Roselle Shoe Corp.

472 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Roselle Shoe Corporation, Harry A. Lebowitz, Charles Rosenthal and Balfi Shoe Company, Inc. and Textile Workers Union of America, AFL-CIO. Case No. 2-CA-7122. January 23, 1962 SUPPLEMENTAL DECISION AND ORDER On October 5; 1960, the Board (Chairman Leedom and Members Rodgers and Jenkins) issued its Decision and Order in the above- entitled case approving the stipulation in settlement of the case be- tween Roselle Shoe Corporation, Harry A. Lebowitz, Charles Rosen- thal, and Balfi Shoe Company, Inc., herein called the Respondents, and the General Counsel of the National Labor Relations Board, and denying as lacking in merit the objections to the stipulation and the request for a hearing filed by Textile Workers Union of America, AFL-CIO, herein called the Union. The stipulation provided for the entry of a consent order by the Board and a consent decree by an appropriate United States Court of Appeals. Thereafter, the case was considered by the United States Court of Appeals for the District of Columbia upon the Union's petition to review the Board's Order. On July 27, 1961, the court issued its de- cision 1 setting aside the Board's Order and remanding the case to the Board for "either (1) a reasonable opportunity for the Union to be heard on its objections or (2) a presentation on the record of the reasons for acceptance of the stipulation as the basis for the order not- withstanding the Union's objections. . . ." In conformity with the court's opinion, the Board has reconsidered the entire matter and has reexamined the entire record which was before it when it originally approved the settlement stipulation-a .record which included not only the materials in the joint appendix, stipulated by the parties to constitute the record before the court, but also the administrative information and advice furnished by the Board's General Counsel and Regional Director. Based upon this re- consideration and reexamination, particularly in the light of the well- established Board policy to encourage settlements which effectuate the purposes of the Act,' the Board has determined to reaffirm and readopt its approval of the stipulation and its finding of lack of merit in the Union's objections to the settlement and in the request for a hearing on the objections. And, in compliance with the second alternative of the court's decision, the Board hereinafter sets forth the salient facts, con- siderations, and reasons for accepting the stipulation as a basis for its Order despite the Union's objections. 1 Textile Workers Union of America, AFL-CIO v. N.L R.B. (Roselle Shoe Corp , et at.), 294 F. 2d 738 (CA D1C ). 2 See Wallace Corp. v. N.L.R .B., 323 U S. 248, 253-254. 1135 NLRB No. 57. ROSELLE SHOE CORPORATION, ETC. 473 Allegations of the Complaint and Answer (a) Following is the substance of the allegations of the complaint: Upon charges filed by the Union, the General Counsel, on April 29, 1960, issued a complaint alleging that the Respondents engaged in certain conduct violative of Section 8 (a) (1), (3), and (5) of the Act. In substance, the complaint alleged that the Respondents were a single, integrated business enterprise, operating shoe manufacturing plants at Port Jervis, New York, and Wilkes-Barre, Pennsylvania, and that the Union, as the exclusive bargaining representative of the production and maintenance employees at the Port Jervis plant, had been bargain- ing with Respondent Roselle since July 1959. On September 24, 1959, some employees went on strike in protest of Roselle's refusal to process a union grievance and the Respondent refused to reinstate them until they had agreed to abandon the griev- ance and not to present such grievances further. On October 6, 1959, the employees struck in support of the Union's bargaining demands. Thereafter, Roselle bargained individually with the employees and disseminated false and misleading information concerning the ob- stacles to a new agreement between Respondent Roselle and the Union. About October 30 1959, Respondent Balfi was organized to operate- the plant at Wilkes-Barre, Pennsylvania. During October and No-, vember 1959, the manufacturing operations performed at the Port Jervis plant were transferred to the newly organized Wilkes-Barre- plant and were performed by Balfi employees hired in Wilkes-Barre. Both the transfer of operations and the hiring of employees were done without prior notice to the Union and were concealed from it. In December 1959, the Port Jervis employees abandoned their strike and applied for reinstatement but Roselle rejected their application unless they abandoned their bargaining demands. The complaint further alleged that the Respondents violated the Act by the following conduct: (1) refusing to reinstate striking em- ployees and conditioning their reinstatement upon the abandonment of their grievances and bargaining demands; (2) trasferring opera- tions from Port Jervis to Wilkes-Barre and hiring employees for new operations without prior notice to the Union; (3) bargaining with the employees individually; (4) refusing to bargain with the Union about grievances; (5) disseminating false information among the employees concerning the obstacles to the negotiation of a new contract with the Union. (b) In their answer, the Respondents generally denied the allega- tions of the complaint, and in addition, as one of their affirmative defenses, alleged that the striking employees had engaged in conduct which removed them from the protection of the Act. 474 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The-.Settlement, Stipulation Thereafter, on July 13, 1960, the General Counsel, by the Regional Director, and the Respondents entered into a 'Stipulation, for the settlement of the complaint. Without admitting the commission of the alleged unfair labor practices, the Respondents consented to the entry of a Board Order and court decree and withdrew their answer. Besides providing for the Respondents to cease and desist from engaging in any of the unlawful conduct alleged in the complaint and affirmatively requiring them to bargain with the Union, if the Port Jervis plant were reopened, the stipulation also required the Respondents to take the following affirmative action of: (1) offering employees reinstatement to their former or substantially equivalent positions at the Port Jervis plant, if reopened, or at the Wilkes- Barre plant, dismissing, if necessary, all Wilkes-Barre plant em-' ployees and providing transportation for the families and household effects of those employees who accepted reemployment in accord with the stipulation; 3 (2) making whole the employees for the loss of pay by the payment to them of $12,000, with the Regional Director determining the proportion of the $12,000, to which each employee would be entitled; and (3) bargaining with the Union about the effect of the transfer of operations to Wilkes-Barre insofar as it did not interfere with the Respondents' statutory obligations to any labor organizations. The Objections Upon receipt of a copy of the settlement stipulation, the Union, by letter of July 20, 1960, advised that it intended filing objections to the- settlement and that it was requesting a hearing on its objections. The objections, dated July 25, 1960, and filed with the Board, the General Counsel, and the Regional Office, contended that the settle- ment stipulation was an inadequate remedy for the unfair labor prac- tice charges and asserted in substance that : (1) because the difficulties and hardships involved in uprooting employees and their families in a move to Wilkes-Barre 50 miles away made it certain that a majority of the employees would not accept the offer of jobs, the Respondents should be ordered to reopen the Port Jervis plant unless the Union and the Respondents agreed otherwise; (2) the $12,000 backpay was. inadequate because, if backpay were calculated to the date when Respondents offered employees reinstatement, it would amount to close to $80,000; and (3) the qualified bargaining order was invalid. 8 Employees were given 5 days after receipt of the offer of reinstatement within which to accept the offer and were given an additional 14 days after acceptance of the offer within which to report for duty. ROSELLE SHOE CORPORATION, ETC. Administrative Information and Advice 475 The Regional Director and General Counsel submitted the settle- ment stipulation to the Board with their recommendations that it be approved despite the Union's objections. To support their recom- mendations that the settlement warranted Board approval, there were submitted administrative reports of investigations and advice, upon which the Board relied in issuing its original Decision and Order of October 5, 1960, approving the stipulation. Prior to the submission of the settlement stipulation for Board approval, the Union has been made aware of the substance of the recommendations and the basic reasons therefor. Basic Considerations The determination of the appropriate remedy in unfair labor prac- tice cases is a matter of administrative judgment reached after the Board has balanced all factors and equities in the light of the policies of the Act. However, in settlement cases, unlike contested unfair labor cases where the Board has made findings of violations, addi- tional elements are considered by the Board 4 Already mentioned is the Board's policy of encouraging settlements to the ultimate benefit of the parties and the public. In the instant case, considering the ad- vice and recommendations it received from those independently re- sponsible for the prosecution of the case, the Board weighed the risks involved in protracted litigation, which, if lost, would result in no relief whatsoever to the employees or to the Union, or which, even if won, would result in relief perhaps fuller, but inadequate because of delay. In this connection, although the Union in its objections maintained that it was "sustained in its charges of unfair labor prac- tices by the Board," the stipulation specifically provided in paragraph 14 that the signing thereof by the Respondents did not constitute an admission that they had violated the Act. Also, the Board evaluated all the factors, legal and factual, elicited by the administrative inves- tigation, to determine whether, in view of the normal uncertainties of litigation, it was reasonable to anticipate that the violations alleged in the complaint could so clearly be established by a preponderance of the evidence that no adjustment, less than the fullest relief indicated, would be warranted. After thorough consideration, the Board concluded and still con- cludes that the Union's objections to the settlement stipulations should 4 In considering these additional elements in settlement cases,rtbe Board's discretion is admittedly broad Thus the Court in remanding the instant case sought, inter alia, in- formation which would enable It to determine "whether the Board's action was within the broad discretion we recognize the Board possesses." Textile Workers Union of America, AFL-CIO v. N.L.R.B. (Roselle Shoe Corp.), supra. 476 DECISIONS OF NATIONAL LABOR RELATIONS BOARD be overruled. These objections are primarily based upon : (1) the Board's failure to order the reopening of the Port Jervis plant; (2) the Board's approval of backpay in the amount of $12,000; and (3) the purported invalidity of the qualified bargaining order. (1) Plant reopening: At the time of its decision, the Board had been administratively advised by the Regional Office that, although the complaint is susceptible of the interpretation that the transfer of operations in October 1959 from Port Jervis to Wilkes-Barre was a "runaway shop" violative of Section 8(a) (3) of the Act, the results of the Regional Director's investigation were such that he had not contemplated actually urging that the transfer was discriminatorily motivated and effected discharges in violation of that section. In fact, his investigation revealed that, until February 2, 1960, the Re- spondents had negotiated with the Union concerning conditions for reopening the Port Jervis plant and until that date did not consider the move to Wilkes-Barre as precluding such reopening. Accordingly, because the parties had failed by that date to reach an agreement on the terms of reopening the Port Jervis plant and because it had become economically unfeasible to do so, the Respondents decided to abandon the Port Jervis operations permanently and to treat the Wilkes-Barre plant as its sole operation.' As far as the Regional Director could determine, this decision of February 2, 1960, seemed motivated only by economic considerations. In this posture of the case, * he concluded, it would have been difficult to establish by a pre- ponderance of the evidence the illegal motivation necessary for a find- ing of a violation of Section 8(a) (3) of the Act on that ground. In these circumstances, an order to reopen the plant did not and does not seem appropriate. (2) Backpay: The Union contended that backpay in the sum of close to $80,000 is due from December 28, 1959, when the striking em- ployees unconditionally requested reemployment, to the date the Re- spondents offered reinstatement (shortly after October 5, 1960, when the Board issued its Decision and Order directing Respondents to offer reinstatement). However, assuming but not conceding the ac- curacy of that computation, this would be the maximum backpay claim, if, after a litigated proceeding, the October 1959 transfer of operations to Wilkes-Barre and the February 2, 1960, decision to shut down permanently the Port Jervis plant were determined to have been discriminatorily motivated. Although, as indicated above, the 5 The Regional Office administratively reported that the Respondents were having finan- cial difficulties when they moved to Wilkes-Barre, where operating costs were cheaper than in Port Jervis ; and that the Port Jervis banks refused to grant the loans necessary to reopen the plant in the absence of an agreement between the Respondents and Union as to the terms of reopening-an agreement which could not be reached. ROSELLE SHOE CORPORATION, ETC. 477 Regional Director had not contemplated urging that the October 1959 transfer was discriminatorily motivated, the complaint was sus- ceptible of that interpretation and there existed the possibility, of finding violations arising out of the October 1959 transfer of. opera- tions and the failure to give notice thereof to the Union. But of greater significance to the proceeding herein was the conclusion of the Regional Director, based upon his investigation, that the Febru- ary 2,1960, decision to shut down Port Jervis appeared to be econom= ically motivated. The investigation revealed evidence that, after October 1959,, the Respondents continued to bargian with the Union concerning the reopening of the Port Jervis plant and it was not until February 2, 1960, when the failure to reach agreement made unavail- able the bank loans essential for reopening, that the Respondents de- cided that reopening was no longer economically feasible. It did not appear to the Regional Director that such bargaining was other than in good faith and that the Respondents' February 2, 1960, decision finally to abandon Port Jervis was other than economically moti- vated.6 Accordingly, based on his reports, the Board agreed with the Regional Director that it would be unnecessary and inappropriate to permit backpay to accrue beyond February 2, 1960, to dissipate the effects of the unfair labor practices that might possibly be found.' Under these circumstances, backpay in the sum of $12,000 was in- cluded in the, settlement stipulation. In the opinion of the Regional Director, the General Counsel, and the Board, this amount was ade- quate herein because backpay was justified and appropriate up to, but not beyond, February 2, 1960, when the Port Jervis operations were in fact finally terminated. According to the Regional Director's calculations, based upon a study of the Respondents' records, only a gross maximum of $20,000 in backpay would be due in the displaced striking employees for the period from December 28, 1959, when they unconditionally requested reinstatement, to February 2, 1960, the date of the Respondents' actual decision to close down Port Jervis per- manently. From this gross amount must be deducted the interim earnings of these employees who, as the Union admitted in part II of its objections, worked during this period. As a final factor bearing on the entire backpay issue was the report from the Regional Director that, at the time of settlement, the Respondents' financial condition 6 The bargaining about reopening and the February 2, 1960 , decision were not alleged to have been violative of the Act even though the complaint issued on April 29, 1960, nearly 3 months thereafter. In fact, according to the Regional Director , there was some color validity to the R.^spondents' claim that they had resolved for economic reasons to shut down their plant prior to the employees ' offer to return to work on December 28, 1959 On this basis, they might not have been liable for backpay in any amount after litigation 7 See Consumers Gasoline Stations, 126 NLRB 1041 , 1043, where the Board ordered backpay only to the date the discriminatee would have been otherwise terminated for nondiscriminatory reasons. 478 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was such that, if pressed too hard, they might be forced out of business with the result that, as a practical matter, the collection of any back- pay for the affected employees would be a difficult and speculative matter. Under all these circumstances, most of which were made known to the Union by the Regional Office, the Board was, and still is, of the opinion that the financial responsibility for backpay imposed upon the Respondents-a responsibility which, the Board has been administra- tively advised, has been met by the Respondents' deposit with the Re- gional Office of $12,000-is appropriate and sufficiently adequate to effectuate the policies of the Act in this proceeding. (3) Qualified bargaining provisions: The Union also objected to the provision in the Board Order limiting the Respondents' bargain- ing responsibilities, as far as the Union was concerned, to preclude interference with any statutory obligations that the Respondents might have toward any other labor organization. However, the Respondents' Wilkes-Barre employees had been represented by another Labor or- ganization, which had been certified as such representative after the Regional Director for the Fourth Region had dismissed charges of illegal assistance filed by the Union. This limiting provision was inserted only to protect the Board certification and- the representation rights of the other certified organization from possible encroachment or infringement by the Union. In the opinion of the Board, such a provision was, and still is, necessary for the proper administration of the Act. From .the above, it is clear that, under the circumstances herein, the reopening type remedy sought by the Union was inappropriate, its backpay, claim was excessive, and its claim for unlimited bargaining rights at Wilkes-Barre was improper. For the reasons and considera- tions hereinabove set forth, which are predicated on the record, includ- ing the administrative reports and recommendations of the Regional Director and General Counsel, who under the Act, are independently charged with the responsibility for initiating and prosecuting unfair labor practice cases, the Board concluded then, and again concludes, that the -approval of the settlement stipulation-was appropriate and proper, and that the Union's objections are lacking in merit and do not serve as an impediment to approval of the settlement stipulation and the entry of the Board Order based upon that stipulation. Accordingly, the Board affirms in all respects its original Decision and Order, issued October 5, 1960, and hereby adopts it in full for the purposes of this proceeding. MEMBER BROWN took no part in the consideration of the above Sup- plemental Decision and Order.