Randolph Rubber Co., Inc.

496 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Randolph Rubber Company, Inc. and United Rubber, Cork Lino- leum & Plastic Workers of America, AFL-CIO, Local #393. Case No. 2.l-CA-571. May 10, 1965 DECISION AND ORDER On November 27, 1964, Trial Examiner David F. Doyle issued his Decision in the above-entitled proceeding, finding that the Respondent had not engaged in unfair labor practices as 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 General Counsel and the Charging Party filed exceptions and support- ing briefs, and the Respondent filed an answering brief.' Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel [Members Fanning, Brown, 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 Trial Examiner's Decision, the exceptions and briefs of the parties, and the entire record in this case, and finds merit in exceptions of the General Counsel and the Charging Party. Accordingly, the Board adopts the findings of the Trial Examiner only to the extent consistent herewith. In November 1953 the Union was certified as bargaining agent of the employees of the Rubber Corporation of California, herein called Rubber Corporation. It has since executed a series of collective-bar- gaining agreements with the Rubber Corporation, the last of which was effective September 29, 1963, and was to run for 3 years. This con- tract contained union-security provisions and provided for the check- off of union dues. In the first week of November 1963 Rubber -Corporation deducted the November dues of 285 employees on behalf of the Union. Pursuant to a sales agreement effected on October 25, 1963, the Respondent took over the operation of Rubber Corporation plant on November 8, 1963. Respondent acquired all the physical assets. It also acquired "most" of the personnel records, hired all who were employed by Rubber Corporation on November 7, and later reemployed employees on layoff status ; employment in the bargaining unit, which stood at 263 on November 9, rose to 300 by December 21. Respondent continued to manufacture canvas, rubber-soled shoes, using the same type of machinery and basically the same production processes as Rub- 1 Respondent's request for oral argument is hereby denied, as the record , including the exceptions and briefs, adequately presents the issues and positions of the parties. 152 NLRB No. 46. RANDOLPH RUBBER COMPANY, INC. 497 ber Corporation.2 Approximately 90 percent of the employee job classifications remained essentially the same. Respondent brought in members of the managerial staff from its operations in Massachusetts, but it hired eight or nine Rubber Corporation supervisors and retained Rubber Corporation Labor Relations Consultant Lawrence H. Larsen 3 Representatives from the Union and Respondent held exploratory, "get acquainted" meetings on November 4, 18, and 26. At the Novem- ber 18 meeting, Larsen indicated that there were certain portions of the Rubber Corporation contract which the Respondent did not like, and stated that he would submit contract proposals within a week. On November 26 ,4 Larsen presented the union representatives with a list of 157 wage increases designed to correct asserted inequities in the existing wage structure.5 After some discussion, the union negotiating committee, headed by Union President Richard Richhart, accepted the proposed increases. At no time during these three meetings did the Respondent question the Union's majority status. On November 26 Respondent posted a letter from Attorney Leon Al. Cooper, which stated his opinion that the checkoff of union dues with- out a collective-bargaining agreement was unlawful under the Cali- fornia Labor Code. On the following day, Richhart instructed the employees to pay their dues directly to the union treasurer, and informed Union District Director Floyd Gartrell that Respondent had refused to check off the dues for December. About December 1 Gar- trell telephoned Larsen and requested an acknowledgement of Respondent's recognition of the Union and of its commitment to the checkoff of union dues. On December 4 Larsen sent Gartrell a letter stating that Respondent's representatives would "meet with you at mutually convenient times and places in an effort to reach an agree- ment thru the processes of collective bargaining based on good faith efforts of both parties." During the week following Larsen's letter, union stewards distrib- uted forms to the employees authorizing the checkoff by Respondent of their union dues. Between December 5 and 12, 208 employees signed such authorizations. On December 6, Respondent posted a notice stating that no employee would be discharged for failing to pay union dues. Ina letter dated December 7 Richhart protested Respond- ent's termination of the dues checkoff, the failure to submit contract proposals, and other aspects of Respondent's attitude toward the 2 Respondent gradually repaired and replaced the machinery and introduced some new production techniques These improvements admittedly resulted in a shoe of higher quality than that made by Rubber Corporation 3 Larsen had negotiated the 1963 agreement for the Rubber Corporation. 4 The Trial Examiner inadvertently places this meeting on November 28. 5 Apparently, Respondent had been adhering to the wage provisions of the Rubber Corporation agreement. 7 8 9-7 3 0-6 0-v o f 15 2- 3 3 498 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Union. Richhart also asserted that the Union was still the employees' bargaining agent, that "most of the employees" had signed new author- ization cards, and that the employees were prepared to strike, if nec- essary, to support the Union's demands. Richhart asked Respondent to honor the Union's dues "check-off system" and to extend the Rubber Corporation agreement for 45 days to provide "sufficient time to nego- tiate a more suitable contract." In a reply on December 9 Larsen vigorously denied any wrongdoing on the part of Respondent, citing the California Labor Code as the reason for terminating the dues checkoff. Larsen also asserted, for the first time, we do not have any knowledge of the majority status of your Union," but stated that Respondent was "in the process of preparing proposals" and was "ready to meet with [the Union] at times mutually convenient." The parties next met on December 19. At the outset of the meeting, Larsen asked for the identity of the Union's spokesman. He was informed that, subject to certain qualifications provided in the Inter- national's constitution and bylaws, Union President Richhart was the spokesman and that International Representative Anthony Rodriguez and Attorney Melvin N. Glow would act in an "advisory capacity." Larsen indicated that this arrangement was not to his liking, appar- ently because of Richhart's action in writing the December 7 letter which Larsen showed to the other union representatives. Larsen then stated that Respondent would not negotiate with the Union in the absence of a secret ballot election. He asserted that the Respondent did not consider itself bound by the Rubber Corporation agreement and that it had a good-faith doubt of the Union's majority status. Attor- ney Glow challenged this good-faith doubt. He pointed out the union- security provisions in the Rubber Corporation agreement, Larsen's December 4 letter expressing his willingness to bargain, and the 208 recently signed checkoff authorizations which Glow offered to show to Larsen or to an independent third party. When Larsen again con- ditioned further bargaining on a Board election, the union representa- tives, after caucusing, prepared to leave. Larsen then asked them to "sit down," stating that there had been a change in circumstances. He presented a list of scheduled wage increases for 34 employees, explain- ing that Respondent intended to put the increases into effect, but was willing to "discuss" them with the union representatives. He continued to refuse to "negotiate" the terms of a complete agreement until the Union submitted to a Board election. After further discussion of Respondent's asserted "good faith," the union representatives left without accepting either the proposed wage increases or the suggested election. Ina January 7, 1964, letter, Larsen informed the Union that the 34 proposed wage increases were effective as of January 6. RANDOLPH RUBBER COMPANY, INC. 499 On February 10, 1964, after the Union filed its unfair labor practice charges, the parties held a final meeting. On this occasion, Respond- ent offered wage increases for 286 employees. The Union accepted the proposal "because it affected everybody in the plant." The Trial Examiner has concluded that the Respondent did not vio- late Section 8(a) (5) of the Act for the reasons that the Respondent was not a "successor "' of the Rubber Corporation such as would require it to bargain with an incumbent union, and that the majority status of the Union had not been established by "voluntary" designations. He further found that Respondent developed a good-faith doubt of the Union's majority which justified its refusal to bargain on December 19. We do not agree with these findings and conclusions. It is settled that, where there is substantial continuity in the identity of the employing enterprise, the purchasing employer is bound to rec- ognize and bargain with the incumbent union.6 In this case, Respond- ent took over the plant, machinery, and the entire work force of the Rubber Corporation, and continued the same type of business activity -the manufacture of canvas shoes. While Respondent introduced improved machines and techniques, made changes in the managerial staff, used its own trademark, and acquired new customers, these fac- tors did not appreciably alter the basic similarity of Respondent's operation to that of the Rubber Corporation. Upon the entire record, we find a continuity in the employing enterprise which obligated the Respondent as successor to Rubber Corporation to bargain with the Union as the incumbent representative of the employees when it assumed control of the plant on November 8, 1963.7 The record discloses an additional basis for establishing Respond- ent's bargaining obligation. For apart from the obligation as a suc- cessor to continue recognition of the incumbent union, the record affirmatively shows that the Union was in fact the majority representa- tive of Respondent's employees during the critical time herein. This is clearly evidenced by the fact that the Union obtained new checkoff authorization cards from 208 employees in early December. Of these cards, 189 were obtained after the Respondent had announced on December 6 that the employees did not need to pay union dues in order to keep their jobs. No evidence was even proffered to show that these cards were not genuine expressions of union support. 9 See Skaggs Drug Centers, Inc, 150 NLRB 518, Maintenance Incorporated. 148 NLRB 1299; Johnson Ready Mix Co., 142 NLRB 437, 441-442; Colony Materials, Inc, 130 NLRB 105, 106, 112; Royal Brand Cutlery Company, 122 NLRB 901, 908-909 7 Although not specifically alleged in the complaint , the matter of successorship was fully developed by the parties at the hearing and extensively argued in their briefs. Our reliance upon this factor is thus proper. See NLRB. v. Mackay Radio et Telegraph Co, 304 U.S. 333, 349-350; N.L.R B v. Puerto Rico Rayon Mills, Inc., 293 F. 2d 941, 947-948 (C.A. 1) ; Local 138, International Union of Operating Engineers , AFL-CIO (Nassau and Suffolk Contractors , etc.), 123 NLRB 1393 , 1396, footnote 8 500 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Trial Examiner's finding that the Respondent entertained a good-faith doubt of the Union's majority on and after December 19 is based upon such factors as employee confusion as to Respondent's pol- icy towards Spanish-speaking, and the more elderly, employees; some dissatisfaction with the Union's last agreement with the Rubber Cor- poration and with an increase in union dues ; and Respondent's uncer- tainty as to the identity of the union spokesman. However, these items, viewed separately or collectively, do not establish the Union's loss of majority status and did not, we believe, create any doubt in Respond- ent's mind as to the Union's continuing representative status. Thus, when Respondent took over the plant on November 8, it could have had no reasonable grounds for believing that the employees no longer wislled the Union to represent them.' And the Respondent expressed no doubt of the Union's majority during the November bargaining ses- sions. Larsen expressly assured the Union of Respondent's continued willingness to meet and bargain with the Union in his letters of Decem- ber 4 and 9. If reports of purported employee dissatisfaction later came to Respondent's ears, it is significant that not only was the alleged dissatisfaction not reflected in repudiation of, or withdrawal from, the Union but, also, there was no showing that the Respondent in fact equated this "dissatisfaction" with rejection of the Union as bargain- ing agent. And, as already noted, the employees did sign new checkoff authorizations manifesting their adherence to the Union, even after the notification that payment of dues was not required for continued employment. Clearly, Respondent did not refuse to bargain with the Union because of any genuine doubt as to the Union's representative status. The events of the December 19 meeting give every indication that Larsen's displeasure over Richhart's selection as union spokesman, more than anything else, was responsible for the abrupt refusal to con- tinue the negotiations. In any event, we find no justifiable basis for Respondent's refusal to continue dealing with the Union, and accord- ingly conclude that on and after December 19, 1963, the Respondent refused to bargain with the Union in violation of Section 8 (a) (5) and (1) of the Act .9 THE REMEDY Having found that Respondent has engaged in and is engaging in certain unfair labor practices, we shall order that it cease and desist therefrom and take certain affirmative action to effectuate the purposes of the Act. 8 See N.L.R B v Saito Ventshade, The, 276 F 2d 303, 307 (C A. 5). s In view of our findings and Order herein , we find it unnecessary to pass upon the matter of the alleged unlawful wage increases. RANDOLPH RUBBER COMPANY, INC. 501 CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the mean- ing of Section 2(2) of the Act. 2. United Rubber, Cork, Linoleum & Plastic Workers of America, AFL-CIO, Local #393, is a labor organization within the meaning of Section 2 (5) of the Act. 3. By refusing on December 19, 1963, and at all times thereafter, to bargain collectively with United Rubber, Cork, Linoleum & Plastic Workers of America, AFL-CIO, Local #393, in good faith as the representative of its employees in the appropriate unit, Respondent has engaged in and is engaging in unfair labor practices within the mean- ing of Section 8(a) (5) and (1) of the Act. 4. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that Respondent, Randolph Rubber Company, Inc., its officers, agents, suc- cessors, and assigns, shall: 1. Cease and desist from : (a) Refusing to bargain collectively with United Rubber, Cork, Linoleum & Plastic Workers of America, AFL-CIO, Local #393, as the exclusive bargaining representative of its employees in the fol- lowing appropriate unit: All production, maintenance, shipping, and receiving employees, excluding office and clerical employees, guards, and supervisors as defined in the Act. (b) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form labor organizations, to join or assist the above-named or any other labor organization, to bargain collectively through representa- tives of their own choosing, and to engage in any other concerted activ- ities for the purposes of collective bargaining or other mutual aid or protection, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8(a) (3) of the Act, as amended. 2. Take the following affirmative action necessary to effectuate the purposes of the Act : (a) Upon request, bargain collectively with United Rubber, Cork, Linoleum & Plastic Workers of America, AFL-CIO, Local #393, as 5502 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the exclusive bargaining representative of employees in the appropriate unit described above, and, if an understanding is reached, embody such understanding in a signed agreement. (b) Post at its plant in Garden Grove, California, copies of the attached notice marked "Appendix." 1'0 Copies of this notice, to be furnished by the Regional Director for Region 21, shall, after being duly signed by a representative of the Respondent, be posted by the Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to its employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 21, in writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith. "In the event that this Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals, Enforcing an Order" shall be substituted for the words "a Decision and Order " APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the purposes of the National Labor Relations Act, as amended, we hereby notify our employees that : WE WILL NOT refuse to bargain with United Rubber, Cork, Lino- leum & Plastic Workers of America, AFL-CIO, Local #393, as the exclusive bargaining representatives of the employees in the following appropriate unit : All production, maintenance, ship- ping, and receiving employees, excluding office and clerical employees, guards, and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the right to self-organization, to form labor organizations, to join or assist the above-named or any other labor organization, to bargain col- lectively through representatives of their own choosing, and to engage in any other concerted activities for the purposes of collec- tive bargaining or other mutual aid or protection, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a) (3) of the Act, as amended. WE WILL, upon request, bargain collectively with United Rub- ber, Cork, Linoleum & Plastic Workers of America, AFL-CIO, Local #393, as the exclusive bargaining representative of the RANDOLPH RUBBER COMPANY, INC. 503 employees in the appropriate unit described above, and, if an un- derstanding is reached, embody such understanding in a signed agreement. RANDOLPH RUBBER COMPANY, INC., Employer. Dated------------ ---- By------------------------------------- (Representative ) ( Title) This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered , defaced, or covered by any other material. Employees may communicate directly with the Board's Regional Office, Eastern Columbia Building, 849 South Broadway , Los Angeles, California, Telephone No. 688-5229 , if they have any question concern- ing this notice or compliance with its provisions. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE This proceeding , with all parties represented , was heard by Trial Examiner David F Doyle in Los Angeles, California, on June 23 to 25, 1964, on complaint of the General Counsel and answer of the Respondent . The issue litigated was whether the Respondent had refused to bargain collectively with the Union in violation of Section 8 (a)(1) and (5) of the Act by certain conduct more fully described hereinafter.' Upon the entire record and my observation of the witnesses , I hereby make the following: FINDINGS AND CONCLUSIONS 1. THE BUSINESS OF THE COMPANY The Company is a corporation duly organized and existing by virtue of the laws of the State of Massachusetts. It maintains an office and plant in Massachusetts, and in 1963 it purchased from Rubber Corporation certain real estate, plant , and machin- ery located in the city of Garden Grove, California. The Company engages in the manufacture of rubber-canvas footwear of the sneaker or athletic type. During the calendar year 1963 the Company in the course of its operations manufactured, sold, and distributed from its California plant products valued in excess of $50,000 which were shipped from that plant directly to customers in States of the United States other than the State of California It is conceded, and I find, that at all times material herein the Company has been an employer engaged in business operations affecting commerce within the meaning of Section 2(6) and (7) of the Act. 'In this report , Randolph Rubber Company, Inc, Is referred to as the Respondent, or the Company ; a second business firm by the name of the Rubber Corporation of Cali- fornia, which is not a party to these proceedings but is frequently mentioned , is referred to as Rubber Corporation ; United Rubber, Cork, Linoleum & Plastic Workers of America, AFL-CIO, Local #393, as the Union, and its parent as, the International ; the National Labor Relations Board, as the Board , the General Counsel of the Board and his represent- ative at the hearing, as the General Counsel ; and the Labor Management Relations Act, as amended , as the Act. The original charge in this proceeding was filed on December 26, 1963, and an amended charge was filed on January 8, 1964 The complaint herein was issued by the Regional Director, for Region 21, on April 15, 1964, and was duly answered by the Respondent on May 4, 1964 It should be noted that all dates in this decision are in the year 1963, unless specified otherwise 504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 11. THE LABOR ORGANIZATION INVOLVED It is conceded, and I find, that the Union is, and at all times material has been, a labor organization within the meaning of Section 2(5) of the Act. 111. THE ALLEGED UNFAIR LABOR PRACTICES A. The sale of the real estate and plant of Rubbei Corporation to the Company It is undisputed that for many years the Company conducted its business from its plant located in the State of Massachusetts. Prior to 1963 the Company maintained two warehouses in California and distributed its products from them. For several years past the Company had sought manufacturing facilities on the West Coast for the purpose of making and distributing its products from its own plant It is likewise undisputed that Rubber Corporation conducted a somewhat similar line of business from its plant in Garden Grove, California It is apparent from all the testimony that Rubber Corporation conducted its business on a marginal basis, appealing to the customer who sought cheap canvas shoes at a cheap price. The testimony of all the witnesses indicates that Rubber Corporation experienced various difficulties in operations which brought about frequent, wide fluctuations in the number of per- sons employed. In October of 1963 the Company purchased the real estate, plant, machinery, and equipment of Rubber Corporation which were located at Garden Grove. Counsel for the parties stipulated that the agreement of purchase specifically excluded by its terms the assumption of any liability by the Company for any contracts of employment, or any responsibility or liability arising from such contracts to anyone. The undisputed testimony establishes that the Company did not in any way con- tinue the business of Rubber Corporation. The Company brought from its eastern facilities its officers, and its own managerial and supervisory personnel It replaced most of the used machinery received from Rubber Corporation and repaired the remainder. It moved and rearranged the placement of machinery in the plant so that the manufacturing processes and methods of the Company could be utilized. The Company continued to purchase all of its own raw materials from its own suppliers and sold all its products under its own trademarks to its own customers. There was no interlocking or overlapping in any way between the directors or offi- cers of the Company and Rubber Corporation. There is no claim by any party, and there is no evidence in this record, which would indicate that the Company was anything but a bona fide purchaser for value of the manufacturing facilities of Rubber Corporation. Furthermore, there is no claim that this purchase by the Company, or for that matter the sale by Rubber Corporation, was for the purpose of avoiding any of the duties imposed on employ- ers by the Act. B. The employee situation on the date of purchase It is undisputed that for many years the Union was the certified exclusive bar- gaining agent of the employees of Rubber Corporation in an appropriate unit described as follows in a stipulation of the parties: All production, maintenance, shipping and receiving employees, as certified by the National Labor Relations Board, November 25, 1953. It is undisputed that the certification of the Board issued on November 25, 1953, followed a Board-conducted election by secret ballot. This is the most recent elec- tion in the unit. It is also undisputed that shortly after receiving its certification the Rubber Corporation and the Union entered into contractual relations covering the wages, hours, and working conditions of the employees of Rubber Corporation. Apparently for many years prior to the purchase of the plant of Rubber Corporation by the Company, the contract between Rubber Corporation and the Union con- tained a provision for union security and the checkoff of the employee's union dues. The last agreement between Rubber Corporation and the Union was consummated on September 27, 1963. It was to be effective September 29 and by its terms it was to run until September 29, 1965 This contract also contained a provision for union security and the checkoff of employees' union dues. This contract was signed by the Union and Rubber Corporation on October 11, but the Union stopped the printing of the contract in book form because of the sale of Rubber Corporation to the Company. RANDOLPH RUBBER COMPANY, INC. 505 It is undisputed that the last checkoff of dues actually made and paid to the Union by Rubber Corporation was for the month of November 1963 and the checkoff cov- ered 285 employees in the appropriate unit. It is undisputed that the negotiations of Rubber Corporation and the Company resulted in a contract of sales on October 25, and, according to the contract, the date for closing, including the transfer of the plant and equipment to the Company, was to be November 8. The closing and transfer took place as scheduled on that date. Counsel for the parties were most diligent in arriving at a series of stipulations set- ting forth the situation of the employees relative to the relinquishment of control by Rubber Corporation and the assumption of control by the Company on November 8. Counsel stipulated that the employees employed by Rubber Corporation at the close of business on November 7 were hired by the Company on November 8, at the opening of business. Counsel also stipulated that for the week ending December 21, 1963, the Com- pany employed 18 persons in its maintenance department; 5 persons in its receiving department; 19 persons in its shipping department, 258 persons in its production department; and 54 persons in the category of office and salaried employees. Coun- sel agreed that the office and clerical employees referred to in the stipulation as office and salaried employees were never members of the appropriate unit and none of counsel sought their inclusion in the unit in this proceeding. However, in the proceeding it is the contention of the Company that employees in the receiving and shipping departments should constitute a unit separate and distinct from the pro- duction and maintenance unit; it being understood that counsel from the Company could offer proof as to the propriety of that exclusion. Counsel also agreed that 208 employees, whose names are signed to individual cards authorizing the Company to deduct dues from their paychecks for the benefit of the Union, were employed by the Company on the date indicated on each card and were all employed collectively on the date, December 19, 1963.2 Counsel further agreed that Rubber Corporation employed, on November 2, 1963, 17 persons in the maintenance department; 3 persons in the receiving department; and 63 persons in the category of office and salaried employees. It was further stipulated that for the week ending November 9, 1963, the Company employed the same number of persons in each of the aforementioned departments, except for the addition of 2 employees in the production department. To further explain the employee situation at the time of the acquisition of control by the Company, counsel stipulated that as of November 1, 1963, Rubber Corporation had on layoff status 210 persons It was also stipulated that counsel had inspected the W-2 forms for all employees for the year 1963 and these W-2 forms showed that for the year 1963 the Company had a total of 369 employees. These forms also showed that in 1963 Rubber Corporation had 982 employees in addition to those previously mentioned who had been employed at some time during that year whose employment had ter- minated by layoff, quit, discharge, death, etc. Counsel stipulated specifically that the agreement of purchase by the Company specifically excluded the assumption of any liability for any contracts of employ- ment or any responsibilities or liability arising therefrom. It was stipulated by counsel that the Company assumed no employee-employer relationship with any of the people on layoff status or with any of the 982 persons mentioned previously. Counsel further stipulated that at the time of the hearing the Company had hit ed hack from layoff status approximately 210 peisons, in addition to those hired at the opening of business on November 8. C. The issue The complaint in substance states that the Union is the majority representative of the Company's employees in an appropriate unit and that since about November 1, 1963, the Respondent had refused the Union's request to bargain collectively con- cerning wages, hours, and other terms of employment, and that on November 26 and December 19 and 23, 1963, the Company without notice to, or consultation with, the Union granted increases in wages and vacations to employees in the appropriate unit, thereby violating Section 8(a)(1) and (5) of the Act. The Company contends that when it assumed control of the plant at Garden Grove and hired the former employees of Rubber Corporation on November 8, it was under no obligation to bargain collectively with the Union by virtue of its con- =These cards are General Coun,el's Eciubit No 13-1 through 15-20S They are dated between December 5 and 12, 1063, and were collected from the employees on those approximate dates as related hereafter 506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tract or any legal duty flowing from the contract , or by virtue of the Act, until the Union had proven to the Company its majority status in an appropriate unit of its employees . The Company contends that within a few weeks of its acceptance of control of the Garden Grove plant and the hiring of employees , it formed a good- faith doubt of the Union's majority status in the appropriate unit . The Company also contends that the unit of employees , which may be found in this proceeding to be appropriate , should exclude the employees in the shipping and receiving depart- ments. The Union in its brief takes a somewhat different tack than the General Counsel. I deem its position to be in addition to the position taken by the General Counsel. It is the contention of the Union that by virtue of the United States Supreme Court's decision in John Wiley Sons, Inc. v. Livingston, President of District 65, Retail, Wholesale and Department Store Union, AFL-CIO, 376 U S. 543, argued Janu- ary 9, 13, 1964, decided March 30, 1964, that Rubber Corporation's contract with the Union automatically became the contract of the Company with the Union by opera- tion of law, and that the duty of Rubber Corporation to bargain with the Union was likewise transferred to the Company by the same means. D. The appropriate unit; inapplicability of the Wiley case, supra In order that two alleged issues, which are without support in this proceeding, may not obscure the serious questions remaining, I will make two findings at this point. It is undisputed that, during all the years from the time the Union was certified as the representative of the employees of Rubber Corporation, the appropriate unit always included the employees of the shipping and receiving departments. While the Company contends that those employees should be excluded from the appro- priate unit found herein, this record contains no evidence which would support such a finding. Therefore, it is found that the appropriate unit of the Company's employ- ees is described as follows: All production, maintenance, shipping, and receiving employees of the Company, excluding office and clerical employees, guards, and supervisors as defined in the Act. It is also found that the decision in the Wiley case, supra, is inapplicable here, for reasons stated hereafter at some length. These findings are made at this point, lest they obscure the primary issue. E. The beginning of the controversy In the synopsis of testimony hereafter related I have set forth testimony which I have credited. Testimony which is repetitious I have omitted. I have credited the testimony of witnesses Glow, Gartrell, Hawkins, Weinstein, Cohen, Lee, Murphy, and Larsen. Upon analysis it is apparent there is no very serious conflict of testi- mony as to what happened at various meetings of the representatives of the parties; the one instance of sharp conflict I have dealt with hereinafter. All testimony which is consistent with this narrative has been accepted; testimony at variance with it has not been accepted. This controversy really had its origin in events which occurred prior to the Com- pany taking over; one of these events being the last contract agreed upon and exe- cuted by Rubber Corporation and the Union. In those negotiations, Lawrence Larsen, of the firm of Donald D. Rea & Company, labor relations consultants, and a group of Rubber Corporation officials represented Rubber Corporation. Larsen was the spokesman for management. The Union was represented by its president, Walter L. Cooper, international rep- resentative, Anthony Rodriguez, and a negotiating committee of five employees. The terms of the contract were reached on September 27, and the written contract was signed by the representatives of the parties on October 11. When the contract was submitted to the membership of the Union for approval, a sharp division of the membership occurred. Gladys M. Hawkins was called as a witness by the Respondent and testified at some length concerning union affairs and certain events at meetings. Hawkins tes- tified that prior to May 1964 she had been a member of the Union and a rank-and- file employee of Rubber Corporation and the Company. In May 1964 she was pro- moted to a supervisory position with the Company and she resigned from the Union. Hawkins testified in a forthright, accurate, and fair manner. When one of her cross- examiners intimated that she might have changed her loyalty from the Union to the Company because of her promotion, Hawkins promptly rejected the intimation and pointed out that she had been not only a member of the Union but also an officer of RANDOLPH RUBBER COMPANY, INC. 507 the Union and that she was testifying to fact, without favor toward either the Union or the Company. Though George R. Richhart, president of the Union and the members of his negotiating committee had knowledge of the events about which Hawkins testified, Richhart in his testimony did not contradict Hawkins, and the other committee members did not testify . Therefore, I credit Hawkins' entire testimony. Hawkins testified that the contract between Rubber Corporation and the Union, which was executed on October 11, 1963, created a great deal of dissatisfaction among the membership of the Union . When it was submitted to the union member- ship for approval, there were between 85 and 90 people at the meeting and the members split down the middle on the approval of the contract. When it was finally put to a vote there were three more votes for approval than for nonapproval. Therefore , the contract was approved . However, the minority was strongly opposed to approval of the contract , because for the first time it contained a "plantwide se- niority bit" and took "the incentive plan away" and did not improve wages . Hawkins explained that the changes in seniority worked to the disadvantage of many mem- bers and the dropping of the incentive plan actually resulted in a substantial cut in wages for a large number of the members , and that the wage scales in the contract were a disappointment to all members . Richhart, previously mentioned, and Hawkins, were among the minority who were against approval of the contract, but who were outvoted at the meeting . Apparently the position of the minority at the meeting, was the position favored by the membership -at-large, for at the next union election , which occurred a few days after approval of the contract , Richhart was elected president of the Union in the place of Cooper , and Hawkins became a member of a new executive board of the Union and a new negotiating committee. Richhart received over 80 percent of the votes cast for president in the election. Also elected to the negotiating committee in addition to Hawkins were employees Colunga, Buck , and Castro, all new representatives. Hawkins also testified that there was another event that caused widespread dis- satisfaction among the membership of the Union. She said that in July 1963 the union dues were increased from $4 25 to $5.75 per month. When the raise was announced , the membership was told that of the $1 .50 increase, $ 1 would be refunded to each member, if the member attended the monthly meeting of the Union. A month or two later at a meeting, some of the members asked Anthony Rodriguez, International representative of the Union, why the members were not being reimbursed the $1 for attendance at the meetings . Rodriguez explained that the plan to refund the $1 was illegal but that it had been decided by higher authority in the Union that the higher rate of dues should be kept in force. Hawkins stated that this failure to refund this $ 1 per month for attendance at meetings continued as a source of dissatisfaction within the membership, even though the members voted to agree to the increase in dues. F. The beginning of company -union relations The officers and supervisors of the Company were new to labor conditions in the West so the officers decided that it would be advisable to retain the services of Larsen's firm as labor relations consultant . It is undisputed that the first meeting of representatives of the Union and the Company occurred on November 4. Pres- ent at this meeting were Gartrell, director of District 5 of the International ; Pipkin, union engineer, and Richhart , president of Local 393. Present for the Company were Cohen, president; Van Dorsen , vice president in charge of manufacturing; Weinstein , executive vice president ; and Larsen . Gartrell testified that he was notified by Richhart that the Company would like to meet with the representatives of the Union . Gartrell explained that since the representative who usually took care of the Company (Rodriguez ) was not in town, he took along with him Pipkin, the Union's industrial engineer. At the meeting they were introduced and Larsen acted as spokesman for the Company. He gave the union representatives a short history of the operations of the Company in the East . Larsen then said that the Company was not pleased with some features of the current contract , one of which was the hourly rated basis ; that the Company believed in some type of an incentive plan. Gartrell replied that the Union was not averse to an incentive plan and that the contract had contained such a plan for many years , but that Rubber Corpora- tion had asked for the change in the last contract and it had finally been dropped from the contract . He assured the representatives of the Company that the Union was not opposed to incentive plans but, on the contrary, believed in them; he said the Union wanted an incentive plan satisfactory to all concerned . At that point Cohen replied that the Company was new to the West and to this plant and that 508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD company officials wanted time to study and plan the needed reorganization; thus they were not prepared at that moment to say exactly what the Company wanted to do Gartrell told them that he appreciated their position and that- if they felt changes were desirable, the Union would be ready to discuss any pertinent sub- ject with them. He suggested that when the Company had studied operations and decided on proposed changes, the Company submit to the Union any proposals which it wished to make. He assured the Company that the Union sought opera- tions in the plant which would be efficient and profitable. After this short discus- sion, the officials of the Company and the Union made a tour of the plant Gartrell said that at this meeting there was no questioning of the Union's majority status by any of the company officials and that this "get acquainted" meeting was most amicable. G. The meeting of November 18 On this date representatives of the parties again met Anthony Rodriguez, Inter- national representative of District 5, testified that for him this was the "get acquainted meeting " The Company was represented by Larsen and other officers and the Union was represented by Rodriguez, Gartrell, and Scaglione At the meeting Larsen informed Rodriguez that there were certain portions of the contract that Randolph did not like. Rodriguez told the company representatives to present draft proposals and the Union would look them over. Larsen said that he would submit proposals within a week. All concerned then took a tour of the plant while the company officials explained to the union representatives what changes they planned to make in the manufacturing operations. On this occasion there was no indica- tion on the part of any company official that he doubted the majority status of the Union H. The mefusal of the Company to check off union dues, on advice of counsel In late October Julian Weinstein , the executive vice president of the Company, had requested Leon M . Cooper, the counsel of record for the Company herein, for an opinion regarding the legality of the Company deducting union dues from the wages of its employees for the Union . Rubber Corporation had done this pursuant to its contract. On November 26, in a letter addressed to the Company , Cooper transmitted the following written opinion. Attention : Mr. Julian Weinstein Executive Vice President Gentlemen : You have asked me to give you my opinion regarding deduc- tions for union dues from the wages of your employees at the Randolph Rubber Company, Inc., in Garden Grove, California. It is my opinion that it is unlawful for an employer to withhold any portion of an employee's wages, except under certain situations , including when the deduction is expressly authorized in writing by the employee to cover a deduc- tion arrived at by a Collective Bargaining Agreement. Under the circumstances, your firm cannot lawfully make deductions for union duties from the wages of your employees The authority for this opinion is found in the provisions of the California Labor Code, Sections 221, 224 and 227. Very truly yours, (S) Leon M. Cooper LEON M COOPER At the hearing counsel stipulated that the letter was posted on the bulletin board, where all employees could read it, on or about November 26 In connection with this document, counsel for the Company asked me to take judicial notice of sections 221-225 of the California Labor Code I took judicial notice of the sections. These particular sections of the California Labor Code forbid any deductions from wages of employees except (1) when the deduction is expressly authorized by statute or a valid labor contract, and (2) when each deduction is authorized by a writing signed by each employee. A violation of the sections is made a misdemeanor, punishable by fine and/or imprisonment Gartrell testified that shortly after November 26, he was informed by Richhart, president of the Union, that the Company had refused to check off the dues for the month of December. On approximately December 1, Gartrell telephoned Larsen. He told Larsen that on their two previous meetings the parties had seemed very amicable and there didn't seem to be any problem, and that he would like to have from Larsen, for the record, an acknowledgment of recognition of the Union and RANDOLPH RUBBER COMPANY, INC. 509 that he would appreciate it if Larsen would include in the acknowledgment of recog- nition a commitment to continue the checkoff for the month of December ; if neces- sary, the Union would secure new authorization forms for the dues. Larsen said that he would send Gartrell the requested letter as far as recognition was concerned , but he did not know what he could do about the checkoff in view of Cooper's legal opinion. Pursuant to this conversation Gartrell received from Larsen the following letter dated December 4, 1963: Re: Randolph Rubber Company, Inc. Gentlemen : As you know, the firm of Donald D. Rea and Company is the labor relations consultant for the above-caption company. In accordance with your recent request, this letter will serve to reiterate our previous verbal indications to you and to the Negotiating Committee of Local No 393 that representatives of the above -captioned company will meet with you at mutually convenient times and places in an effort to reach an agreement thru the processes of collective bargaining based on good faith efforts of both parties. Yours very truly, DONALD D. REA AND COMPANY (S) Lawrence H. Larsen LAWRENCE H LARSEN Labor Relations Consultant. During the next 7 days the union stewards, under the direction of Richhart, cir- culated among the employees a form of authorization for deduction of monthly dues. This form is divided into two parts by a perforated strip; one portion being marked "Company Record" and the second portion being marked "Union Record." In substance the company record authorizes the Company "to deduct from wages due the employee any unpaid dues . . . in accordance with the Union 's constitution; the dues to be checked off in accordance with the agreement signed on------------ date (------------ ) and any extension thereof as provided in said agreement, etc." The union record acknowledges that on the same date the employee signed a union dues assignment and authorization form as provided for in the contract . It is undis- puted that 208 employees signed such cards between December 5 and 12. These cards were received in evidence 3 However, it should be noted that this form of dues checkoff had been authorized and used for many years by the Union and Rub- ber Corporation , pursuant to the union-security and checkoff provisions of their con- tract . Since the contracts contained such clauses the execution of such authorization caids in the past had been compulsory . These authorization cards were addressed to the Company ; the date of the contract between the Union and the Company being left blank on the form On the day after the Company posted Cooper's opinion on the bulletin board, Richhart posted a notice directing employees to pay their union dues directly to the treasurer of the Union. As might have been expected , these notices were the topics of considerable talk and confusion among the employees. 1. The differences among the employees Gordon Lee, superintendent of the plant, and Richard Murphy, a foreman , testified credibly that many employees asked the foremen in the departments if they would be fired by the Company if they did not pay their dues or if they did not belong to the Union. Lee and his foremen told the employees that belonging to the Union and the paying of union dues was exclusively the business of the employees and that the Company had no interest in what they did on that score. However, through this talk, the foremen became aware of the factions and divi- sions among the employees , and of the other reasons for employee disenchantment with the Union , the contract provisions, and the increase in dues. In Murphy's stitching room the women were paid less under the current hourly wage scales, than under previous incentive plans, etc. At this time also, rumors circulated through the plant that the Company had a policy of not employing Spanish-speaking persons, or persons who were middle -aged or elderly. Since there were many employees in these groups , these rumors caused considerable consternation among the employees. The foremen, who allayed these rumors repeatedly , reported their substance to Lee, who in turn reported them to his superiors , Weinstein and Van Doren. ' General Counsel' s Exhibit No 15-1 through 1555-20S 510 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On December 6, 1963, the Company posted on the bulletin board the following notice: TO ALL RANDYITES: We have had many inquiries regarding the position of this Company as to Randyites who fail to pay Union dues. In order to answer these many questions , we wish to state that NO RANDY- ITE will be discharged for failure to pay Union dues. J. The meeting of November 28 (S) Paul Cohen (S) Julian Weinstein However, despite these events, Richhart and his negotiating committee of the Union met with representatives of the Company on November 28. Gladys M. Hawkins, previously referred to, testified that she attended this meeting of the negotiating committee of the Union and representatives of the Company, which was held in the Company's conference room, on this date. At this meeting, Larsen and a group of officers represented the Company, and the negotiating committee of the Union was composed of Richhart, president, and employees Colunga, Buck, Castro, and the witness, Hawkins. Larsen explained that the wage structure of the Com- pany had been examined by company officials who had found that many wage inequities existed, when the comparative skills of the employees were considered. He presented a written list of 157 employees to whom the Company desired to give wage raises of various amounts to correct these inequities. Then Larsen asked the opinion of the committee about the matter. This discus- sion drifted into a discussion of how much money the old company had lost, etc., and then came back to the wage rates. After some discussion, the negotiating com- mittee accepted the Company's proposal, because a majority of the employees were getting a raise. Hawkins stated that Richhart was the first one to accept the pro- posal, and he asked the opinion of the others. Some of the committee said that the wage rates were still not good. Colunga said that the proposed raises didn't do him any good, so he wanted to renegotiate everything when they made up a new contract. But, no one voiced any objection to the Company giving this raise to the employees. According to Hawkins, none of the company officials questioned the majority status of the Union at this meeting. K. Richhart's letter of December 7 On this date Richhart, as president of the Union, sent a copy of the following letter to each officer of the Company. Gentlemen: Nearly one month has gone by since you took over active ownership and management from the Rubber Corporation of California, of the plant at 10631 Stanford Avenue, Garden Grove, California. Shortly after you took over active management of this plant you asked to meet the Union officers of Local No. 393 and our International Representatives. This meeting was held in one of your plant offices, during the course of our conversation our Interna- tional Representatives asked you to honor the check-off system and collect Union dues from the employees for us. You said you would consider it and let us know, you never did, instead you very considerately posted on all Bulletin boards a copy of a letter from your attorney wherein an opinion was handed down stating it was illegal to collect dues without a signed dues authorization card from each employee. All you had to do on this was to notify the Union officers to get the employees to sign new authorization cards and turn them in to you and you could have legally collected these dues for us. (This was unfair labor practice on your part.) The law specifies: That Local #393 is still the bargaining representative for all these employees, and the Company must recognize Union Local No. 393 as such. The company or its representatives must bargain with the Local Union before they put any proposal into effect. Your recent wage raise to 157 people of nearly 300 employ- ees which you did not negotiate with the Union Officers or Negotiating Com- mittee on is another unfair labor practice on your part, I should have filed an unfair Labor Charge against you on that deal which was no more and no less than bribery. (I have another name for it, Subversive activity to try and outlaw the Union.) Since Local No. 393 is still the majority bargaining agent in the plant it fol- lows that all present members of Local 393 now employed in your plant are still obligated to pay dues to the Union. RANDOLPH RUBBER COMPANY, INC. 511 In the second meeting held between Company officials and Union Officers it was stated by you that you were interested in placing the plant wage system back on the incentive plan again from our present hourly wage plan. You also stated that you would draw up a proposal and submit it to the Union Negotiat- ing Committee at a formal meeting to be called for the purpose. No proposal was ever submitted to us. On our third and last meeting held on November 26, 1963 you came out openly and for the first time and said you did not like our present Collective Bargaining Agreement. Up to this point in our relationship we were under the impression that your company accepted this contract with but a few minor changes such as the name of your company instead of Rubber Corporation Of California etc; But you told us at the above mentioned meeting that you liked no part of that contract. Since over half of our above mentioned contract is standard contract lan- guage found in all Union contracts I feel like somebody is trying to kid some one again or you are just plain stalling. We mentioned to You in our last meet- ing we would like to be informed in writing as to what specifically you do not like in our present Contract and Agreement. This you have never done. It would be plain stupid of me to sit down with my Union Negotiating Committee and attempt to tailer make a contract proposal to suit the Company and not having the least idea what kind of a proposal would run along the line you desire, therefore I believe it would be to the Company's advantage and also should be the Company's prerogative to draw up a proposal suitable for the plant operation and submit it to the Union Negotiating Committee imme- diately. Now I get to the gist and the most important part of this whole long letter. The officers and members of this Local Union #393 asked me to inform you as company officials that they are tired of working without a contract, and will do it no longer. Again I am asking you to recognize and honor our present contract and agreement for another forty-five (45) days or until January 21, 1964 for all operations in the plant. This should give both the Company and the Union sufficient time to negotiate a more suitable contract. Also I am asking the Company through you as officials to honor our check-off system and collect all current or delinquent Union dues now due our Local Union. As you are aware of I have most of the employees signatures on new authorization cards already. Gentlemen: the present situation is a very serious one and is one which should command your fast and immediate action on the above requests. As I am sure you are now aware of a special Union membership meeting was held last Mon- day December 2, 1963 for the specific purpose of choosing a course of action against Randolph Rubber Company, Inc. for failure to recognize our Union or Contract. The hall where this meeting was held was jam packed with employees and they were even standing out in the street because of the number employees showing up at this meeting. An unanimous vote was cast to hold another meet- ing on Monday December 9, 1963 to cast a strike vote; There is no question in my mind but that there will be the same kind of turnout on the part of these employees to cast a strike vote to back me up in our above requests if necessary. These people are all good Union members and have been for many years and I am sure I can depend on them to back me in any and all actions it may be necessary to take Hoping the above gets your immediate attention, I Am, etc .4 Apparently Richhart's letter annoyed Larsen on several scores, for on December 9, he replied to the Union as follows: Attention: George C. Richhart, President Re: Randolph Rubber Company, Inc. Gentlemen: As you know, the firm of Donald D. Rea and Company is the labor relations consultant for the above-captioned firm. In this regard may we request that in the future you conform to accepted procedures and forward to this office copies of all documents pertaining to labor relations by and between your Union and the above-captioned firm, our client. Your letter dated December 7, 1963, has been forwarded to this office for reply. In behalf of our client, we do both specifically and categorically deny the commission of any unfair labor practices in our relationship with Local No. 393. ' Several errors in spelling and punctuation in the above have been corrected. 512 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In our opinion, your insinuation relating to "bribery" is libelous, and we demand an immediate apology from you, and insist that you refrain from such conduct in the future. With regard to the check-off of your Union dues, your letter states that "you could have legally collected these dues for us." You should check the Labor Code of the State of California regarding the collection of dues from employees in the absence of a collective bargaining agreement. Our attorney advises us that for us to do so would be a violation of this Code Please be advised that the establishment of a system of dues check-off is a subject of collective bargain- ing, and we stand ready to discuss it with you at any time mutually convenient to both parties. In answer to your statement, "Local 393 is still the majority bargaining agency in the plant," please be advised that we do' not have any knowledge of the majority status of your Union. We can only repeat again, as we have done many times in the recent past, both verbally and in writing, that the Company will negotiate in good faith with your Local in an attempt to reach an agreement acceptable to both parties. After all, as you point out in your letter, we have already had three (3) meetings since November 8, 1963, despite a two or three- week absence during that period of time on the part of your International Repre- sentative, who normally acts as your spokesman' We are now in the process of preparing proposals to submit to you at our next meeting. We assume you are doing the same, inasmuch as you did ask the Company to assist you in the preparation of the Union proposals at the November 26 meeting Our answer to you at that time was that we could not assume such an interest in the affairs of the Union However, we stand ready to meet with you again at times mutually convenient to both parties, providing you conduct your relations with this Company in a legal manner, and without any further improper threats or libelous statement. Please notify this office when you wish to meet. Very truly yours, DONALD D. REA AND COMPANY (S) Lawrence H Larsen LAWRENCE H LARSEN Labor Relations Consultant [Emphasis supplied.] L. The meeting of December 19 Representatives of the parties met again on December 19. Larsen and a group of company officials represented the Company; Richhart and the negotiating committee represented the Union On this occasion, Anthony Rod- riguez, International representative, and Mervin N. Glow, counsel for the Union, were also present. Glow testified that the representatives of the parties gathered at the plant at approxi- mately 10.30 on this morning After introductions, Larsen identified himself as spokesman for the Company and asked the union representatives who was spokesman for the Union? After caucusing, the union committee, by Glow, stated that under the International's constitution the Union had autonomy and that the Local negotiating committee had designated Richhart to speak for the Union, and that Rodriguez and Glow, himself, were present in an "advisory capacity." Glow then said that, for the purpose of this one meeting only, that he (Glow) would be the spokesman. Larsen asked the union committee to notify him in writing that Rtchhart was to be the spokesman. At that point Rodriguez and Glow stepped out of the meeting and dis- cussed the question of whether there was any reason why they should not furnish the Company with such a written statement. They then returned to the meeting and advised Larsen that the Union had no objection to putting Richhart's designation in writing, subject to the International's constitution and bylaws, which placed some restrictions on local negotiations At that point, Larsen indicated that he was not happy about the situation. He said that the Company had forwarded a letter to him which Richhart had written to the Company, and he showed the negotiating committee of the Union the letter dated December 7. This was the first knowledge that any of the negotiating committee had that Richhart had sent such a letter. At that point Larsen said that he wanted a Board-conducted election; that the Company would not discuss a collective-bargaining agreement or negotiate with the Union in the absence of a secret ballot election Glow then "cross-examined" Larsen as to whether the Company had purchased the assets of Rubber Corporation or were the successors in interest to that corporation and whether it considered itself bound by the collective- bargaining agreement between the Union and Rubber Corporation Larsen replied that the Company had simply purchased the manufacturing facilities of Rubber RANDOLPH RUBBER COMPANY, INC. 513 Corporation, and did not consider itself bound by the collective-bargaining agreement between the Union and Rubber Corporation. At that point Glow asked Larsen if he was refusing to negotiate with the committee because he claimed a good-faith doubt as to the Union's majority status. Glow testified that was the first time that the par- ticular phrase "good-faith doubt" had been used in the meeting. Larsen said, "Yes." Glow then said that the Company's position was not valid and that Larsen was giving him a bunch of "hog wash," because (1) Larsen knew that there was "a union security clause" in that contract, which required that every employee in the bargaining unit be a member of the Union. Glow also told Larsen (2) that since the Company had begun operations, the Union had secured new authorization cards signed by a majority of the employees and he offered to show the cards "to him or to any third party, independent designee, to check the validity of those cards." Larsen replied that the Company was not interested in cards-the Company wanted a secret ballot elec- tion. Glow then pointed out (3) that in the letter of December 4, which Larsen had written to Gartrell, Larsen had stated that the Company was willing to sit down and negotiate with the Union as the collective-bargaining agent of the employees, and that letter raised no question as to majority status of the Union Larsen again said that the Company wanted a secret ballot election under Board auspices and that the Company would not negotiate with the Union unless they had such an election. At that point the union representatives withdrew for a caucus, dur- ing which they phoned Gartrell, the district director who was in Cleveland, Ohio. After talking to Gartrell, the union committee went back to the meeting and told the company representatives that if the Company was adamant in its position, the Union felt that the meeting should be adjourned. When Glow rose, preparatory to leaving, Larsen said that there had been a change in circumstances and asked Glow to sit down. Larsen then handed to Glow a docu- ment consisting of a number of pages, dated December 19, 1963, which were entitled, "Proposed Wage Increases." Glow asked Larsen if he was willing to negotiate with the committee on other terms and conditions of employment that are usually included in a collective-bargaining agreement, in addition to the proposed wage raises. Larsen said they would not negotiate with the committee until there had been a secret ballot election, and advised the committee that these were increases in wage rates which they intended to put into effect, but which they were willing to discuss with the com- mittee. Glow then answered that the committee could not intelligently discuss these proposed wage increases until they had looked them over. After looking them over, the Union might want to discuss them with the Company, but that the Union still considered the Company's position, of refusing to negotiate with the committee on all issues, improper and illegal. Larsen then said that the Company and the Union were fighting to no purpose since both were interested in the welfare of the employees, and he urged the Union to agree to a Board-conducted election, saying that the Company had a doubt as to the majority status of the Union because "several people had come up to them and asked them who represents them now," etc. Glow replied that this was a "bunch of malarkey" and reiterated the thiee points he had made earlier He added that if the Company wanted to stabilize the employees' situation they should sit down with the Union and negotiate changes in the Rubber Corporation union con- tract as Gartrell had offered to do. On cross-examination Glow stated that he could not remember the exact words that Larsen used when he said that there was confusion among the employees, but he indicated there was in his (Larsen's) opinion "a com- plete confusion as to who was running the show" for the employees On December 23, 1963, the officers of the Company posted a "Randy-gram" to the employees. This explained the Company's policy on vacations, holidays, funeral pay, jury duty pay, overtime pay, shift bonus, emergency call-in pay, insurance coverage, Christmas party, leaves of absence, promotions, etc. M. The original and amended charge On December 26, 1963, Mervin N. Glow, of the law firm which is the Union's representative of record herein, filed the original charge of unfair labor practice with the Regional Office of the Board. This original charge was transmitted to the Company by a letter signed by the Regional Director on December 27, 1963. This letter also stated that the case had been assigned to Bill Fitzgerald, attorney in the Regional Office, who would handle the case. The return receipt of the postal department indicates that the document was received by the Company on December 28, 1963. On December 27, 1963, Mervin N. Glow amended the original charge but, as will be noted hereafter, this amended charge was not filed with the Board until January 8. 1964. 759-730-6G-vol 152 34 514 DECISIONS OF NATIONAL LABOR RELATIONS BOARD N. Concluding correspondence On December 30, 1963, Paul Van Doren, vice president of the Company, addressed the following letter to Richhart in regard to the wage increases proposed on Decem- ber 19: Attention: Mr. George Richhart: Dear George: Re: Proposed Wage Increase On December 19, 1963, the Company submitted to you its schedule of pro- posed wage increases for your consideration. Since that time , we have not received any indication from you as to your approval or disapproval of the wage increases. As expressed to you in the above-mentioned meeting, the Company desires to give these raises as soon as possible. Please indicate your approval or dis- approval by return mail so the Company may take further action. Very truly yours, RANDOLPH RUBBER COMPANY, INC. On January 3, 1964, Richhart, president of the Union, replied to Van Doren as follows: Dear Sir: With reference to your letter addressed to me dated December 30, 1963, please be advised that our position has not changed since our meeting with you of December 19, 1963, when you "handed " us your proposed wage increases. We thought we made our position quite clear at said meeting when we told you we were always willing to talk about better wages for the people WE REPRE- SENT, but that we were not desirous of doing it piecemeal . We felt then and we feel now, that wages is a proper subject for negotiations and that we should negotiate these wage increases so that all of our people would be treated FAIRLY and EQUALLY. Again, our position is that we are opposed to the unilateral wage increases you are putting into effect . We feel that wage increases should be through the process of negotiations so that we can talk about wage increases for ALL OF YOUR EMPLOYEES. Yours truly, George Richhart, President Local Union No. 393, URCLPWA. (Emphasis and capitalization in the original; no emphasis supplied by the Trial Examiner.) On January 7, 1964, Van Doren replied to Richhart by letter as follows: Dear Mr. Richhart: Your letter of January 3, 1964, which apparently is in reply to our letter of December 30, 1963, only adds more confusion to the pic- ture at the Company. The purpose of our letter was to get your approval or disapproval of the wage increase proposal we presented to you on December 19, 1963. We did not ask for your opinion on how to do it, but only for a plain "Yes" or "No." We did not ask whether or not you represent the people; after all, the Company requested that an election be held by the National Labor Rela- tions Board where the people could make their own wishes known by way of a secret ballot election. You would not agree to such an election. The Company will request the National Labor Relations Board to hold such an election in the near future. There is no contract between the Company and your Union. The Company has discussed the wage increases proposed on December 19, 1963 with you. On December 30, 1963, we asked for an indication of your approval or disapproval of the increases. Your reply says nothing. THE COMPANY WANTS TO TREAT ALL RANDYITES FAIRLY AND EQUALLY. Therefore, the Company feels that sufficient time and sufficient opportunity has been available and we have had no cooperation from you in this matter; further, your letter closes the door to any more attempts on the part of the Com- pany to discuss the matter of the increases with you. Please be advised that, in view of the above, the increases will be made effective as of January 6, 1964. Very truly yours, RANDOLPH RUBBER COMPANY, INC. Paul Van Doren Vice President i1 c Manufacturing. RANDOLPH RUBBER COMPANY, INC. 515 As noted previously the amended charge of the Union was filed with the Regional Office of the Board on January 8, 1964. On the next day a copy of the letter of Van Doren dated January 7 was posted on the bulletin board of the Company in both English and Spanish. 0. The meeting of February 10 Julian Weinstein, executive vice president of the Company, testified that although there were charges filed against the Company that there was another meeting between the negotiating committee and representatives of the Union on February 10, 1964. At this meeting representing the Union were Richhart, president, and the negotiating committee including Buck, Hawkins, Caporale, Castro, and some others . Van Doren of the Company reviewed the accomplishments made in the manufacturing processes and the fact that the Company was making better quality shoes. He then told the committee that the Company would like to make 268 additional pay raises which would complete a basic wage structure for the Company. The committee discussed the raises and said that they liked the proposal and that they would be pleased to see the Company put the raises into effect . Some members of the committee then asked "What could be done about the unfair labor practices charge." The company repre- sentatives replied that there was nothing that the Company could do about that; it had been filed by the Union and the Company could do nothing about it. Richhart testified in this proceeding . In the course of his cross-examination, Richhart was asked if the Union negotiating committee had agreed to raises for 285 people on February 10, 1964. He testified as follows: ". . . there was another wage raise on February 10 for 285 people in this plant, which consisted of the entire plant, and so my negotiating committee , at a meeting with the Company, did agree to let them increase those wages because it affected everybody in the plant." P. The private meeting of Larsen and Rodriguez As the witnesses testified at the hearing and the correspondence set forth above was received in evidence, the Company's repeated request to the Union for a Board- conducted election became increasingly important . So, too, inherent in this situation, was the question , why then had not the Company filed an RM petition seeking an election on its own initiative? The last witness called by the Company, Larsen, gave the answer to that question in testimony which I credit. Larsen testified that a few minutes after the end of the meeting of December 19, while he was still at the plant , he received a personal phone call from Rodriguez , who asked Larsen to meet him in private at the Chalet Restaurant, which is near the plant. Larsen agreed to meet Rodriguez and joined the latter a few minutes later at the restauiant . Rodriguez expressed regret that the meeting had ended in disagreement . Rodriguez said that if Richhart , as spokesman for the Union, was the cause of Larsen's demand for an election, that Rodriguez could have Richhart removed as spokesman . Larsen said that Richhart's selection as spokesman for the Union had nothing to do with the Company's position. Rod- riguez then said that he desired to reach some amicable understanding with Larsen, rather than have the Union file charges or the Company file an RM petition. Rodriguez asked Larsen to hold up on filing the RM petition , while both Larsen and Rodriguez discussed the situation with their respective superiors. Larsen agreed to hold up on the RM petition and Rodriguez agreed to let Larsen know if anything came of Rodriguez' appeal to his superiors . The next thing Larsen heard was that the charge of unfair labor practices had been filed by Glow. Larsen then phoned the Regional Office of the Board and talked to either Fitzgerald or Gershman , who told him that the Company could file an RM petition , but that the Regional Office would not conduct an election because the unfair labor practice charge had been filed. Rodriguez was recalled in rebuttal by the General Counsel , as to this testimony. He said that he had not disclosed the fact of this meeting to representatives of the General Counsel in the investigative stage of this proceeding because he considered the meeting confidential. He admitted that he first discussed this meeting with repre- sentatives of the General Counsel during the recess which followed immediately upon the conclusion of Larsen's testimony . Rodriguez, after some rather rambling testi- mony, then denied that he agreed with Larsen not to file an unfair labor practice charge, if Larsen did not file an RM petition. Rodriguez is an intelligent, alert person , but in this testimony he did not appear to advantage ; his denials sounded hollow and not at all persuasive . I do not credit any aspect of Rodriguez' testimony, for there are other points in which Rodriguez' testimony does not agree with that of even his fellow-unionists , Richhart and Gartrell, e.g., the Company's dissatisfaction within the Union as to failure to refund $ 1 of the higher dues. 516 DECISIONS OF NATIONAL LABOR RELATIONS BOARD I credit Larsen's entire testimony. Larsen said that as the relationship of the Com- pany and the Union began, he and the officers of the Company did not know anything about the majority status of the Union except that prior contracts required that the employees be members of the Union. However, as the relationship of the Union and Company developed, the division of employees and the dissatisfaction of employees with the Union became increasingly manifest. Around December 1, 1963, he and the officers of the Company began to doubt that the Union had majority status in the Union, thereafter, he consistently asked for the Union to prove its majority by a Board-conducted election. Furthermore, Larsen was not sure even who conducted affairs for the Union, Richhart, Rodriguez, or Gartrell, and that was why he asked who was spokesman for the Union in the meeting on December 19. After a caucus of union representatives, Larsen was told that Richhart was spokesman. Larsen testified that at one time Richhart fold Larsen that he would go hand-in-hand with Larsen to the Board and consent to an election When Richhart was asked about this statement in the course of his examination, he said that he had told Larsen that he would go to the Board with Larsen and consent to an election, if the International representatives (presumably Gartrell and Rodriguez) agreed to an election; they didn't agree, so his agreement with Larsen was not effective. The above narrative of testimony and correspondence is not a recital of all the evidence, it is merely a synopsis of the highlights, which demonstrates the evidence upon which the parties rely. All the evidence has been considered in reaching the findings hereinafter set forth. Concluding Findings Upon all the evidence it is clear that when the officers of the Company assumed control of operations on November 8, 1963, they knew nothing about the majority status or the lack thereof by the Union in the appropriate unit Larsen, of course, knew that Rubber Corporation and the Union had a contract for many years which required compulsory membership of all employees in the Union and a checkoff of their union dues. However, as the Company took control neither the officers nor Larsen had any definite idea as to the satisfaction of the employees with their bargain- ing representative. Within a few weeks they learned various facts, which led the Company to have a good-faith doubt of the Union's majority status in the appropriate unit Through the supervisors, company officials became aware of the widespread dissatisfaction in the plant with the last contract negotiated a few weeks previously by Rubber Corporation and the Union. The foreman reported that many employees complained bitterly of severe cuts in wages, when the incentive plan was dropped from the contract This dissatisfaction was so severe that the union president and the negotiating committee who had represented the employees in the ill-starred negotiations were overwhelm- ingly defeated in a union election and replaced by Richhart, a new president and a new negotiating committee. It should be noted at this point, that International repre- sentative Rodriguez also participated in those ill-starred negotiations The Company also learned that there was a great deal of dissatisfaction among the employees with the Union because the union dues had been raised $1.50 per month upon a promise to refund $1 to those members who attended the monthly meetings. Later the refund was found to be illegal, but the dues were not returned to the former amount. The Company learned of all this dissatisfaction in the first few weeks of operations. Furthermore, the plant was plagued with rumors that the Company, which was new to the West and not used to Spanish-speaking employees, had a policy of not hiring those employees. Another rumor stated that the policy of the Company was not to hire middle-aged or elderly persons. These unsettling conditions, about which there is no conflict in the evidence, had to be resolved by the Company. The action which triggered the present controversy was the refusal of the Company to collect dues for the benefit of the Union. As to the propriety of Cooper's opinion to the Company on this point, there can be little doubt. Both the California Labor Code and the Act provide substantially the same conditions precedent to the deduction of an employee's union dues by an employer. Under each law before such a deduc- tion may be made and paid to the union there must be (1) a valid contract between the employer and the employees' bargaining representative which provides for such a checkoff and (2) a written authorization for checkoff executed by each employee. On this point the Company had to proceed with caution, for if it made any unauthorized dues deductions it would have to repay the same in an action or proceeding brought to effect such repayment. The Company had to proceed in an equally cautious way in granting recognition to the Union because if it granted recognition and executed a contract with a union which was not in fact the majority representative of its employ- ees it also committed an unfair labor practice, regardless of its good faith in such recognition. RANDOLPH RUBBER COMPANY, INC. 517 In my judgment, the Company proceeded in the exactly correct legal way.5 The Company in the first instance sought conferences with the Union and asked for time to consider its action as to its changes in manufacturing operations in the plant and time to determine its position in regard to the Union. Until the Company refused to collect dues for the Union, both parties proceeded on this basis quite amicably. When the Company determined that it wished to increase certain rates of pay it notified the Union of the proposed raises and consulted with the Union. There is no question upon the basis of the evidence in this record that Richhart and his negotiating com- mittee were consulted; and indeed agreed, that the Company could give the raises to the employees involved. Even after these unfair labor practice charges were filed with the Board, Richhart and his negotiating committee admittedly sat at the con- ference table with the representatives of the Company and agreed that the last of the general wage increases could be put into effect with the consent of the Union. This undisputed evidence must warrant the dismissal of those paragraphs of the complaint which allege that these wage raises were unilateral on the part of the Company It is also apparent that the attitude of the various union officials contributed to the good-faith doubt of company officials as to the majority status of the Union At the meeting of December 19 the first matter raised by Larsen was, who was to be spokes- man for the Union? This was entirely understandable because the company officials at that point had met with Gartrell and Rodriguez and were being blamed by Rich- hart because the Company had not recognized the Union and negotiated with hint, and his committee. The undisputed testimony is that at this point the union repre- sentatives held a caucus to decide this question and it was agreed that Richhart would be the spokesman, with Rodriguez and Glow in an advisory position. This meeting ended with Glow threatening to file unfair labor practice charges against the Com- pany, and the Company stating its intention to file an RM petition for an election. Within minutes of the end of this meeting, Rodriguez offered Larsen the use of his influence with the International to oust Richhart from his position as spokesman. This offer was refused by Larsen, who, at Rodriguez' request, then agreed to refrain from filing an RM petition for an election. A few days thereafter Glow, not Rich- hart, the president of the Union and its spokesman, filed an unfair labor practice charge against the Company, which prevented the Company from filing an effective RM petition. Apparently, these charges filed by Glow did not prevent Richhart from continuing to consult with the Company, for on February 10, Richhart and the negotiating committee discussed additional raises for 285 employees and told the Company they had no objection to the Company putting the raises into effect. Certainly it must be found that in the first month or two of operations the Company gained a knowledge of such facts as would naturally raise a doubt in the minds of its officers and Larsen that the Union was still the voluntarily chosen bargaining repre- sentative of a majority of the employees. With that basis, we may assess the good faith of the doubt which the Company says that it entertained prior to and on December 19. Usually in refusal-to-bargain cases bad faith evidences itself by con- duct which has for its purpose the destruction or impairment of the Union as an effective representative of the employees; often the request for an election is a play for time, during which the majority status of the union may be undermined In this record there is not a scintilla of evidence as to any statement or conduct of any official or representative of the Company which can be construed as being antiunion in any respect. In fact, quite the contrary is true. The Company, after its study of its operations in the new plant, instituted a series of three raises for all the former employees of Rubber Corporation, whom it had hired. Originally it had hired each and every one of these employees, with full knowledge that for many years they had been members of the Union, either by choice, or by compulsion of the bargaining contract. I deem it significant that the Company made no attempt to rid itself of these longtime union adherents. On the contrary, it welcomed them, gave them assurances of continued employment, and with the consent of the Union gave them raises in pay. In addition, when the Company desired to augment its work force by the hiring of 200 additional employees it made use of the layoff list of Rubber Corporation to rehire some 200 employees, formerly employed by Rubber Corpora- tion, who also must have been members of the Union by virtue of the contract. Counsel for all the parties in this proceeding agree that the Company had no duty of any kind to hire these persons. Despite the fact that these laid-off employees had been members of the Union, either voluntarily or by compulsion of the contract between Rubber Corporation and the Union for various periods of time, the Company did not hesitate to hire them. With these undisputed facts in this record, I find that the Company at all times since December 19, 1963, has had a good-faith doubt that 5See1?mmyBrooIsv. NLR It ,348 US 96 518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Union was the voluntary choice as bargaining representative of a majority of its employees in the appropriate unit, and for that reason has refused to recognize and bargain with the Union. The specious basis of the Union' s charge in this case is illustrated by what Glow told Larsen at the meeting of December 19. On that occasion Glow termed Larsen's expressed good-faith doubt as "hog wash" because Larsen knew that there was a union-security clause in the Rubber Corporation union contact, which required that every employee in the Rubber Corporation bargaining unit be a member of the Union. The superficiality of this reasoning needs no explication. Back in the year 1953 some of the then employees of Rubber Corporation had chosen the Union as a bargaining representative. Thereafter, for 12 years as empolyees came and went, they were required to join the Union by virtue of the contract. Glow's assertion that evidence of this compulsory membership in the Union is proof that the Union is the present voluntary choice of a majority of the employees is patently fallacious. Glow also said to Larsen on that occasion that the Union had secured new "authorization cards signed by a majority of the employees" and he offered to show the cards to Larsen or to any third party to check the validity of the cards. Such a statement con- tains the same fallacy. The undisputed evidence establishes that the Union has two types of authorization cards. One type is used in signing up new members. The type of card used in this case , which had a place for the authorization of a checkoff of dues, was customarily used where the Union had a contract with the employer which contained union-security and checkoff provisions. This was the same type of card which had been used by the Union for 12 years under the union-security and checkoff provisions of its contract with Rubber Corporation. It is true , that these cards were newly executed, but since they were in the same form as those used for 12 years prior, to comply with the compulsory membership requirement of the contract, these 11 new authorization cards" can hardly be said to be voluntary designations which could be either a substitute or the equivalent of a Board election conducted "under labora- tory conditions" in proving the majority status of the Union. Therefore, I find that the "new" checkoff authorization cards are unacceptable and inadequate as proof of the voluntary choice of the majority of employees in the appro- priate unit. On December 19 Glow also said that the Company's letter of December 4 had stated that the Company was willing to sit down and negotiate with the Union as the collective-bargaining agent of the employees and the Company was bound by that letter. This too is without foundation in the light of all the evidence here. The evi- dence establishes beyond a peradventure of a doubt that in the beginning the Com- pany, with the consent and knowledge of the Union, was feeling its way in its efforts to reorganize and was attempting to determine the extent of its duty, if any, toward the Union based on the relationship of its employees toward the Union. This transi- tional period to which the Union tacitly agreed did not turn out as the Union expected; instead of being recognized as the majority representative of the Company's employ- ees, this transitional period needed with the Company having a good-faith doubt of the Union's majority status on the solid facts set forth above. This case is very similar to the facts in Mitchell Standaid Corporation, 140 NLRB 496. In that case the Board found that the following factors in the record supported the good-faith doubt of the Company as to the majority status of the Union there involved: (1) the lack of recent certification of the Union as bargaining agent; (2) the Company's assurance to the Union's representative that if the question of majority was resolved by an election, the Company would quickly extend recognition; (3) lack of any evidence of antiunion animus; (4) the hiring by the Company of employees of the predecessor who had been shop stewards and union officers. The Board found that the evidence on these points and evidence of dissatisfaction with the Union among the employees overcame any inference that might be drawn from current checkoff authorizations and a history of 17 years of collective bargaining with the Union.6 We come now to a consideration of the Union's argument based on the Wiley case, supra. In that case the United States Supreme Court held "That the disappearance by merger of a corporate employer which has entered into a collective bargaining agree- ment with a union does not automatically terminate all rights of the employees covered by the agreement, and that, in appropriate circumstances, present here, the successor employer may be required to arbitrate with the Union under the agreement " By virtue of this decision an employer was required to arbitrate with the Union an alleged injury to an employee, which arose before the merger of the first corporate employer with the second corporate employer. See also The Randall Company , Division of Textron, Inc, 133 NLRB 289, Diamond National Corporation, 133 NLRB 268 RANDOLPH RUBBER COMPANY, INC. 519 Thereafter the United States Court of Appeals (C.A. 9) in Wackenhut Corp. V. Plant Cards, 56 LRRM 2466, 332 F. 2d 954, applied the rationale of the Wiley case to situations where the change in ownership came about by direct sale rather than by merger and held that a union's collective agreement and its arbitration clause are binding upon the successor employer, when the purchaser continues to operate the business in substantially the same manner with the same employees. Upon the basis of these two cases the Union argues that the Company is a successor employer to Rubber Corporation and that by virtue of the contract between Rubber Corporation and the Union the Company was bound to recognize and bargain with the Union as the certified bargaining representative and majority representative of the employees in an appropriate unit of the Company's employees. In my judgment, counsel for the Union has read into the Court's opinion in Wiley, much more than the Court asserted. While the Court held that the duty of Wiley's predecessor to arbitrate under a contract with the Union could be imposed upon Wiley when the contract was "construed in the context of the National Labor policy," it specifically stopped at that point. At that point, the Court wrote as follows [supra, 551]: We do not hold that in every case in which the ownership or corporate struc- ture of an enterprise is changed the duty to arbitrate survives. As indicated above, there may be cases in which the lack of any substantial continuity of identity in the business enterprise before and after a change would make a duty to arbitrate something imposed from without, not reasonably to be found in the particular bargaining agreement and the acts of the parties involved. So too, we do not rule out the possibility that a union might abandon its right to arbi- tration by failing to make its claims known. Neither of these situations is before the Court. Although Wiley was substantially larger than Interscience, relevant similarity and continuity of operation across the change in ownership is ade- quately evidenced by the wholesale transfer of Inteiscience employees to the Wiley plant, apparently without difficulty. The Union made its position known well before the merger and never departed from it. In addition, we do not sug- gest any view on the questions surrounding a certified union's claim to continued representative status following a change in ownership. See, e g., Labor Board v. Aluminuin Tabular Corp., 299 F. 8d 595, 598-600; Labor Board v. McFarland, 306 F. 2d 219; Cruse Motors, Inc., 105 NLRB 242, 247. This Union does not assert that it has any bargaining rights independent of the Interscience agree- ment; it seeks to arbitrate claims based on that agreement, now expired, not to negotiate a new agreement. [Emphasis supplied, except as to citations of cases ] The reference of the Court to the cited cases puts this case in its proper perspective because here the Union's claim is specifically that it is the "certified union" for a unit of employees who are involved in "a change in ownership." Thus, far from present- ing us with a new concept, the Wiley case remits us to the line of cases dealing with the problems of "successorship " In Cruse Motors, Inc, referred to by the Court, supra, the Board wrote as follows: A mere change in ownership of the employment enterprise is not so unusual a circumstance as to affect the certification. Where the enterprise remains essen- tially the same, the obligation to bargain of a prior employer devolves upon his successor in title. A purchaser in such a situation is a successor employer. Armato, 199 F. 2d 800 (C.A. 7); Southerland's Tennessee Company, Inc., 102 NLRB 1178; Allan W. Fleming, 91 NLRB 612; Blair Quarries, Inc., 152 F. 2d 25 (C.A. 4). "It is the employing industry that is sought to be regulated and brought within the corrective and remedial provisions of the Act in the interest of industrial peace .... It needs no demonstration that the strife which is sought to be averted is no less an object of legislative solicitude when contract, death, or operation of law brings about change of ownership in the employing agency." Kiddie Kover Co., 105 F. 2d 179, 183 (C.A. 6). Where, however, the nature or extent of the employing enterprise, or the work of the employees, is substantially changed, the transfer of a part, or even all, of the physical assets does not carry along with it the duty of the former owner to continue bargaining with the former exclusive representative. Herman Lowenstein, 75 NLRB 377; Sewell Mfg. Co., 72 NLRB 85; Tampa Transit Lines, 71 NLRB 742. The purchaser in such a situation is not a successor employer. The controlling fact in each case is therefore whether the employment enterprise substantially or essentially continues under the new ownership as before. Here, the undisputed evidence establishes, and I find, that the Company is not the "successor" or the "same employing industry" as Rubber Corporation. Here, the 520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Company brought from the East its capital, its officers, and its supervisors; it took over the real estate but installed much new equipment and machinery and entirely differ- ent manufacturing processes. While it hired the employees of Rubber Corporation it initiated a training program to teach these employees new skills, and with their new skills installed higher rates of wages in consultation with the Union. Its product is admittedly superior to any of the products of Rubber Corporation. Furthermore, it is a larger and expanding company with sound financing and its own labor relations policy. It manufactures its own products, which are manufactured by its own methods, from materials purchased from its own suppliers, and sold under its own trademark to its own customers. RECOMMENDED ORDER Upon all the evidence and the legal authorities set forth above, I find that the Company did not fail or refuse to bargain as alleged in the complaint. Therefore, it is recommended that the complaint be dismissed in its entirety. Draper Corporation and United Steelworkers of America, AFL- CIO. Case No. 1-CA-4806. May 10,1965 DECISION AND ORDER On March 2, 1965, Trial Examiner Arthur E. Reyman issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent and the Charging Party filed exceptions to the Trial Examiner's Decision and the Respondent also filed a brief in support of its exceptions. Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this; case to a three-member panel [Members Fanning, Brown, and Jenkins]. The Board has considered the Trial Examiner's Decision, the excep- tions and brief, and the entire record in the case, and hereby adopts the Trial Examiner's findings, conclusions, and recommendations. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby adopts as its Order, the Recommended Order of the Trial Examiner and orders that Respondent Draper Corporation, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recom- mended Order. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE On November 20, 1964, United Steelworkers of America, AFL-CIO, herein called the Union, filed a charge against Draper Corporation, the Respondent herein, alleging as a basis therefor that "since about November 10, 1964, the Employer [Respondent] 152 NLRB No. 57.