Enterprise Corrugated Container Corp.

ENTERPRISE CORRUGATED CONTAINER CORP. 346 NLRB No. 24 215 Enterprise Corrugated Container Corp. and Interna- tional Brotherhood of Teamsters, Local 560. Case 22–CA–26872 January 10, 2006 DECISION AND ORDER BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN AND SCHAUMBER The Acting General Counsel seeks a default judgment in this case on the ground that the Respondent has failed to file an answer to the complaint. Upon a charge filed by the Union on April 22, 2005, the Acting General Counsel issued the complaint on August 11, 2005, against Enterprise Corrugated Container Corp., the Re- spondent, alleging that it has violated Section 8(a)(1) and (5) of the Act. The Respondent failed to file an answer. On September 22, 2005, the Acting General Counsel filed a Motion for Default Judgment and Memorandum in Support with the Board. On September 26, 2005, the Board issued an order transferring the proceeding to the Board and a Notice to Show Cause why the motion should not be granted. The Respondent did not file a response. The allegations in the motion are therefore undisputed. Ruling on Motion for Default Judgment Section 102.20 of the Board’s Rules and Regulations provides that the allegations in a complaint shall be deemed admitted if an answer is not filed within 14 days from service of the complaint, unless good cause is shown. In addition, the complaint affirmatively stated that unless an answer was filed by August 25, 2005, all the allegations in the complaint would be found to be true. Further, the undisputed allegations in the Acting General Counsel’s motion disclose that the Region, by letter dated September 2, 2005, notified the Respondent that unless an answer was received by September 9, 2005, a motion for default judgment would be filed. In the absence of good cause being shown for the fail- ure to file a timely answer, we grant the Acting General Counsel’s motion for default judgment. On the entire record, the Board makes the following FINDINGS OF FACT I. JURISDICTION At all material times, the Respondent, a corporation with an office and place of business in Saddle Brook, New Jersey, has been engaged in the manufacture, distri- bution, and sale of packaging materials. During the 12-month period preceding the issuance of the complaint, the Respondent, in conducting its business operations, sold and shipped from its Saddle Brook, New Jersey facility goods and materials valued in excess of $50,000 directly to points outside the state of New Jer- sey. We find that the Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act and that the International Brotherhood of Teamsters, Local 560, the Union, is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES The following employees of the Respondent (the driv- ers’ unit) constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. All full-time and regular part-time drivers employed by the Respondent at its Saddle Brook, New Jersey facil- ity. The Union has been the designated exclusive collec- tive-bargaining representative of the drivers’ unit and has been recognized as such by the Respondent. This recog- nition has been embodied in the most recent collective- bargaining agreement, effective from April 1, 2003, through March 31, 2006. At all material times, based on Section 9(a) of the Act, the Union has been the exclusive collective-bargaining representative of the drivers’ unit. Since about March 2005, and by letter of April 1, 2005, the Union requested that the Respondent furnish the Union with information concerning the sale of the Respondent’s business. The information requested by the Union is necessary for, and relevant to, the Union’s performance of its duties as the exclusive collective-bargaining agent of the driv- ers’ unit. Since March 2005, and at all material times, the Re- spondent has failed and refused to furnish the Union with the information requested by it. About March 2005, and by letter of April 1, 2005, the Union requested that the Respondent bargain collectively about the effects of the Respondent’s decision to close its business. Since about March 2005, and at all material times, the Respondent has failed and refused to bargain about the effects of its decision to close its business. The subject set forth above relates to the wages, hours, and other terms and conditions of employment of the drivers’ unit and is a mandatory subject for the purposes of collective bargaining. CONCLUSIONS OF LAW 1. By failing and refusing to provide the Union with requested information concerning the sale of its business, and by failing and refusing to bargain with the Union DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 216 about the effects of its decision to close its business, the Respondent has been failing and refusing to bargain col- lectively and in good faith with the exclusive collective- bargaining representative of its employees, and has thereby engaged in unfair labor practices affecting com- merce within the meaning of Section 8(a)(1) and (5) and Section 2(6) and (7) of the Act. 2. Our dissenting colleague would deny the Acting General Counsel’s motion for default judgment with re- spect to the allegation that the Respondent failed to pro- vide the Union with requested information concerning the sale of the Respondent’s business. In the dissent’s view, because the complaint did not detail the informa- tion requested and, further, because not all information relating to business sales, generally, is presumptively relevant, the Acting General Counsel’s pleading fails. We disagree. 3. The complaint, which the Respondent failed to an- swer, includes the express allegation that the requested information regarding the Respondent’s business sale was “necessary for and relevant to the Union’s perform- ance of its duties as the exclusive bargaining agent of the driver’s unit.” By failing to answer the complaint, the Respondent admits this allegation. As we have previ- ously held, “[t]he Respondent’s admission of the rele- vance of the requested information is sufficient to sup- port an unfair labor practice finding.” TNT Logistics of North America, 344 NLRB 489 fn. 3 (2005). See also, Artesia Ready Mix Concrete, 339 NLRB 1224, 1226– 1227 (2003); Mid-America Gunite, 345 NLRB 1119, 1120 (2005). Accordingly, it is appropriate to grant the Acting General Counsel’s motion for default judgment on this information allegation. REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, we shall order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act. Specifically, having found that the Respondent has violated Section 8(a)(1) and (5) by failing and refusing since March 2005 to fur- nish the Union with the information it requested concern- ing the sale of the Respondent’s business, which is nec- essary for and relevant to the Union’s performance of its duties as the exclusive collective-bargaining representa- tive of the drivers’ unit, we shall order the Respondent to furnish the Union with the requested information. In addition, to remedy the Respondent’s unlawful fail- ure and refusal to bargain in good faith with the Union concerning the effects of the Respondent’s decision to close its business, we shall order the Respondent to bar- gain with the Union, on request, about the effects of that decision. Because of the Respondent’s unlawful con- duct, however, the drivers’ unit employees have been denied an opportunity to bargain through their collective- bargaining representative at a time when the Respondent might still have been in need of their services and a measure of balanced bargaining power existed. Mean- ingful bargaining cannot be assured until some measure of economic strength is restored to the Union. A bar- gaining order alone, therefore, cannot serve as an ade- quate remedy for the unfair labor practices committed. Accordingly, we deem it necessary, in order to ensure that meaningful bargaining occurs and to effectuate the policies of the Act, to accompany our bargaining order with a limited backpay requirement designed both to make whole the employees for losses suffered as a result of the violation and to re-create in some practicable man- ner a situation in which the parties’ bargaining positions are not entirely devoid of economic consequences for the Respondent. We shall do so by ordering the Respondent to pay backpay to the drivers’ unit employees in a man- ner similar to that required in Transmarine Navigation Corp., 170 NLRB 389 (1968), as clarified in Melody Toyota, 325 NLRB 846 (1998).1 Thus, the Respondent shall pay its drivers’ unit em- ployees backpay at the rate of their normal wages when last in the Respondent’s employ from 5 days after the date of this Decision and Order until occurrence of the earliest of the following conditions: (1) the date the Re- spondent bargains to agreement with the Union on those subjects pertaining to the effects of the closure of its business on the drivers’ unit employees; (2) a bona fide impasse in bargaining; (3) the Union’s failure to request bargaining within 5 business days after receipt of this Decision and Order, or to commence negotiations within 5 business days after receipt of the Respondent’s notice of its desire to bargain with the Union; (4) the Union’s subsequent failure to bargain in good faith. In no event shall the sum paid to these employees ex- ceed the amount they would have earned as wages from the date on which the Respondent closed its business to the time they secured equivalent employment elsewhere, or the date on which the Respondent shall have offered to bargain in good faith, whichever occurs sooner. How- ever, in no event shall this sum be less than the employ- ees would have earned for a 2-week period at the rate of 1 See also Live Oak Skilled Care & Manor, 300 NLRB 1040 (1990). The complaint and motion do not specify whether the Respondent implemented its decision to close its business or laid off the drivers’ unit employees. Thus, we do not know whether, or to what extent, the refusal to bargain about effects had an impact on the drivers’ unit em- ployees. In these circumstances, we shall permit the Respondent to contest the appropriateness of a Transmarine backpay remedy at the compliance stage. See, e.g., Fabricating Engineers, Inc., 341 NLRB 10, 11 fn. 1 (2004); Corbin, Ltd., 340 NLRB 1001,1002 fn. 2 (2003). ENTERPRISE CORRUGATED CONTAINER CORP. 217 their normal wages when last in the Respondent’s em- ploy. Backpay shall be based on earnings which the drivers’ unit employees would normally have received during the applicable period, less any net interim earn- ings, and shall be computed in accordance with F. W. Woolworth Co., 90 NLRB 289 (1950), with interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987). Finally, in view of the fact that the Respondent’s busi- ness has apparently closed, we shall order the Respon- dent to mail a copy of the attached notice to the Union and to the last known addresses of the drivers’ unit em- ployees who were employed by the Respondent when it closed or announced the closure of its business, in order to inform them of the outcome of this proceeding. ORDER The National Labor Relations Board orders that the Respondent, Enterprise Corrugated Container Corp., Saddle Brook, New Jersey, its officers, agents, succes- sors, and assigns, shall 1. Cease and desist from (a) Failing and refusing to furnish the International Brotherhood of Teamsters, Local 560 with information necessary for and relevant to the performance of its du- ties as the exclusive collective-bargaining representative of the employees in the following appropriate bargaining unit. The unit is: All full-time and regular part-time drivers employed by the Respondent at its Saddle Brook, New Jersey facil- ity. (b) Failing and refusing to bargain collectively and in good faith with the Union about the effects on the driv- ers’ unit employees of its decision to close its business. (c) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Furnish the Union with the information it has re- quested since about March 2005, and by letter of April 1, 2005, concerning the sale of the Respondent’s business. (b) On request, bargain with the Union concerning the effects on the drivers’ unit employees of the Respon- dent’s decision to close its business, and reduce to writ- ing and sign any agreement reached as a result of such bargaining. (c) Pay the drivers’ unit employees their normal wages for the period set forth in the remedy section of this deci- sion. (d) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place desig- nated by the Board or its agents, all payroll records, so- cial security payment records, timecards, personnel re- cords and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order. (e) Within 14 days after service by the Region, dupli- cate and mail, at its own expense and after being signed by the Respondent’s authorized representative, copies of the attached notice marked “Appendix”2 to the Union and to all drivers’ unit employees who were employed by the Respondent when it closed or announced the closure of its business. (f) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a re- sponsible official on a form provided by the Region at- testing to the steps that the Respondent has taken to comply. MEMBER SCHAUMBER, dissenting in part. An employer is required to provide a union with in- formation necessary and relevant to the union’s perform- ance of its duties as the exclusive collective-bargaining representative. Failure to provide such information when requested is a violation of Section 8(a)(5). In this case, the complaint alleges that the union requested informa- tion “concerning the sale of Respondent’s business.” However, not all information concerning the sale of a business is presumptively relevant. See Sierra Interna- tional Trucks, Inc., 319 NLRB 948, 950–951 (1995). If any portion of the information is not presumptively rele- vant, the Union must first demonstrate its relevance to the employer before a disclosure obligation is triggered. Allegations to this effect must be set forth in a complaint. “[A] default judgment is unassailable on the merits, only so far as it is supported by well-pleaded allegations assumed to be true.” Nishimatsu Construction Co. v. Houston National Bank, 515 F.2d 1200, 1206 (5th Cir. 1975), citing Thomson v. Wooster, 114 U.S. 104 (1885). Since in this case the complaint failed to allege facts suf- ficient to establish the presumptive relevance of the re- quested information or that its relevance was demon- strated by the Union to the Respondent, I find that the complaint is not well pled and is insufficient to support a default judgment on this allegation. 2 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading “Posted by Order of the Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 218 My colleagues in the majority find as sufficient the summary allegation of the complaint that the requested information was “necessary for, and relevant to, the Un- ion’s performance of its duties as the exclusive collective bargaining agent . . . .” They conclude that by not an- swering the complaint, the Respondent has admitted the relevance of the information. In my view, however, where the specific information identified in the com- plaint as having been requested by the Union is not all presumptively relevant, a summary allegation that it is “necessary for, and relevant to, the Union’s performance of its duties as the exclusive collective bargaining agent . . .” fails to satisfy due process standards. Again, infor- mation relating to the sale of a business is not necessarily presumptively relevant and for any information that is not presumptively relevant, a demonstration of its rele- vance must have been made. Consequently, consistent with the Supreme Court’s decision in Thomson v. Woos- ter, supra, I believe the complaint is not well pled and insufficient to support entry of a default judgment on this allegation. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we vio- lated Federal labor law and has ordered us to post and obey this notice. FEDERAL LAW GIVES YOU THE RIGHT TO Form, join, or assist a union Choose representatives to bargain with us on your behalf Act together with other employees for your bene- fit and protection Choose not to engage in any of these protected activities. WE WILL NOT fail and refuse to furnish the Interna- tional Brotherhood of Teamsters, Local 560, with infor- mation necessary for and relevant to the performance of its duties as the exclusive collective-bargaining represen- tative of the employees in the following appropriate bar- gaining unit. The unit is: All full-time and regular part-time drivers employed by us at our Saddle Brook, New Jersey facility. WE WILL NOT fail and refuse to bargain collectively and in good faith with the Union about the effects of our de- cision to close our business. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act. WE WILL furnish the Union with the information it has requested since about March 2005, and by letter of April 1, 2005, concerning the sale of our business. WE WILL, on request, bargain with the Union concern- ing the effects on the drivers’ unit employees of our deci- sion to close our business and reduce to writing and sign any agreement reached as a result of such bargaining. WE WILL pay limited backpay to drivers’ unit employ- ees in connection with our failure to bargain with the Union over the effects of our decision to close our busi- ness, with interest. ENTERPRISE CORRUGATED CONTAINER CORP.