same location in Chamblee, Georgia," and that "Prices, terms, discounts and the `Buyer's Guide and Recall Plan' in effect just prior to May 13 will continue with no changes foreseen at this time." Respondent began hiring employees on May 20, employing B. W. McElvaine, Cecil Rogers, F. H. Hammond, and L. B. Shirley on that date, R. B. Blake on May 21, and C. J. Blackwell and Denver Roberts on May 22. All except Roberts were employees of Ventshade at the time it ceased operations and Roberts had previously been in its employ. Around July 15, Respondent hired five more employees, none of whom were in Ventshade's employ when it ceased operations.' From May 20 to August 28, Respondent's only supervisor, except for the officers, was Carl Meade. Another supervisor, T. L. Wood, was hired on August 28, 1957. From about May 20, 1957, to about October 1, 1958, Respondent's employees were engaged in manufacturing substantially the same product that had been manufactured by Ventshade, using substantially the same machinery, equipment, and fixtures and substantially the same manufacturing operations, procedures, and similar materials which had been used by Ventshade employees. Sometime during that period Respondent also began the manufacture with the same employees of another auto accessory called a garnishield, which is a stainless steel molding which fits on the door at the point where the driver's arm protrudes over the outside door area. From on or about May 20, 1957, until on or about July 1, 1958, such manufacturing operations were conducted in the same premises pre- viously occupied by Ventshade, and since July 1, 1958, they have been conducted at 187 Courtland Street N.E., Atlanta. On May 21, 1957, the Union wrote a letter addressed to Phillips, Sr., Phillips, Jr., and Goodman, and Auto Ventshade, Inc., in which it stated that it had information that "in reopening the Auto Ventshade Plant you have departed from, and are acting in violation of, the Agreement between UAW and the Company" in at least six specified respects. It requested that a meeting be held within 2 days "at which these matters may be discussed and made the subject of bar- gaining," and it concluded: At the meeting we will be willing to discuss any other matters pertinent to the reopening of the Company, including the fact that there has been no change in the bargaining relationship between the Company and the Union because of the technical fiction of incorporation. On May 22, Phillips, Jr., as president, acknowledged the Union's letter and stated: You are hereby advised that Auto Ventshade, Inc., does not recognize your Union, or any other labor organization, as bargaining representative of any of our employees. Therefore, we must decline to meet with you as proposed in your letter. On October 21, 1957, the Union wrote Respondent, quoting the above paragraph and stating: While it was our belief that the foregoing statement was a refusal to bargain within the meaning of Section 8(a)(5) of the National Labor Relations Act, as amended, nevertheless, in order that you may have full opportunity to fulfill your obligations to bargain under said Act, we hereby request that you bargain with the undersigned Union as exclusive representative of your employees for the purposes of collective bargaining ... . On October 22, Respondent's counsel wrote in reply: You are advised that Auto Ventshade Incorporated, does not at this time recognize your union as the agency for collective bargaining for any of its employees and will not recognize your union as such agency until your union has been certified in due course by the National Labor Relations Board. 1 These were presumably the "extras" or temporary employees, referred to in Goodman's testimony, who were hired during peak periods (usually in August and September) for inventory buildup. His testimony and that of Phillips, Jr., showed further that at the time of the hearing Respondent had a total of nine permanent employees, seven of whom were the seven originally employed. 456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Goodman-Phillips testimony, which in general corroborated and confirmed the stipulated facts, was devoted mainly to emphasizing the economic factors which influenced Phillips, Sr., to sell the business, the bona fides of the sale, itself, and the lack of any connection by Phillips , Sr., with the new corporation. The Gen- eral Counsel, however, makes no contention that the transfer of the business to Respondent was for the purpose of enabling Ventshade to evade its bargaining obligations. Contentions and Concluding Findings The foregoing facts may be succinctly summarized in the following finding of ultimate - facts: When the majority stockholder (and president) of a small family corporation decided for bona fide business reasons to cease manufacturing operations and dis- pose of the business, the remaining officers organized a new corporation which purchased the business and many of the assets and which resumed the manu- facture of the same product at the same plant , with the same machinery, equip- ment, and procedures and with substantially the same employees under the same supervision,2 and with knowledge that the Union was the certified bargaining rep- resentative of the predecessor's employees and with actual knowledge (through the checkoff) that a clear majority of those whom it hired were union members. The General Counsel and the Union contend that under the foregoing circum- stances the successor employer in "the employing industry" fell heir to an obliga- tion to bargain with the Union, and that questions concerning the bona fides of the transfer and alter ego, or separate entities, are not involved. They also argue that though the finding of a "successorship " is not essential , the term "successor" is one which has been loosely used , varying widely in denoting different relation- ships-between transferor and transferee, and that the relationship required, for 'example, to-impose ' on a "successor" the duty to remedy unfair' labor practices committed by a predecessor is not necessarily the same as when used to indicate the employer's responsibility to bargain with a union which was the representative of the employees who were employed by the predecessor. Respondent contends, to the contrary, that the sole question is whether Respond- ent is the alter ego of the Phillips Company, formerly Ventshade, so as to make it liable for the latter company's responsibilities under the Act, and that Respondent is a separate entity which at no time succeeded to the responsibilities of the former entity. Respondent contends further that in order for the General Counsel and the Union to prevail, the evidence must establish that the sale to Respondent was a mere sham, that Respondent is merely a disguised continuance of the Phillips Company, and that the purpose of the sale was to defeat the Union's right to act as the bargaining agent of the employees involved. Though the parties have cited in support of their respective positions numerous cases which present both a variety of successorships 'and a' variety of ' situations in which questions concerning the successor's liability for unfair labor practices (both his own and his predecessor's) have been considered , it is unnecessary to review or to analyze the respective lines in detail, because the Board , in its most recent pronouncement, has adopted and followed, in a case which is closely analogous to the present , the lead cases which are relied upon by General Counsel and the Union here. Thus, in Royal Brand Cutlery Company, 122 NLRB 109, there was a stipu- lated record which presented, as here, no question concerning the bona fides of the transfer and which showed the relationship between the predecessor and successor companies to be much less close than here. Indeed, it was there stipu- lated that prior to the negotiations for the sale , the parties "were strangers to each other." The Board nevertheless affirmed by short form order the Trial Examiner, who quoted with approval from and who followed as controlling the following cases which are relied upon by General Counsel and Union here: N.L.R.B. v Armato, etc., 199 F. 2d 800 (C.A. 7); enfg. Krantz Wire & Mfg. Co., et al., 97 NLRB 971; N.L.R.B. v. Arthur J. Cotten and Abe J. Colman, d/b/a Kiddie Kover Manufacturing Company, 105 F. 2d 179 (C.A. 6), enfg. 6 NLRB 355; Cruse Motors, Inc., 105 NLRB 242; Boyce Wallace, et al., t/a Investment Building Cafeteria, 120 NLRB 38. That decision and the cases cited are plainly controlling here. Indeed, the Krantz case, supra, comes about as close to an "all-fours" situation as can be found, as shown by the many striking factual parallels which the General Counsel a Phillips , Jr., testified that he served as the operating manager of Ventshade . Goodman and Meade also continued as supervisors. AUTO VENTSHADE, INC. 457 points out in his brief. Also in point are South Carolina Granite Company, 58 NLRB 1448, enfd. N.L.R.B. v. Blair Quarries, Inc., 152 F. 2d 25 (C.A. 4); Northwest Glove Co., Inc., 74 NLRB 1697; and Lunder Shoe Corporation, 103 NLRB 1322, enfd. 211 F. 2d 284, 286-7, (C.A. 1). The gist of the holding is that in a "successorship" of the present type, it is the employing industry which is regulated, that a mere change of ownership of the employing industry is not so unusual a circumstance as to affect the certification, and that where the enter- prise remains substantially the same, the obligation to bargain devolves upon the successor in title. In the interests of brevity the discussion of the present legal issue will not be prolonged. The Trial Examiner adopts in full (as did the Board) the conclusions of the Trial Examiner in the Royal Brand case, supra. The cases cited by Re- spondent, listed in the footnote 3 plainly do not overcome the force of the Board's recognition that the cases relied upon by the General Counsel are controlling in a successorship situation like the present one. There remains, however, an issue raised in Respondent's answer that the Union's letter of May 21 did not constitute a request to bargain, and its further defense that it properly rejected the October 21 request because it had a right to refuse recognition until the Union was certified by the Board. The first request made it clear that the Union was seeking to bargain at least about the six specified matters, four of which were directly related to wages and terms and conditions of employment, and that it volunteered as well its willingness "to discuss any other matters pertinent to the reopening of the Company." This was met by a flat refusal to recognize or to meet with the Union "as bargaining representative" of the employees. Thus, not only was the Union's letter a request to bargain, but Respondent's reply recognized it to be so and explicitly rejected it as such. Though the adequacy of the October request is unquestioned, it is also surplusage in view of the foregoing findings. Its only relevancy would have arisen if it had become necessary to consider the Union's contention (now joined in by the General Counsel) that even apart from the certification and the General Counsel's suc- cessorship theory, the October request would have supported an 8(a)(5) finding because an actual majority of the employees were union members. Though now immaterial, the findings concerning the checkoff, the hiring of the old (union member) employees, and Respondent's awareness of their membership, support that majority contention. It is therefore concluded and found on the basis of the entire evidence that on and after May 22, 1957, Respondent refused to bargain collectively with the Union as the exclusive representative of Respondent's employees in an appropriate unit. Upon the basis of the above findings of fact and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The Union is a labor organization within the meaning of Section 2(5) of the Act. 2. All production and maintenance employees of Respondent, excluding office clerical employees, professional employees, guard or watchman, and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 3. On May 21, 1957, and at all times thereafter, the Union has been and now is the exclusive representative of all Respondent's employees in said unit within the meaning of Section 9(a) of the Act. 4. By refusing to bargain with the Union on and after May 22, 1957, Re- spondent engaged in unfair labor practices proscribed by Section 8(a)(5) and (1) of the Act. 'Mount Hope Finishing Company v. N.L.R.B., 211 F. 2d 365 (C.A. 4) ; N.L.R.B. v. Birdsall-Stockdale Motor Company, 208 F. 2d 234 (C.A. 10) ; N.L.R.B. v. Lunder Shoe Corp., 211 F. 2d 284, 288-289 (C.A. 1) ; N.L.R.B. v. New Madrid Manufacturing Company, 215 F. 2d 908 (C.A. 8) ; N.L.R.B. v. Bonita Fruit Co., Inc., et at., 158 F. 2d 758 (C.A. 5) ; Juneau Spruce Corporation, 82 NLRB 650; Olympia Shingle, Company, 26 NLRB 1398; Herman Loewenstein, Inc., 75 NLRB 377; Klamath Pine Co., 56 NLRB. 587; Mackenzie Awning Company, 87 NLRB 1098; Sewell Manufacturing Company, 72 NLRB 85; T. A. Tredway, at at., d/b/a Diaper Jean Manufacturing Company, 109 NLRB 1045; Schiefer a Sons, (WLB) 14 LRRM 1745; Essential Tool and Die Corporation, (WLB) 13 LRRM 1698; Tarr v. Motor Coach Employees, (Idaho Supreme Court) 31 LRRM 2095; Jones et at. v. Hearst Consolidated Publications Inc., 190 Ga. Rep. 762, 10 S.E. 2d 761. 458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 5. The aforesaid unfair labor practices having occurred in connection with the operation of Respondent's business as set forth in section I, above, have a close, intimate, and substantial relation to trade, traffic , and commerce among the several States and substantially affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent engaged in certain unfair labor practices , I shall recommend that it cease and desist therefrom and that it take certain affirmative action of the type conventionally ordered in such cases, which I find necessary to remedy and to remove the effects of the unfair labor practices and to effectuate the policies of the Act. Because of the limited nature of the unfair labor practices charged and found herein , the recommended remedial action will be limited to requiring Respondent to bargain with the Union on request. [Recommendations omitted from publication.] Tee-Pak, Inc. and Oil, Chemical and Atomic Workers Interna- tional Union, AFL-CIO, Local 7-569. Case No. 13-CA-92747. March 30, 1959 DECISION AND ORDER On November 28, 1958, Trial Examiner Albert P. Wheatley issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent had not engaged in the unfair labor practices alleged in the complaint and recommending that the complaint be dis- missed in its entirety, as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the General Counsel filed ex- ceptions to the Intermediate Report and a supporting brief. The Respondent filed a brief in support of the Intermediate Report.' Pursuant to the provisions of Section 3 (b) of the Act, the Board has delegated its powers in connection with this case to a three- member panel [Chairman Leedom and Members Rodgers and Jenkins]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds no prejudicial error was committed. The rul- ings are hereby affirmed. The Board considered the Intermediate Report, the exceptions, the briefs, and the entire record in the case and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the modifications noted below. We agree with the ultimate conclusion of the Trial Examiner inso- far as he finds that the Respondent's conduct in terminating the cleanup project with the resultant layoff was not a violation of Sec- tion 8 (a) (1) and (3). However, in arriving at this conclusion, we do so only because we find that the layoffs were motivated by eco- nomic reasons. 1 The Respondent 's request for oral argument is hereby denied as the record , exceptions, and briefs adequately present the issues and positions of the parties. 123 NLRB No. 56.