United Dairy Co.

UNITED DAIRY CO. 187 Employees may communicate directly with the Board's Regional Office, 528 Peach- tree-Seventh Building, 50 Seventh Street , NE., Atlanta, Georgia, Telephone No. 876-3311, Extension 5357, if they have any question concerning this notice or com- pliance with its provisions. United Dairy Co. and Retail, Wholesale and Department Store Union, Dairy, Bakery and Food Workers Local 379, AFL-CIO. Case No. 6-CA-92551. February 27, 1964 DECISION AND ORDER On May 31, 1963, Trial Examiner George J. Bott issued his Inter- mediate Report in the above-entitled proceeding, finding that the Respondent had engaged in certain unfair labor practices and recom- mending that it cease and desist therefrom and take certain affirma- tive action, as set forth in the attached Trial Examiner's Report. Thereafter, the Charging Party, the General Counsel, and the Re- spondent filed exceptions to the Intermediate Report and supporting briefs. 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 [Members Leedom, Fanning, and Jenkins]. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions and briefs, and the entire record in the case, and for the reasons set forth below-concerning the pro- cedural handling of the case before hearing-has determined to dis- miss the complaint in its entirety. On July 2, 1962, the Union filed its charge alleging 8 (a) (1), (3), and (5) violations, the latter including an allegation that the Re- spondent had refused to bargain by failure to discuss with the Charg- ing Party the decision to sell two of its plants. After consideration, the General Counsel authorized the Regional Director to issue a com- plaint which alleged 8 (a) (1) and (5) violations, limited, however, to failure to bargain as to the effect on employees of the decision to sell. The limitation on the scope of the complaint, more particularly the "refusal to issue" a complaint on that part of the charge relating to the failure to bargain about the decision to sell, was the subject of a timely appeal by the Charging Party to the General Counsel. Thereafter the Respondent executed a settlement agreement, appar- ently after being told by the Board agent that the Regional Director would not issue a complaint on other portions of the charge once the settlement had been approved. The agreement itself, with appro- priate review provision, provided for withdrawal of the existing 146 NLRB No. 16. 188 DECISIONS OF NATIONAL LABOR RELATIONS BOARD complaint and for "refusal to issue new complaint" in the discretion of the Regional Director should the Charging Party fail to become a party to the settlement. The settlement was approved by the Regional Director on Decem- ber 17, the complaint was withdrawn, and the Charging Party- which did not become a party to the settlement-was advised that it might appeal from this action on or before December 31. The Charg- ing Party did not appeal. In the meantime, on December 29, it met with the Respondent pursuant to the settlement agreement. At the meeting, information concerning the terms of the June 20 sale and the employees affected, which had been requested by the Charging Party in July, was supplied by the Respondent. In addition, the Respond- ent at that meeting agreed to bargain with the Charging Party con- cerning the effects of the sale at a future time to be selected by the latter. Thereafter, the Respondent reported these compliance steps to the Regional Director. In a crossing letter the Regional Director advised the Respondent to proceed with compliance inasmuch as the Charging Party had not appealed from the "refusal to issue complaint." Several weeks later, on January 25, 1963, the General Counsel- in a letter to the parties in which he stated correctly that the Charging Party had appealed from the refusal to issue complaint on all theories suggested, but stated erroneously that the Charging Party had also appealed from approval of the settlement agreement to which it had not become a party-authorized withdrawal of the settlement. The General Counsel authorized the issuance of a new complaint that would combine in the 8(a) (5) allegation the Respondent's failure to consult with the Charging Party on its decision to sell as well as on the effects of the sale. Admittedly the General Counsel's action in authorizing withdrawal of the complaint and issuance of a new complaint-iden- tical except for one paragraph-was not the result of a failure of the Respondent to comply with the settlement. The General Counsel ap- parently assumed that the Charging Party had taken the necessary step of appealing in order to protest the settlement, and, finding merit at this point in the Charging Party's position relating to the scope of the complaint, determined that the entire problem should be litigated as a whole. The Trial Examiner saw no prejudice to the Respondent in the `lack of precision and certainty" which, he observed, characterized the Gen- eral Counsel's handling of the case, and therefore reached the merits of the proceeding. He also found that an appeal by the Charging Party from the settlement agreement would have been "needless dupli- cation" in the circumstances. We do not agree. This is not a case such as Tompkins Motor Lines, Inc.,' where the parties themselves, 1 142 NLRB 1. UNITED DAIRY CO. 189 in settling part of their controversy, clearly exempted from the settle- ment a specific issue and reserved it for future determination. Here the Respondent had been assured by the Board agent that the settlement, if approved by the Regional Director, would dispose of the entire matter. This was consistent with the discretion given the Regional Director in the agreement. The agreement also provided that, in the event the Charging Party was not a party, the Respondent's performance under the agreement would commence immediately upon advice that no re- view had been requested. Nevertheless, the Charging Party was agree- able to the Respondent's initiating compliance several days before the expiration of the time within which it could request review. Thereby the Charging Party implied-not that it was reserving any issue for future determination-but that it was looking to compliance with the settlement to remedy its controversy with the Respondent. In addi- tion, it did not thereafter appeal the settlement. In these circum- stances the Board's general rule is clearly applicable-not to go behind a settlement agreement unless the Respondent has failed to comply with it or has since engaged in independent unfair labor practices 2 We do not see this as a case where further action on our part-over and above the settlement agreed to by the Respondent and acquiesced in by the Charging Party-will significantly further the purposes of the Act. Accordingly, as the record shows compliance by the Respondent with the settlement, including its agreement to meet with the Charging Party and to bargain concerning the effect of the sale on the employees, and as no independent unfair labor practices by the Respondent have since been alleged, we shall reinstate the settlement agreement approved December 17, 1962, and dismiss the complaint herein 3 [The Board reinstated the settlement agreement approved Decem- ber 17, 1962, and dismissed the complaint.] 2 Larrance Tank Corporation, 94 NLRB 352. 2In reaching this conclusion , Member Leedom also relies on his stated position (see Town d Country Manufacturing Company, Inc ., and Town d Country Sales Company, Inc., 136 NLRB 1022, 1028, footnote 10) that a refusal to bargain concerning an economically motivated decision of this nature does not in any event violate the Act. The settlement agreement, accordingly, adequately remedies the only violation which he would find herein. INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE" Upon a charge of unfair labor practices duly filed on July 2, 1962, against United Dairy Co., herein called the Company or Respondent, the General Counsel of the National Labor Relations Board issued a complaint and notice of hearing dated February 19, 1963, alleging that Respondent had violated Section 8 (a) (1) and (5) of the Act. An answer admitting certain allegations of the complaint but denying the commission of any unfair labor practices was filed by Respondent. In its answer, Respondent raised certain affirmative defenses based on the issuance of an earlier complaint by General Counsel and the settlement thereof.' A hearing at which 'The procedural and substantive questions relating to the settlement of the earlier com- plaint are discussed in section III, D, infra. 190 DECISIONS OF NATIONAL LABOR RELATIONS BOARD all parties were represented was held before Trial Examiner George J. Bott in Wheeling, West Virginia, on April 1 and 2, 1963. Subsequent to the hearing, the parties filed briefs which I have considered. ' Upon the entire record in the case and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. RESPONDENT'S BUSINESS Respondent is an Ohio corporation with its - principal office in Barnesville, Ohio, and has plants and offices in Ohio and West Virginia. During the year just prior to the issuance of the complaint , the Respondent received goods directly from outside the State of West Virginia for use at its West Virginia plants valued at in excess of $50,000 and, during the same period , shipped goods and materials from its West Virginia plants to points outside the State of West Virginia valued at in excess of $50,000. Respondent concedes and I find, that it is an employer -engaged in commerce within the meaning of Section 2(6) of the Act. II. THE LABOR ORGANIZATION INVOLVED Retail, Wholesale and Department Store Union , Dairy, Bakery and Food Workers Local 379, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. The sale of the Wheeling and Wellsburg plants - Until June 20, 1962 , Respondent owned and operated three dairy 'plants located in Wheeling, Wellsburg, and New Martinsville,' West Virginia. The Union has represented the production and maintenance employees and route salesmen at these three plants in a single unit since 1958 and there is no dispute about its appropriate- ness for bargaining purposes. The most recent contract between the parties cover- ing these plants ran from January 1, 1961 , to December 31, 1962. On June 20, 1962, Respondent sold its Wheeling and Wellsburg plants to Ohio Valley Dairy Products, Inc., and Ohio Valley Dairy Company. The former changed its name to United Ohio Valley Dairy, Inc., and presently operates the business sold by Respondent. On June 20, 1962, by a letter dated June 18, 1962, Respondent advised the Union that it had sold its Wheeling and Wellsburg-plants and, on June 20, notified all the employees of these two plants of their termination. Respondent also has plants in Barnesville , Waterford, and Lodi, Ohio. The plants at Barnesville and Lodi, Ohio, manufacture evaporated and powdered milk. The Waterford plant mainly manufactures evaporated milk, but there is also a small fluid processing plant in connection with the operation. The Company also has a receiving depot in Athens, Ohio, where milk from farms is delivered, cooled, and trucked to the Waterford plant. The New Martinsville plant is a distribution plant where bottled milk and dairy products are brought from the Waterford fluid milk plant and distributed to consumers. Prior to its sale, the Wheeling plant was engaged solely in fluid milk operation. Wheeling distributed most of its product to customers but part was trucked to Wells- burg where the Company maintained a distribution plant. Prior to the sale of' the Wellsburg plant, it delivered the product sent it by Wheeling to customers in its area. There is little similarity between the operations of fluid milk plants and evaporated and powdered milk plants. Employees of the Barnesville, Waterford, Athens, and New Martinsville plants are represented by the Union. Employees at Lodi are unrepresented. New collective-bargaining contracts have recently been negotiated for the represented plants. Although General Counsel stipulated that Respondent was not discriminatorily motivated in the sale of its Wheeling and. Wellsburg plants; a considerable amount of evidence was introduced concerning the, economic factors involved in Respond- ent's decision to sell. The record shows that rising costs of operation were a contributing factor in the Wheeling and Wellsburg plants becoming unprofitable over the years. While the dollar volume of sales remained about the same, profits from operations declined. From a profit, before taxes of $63,000 in 1957, it dropped steadily to a loss of UNITED DAIRY CO. 191 $6,170 in the first 3 months of 1962. In the negotiations for the 1961 contract the Union was told that the Company could not stay in business unless the trend was reversed. Respondent's Wheeling plant was an old, inefficient, three-storied building in a crowded section of the city. Respondent tried to locate a site for a modern single- story plant but no satisfactory sites were found. Estimates of the cost of building such a plant ran as high as $750,000, and Respondent decided that the condition of the business and the economic conditions of the area served did not justify the investment of that much capital. It also appears that the department of health of the State of West Virginia, and the health department of the city of Wheeling and Ohio County, inspected and rated Respondent's Wheeling plant in November 1959. A number of violations were found and Respondent was ordered to correct them. The plant was given a rating of 90 which is the lowest that a dairy can receive and still sell grade A milk. In addition, if violations are'not corrected the plant is degraded to "C" grade which means the loss of "Grade A" on its labels, and is tantamount to putting the plant out of business. The Union was told that Respondent's milk would be "degraded" if improvements were not made in the Wheeling plant. The low rating of the plant and its general inefficiency caused the Company to consider extensive remodeling. Estimates were obtained running about $300,000. This also was communicated to the Union. The Company found that the expendi- tures of so much money would not result in substantial efficiencies and because of the other economic factors described continued to consider other solutions for its problem. While the general plant problems were under consideration, Respondent was approached by Ohio Valley Dairy with an offer that Respondent buy Ohio Valley. After negotiations beginning in April 1960, Respondent turned down Ohio Valley Dairy's proposal in October 1961. Sometime in November 1961, Respondent was approached by Town & Country Dairy Company of Wheeling and a merger of Respondent's Wheeling and Wellsburg operations with Town & Country was discussed. The merger plan which developed was rejected by Town & Country stockholders. Respondent resumed negotiations with Ohio Valley Dairy Company again in early April 1962 when Ohio Valley made an offer to buy the Wheeling and Wells- burg plants. On May 24, 1962, Respondent submitted a written offer signed by officers of Respondent to Ohio Valley Dairy to sell its Wheeling and Wellsburg plants. The May 24 proposal was approved by shareholders of Ohio Valley Dairy on May 27, and on May 28, an officer of Ohio Valley Dairy notified Respondent that its offer had been accepted. On June 1 the proposal was signed by representatives of Ohio Valley Dairy. On June 4, 1962, Respondent and Ohio Valley Dairy representatives discussed the absorption of Respondent's employees. Respondent suggested that the em- ployees be dovetailed into Ohio Valley's seniority list but Ohio Valley was unable to agree because of a labor agreement with another union . On June 19, 1962, Respondent signed the required deeds and bills of sale and delivered them to Ohio Valley Dairy. On June 20, all employees of Respondent were terminated, but all but 5 of the 50 in the unit were hired by Ohio Valley Dairy. The machinery at the Wheeling plant has been dismantled and disposed of. Ohio Valley Dairy has com- pletely absorbed the operations formerly performed by Respondent at Wheeling and Wellsburg, and it was agreed at the hearing that Respondent has not transferred operations to other plants. It was also agreed that there is no theory of successor- ship in this case and that the sale to Ohio Valley was at arm's length. The exact date that the Respondent informed the Union of the sale of the two plants is in dispute. Respondent's attorney, Jones, testified that he told Union Representative Kee about it in a telephone call which Kee made to him on June 15 or 16. Kee testified that he did call Jones about rumors of a sale but that Jones merely told him that he had dictated a letter which Kee would receive shortly. A resolution of this small disagreement is unimportant. It is clear that the Union got no formal or informal advice from Respondent about the resumed Ohio Valley Dairy negotiations until after the sale was completed. I so find. General Counsel contends that a decision to sell, even for economic reasons, is a mandatory subject of collective bargaining and that Respondent failed in its obligation by not affording the Union an opportunity to bargain about its decision to sell. On this phase of the case, Respondent argues, in substance, that there is 744-670-65-vol. 146-14 0 192 DECISIONS OF NATIONAL LABOR RELATIONS BOARD no existing legal obligation to bargain with a union about a decision to sell a plant; that the Union never made a demand to bargain, although it knew that Respondent had some plans about the disposal of the Wheeling and Wellsburg plants; and that, even if there is some obligation to bargain about a sale in general , there was none in the economic circumstances of this case. B. The question of waiver With respect to the Union's knowledge of Respondent's activities, or its failure to request a bargaining conference, I find nothing in its conduct which would amount to an estoppel or waiver-which is essentially what Respondent contends here-if the obligation to bargain about a sale exists. In the first place, Respondent resumed negotiations with Ohio Valley Dairy on April 5, 1962, and it was after that time that the question of the sale of Respond- ent's plants rather than a purchase or merger with another company arose. Prior to that time the Union had been advised of possible mergers, purchases, or exten- sive remodeling. It was not advised of Respondent's resumption of negotiations with Ohio Valley Dairy, or of a contemplated sale, until after the sale had been consummated. Whatever information the Union may have had about earlier plans of Respondent could not excuse Respondent's failure to advise the Union of a radi- cally different objective, namely, a sale rather than an expansion or merger of its West Virginia operations. In the second place, the conversations between the union representatives and Attorney Jones concerning the Respondent's earlier plans would support no finding that the Union had no interest in bargaining about Respondent's final action in selling. When Respondent began discussing the possibility of merger with Ohio Valley Dairy in 1960, it did not advise the Union, but the Union learned of it from other sources. When Union Representative Kee asked Respondent if nego- tiations were going on, he was told that the companies were just talking and there was nothing to tell him. Similarly, in regard to the Town & Country negotiations, the Union evidenced an interest in what was going on as it would affect their mem- bers, having again learned of the matter indirectly, but was again told by Jones that there were no definite plans to merge . It was agreed that the Union would be kept informed with respect to the merger plans . In my view, the facts indicate that the Union was vitally interested in the Respondent 's plans and indicated such to Respondent. This is not consistent with waiver. Finally, Respondent, while admitting that it supplied the Union with no informa- tion about the sale negotiations until about June 16, contends that the Union was aware of the proposed sale from other sources and did nothing about it. Kee testi- fied, however, that the first time he heard from any source that negotiations had been resumed was 2 or 3 days before the sale. There is nothing in the record of any probative value to contradict this testimony and I credit it. Kee's testimony is also consistent with Attorney Jones' testimony that he did not advise Kee of the sale because since it involved a management prerogative , in his opinion, there was, there- fore, no obligation to bargain about it, and that, in addition, the Company was trying to keep the ". . . thing from becoming public property . . Although I find no waiver or estoppel in the circumstances and nothing in the Union's failure to request bargaining that would excuse the Respondent's failure to give the Union reasonable notice of the change and a chance to bargain about it,2 the existence of any legal obligation to bargain about a decision to sell a part of a business-as distinquished from the duty to bargain about the impact of the sale on the employees-is not clear from the decided cases. C. The failure to bargain about the sale of the plants Early decisions of the Board and courts give some indication that an employer need not bargain about a decision to go out of business or move his plants for economic reasons, and even the view that a decision to subcontract operations is bargainable has not at all times been the Board's position and today does not have 2 NL.RB. v. Highland Park Manufacturing Company, 110 F. 2d 632 (C.A. 4) ; The Item Company, 220 F. 2d 956 (C.A. 5), cert . denied 350 U.S. 836; N.L.R.B v. Brown- Dunkin Company, Inc. 287 F. 2d 17, 20 (C A. 10) ; see N.L.R B. v Rapid Bindery, Inc. 5 Frontier Bindery Corp , 293 F. 2d 170, 176 (IC.A. 2), where the court said, "Moreover, we are of the opinion that conjecture or rumor is not an adequate substitute for an em- ployer's formal notice to a union of a vital change in working conditions that had been decided upon ." See also Adams Dairy, Inc, 137 NLRB 615. 0 UNITED DAIRY CO. 193 unanimous support within the Board.3 Although the instant case, as is conceded, involves the outright sale and termination of a considerable portion of Respondent's business and not subcontracting, General Counsel contends that the case is con- trolled by the Board's reasoning in Town & Country. Respondent argues that Town & Country and other cases cited by General Counsel were based upon the discriminatory motivation of the employer in subcontracting an operation, and no Board or court case exists in which an employer was found in violation of the Act for failure to bargain with the Union about his decision where his decision was prompted solely by economic considerations. This is not the fact. While it is true that in Town & Country there were two grounds for the Board's decision, one the discriminatory motivation in subcontracting, and the other the failure to bargain with the Union about whether to subcontract the work at all even if the decision was lawfully motivated, in Fibreboard Paper Products Corporation 4 and Adams Dairy, Inc.,5 the only ground for decision was that Respondents violated Section 8(a) (5) of the Act by their unilateral actions in terminating certain opera- tions without consulting the Union.6 It would appear, therefore, that unless a sale is treated differently than a subcontract, Respondent's motivation is immaterial, and it violated the Act, by not giving the Union a reasonable opportunity to bargain about the Company's decision to sell its plants. General Counsel urges that the Board's recent decision in Weingarten Food Center of Tenn., Inc? suggests that had the issue of a sale been properly presented, a majority of the Board panel would have found the Town & Country principle applicable to an employer's decision to sell a portion of its business. In that case, the employer sold five of its six retail stores without bargaining with the union about its decision to sell. Board Member Rodgers agreed with the Trial Examiner's dismissal of the case for the reasons stated in his dissent in Town & Country Manufacturing Company. Member Fanning, while agreeing with dissenting Mem- ber Brown that an employer must bargain about a decision to discontinue opera- tions, was for dismissal on the ground that the issue was not properly before the Board. Member Brown dissented and would have found a violation on the basis of Town & Country. Member Brown's dissent, however, emphasized that Re- spondent's ". . . entire course of conduct was lacking in good faith . . ." as well as lacking a ". . . timely invitation to the Union to consult about the sale's effect upon employees." If Weingarten is a guiding beacon as General Counsel suggests, its light is dim and wavering. In addition, obvious practical differences exist in sales as contrasted with subcontracting. In a sale the seller normally divests himself of all control of the enterprise, as was the case here, but in subcontracting, the principal business may go on with economic control retained over the very existence of the subcon- tractor. The finality and permanence of one as compared to the executory and potentially temporary nature of the other is perhaps a reason for difference in treatment. The difficulty in framing a realistic remedy when an enterprise has been extinguished or changed hands and the rights of innocent purchasers vested, is another consideration that cannot be ignored. Other considerations will quickly come to mind to those more versed in the needs and habits of the business com- munity, such as, for example, the effect of premature publicity on dissident stock- holders, on the market, and on competitors as well as the purchaser. Neverthe- less, on balance, I think that since sales, or mergers, or other dispositions of facilities in our rapidly changing economy have such an obvious, direct, and often devastating impact on the jobs of employees they fall within the principle relied upon by the Board in subcontracting cases. In Town & Country the Board rea- 8 Gustave S. Krantz, d/b/a Krantz Wire & Mfg. Co., et al., 97 NLRB 971, 988, enfd. sub nom. N.L.R.B. v. Albert Armato and Wire & Sheet Metal Specialty Co., 199 F.-2d 800 (C.A. 7) ; Walter Holm & Company, 87 NLRB 1169; Mahoning Mining Company, 61 NLRB 792, 803 ; N.L R.B. v. Rapid Bindery, Inc., 293 F. 2d 170, 176 (C.A. 2) ; Brown Truck and Trailer Manufacturing Company, Inc., Newel Manufacturing Company, Inc., and Joseph L. Brown, 106 NLRB 999. The Timken Roller Bearing Company, 70 NLRB 500; Fibreboard Paper Products Corporation, 130 NLRB 1558; Town & Country Manufacturing Company, Inc, and Town & Country Sales Company, Inc., 136 NLRB 1022, enfd. 316 F. 2d 846 (C.A. 5) ; Adams Dairy, Inc., 137 NLRB 815; Fibreboard Paper Products Corporation, 138 NLRB 550. 4138 NLRB 550. 6137 NLRB 815. 6 See also N.L R.B. v. Brown-Dunkin Company, 287 F. 2d 17 (C.A. 10). Jays Foods, Inc. v. N.LR.B., 292 F. 2d 317 (C.A. 7). 7140 NLRB 256. 194 DECISIONS OF NATIONAL LABOR RELATIONS BOARD soned that ". .• the elimination of unit jobs, albeit for economic reasons, is a matter within the statutory phrase `other terms and conditions of employment' and is a mandatory subject of collective bargaining within the meaning of Section 8(a)(5) of the Act." I find that Respondent's decision to dispose of its Wheeling and Wells- burg operations by sale was also a mandatory subject of collective bargaining.8 Respondent also contends that the facts with respect to Respondent 's efforts to find a solution for its economic problems involving its Wheeling and Wellsburg operations and its reasonable solution , which it contends saved the jobs of all but 5 of the 50 employees in the bargaining unit , made prior negotiations with the Union about its decision unnecessary as a matter of law and reality. In its view, nothing could have been accomplished by such negotiation but a waste of time and effort which was better utilized in solving the problems of Respondent and its employees. However sympathetic one may be toward Respondent in its difficulties, the impact of the solution on employees was of sufficient magnitude that their rep- resentatives should have been , given some opportunity to be heard before the decision was made final . None was given here. It may be that in these difficult cases, involving some restriction on an employer 's freedom to act without prior restraint, the nature of the problem and' the situation existing after the sale will be factors considered by the Board in developing remedies empirically. I find that the circumstances in this case afford Respondent no complete defense for its failure to give the Union reasonable notice of its decision to sell and terminate its employees before it took that action and that by such failure Respondent violated Section 8 (a) (5) of the Act. D. The settlement agreement On July 2, 1962, the Union filed a charge of unfair labor practices against Re- spondent under Section 8(a)(1), (3 ), and (5) of the Act. The charge complained of discrimination against the employees at Wellsburg and Wheeling , and asserted a general refusal to bargain, as well as refusal to bargain about the decision to ter- minate a phase of Respondent 's business. On July 17, 1962, the Union requested Respondent to meet with it to discuss the effects of the sale on the employees in the bargaining unit. The Union also asked Respondent to supply it with certain information which it considered necessary to the proper administration of its collective-bargaining contract. The information requested was the sales agreement, a seniority list, names of employees terminated, and information about vacation and other benefits. The Respondent refused to meet with the Union and refused to supply the requested information. On November 21, 1962 , the Board's Regional Director notified the Union that he was refusing to issue a complaint involving discrimination under Section 8 (a) (3) of the Act, or under Section 8 (a)(5) based on the Company's failure to bargain on its decision to, sell its plants. The charge was retained, however, to support the Complaint issued against the Employer alleging violations of 8 (a) (1) and (5) of the Act." It appears that a complaint issued on November 13, 1962, in which it was alleged that Respondent had refused to bargain about the effects of the sale and refused to supply the Union with certain informtion requested by it. Sometime prior to December 5, 1962 , the Union took an appeal to the General Counsel of the Board from the Regional Director 's refusal to issue a complaint with respect to certain portions of the Union 's charge and the appeal was acknowledged by the General Counsel on December 5, 1962. Copies of the acknowledgment went to Respondent and its attorney. The Regional Director of the Board and the Respondent entered into a settle- ment agreement on December 17, 1962, of the issues raised by the November 13, 1962, complaint. In the agreement Respondent undertook to supply the Union with the requested information, agreed to bargain about the effects of the sale of the employees, and to send certain notices to that effect to the employees . The Union was not a party to the settlement agreement , and on December 17, 1962, the Regional Director advised the Union that the complaint was being withdrawn on the basis of the settlement. The Regional Director's letter to the Union further advised the Union that it could obtain review of his action by filing a request for such with the General Counsel of the Board in Washington within a certain time . No request for review of the Regional Director's action in approving the settlement agreement was filed by the Union . As noted, however, the Union had taken an earlier appeal from the Director's refusal to issue a complaint on all of its allegations in its charge. 8 Town & Country Manufacturing Company, 136 NLRB 1022, 1027 ; see also The Order of Railroad Telegraphers, et al. v. Chicago and North Western Railway Co., a Corporation, 362 U.S. 330. UNITED DAIRY CO. 195 The Regional Director of the Board, on January 8, 1963, wrote Respondent and informed it that no request for review had been filed by the Union from his refusal to issue complaint and that the Company should proceed to carry out the settlement agreement. The Company immediately took steps to do so, and, by January 11, 1963, it had signed letters to employees for mailing by the Board and by the time of the hearing herein had supplied the Union with the required information. However, while Respondent was complying with the terms of the settlement agree- ment, the Office of the General Counsel of the Board wrote the attorney for the Union to tell him his ". . . appeal from the Regional Director's approval of the settlement agreement and refusal to issue complaint . . . (had) been fully con- sidered." The letter stated that the General Counsel sustained the Director's refusal to issue complaint on the allegations of discrimination under, Section 8(a)(3) but that the appeal was sustained with respect to Respondent's failure to consult with the Union about its decision to sell the plants in question. The Union's attorney was notified that the case was being remanded to the Regional Director with instruc- tions to withdraw his approval of the settlement agreement and issue an 8(a) (1) and (5) complaint. Copies of this letter went to Respondent and its attorney. On February 19, 1963, the Regional Director notified the parties that his approval of the settlement agreement was withdrawn, and, on the same day, issued the instant complaint, which contained allegations regarding Respondent's failure to bargain about its decision to sell, as well as its refusal to supply information to the Union and bargain about the effects of the sale. On the basis of the above history of the proceedings in this case, Respondent argues that all matters involving the alleged refusal to meet about the effects of the sale on the employees, and.the refusal to supply the Union with information, were finally settled and are res judicata. In support of its position it relies heavily on the fact that no appeal was taken by the- Union from the Regional Director's approval of the settlement agreement and on the fact that it has complied with the agreement. Although, in my opinion, the outlined procedure in the case lacked precision and certainty, I see no prejudice to Respondent. In the first place, Re- spondent was aware that the Union had taken an appeal from the Regional Director's action of November 21, 1962, in which he notified the Union that he was not pro- ceeding under Section 8(a)(5) based on the Company's failure to bargain about its decision to sell. Attorney Jones concedes that he was aware of the appeal when he settled the earlier complaint, and, as indicated earlier, General Counsel notified all parties of his receipt of the appeal. In addition, the appeal was timely, contrary to Respondent's present contention, for it. was received in Washington prior to December 5, 1962, which complied with the Regional Director's advice in his letter of dismissal, and with the Rules and Regulations of the Board.9 Moreover, if Respondent thought the appeal should not have been processed because untimely, the time to raise it was when it was notified of the acceptance of the appeal. In addition, although no -technical appeal was taken from the settlement agreement in reality there was one already on file, for the settlement agreement itself provides that review is obtained under Section 102.19 of the the Rules and Regulations, which is the same section the Regional Director was operating under when he refused to proceed in toto originally, and with which the Union complied when it took its appeal. Despite the Regional Director's confusing advice to the Respondent that no appeal had been taken from the settlement agreement, in actuality an appeal would have been needless duplication. .Finally, since General Counsel is not asking that Respondent supply the Union with any information it has previously given it, and because Respondent has not actually met and bargained with ,the Union about the impact of the sale on the employees, although it has in good faith agreed to do so, I see no abuse in trying together issues which are so closely related. E. Refusal to bargain about the effects of the sale on employees and to supply information On the merits, I also find that Respondent, in violation of Section 8(a)(1) and (5) of the Act, refused to meet with the Union at the Union's request to discuss the effects of the sale on the unit employees, and refused to supply. the Union with information necessary for an intelligent discussion of Respondent's termination of its employees and its ramifications. The law is well, settled that an employer is obligated to bargain about the effect on employee rights of a change in operations 10 and to furnish the union relevant data to enable it to administer the collective- 9 Section 102.114. •• 10 Town & Country Manufacturing Company; Fibreboard Paper Products Corporation; Brown Truck and Trailer Manufacturing Company, supra, footnote 3. 196 DECISIONS OF NATIONAL LABOR RELATIONS BOARD bargaining agreement.ll Respondent concedes that it refused the Union's request to negotiate regarding the effects of the sale claiming that since the employer- employee relationship had been severed there was no legal obligation to bargain. Respondent also concedes that it did not supply the Union with certain information but contends that the sales agreement was confidential and that the other data was already in the hands of the Union. With respect to the requested information, Union Representative Kee testified credibly that none of the information requested by him was in his possession, and I credit his testimony. Without a copy of Respondent's agreement with the pur- chaser the Union obviously could not determine whether the transaction was a sale or a merger or whether Respondent had divested itself of its interest in the former operations at all. Bargaining with respect to the rights of employees terminated could not begin until Respondent's relationship with the purported purchaser was accurately disclosed. The other information, such as the seniority list, vacation benefits paid, and pension rights of specific employees, seems clearly relevant to the question of possible benefits to the severed employees. Finally, in regard to the effects of the sale, although Respondent has terminated and sold substantially all its operations in West Virginia, it is not completely out of business and part of the bargaining unit remains at New Martinsville. In these circumstances, it would seem that the principles that determine a holding that Respondent bargain about its decision to sell would, a fortiori, require a finding that Respondent was required to bargain about the effects on and the treatment of employees affected by the sale. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with the operations of Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY I have found that Respondent refused to bargain with the Union about its decision to sell its Wheeling and-Wellsburg operations. General Counsel asks that the remedy utilized by the Board in Town & Country Manufacturing be applied. He points out that in that case the Board ordered the employer to restore the status quo ante by reinstating its employees with backpay and bargaining with the Union over any future changes in operations. Although there is no Section 8(a)(3) allegation in the case, General Counsel points to Fibreboard Paper Products Corpo- ration, supra, which involved only an 8(a)(5) allegation but where the Board ordered restoration of the status quo ante by reinstating the maintenance operation .and bargaining with the Union as well as making the employees whole for loss of earnings suffered as the result of the employer's unlawful action in unilaterally subcontracting jobs out of existence. Specifically, he asks here, that Respondent resume its operations at the Wheeling and Wellsburg plants, reinstate its employees with backpay, bargain with the Union, and mail appropriate notices to its employees. As set forth in detail earlier, Respondent is out of business for all intents and purposes in West Virginia, its plants are sold, its machinery dismantled, and its customers serviced by others. Restoration of the status quo ante to the extent of putting Respondent back in business in Wheeling and Wellsburg, for which there is no continuing need, is harsh, unrealistic and perhaps economically impossible. I will not recommend it.12 As for backpay for employees either until reinstated, or until they obtain sub- stantially equivalent employment, I will recommend neither because of the cir- cumstances of this case, and because the principles in the cases cited by General Counsel do not appear controlling here. With respect to the circumstances, the long recital of Respondent's economic problems with its Wheeling and Wellsburg operations indicates to me that their ultimate solution by a sale or merger was as likely a forecast whether Respondent bargained with the Union or not about its decision to sell. It is true that the cases teach us that if an employer bargains about a decision to change operations, the decision may change instead of the operations, and jobs may be saved. Full acceptance of the roseate belief, how- ever, cannot erase the hard facts that Respondent had been heading for a long 11 N.L R B. v. Whitin Machine Works, 217 F. 2d 593 (CA. 4), cert. denied 349 U.S 905. 12 Carl Rochet and Charles 'Rund, partners, doing business as The Renton News Record et al, 136 NLRB 1294. UNITED DAIRY CO. 197 time in the direction it finally reached in June 1962, and that death's-door bargaining would not have diverted the solution or eased its pain. At least the hypothesis that absorption by the buyer of 45 employees in the sale was the best that could be obtained for them is as believable as speculation that no one would have been hurt if only Respondent had talked with the Union. In addition, so far as the cases are concerned, Darlington Manufacturing Company, and Esti Neiderman and Gizela Eisner, co-partners doing business as Star Baby Co.,13 cited by General Counsel are both cases in which Respondents were discriminatorily motivated in closing their operations, and in Darlington the Board also said, "It is reasonable to assume that these employees would have continued in their employment indefinitely, particularly in view of the large sums spent and allocated for modernization of the mill." The language quoted was prefatory to the Board's Order to restore ". . . the situation, as nearly as possible, to that which''would have obtained but for the illegal discrimination . . ." and must be contrasted with this Respondent's sad plight as far as its Wheeling plant was concerned. It can be said with certainty that the employees in the instant case would not have lost their jobs "but for" the sale, but it is a leap in the dark to say that they would have remained in Re- spondent's employ indefinitely "but for" Respondent's failure to tell the Union that it had decided to sell to United Dairy after months of negotiations. Finally, in view of the uncertain state of the law as evidenced by the original dismissal of the charge in the case as it related to the failure to discuss the decision to sell, imposition of a substantial backpay liability upon Respondent in the compelling economic circumstances of this case seems inequitable. A small part of the bargaining unit, however, still exists at New Martinsville where Respondent has a distribution center. In view of Respondent's past refusal to bargain, I will recommend that it cease and desist from failing to bargain collec- tively with the Union with respect to decisions affecting its employees connected either with a sale or any other disposition of operations. Having found that Respondent violated Section 8(a)(1) and (5) of the Act by refusing to bargain with the Union concerning the effect of the sale of its operations on its employees and by refusing to supply certain information to the Union nec- essary for such bargaining, it will be recommended that Respondent cease and desist from such conduct and bargain with the Union. Since Respondent has already supplied the information requested it will not be required to supply it again. In view-of the fact that operations at Wheeling and Wellsburg are nonexistent and since no affirmative relief respecting reinstatement or backpay is recommended, it would seem that posting or mailing of notices would serve no useful purpose and I will not recommend that it be done. Upon the basis of the foregoing findings of fact and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of ,the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. At all times material herein, the Union has been the exclusive bargaining representative of the employees of Respondent in an appropriate unit within the meaning of Section 9(a) and (b) of the Act. 4. By selling its Wheeling and Wellsburg plants and terminating the employment of its employees working within the unit at those plants, all without prior notice to, or consultation or bargaining with, the Union, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (5) and (1) of the Act. 5. By refusing to bargain with the Union about the effects of the sale of its plants on the employees in the unit and by refusing to supply the Union with informa- tion necessary to bargaining, Respondent has further violated Section 8(a)(5) and (1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, it is recommended that United Dairy Co., Barnesville, Ohio, its officers, agents, successors, and assigns, shall: 13 139 NLRB 241; 140 NLRB 678. 198 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1. Cease and desist from: (a) Failing and refusing to bargain collectively with the Union as the exclusive representative of its employees in the appropriate unit with respect to any decision to sell or otherwise terminate its operations. (b) Refusing to bargain with the Union about the effects on employees in the appropriate unit of any sale or other termination of operations. (c) Refusing to supply the Union with information necessary for collective bargaining. (d) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action which will effectuate the policies of the Act. (a) Bargain, upon request, with the Union concerning the effects of the sale of its Wheeling and Wellsburg plants on the employees in the bargaining unit. (b) Notify the Regional Director for the Sixth Region, in writing, within 20 days from the receipt of this Intermediate Report and Recommended Order, what steps Respondent has taken to comply herewith.14 14 If this Recommended Order is adopted by the Board , this provision shall be modified to read: "Notify the Regional Director for the Sixth Region, in writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith." Samuel Rafowitz and Chaim Bonk, d/b/a Northern Cap Manu- facturing Co. and United Hatters, Cap and Millinery Work- ers International Union, • AFL-CIO. Case No. 18-CA-1624. February 27, 1964 DECISION AND ORDER On November 15, 1963, Trial Examiner Stanley N. Ohlbaum is- sued his Decision 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 dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, the Charging Party filed exceptions to the Trial Ex- aminer's Decision. 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, McCulloch and Members Leedom and Brown]. 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 Trial Examiner's Decision, the Charging Party's exceptions, and the entire record in this case, and hereby adopts the Trial Examiner's findings,' conclusions, and recommendations. [The Board dismissed the complaint.] 1 The 'Charging Party has excepted to the credibility findings made by the Trial Ex- aminer. It Is the Board 's established policy, however, not to overrule a Trial Examiner's resolutions with respect to credibility unless, as is not the case here , the clear preponder- ance of all the relevant evidence convinces us that the resolutions were incorrect. Standard Dry Wall Products, Inc., 91 NLRB 544, enfd . 188 F. 2d 362 (C.A. 3). 146 NLRB No. 22.