Crago Gear & Machine Works

CRAGO GEAR & MACHINE WORKS Crago Gear & Machine Works and District No. 71, International Association of Machinists and Aero- space Workers, AFL-CIO. Case 17-CA-7738 May 30, 1978 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND MiURPHY On January 19, 1978, Administrative Law Judge James L. Rose issued the attached Decision in this proceeding. Thereafter, the General Counsel and the Respondent filed exceptions and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions ' and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge, to modify his remedy,2 and to adopt his recommended Order.3 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondent. Crago Gear & Machine Works, Kansas City, Missouri, its officers, agents. successors, and assigns, shall take the action set forth in the said recommended Order, except that the at- tached notice is substituted for that of the Adminis- trative Law Judge.4 The Respondent has excepted to certain credibility findings made b, the Administrative Law Judge It is the Board's established policN not to o,er- rule an Administrative La. Judge's resolutions w ith respect to credibilits unless the clear preponderance of all of the relevant evidence consinces us that the resolutions are incorrect. Sa,,nda, )r Dr Wall Products. Inc. 91 NILRB 544 (1950). enfd 188 F.2d 362 ((',A 3, 1951). We have carefulls examined the record and find no basis for resersing his findings 2 See Isis Plumbing & Heating Co.. 138 N l RB 716 (1962). for rationale on interest payments. 3 Chairman Fanning would date the Respondent's bargaining obligation from February 16, 1977, when it refused the Petitioner's bargaining request See then-Member Fanning's concurring opinion In Trading Port, Inc, 219 NLRB 298 (1975). 4 The General Counsel has excepted to the Administrative Lasw Judge's failure to conform his notice to his recommended Order, Therefore we A ill substitute the attached notice to remend that inadvertent omission. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing in which all parties were represented by counsel and had an opportunity to call, examine, and cross-examine witnesses, it has been found by the National Labor Relations Board that we have violated the National Labor Relations Act. We have been ordered to post this notice and to comply with its terms. Our employees have the right to join District Council No. 71, International Association of Ma- chinists and Aerospace Workers, AFL-CIO, or any other labor organization, to engage in collective bar- gaining through a representative of their own choos- ing. or to refrain from any or all of these things. WE WIL[ NOT grant or deny our employees economic benefits such as wage increases, in- creased vacation benefits, or increased holiday benefits in order to influence their interest in or activitv on behalf of the Union or any other la- bor organization. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL recognize and bargain upon request with District Council No. 71, International As- sociation of Machinists and Aerospace Workers, AFL-CIO, and WE WILL embody any under- standing reached in a written signed contract. The appropriate unit is: All full-time and regular part-time production and maintenance employees employed by us at our Kansas City. Missouri, facility exclud- ing office clerical employees, professional em- ployees, guards and supervisors as defined in the National Labor Relations Act, as amended. WE witi. make whole Bryan Groves for the losses he suffered as a result of our not granting him an earned merit increase, with interest. CRACGO GEAR & MACHINE WORKS DECISION STATEMENT OF THE CASE JAMES L ROSE, Administrative Law Judge: This case was heard before me on November 16, 1977, at Kansas City, Kansas. on a complaint alleging, in substance, that since 539 DECISIONS OF NATIONAL LABOR RELATIONS BOARD on or about February 16, 1977, the Respondent has refused to bargain with the Charging Party in violation of Section 8(a)(5) of the National Labor Relations Act, as amended, 29 U.S.C. Sec. 151, et seq. It is also alleged that the Respon- dent committed certain violations of Section 8(a)(l). The Respondent generally admits the factual allegations in the complaint but denies that it has engaged in any ac- tivity violative of the Act. Upon the record as a whole, including my observation of the witnesses, briefs and arguments of counsel, I hereby make the following: FINDINGS OF FACT AND CONCLUSIONS OF LAW I JURISDIC( TION The Respondent is engaged in the manufacture of cus- tom gears for companies doing business in Kansas, Ne- braska, and Missouri. In the course of its business, the Re- spondent annually sells goods, products, and materials valued in excess of $50,000 to customers who themselves meet the Board's jurisdictional standards. The Respondent annually receives goods, products, and materials valued in excess of $50,000 directly from points outside the State of Missouri. At the hearing, the Respondent admitted, and I now find, that it is an employer engaged in commerce with- in the meaning of Section 2(2), (6), and (7) of the Act. 11. THE LABOR ORGANIZATION INVOLVED District No. 71, International Association of Machinists and Aerospace Workers, AFL-CIO (herein the Union) is admitted to be, and I find is, a labor organization within the meaning of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES A. Factual Summary In May 1976, Horace C. Hearne, Jr., and partners pur- chased and began operating Crago Gear and Machine Works, a company which had been in business for many years. At the time, Hearne had no machine shop experi- ence himself thus he brought into the operation with him a general manager, Gordon Chambers, and a general fore- man, Elmer Bryson. Chambers and Bryson were responsible for the operation end of the business. As general manager, Chambers was generally in charge of the office. He did blueprints, super- vised billing, job estimates, and the like. As general fore- man, Bryson supervised the work as it moved through the shop. Hearne was the principal salesman for the Company and its treasurer. At the time Hearne took over, there were four machinist employees, all of whom had worked for the Company many years; Gilford Nutt, Lincoln Karr, James Ault. and Thurman Joe Tate. In October 1976, for reasons still unknown to Hearne, Chambers quit. As a result, Bryson assumed the duties of general manager but continued function as general fore- man, thus dividing his time between the jobs. And the Company began looking for a general foreman in order to release Bryson from the double duty. In January and February at least three individuals were tried out as general foreman, but none worked out. Thus from the time the Union demanded recognition on Febru- ary 16, through the election on May 17, the material time involved, Bryson functioned both as general manager and general foreman. As a result of Hearne's aggressive salesmanship, from the latter part of 1976, the business of the Respondent be- gan to increase substantially to the point that by June 1977, sales had almost doubled from the year previously. With this growth in sales, the Respondent undertook to recruit additional machinist employees. A number were tried. Some were kept and others were not. In any event, from the four employees in May 1976 the employee complement in the shop increased to 9 by February 16, 1977, to I by early April, and back to 8 at the time of the hearing. On or about February 14, Tate contacted Floyd Stone, a business agent for the Union, indicating that some of the employees wanted to be represented by it. Stone gave Tate authorization cards which Tate solicited employees to sign. Four ' of the six eligible employees in fact signed authori- zation cards on February 15. Tate turned these cards over to Stone who, on February 16 along with another business agent, went to the Respondent's facility, met with Hearne and demanded recognition. Hearne did not recognize or agree to recognize the Union. To the contrary, a fair sum- mation of the essentially undisputed testimony of both Hearne and Stone is that Hearne would not do so. Hearne then contacted his attorney who in turn contact- ed Stone saying that the Company would decline to recog- nize the Union in that they entertained a "good faith doubt" of the Union's majority status, and suggested the Union file a representation petition. This was in fact done on or about February 19.2 Following a hearing, an election was directed and was held on May 17, with an eligibility cut off date as of April 8. Of the approximately eight eligible voters, four voted for the Union and four against. There was one challenged bal- lot which was ultimately withdrawn. Objections were duly filed but were not consolidated with this matter for hearing and had not yet been acted on. On two occasions within a week or so of April 22, Bry- son met with employees Ault, Tate, Nutt, and Karr asking if they would consider being promoted to positions of de- partment foreman with an increase in pay. Bryson testified that since he had been unable to find a suitable general foreman, he would reorganize the shop into four depart- ments, each with a foreman who would be responsible for that particular department. The foremen would then report to him and such would save him a substantial amount of time in the shop. In addition to the wage increase, the four asked for an additional week of vacation and another holiday and told Bryson that they would consider his proposition. They met ' Greg Ford, one of the signers, was ruled ineligible to vote by the Re- gional Director on grounds that he lacked sufficient community of interest with unit employees. 2 ase 17 RC 8329. 540 CRAGO GEAR & MACHINE WORKS again with Bryson on April 22, and told him they would accept his plan for "reorganization." The pay of each was increased from $6.65 to $7.50 per hour. Each was told he would receive a third week of vacation a year plus the additional holiday. On Monday, April 25, the "reorganization" went into effect with Ault being in charge of the machine shop, Nutt in charge of the gear department, Karr in charge of mate- rial handling and shipping and receiving, and Tate in charge of the grinding and milling machines. In addition. a new employee, Ken Chaffin, was promoted to the position of "night foreman" on or about May 2, 1977. B. A nalisis and Concluding Findings The principal allegation in this matter concerns the Respondent's promotion of the four senior employees (about half of the bargaining unit) to department foreman and granting them a wage increase and other benefits shortly prior to the election. This is alleged to be violative of Section 8(a)(1) and is alleged to be sufficiently egregious so as to require entry of a bargaining order, the Union having established its majority status by authorization cards. The Respondent contends that this was prompted by business necessity, namely, the increase in business and its inability over a period of several months to hire an accept- able general foreman for the shop. Thus, argues the Re- spondent, the promotion of the four employees was not meant to interfere with employees' freedom of choice of a bargaining representative, nor did it do so. Accordingly, such could not be violative of the Act. Granting such benefits as here is not per se unlawful. Centralia Fireside Health, Inc. d/bha The Fireside House of Centralia, 233 NLRB 139 (1977). However, from the cir- cumstances I conclude that designation of the four em- ployees as department foreman along with the increased wages and other benefits was calculated to interfere with employees' right to organize. I conclude that designating the four senior employees as foremen was illusory-a ruse by which the Respondent sought to give these four sub- stantial benefits "without violating any laws." 3 I conclude that the Respondent intended to grant benefits to the four senior employees in an effort to affect the freedom of choice of employees in the bargaining unit, and by such activity violated Section 8(a)(l). N.L.R.B. v. Exchange Parts Co., 375 U.S. 405 (1964). I am satisfied that the Respondent knew very well that by giving the four senior employees a substantial wage in- crease and other benefits, with or without additional re- sponsibility, prior to the time that they would vote in an election, could reasonably affect the results of the election. The fact that these employees may have in fact voted their initial inclination for or against the Union is irrelevant. Certainly the Respondent must have known, and therefore must have intended, that by giving four employees in a bargaining unit of eight a wage increase of 85 cents an hour, as well as additional vacation and holiday benefits, 3 Tate credibly testified that Bryson made this statement during one dis- cussion about the "reorganization' plan tends to interfere with their freedom of choice. Further, irrespective of the Respondent's contention that the wage increase followed the "reorganization" of the shop, I conclude that this was really not the case. Indeed, from the rather straightforward testimony of Karr, a Re- spondent witness, there was no charge in his duties on April 25 and he had no one to "supervise" for at least 2 weeks thereafter. Further on April 25 there were only five other employees for these four to supervise, and three at the time of the hearing.4 From these facts, I conclude that the "reorganization" was more sham than substance. The four employees who were made "department heads" had something in the range of 20 years service. They were clearly far and away the most senior, competent, skilled, and knowledgeable of all the Respondent's employees, including Hearne and pos- sibly Bryson. These individuals would have leadership po- sitions in a small shop regardless of whether they were des- ignated department foremen. They would tend to oversee and help the junior employees. But such doesn't mean they were supervisors within the meaning of Section 2(11) after April 25. nor does the record evidence show that their sta- tus and duties really changed. There is no persuasive evi- dence that the four had or exercised any of the authority listed in the Section 2(11) definition of supervisors. Nor does the Respondent really argue that they are. For in- stance, they all voted without challenge. Rather, the Re- spondent argues that they were given additional duties and such justified the additional benefits. While their jobs may have changed under the "reorganization," the evidence just does not show such a change as to establish a justification for the benefits other than the one I find-to affect the election. During the critical period prior to the election the Re- spondent gave substantial economic benefits to half of bar- gaining unit including the principal leader of the organiza- tional campaign, which I conclude, absent evidence of some reasonable justification, was accomplished with an unlawful object. However, the same considerations do not apply to Chaf- fin. I find nothing in the record to indicate that in designat- ing him the night foreman the Respondent violated the Act, or that such had any kind of effect on the election. Accordingly, I will recommend dismissal of this allegation. Similarly, I am persuaded, from the totality of the testi- mony, that the Respondent had no set policy of granting cost of living increases. Indeed the Respondent had been in business for only a few months by the time that the Union demanded recognition in February. I conclude, therefore, that the Respondent did not violate Section 8(a)(X) by fail- ing to grant the employees a cost of living increase at any- time after February and anytime before June 1977. Finally it is alleged that Bryan Groves was sent for train- ing in March and promised a merit increase upon his re- turn, but he did not receive it because of the union activity. Though Groves' testimony concerning this event differs from Bryson's, it is clear that some time in late March Groves did go to Coffeyville, Kansas, for a week of train- 4 (haffin, the "night supervisor" does not enter into this. though his de- signation as such is also an alleged violation. 541 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ing. Though he was still a relatively new employee, it is not unreasonable that after such training a wage increase would be forthcoming. Thus, I credit Groves' version that he was told he would get a raise and, on inquiring about it, was told that because of the Union no raises could be giv- en. Under these circumstances, it would not have been un- lawful to give Groves a raise. Thus, I conclude that in de- nying it and placing the blame on the Union, the Respondent violated Section 8(a)(l). Although the activity found unlawful is limited, it should be noted that this is a very small bargaining unit. Thus, to have dissipating effect, not much is required. I accordingly conclude that the rather substantial increase in benefits to half of the bargaining unit employees, as well as denying the increase to Graves, made conducting a fair election so unlikely to justify a remedial bargaining order, the Union having been designated by a majority of employees and having demanded recognition on February 16, 1977. N.L.R.B. v. Gissel Packing Co., Inc., et al., 395 U.S. 575 (1969). The bargaining order should be effective on April 15, 1977, the approximate first date on which the Respon- dent embarked on its unlawful course of conduct. Trading Port, Inc., 219 NLRB 298 (1975). IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The unfair labor practices found are unfair labor prac- tices affecting commerce and the free flow of commerce within the meaning of Section 2(2), (6), and (7) of the Act. V. THE REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, I shall recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Groves should be made whole for the loss suffered by him as a result of the Respondent's refusal to grant the promised merit increase, with interest as provided in Flor- ida Steel Corporation, 231 NLRB 651 (1977). Since no amount of the increase was designated, I find a reasonable increase would have been 12 percent of Groves' wage rate, the percent increase given to Tate, Nutt, Ault, and Karr. Upon the foregoing findings of fact, conclusions of law, and the entire record in this proceeding, and pursuant to the provisions of Section 10(c) of the Act, I hereby issue the following recommended: ORDER 5 The Respondent, Crago Gear & Machine Works, Kan- sas City, Missouri, its officers, agents, successors, and as- signs, shall: 1. Cease and desist from: (a) Granting or denying wage increases or additional va- cation or holiday benefits to employees in order to inter- fere with their freedom of choice of a'bargaining represen- tative; provided, however, that nothing herein should be construed as requiring the Respondent to vary or abandon any benefits heretofore established. (b) Refusing to bargain with the Union as the duly des- ignated representative of a majority of its employees in the bargaining unit described below, as found appropriate un- der Section 9(b) of the Act: All full-time and regular part-time production and maintenance employees employed by the Respondent at its Kansas City, Missouri, facility excluding office clerical employees, professional employees, guards and supervisors as defined in the Act. (c) In any like or related manner interfering with, re- straining, or coercing employees in their exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to ef- fectuate the policies of the Act: (a) Recognize and, upon request, bargain collectively with the Union as the exclusive bargaining representative of the employees in the above-described unit and, if an understanding is reached, embody such agreement in a written signed contract. (b) Make whole Bryson Groves for the losses he suf- fered in accordance with the formula set forth in the Rem- edy section above. (c) Post at its Kansas City, Missouri, facility copies of the attached notice marked "Appendix." 6 Copies of the notice, on forms provided by the Regional Director for Region 17, after being duly signed by the Respondent's authorized representative, shall be posted by the Respon- dent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, de- faced, or covered by any other material. (c) Notify the Regional Director for Region 17, in writ- ing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. The allegations of the complaint not specifically found to be violative of the Act are dismissed. In the event no exceptions are filed as provided by Sec. 102 46 of the Rules and Regulations of the National Labor Relations Board. the findings, conclusions, and recommended Order herein shall, as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings. conclusions, and Order. and all objections thereto shall be deemed waived for all purposes. In the event that this Order is enforced by a Judgment of a United States Court of Appeals. the words In the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States ('ourt of Appeals Enforcing an Order of the National l.abor Relations Board." 542