Guardian Glass Co., Inc.

GUARDIAN GLASS CO., INC. 439 Guardian Glass Co., Inc., and Davidson Glass Works, Inc. and United Glass and Ceramic Work- ers of North America, AFL-CIO-CLC, Charg- ing Party and Window Glass Cutters League of America, Intervenor. Case 25-CA-2506 June 26, 1968 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS FANNING AND ZAGORIA On June 22, 1967, Trial Examiner Melvin Pol- lack issued his Decision in the above-entitled proceeding, finding that the Respondent had en- gaged in and was engaging in certain unfair labor practices and recommending that it cease and de- sist therefrom and take certain affirmative action as set forth in the attached Trial Examiner's Decision. He also found that Respondent had not engaged in certain other alleged unfair labor practices. Thereafter, the General Counsel and Davidson Glass Works, Inc. (Davidson Glass or the Com- pany), filed exceptions to the Trial Examiner's Decision and supporting briefs and Guardian Glass Co., Inc.,' filed a brief in support of the Trial Ex- aminer's recommendation and Order with respect to Guardian. 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 powers in connection with this case to a three- member panel. 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 the briefs, and the entire record in the case, and hereby adopts the findings , conclusions, and recommenda- tions of the Trial Examiner to the extent consistent herewith. As more fully described by the Trial Examiner in his Decision , on February 11, 1966,2 Davidson Glass purchased the Vincennes plant from Blackford Window Glass Company (Blackford) and between March 1 and 8 attempted without success to negotiate a contract with the United Glass and Ceramic Workers of North America, AFL-CIO-CLC (the Union). The failure to reach an agreement resulted in the closing of the Vin- cennes plant on March 8. The Trial Examiner found that the Company did not bargain in good faith from March 1 to March 8 and that the plant closing constituted an illegal lockout. We do not agree. At the meeting held on February 16, with representatives of the Union and the Window Glass Cutters League of America (the Glass Cutters),3 the Company described in detail the unsound economic status of the Vincennes plant and insisted that to achieve success it was necessary "to stream- line" the operation, a process requiring considera- ble changes, large expenditures of capital, and union cooperation . On March 1, the Union and the Company held their first bargaining session.4 Although the Union claimed that the Company was bound by the Union-Blackford contract, it did agree that there could be language changes and that a contract acceptable to both sides could be negotiated. Because of its precarious economic position, the Company introduced proposals which included a 3-year contract, no pay increases during this period, and a 3-year moratorium on contribu- tions to the pension plan under the Blackford con- tract. The Union found none of the Company's proposals acceptable. Another meeting was held on March 2, during which William Davidson, the Com- pany's owner, was present. Davidson detailed the Company's economic difficulties, aggravated by the acquisition from Blackford of inefficient and seri- ously abused equipment. He directed attention to the $800,000 losses suffered by Blackford in operating the Vincennes plant during the preceding 2 years and stressed that the Company was cur- rently losing $1,000 a day, a loss he stated he was not in a position to sustain. Davidson criticized the attitude of the union bargaining committee toward the Company's proposals and asserted that he was left "no alternative than to shut [the] plant down Friday, March 4." Davidson subsequently changed his mind and the Union was given until March 9 to answer the Company's proposals. At the meeting the Company agreed to include in its 3-year con- tract proposal a General Motors type cost-of-living provision. The Union asked the the Company's proposals be put in writing and the Company prepared a "Memorandum of Agreement " encom- passing its proposals, which it presented to the union committee at the bargaining session which took place the next day. At the March 3 meeting, 'in view of our decision here we find it unnecessary to decide whether The Union contract expired in December and that of the Glass Cutters in Guardian Glass Co., Inc ., and Davidson Glass are a single employer under June. Soon after the Company purchased the Vincennes plant it notified the Act both Unions that it would not recognize their contracts with Blackford 2 All dates hereafter are in 1966 unless otherwise noted . I Negotiations with the Glass Cutters were deferred until June ' Both the Union and the Glass Cutters had contracts with Blackford 172 NLRB No. 49 440 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the "Memorandum" was explained in detail. The Union was noncommittal . Bruce Morse , a company representative , told the Union that the Company had to have an answer to its proposals by March 8, and "if there was no answer we would consider it to be no, and we would have to start making prepara- tions for shutting down the plant." Thereafter, on March 7, the Union held a meeting at which the members voted unanimously to reject the Com- pany's proposals, although prior to the vote they were warned that rejection might result in a plant shutdown . The following morning, the Union met with the Company and advised Morse that the membership had turned down the Company's proposals and had insisted that the Blackford con- tract be maintained until its expiration date of December 1966, also that any agreement would have to include economic gains . Morse reported the Union 's decision to Davidson who gave the order to lay off the employees and shut down the plant. In essence , the Trial Examiner found that David- ,son's threat on March 2 to shut down if the Com- pany's changes were not accepted , coupled with a similar threat made by Morse on March 3 pertain- ing to its "Memorandum of Agreement ," destroyed the Company 's contention of good-faith bargaining between March 1 and 8. We disagree. In deciding whether a bargaining impasse exists many factors are taken into consideration .5 In the instant proceeding, we are particularly influenced by the intransigence of the Union in maintaining its position during the bargaining sessions prior to March 8 , in light of the Company's need to mitigate its economic losses. At the meeting held on Febru- ary 16, the Union was informed that the Company was close to bankruptcy and that many changes requiring union cooperation were necessary to prevent this from happening . On March 2 , David- son told the Union of the $800 ,000 losses suffered by Blackford and the Company 's own losses of $1,000 a day since it began operations . Viewed in the context of these losses , we find that the Com- pany was justified in concluding that further bar- gaining with the Union would be futile after March 8, since the Union had foreclosed the possibility of an agreement being reached by stating that it would hold the Company to the Blackford contract until its expiration date in December 1966 and that any contract agreed on would have to include economic gains. Accordingly , we find that a bargaining im- passe was reached between the parties on March 8. Further, unlike the Trial Examiner , we find that the Company bargained in good faith during the sessions which took place in March . In reaching this conclusion , we have taken into consideration the absence of union animus on the part of the Company as indicated by its immediate recognition of the Union and the Glass Cutters as the bargain- ing representatives for the Vincennes plant em- ployees and by the Company's attempt to reach an accord with the Union during the bargaining ses- sions which took place from May through August.e Having found that the Company bargained in good faith during the March 1 through 8 period and that on March 8 a bargaining impasse was reached, and as it does not appear that the Company was motivated by other than legitimate economic con- siderations, we find that the Company's action in closing the plant on March 8 did not violate the Act. Accordingly, we shall dismiss the complaint.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended , the National Labor Relations Board hereby orders that the complaint herein be , and it hereby is, dismissed in its entirety. " Taft Broadcasting Co., 163 NLRB 475. • Unlike the Trial Examiner we find that statements of the Company on March 24 and April I concerning the possibility of bypassing the Interna- tional of the Union and negotiating directly with the Local did not violate Section 8(a)(1). The permission given by the International to the Local on May 18 to bargain directly with the Company indicates approval of this practice. ' Even were we to find that the parties were not actually at a bargaining impasse on March 8 , we would still conclude in the light of all other cir- cumstances in this case that the closing of the plant on that date was not un- lawful TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE MELVIN POLLACK,Trial Examiner : This case was heard at Vincennes , Indiana, on March 20 thru 24, 1967, pursuant to an amended complaint issued by the General Counsel of the National Labor Rela- tions Board on January 13, 1967, upon a charge filed on May 5, 1966, against Respondent Davidson Glass Works, Inc. (herein called Davidson or the Company), and an amended charge filed on December 15, 1966, against Davidson and Respon- dent Guardian Glass Co., Inc. (herein called Guar- dian ), by the Charging Party. The principal question presented is whether Respondent David- son violated Section 8(a)(1), (3), and (5) of the National Labor Relations Act, as amended, by refusing to bargain in good faith with the Union over the terms of a collective-bargaining contract and by locking out its employees at Vincennes, In- diana, to compel acceptance of its contract de- mands.' After the close of the hearing , the General ' Guardian 's liability for Davidson 's conduct is considered below GUARDIAN GLASS CO., INC. Counsel, Davidson, and Guardian filed briefs which have been fully considered. Upon the entire record,2 including my observa- tion of the witnesses, I make the following: FINDINGS OF FACT AND CONCLUSIONS OF LAW I. THE BUSINESS OF THE RESPONDENTS Davidson, a Michigan corporation , is engaged in the manufacture , sale, and distribution of glass products at its plant in Vincennes , Indiana. Guardi- an, a Michigan corporation , is engaged in the manufacture , sale, and distribution of auto glass at its plant in Detroit, Michigan . The operations of each plant annually involve interstate purchases and sales of products in excess of $50,000. I find and Respondents admit that they are employers within the meaning of Section 2(6) and (7) of the Act. 11. THE LABOR ORGANIZATIONS INVOLVED The charging International and its Local No. 454, and the Window Glass Cutters League of America, herein called the Glass Cutters, are labor organiza- tions within the meaning of Section 2(5) of the Act. 111. THE ALLEGED UNFAIR LABOR PRACTICES A. Sequence of Events On February 11, 1966,3 Davidson purchased the Vincennes plant from the Blackford Window Glass Company (herein called Blackford). Blackford and the International were parties to a 1-year collective- bargaining contract dated December 1, 1965, covering production and maintenance employees except for glass cutters who were separately represented by the Glass Cutters under a contract with Blackford. Davidson notified both the Interna- tional and the Glass Cutters that it would not as- sume the Blackford contracts. It agreed, however, with the Glass Cutters to defer negotiations on a new contract until June. Ross Steggles is president of Davidson and a vice president of Guardian. William M. Davidson is trea- surer of Davidson and president of Guardian. Bruce Morse is a labor relations consultant for both Davidson and Guardian. These three men met with representatives of the Unions at the Vincennes plant on February 16. A movie showing the opera- tions of the Guardian plant, and in which Mr. Davidson and Mr. Steggles appeared, was shown at this meeting to committeemen of the Unions. After the movie, Morse told the committeemen that Mr. Davidson and Mr. Steggles had brought the Guardi- r An affidavit of Ross Steggles , dated March 31, 1967, is received in evidence as Davidson's Exhibit 3 ' All dates hereafter are in 1966 unless otherwise noted ' The parties stipulated that the International and its Local 454 441 an plant from a state of bankruptcy to a thriving manufacturing firm in a matter of 3 years, that they "could accomplish the same thing here at Vin- cennes if [they] could get the cooperation of the committee and their people," and that it "would require the expenditure of large sums of money" to "streamline the operation" and to "purchase a lot of new modern machinery." He assured the com- mitteemen that everyone at the Vincennes plant could continue to work, that "we will have suffi- cient employment for all, because we have expan- sion plans ... and intend to grow." On Tuesday morning, March 1, International Representative Wilbur Long and members of Local 4544 met with Morse, Steggles, and Works Manager Ray Chalk of the Vincennes plant.' Morse said the Company wanted a 3-year contract because it would take that long to get the plant into a satisfac- tory operating condition and that the Company would not be able to "absorb" any pay increases during this period. He suggested a 3-year "mora- torium" on contributions to the pension plan in the Blackford contract and "the acquiring of service credits" under the plan. He also said that piecework would have to be eliminated because "the methods would be changed rather soon" for the piecework jobs held by about 50 of the 180 em- ployees at the plant. Long replied for the Union that the Company was bound by the Blackford con- tract but that he thought "we can get together on language changes and come up with a contract that we can both live with." He declared, however, that the Union could not agree to a 3-year contract "without any monetary gains." After lunch, Morse told the union men that the piecework would "go on a straight base rate" on March 11 "regardless of the outcome" of the negotiations. Long objected to the elimination of piecework but Morse replied it was necessary if Davidson was to stay in business. The parties agreed to meet the next morning and go over the Blackford agreement "in detail." The negotiators met again at the plant on Wednes- day morning, March 2. Mr. Davidson and Steg- gles were present for the first part of the meeting. Davidson described the plans he had for moderniz- ing the plant.6 He "criticized the local committee" for the poor condition of the melting tank and declared that the "attitude" of Long and the bar- gaining committee toward the proposed contract changes left him "no alternative than to shut this plant down Friday, March 4." Long replied that a contract could not be reached so quickly because "too many things ... had to be hashed out." David- son said he would give the Union until noon on March 9 to answer his proposals and would shut the plant down if he did not hear from the Union by then. Long told Davidson that he "wasn't too happy (hereinafter collectively referred to as the Union) jointly represented the production and maintenance unit at the Vincennes plant ' Steggles left the meeting after an hour or so s Davidson is the sole stockholder of Davidson Glass. 442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD about his attitude ... of being whole hog or none" and asked Davidson if he would be willing to put a General Motors type of cost-of-living clause in the contract. Davidson replied, "Let's have a caucus" and the company negotiators left the conference room. After a recess of about 15 minutes, Morse and Chalk returned to the conference room. Morse said the Company would include in its 3-year con- tract proposal "an escalator clause similar to the General Motors type of escalation." That after- noon, after discussion of contract changes proposed by Morse, Long requested Morse to put the proposed changes in writing and Morse agreed to do so. On Thursday morning, March 3, Morse handed the union negotiators a "Memorandum of Agree- ment." The memorandum called for a 3-year con- tract with a General Motors type of cost-of-living provision, discontinued company payments into the pension fund and suspended pension service credits, established hourly rates for all "piece work classifications," and contained the Company's first specific proposals on additional changes in the Blackford contract. One such change reduced the Local's grievance committee from six to four representatives . Another proposed change relating to the filling of job vacancies eliminated meetings between the Company and the Union. The Com- pany similarly proposed to eliminate a provision for union participation in "selecting the best qualified individual" for operations requiring "especially trained persons." The Company further proposed to delete from the contract a restriction on its power to "reclassify employees or duties," and also to delete a provision requiring equal distribution of work among regular employees and discussion with the Union where "an equal distribution of work shall result in a reduction of hours and/or working force." The Company also proposed to substitute a no-strike , no-lockout clause for a clause in the Blackford contract permitting the Union to call a strike after meeting "with the proper officials of the Company to determine whether the grievance is a violation of this Agreement." Under another proposed change , employees temporarily assigned to jobs other than their own lost a guarantee that they would be paid their regular rate on a lower paid job and the higher rate if assigned to work paying a higher rate of pay. The memorandum also added a clause to the contract giving the Company sole responsibility for "deterniming the products to be manufactured , the methods of manufacture, selection of tools and equipment, the sequence of operations, work assignments and the like." Morse explained to the union men "the sig- nificance of each change ... and the reasons for them " but the union negotiators were "noncommit- tal." Long at one point suggested hourly rates for Shutting off the melting tank involved a gradual turning off of" feeder" lines, draining the tank , shutting the fire off, and bringing the tank "in" as it cooled The process was not completed until some time in April the pieceworkers which Morse rejected as too high. The meeting was "not too long that day" and Morse suggested that the parties meet the next 2 or 3 days but Long had prior commitments and could not do so. Morse said the Company had to have an answer to its proposals by March 8 and "if there was no answer we would consider it to be no, and that we would have to start making preparations for shutting down the plant." At a union meeting on Monday night, March 7, the members present were advised that such action might result in a plant shutdown but nevertheless voted 124 to 0 to reject the Davidson contract proposals. The next morning, International Vice President Enoch Rust, Long, the local bargaining committee, and other employees met with Morse and Supervisor Octave Quinette. Long informed Morse that the employees had rejected the items in the Davidson memorandum and stated the Union's position to be: maintenance of the Blackford con- tract for its term to December 1966, negotiation of rates for new or changed jobs, continuance of piecework and no reduction in piecework rates, no deviation from the pension, no 3-year contract un- less Davidson would bargain jointly with the Union and the Glass Cutters, and the contract "must con- tain economic gains." Morse said , " I'm sorry that you cannot see it our way," and that "If Bill [Davidson ] cannot get his demands , the plant will be shut down." Rust spoke about the Union's efforts to help domestic glass manufacturers through higher tariffs and said "the prospects of a good relationship between the Company and the Union were good." Morse replied that it appeared from the Union's position that Mr. Davidson would have to reactivate his plans to build a melting plant else- where. Rust retorted that the Union would be knocking at his door. Morse said the meeting was over and walked out. Morse reported what had happened at the meet- ing to Mr. Davidson, who "gave the order" to lay off the employees and shut down the plant.' The plant remained open after March 8 for the cutting and shipping of glass inventory .' About March 24, Local President Dailey, Vice President Kenneth Briner, and committeeman James Hennon came to the plant and spoke to Company President Steggles about Blue Cross insurance payments.9 The conversation turned to the question of a con- tract and Steggles remarked that "in Detroit they did not negotiate with Mr. Reuther, or the big boys" and said that if Dailey would pick out two or more members of the Local to act with himself as a bargaining committee, he would negotiate a con- tract with them . He declared that "if we get this thing straightened out ... we'll all make more money than we've ever made before," but that if Dailey and Hennon "ever reported " that he had of- Supervisor Octave Quinette cut glass after the shutdown. s Ceramics engineer George Nelson was present during the conversation GUARDIAN GLASS CO., INC. 443 fered to negotiate a contract without the Interna- tional present , he and Nelson would deny it.10 About April 1, Kenneth Melvin , a vice president of Local 454, and James Hartsock, its financial secretary , spoke at the plant to William Lochman, in charge of Davidson 's payroll, about "the status of our vacation pay." Lochman referred them to Steggles who was in the "main office." Steggles said that Davidson "wasn 't liable for the vacation pay." After some further talk, Steggles said , "Why don't you boys do your own negotiating ? If you would I'm sure we would reach an agreement ." Hartsock replied , "Mr. Steggles, we can't do that. This or- ganization is our representative." Steggles said, "We just can 't deal with the International" and added, "You boys needn 't tell anyone what I said here because I'll deny it." Before the conversation ended , Local President Dailey came into the office and said, "You boys have no right to come in here and negotiate on your own." Hartsock and Melvin explained to Dailey that they had come to the plant to see about their vacation pay." On May 18, Dailey called Steggles in Detroit and asked him about an employee 's retirement status. After the men had discussed this matter , Dailey re- marked that he "couldn 't understand some of the trouble" about a contract for the Vincennes plant. Steggles suggested that Dailey "see him personally" and Dailey said he "would talk to the men." Dailey called the International and was told to "go right ahead" and see if there was anyway to "iron out this trouble." Steggles and Dailey met the next day at the Ramada Inn in Vincennes. Steggles handed Dailey a proposed contract dated May 18, 1966,12 saying that Dailey and the other officers should "look at it , and you can always add to it." Steggles also said that it was his "desire " that the Union drop the unfair labor practice charges it had filed against the Company. On June 14, Steggles and Bruce Morse met with Local 454 representatives Dailey, Briner , Hennon, Walter McCarthy , and Bob Metz . Steggles asked, "Can we sit down and bargain an agreement with you men or do we have to have someone from the International in?" The men indicated that they were prepared to talk and one of them asked, if a contract was reached , when would work begin "to get the plant going again." Steggles replied "the lack of an agreement was all that was holding up the activity." Hennon asked about "the status of various people who had equity in the pension fund" if a 3-year contract was negotiated , and Morse said he did not know . He said, however, that if an agree- ment was reached , "previous employees ... with the necessary skills" would be hired "as new em- ployees and we would build up a seniority list from that day."13 Steggles remarked that the Company would not be "in a position to create jobs" for men who could not pass a physical examination. The men requested jury and funeral pay and a vacation plan like the one in the Blackford contract. Morse said these items "would be given very serious con- sideration " if they arrived at "a total agreement." Hennon offered to have copies of Davidson's May 18 contract proposal "reproduced downtown" and the parties arranged to meet the next day. Morse met on June 15 with the same union negotiators plus International Representative Rust. The parties "got clear through the contract" before noon with Morse agreeing to include "a lot of the language of the Blackford contract. 11 14 He then declared , "Now, we 're down to the meat of it" and said the Company would have to have a 4-year con- tract without any wage increase . Rust suggested a 2-year contract with a wage reopening clause. Morse answered that "it had to be a 4-year contract without any wage reopener ." The matter of pen- sions was then considered and Morse said he "wouldn't touch [the Blackford pension program] with a 10-foot pole " because it would cost some $45,000 a year. Rust said he "couldn 't live with the 4-year contract" and that he could not agree with the Company's position on the pension. He requested Morse to type up a new proposal consist- ing of the Company's May 18 contract proposal plus the changes agreed to . Morse agreed to do so and the meeting adjourned . " Morse prepared a new contract proposal and the Company mailed co- pies to the Union 's members. On June 24, Morse , Steggles, and Personnel Director Parraghi from Guardian's Detroit plant met with Local 454's bargaining committee. Morse introduced Parraghi , who told the committeemen that the Guardian plant had once been in a situa- tion similar to the Blackford plant but that the union there "had agreed to a 15 cent cut to get Guardian on its feet , and it had paid off, and was ultimately restored ." The rest of the meeting was spent "tying up the questions that the committee had" on such matters as vacations, seniority, and physical examinations. About a week later, Morse telephoned Local President Dailey and asked him if the union membership had acted upon the Com- pany's latest contract proposal . Dailey replied that 10 The findings in this paragraph are based upon a synthesis of the testimony of Steggles, Dailey, Hennon , and Briner. " Steggles dented that he suggested bargaining without the International to Hartsock and Melvin . I consider Hartsock the more reliable witness and credit his testimony concerning this conversation. 11 This document was received in evidence as G C . Exh. 5C 131 find, contrary to the allegation in the complaint, that Morse's re- marks on hiring and seniority did not amount to a threat of discharge 11 Morse agreed to jury and funeral pay , to the Blackford vacation plan, and to the Blackford provisions limiting production work by supervisors. He also agreed to "full seniority" for Blackford employees 11 Morse testified that he asked Rust at the opening of the meeting what he was going to do about the unfair labor practice charges against the Com- pany Rust said the lockout charge would not be dropped even if a contract were reached Rust told Morse at the end of the meeting that the Union would take "a long look " at the lockout charge if an agreement were signed I credit Morse's testimony over the testimony of Briner and Hennon that Morse said no contract would be signed unless the charges were withdrawn 444 DECISIONS OF NATIONAL LABOR RELATIONS BOARD no meeting had been held and none was scheduled to be held. In July , Steggles called Assistant Su perintendents James Bahr and Finis Durall, Traffic Manager Harold Rose, Maintenance Supervisor George Welch, and Furnace Repair Foreman Richard Rodgers to Detroit and told them they would be a new negotiating committee which perhaps "could end a stalemate in the negotiations." Steggles gave them "complete authority " to negotiate a contract with the Union except that he set down as "guidelines" the Company's "wish for a 4-year con- tract and its "desire" not to pick up the pension plan for 3 or 4 years. On July 29 , the "Bahr committee " and Local 454 negotiators Dailey , Briner, and Hennon had "a get- together meeting to clear the air." The same negotiators agreed at a second meeting on August 3 to use the contract proposal prepared by Morse after the June 15 meeting and mailed by the Com- pany to the employees "as a basis [for] negotia- tions." Bahr read "each paragraph" of the proposal and the negotiators marked for later discussion the items that the union men did not accept. The parties reached substantial agreement on grievance procedures at this meeting and Bahr said he would ask the Blackford pension plan representative, Paul Brokhage, to attend a later meeting to answer questions on what happened to pension moneys if Davidson failed to pick up the plan . Brokhage met with the negotiators on August 4 and explained the pension setup. On August 5, the parties discussed physical examinations for employees, application forms, a 7-day tryout period for new jobs, and job classifications. The Davidson representatives said they were offering "the cost-of-living clause as a pay raise." International Representatives Rust and Roman attended the next meeting on August 6. Rust said that "the local union committee had no authority to negotiate . without an International man present." He said the proposal sent to the men after the June 15 meeting was different in some respects from what had been agreed to on June 15, and he pointed out the differences. After some discussion about a trial period for new jobs, Rust told Bahr that Roman would call him and "set up future meetings." On August 11, the Bahr committee met with International Representatives Roman and Long and the local union committee . It agreed to Roman 's suggestion that negotiations "start from scratch" using the June 15 proposal as a guideline. After the parties had reviewed the June 15 proposal and noted their disagreements, Roman said he wanted something "we could finalize." On August 19, the negotiators met and the Company presented a revised contract proposal to the Union. The meet- ing recessed at 4 p.m. and resumed at 7 p.m. Inter- national President Reiser rejected the revised Davidson proposal, saying the Company was "some 28 cents [behind] Big Glass to start with. Roman said the Union wanted a 3-year contract with raises of 5 cents the first year, 8 cents the second year, and 9 cents the third year; an hourly rate of $ 2.50 for former pieceworkers; a cost-of-living clause;16 and the pension plan "picked up in its entirety." He also requested modification of the company proposals on grievance procedure, the taking of physical examinations , and the filing of applications for new employment. Bahr said the Union's terms were unacceptable and the meeting adjourned without arrangements for future negotiations. B. Analysis and Conclusions After purchasing the Vincennes plant from the Blackford Window Glass Company, the Company continued operations without significant chan,*e in personnel or methods. As a "successor' to Blackford, the Company was obligated to recognize the Union as the representative of its production and maintenance employees and not to change uni- laterally the conditions of employment established by the Union's contract with Blackford." Overnite Transportation Co., 157 NLRB 1153, enfd. 372 F.2d 765 (C.A. 4). The Company had several cour- ses of action open to it if it considered operation of the Vincennes plant uneconomic without changes in the Blackford contract. It could have elected to go out of business at any time. N.L.R.B. v. Darling- ton Mfg. Co., 380 U.S. 263. It could have bargained in good faith with the Union and, if an impasse was reached, put the changes it desired into effect. Taft Broadcasting Co., 163 NLRB 475. And, for pur- poses of analysis, I assume that the Company was privileged while engaged in good -faith bargaining to lock out its employees in support of its bargaining position before an impasse. American Ship Build- ing Company v. N.L.R.B., 380 U.S. 300, 318 (con- curring opinion); Detroit Newspaper Publishers As- sociation v. N.L.R.B., 372 F.2d 569 (C.A. 6). It was not privileged, however, to evade its obligation under the Act to bargain over changes in conditions of employment and attempt to force acceptance of these changes by a lockout. Cf. American Stores Packing Co., 158 NLRB 620. The record establishes that the Company followed this illegal course of ac- tion. Upon taking over the plant from Blackford, the Company duly recognized the Union as the collec- tive-bargaining representative of the production and maintenance employees and advised it that it " The Company 's revised proposal substituted annual wage increases of 2, 3, and 5 cents an hour for a coat -of-living clause. 'r The General Counsel contends, in effect , that the Company as a suc- cessor was also bound to honor the Blackford contract as a "party" and hence that it violated Section 8 (a)(5) of the Act by terminating the con- tract and locking out its employees in disregard of the requirements of Sec- tion 8(d)( I ), (2), (3), and (4) of the Act I do not reach this question as an affirmative finding would not significantly affect the remedy based on my finding below that the Company's conduct was otherwise violative of Sec- tion 8(a)(5). Cf. Glenn Goulding, d/b/a Fed-Mart, 165 NLRB 202. GUARDIAN GLASS CO., INC. wanted to negotiate a new contract. The Company early in March requested changes in the Blackford contract which, if accepted by the Union, would have fixed wages and placed a "moratorium" on a pension plan for 3 years, eliminated piecework and put the pieceworkers on a less favorable hourly rate, and greatly curtailed the Union's role in deci- sions on such matters as job transfers , reclassifica- tions, and distribution of work. Mr. Davidson told the union representatives that he would shut down the plant if the changes were not accepted. Upon the Union's rejection of the proposed changes on March 8, the Company broke off negotiations and shut down the plant. Company President Steggles indicated to members of Local 454's bargaining committee about March 24 and April 1 that the Company would resume operations if it got the contract it needed and encouraged them to bargain without the International . The Company made no efforts to resume bargaining with the Union until the middle of May when Steggles tendered Local President Dailey a new contract proposal. For the reasons stated below , I find from these facts that the Company failed to bargain in good faith with the Union before it suspended production opera- tions on March 8, and that it "locked out" its em- ployees on that date in support of its bargaining de- mands. The Company contends that it was "losing money," that it bargained in good faith with the Union on its "requests for relief," that an impasse was reached on March 8 , and that it closed down the plant on that date to avoid a further loss of money in an uneconomic operation and not to bring economic pressure in support of its bargain- ing position. The meetings before March 8 were clearly preliminary to full negotiations and were highlighted by the Company's threat to close down if its proposals-first presented to the Union in their entirety in the "Memorandum of Agreement" on March 3-were not accepted . As the Company, in effect, asked for a "Yes" or "No" answer to the memorandum , I see no bargaining impasse on March 8, as the Company argues, because the Union, backed by a unanimous membership vote, answered "No" and offered no counterproposals. Under the circumstances, I view the Union's con- duct on March 8 as a refusal to yield to improper pressure and a request for genuine negotiations. Concerning the Company's claim that the purpose of the shutdown was not to bring pressure on the employees and the Union to accept its demands, I note that the Company made no effort for almost 3 months to obtain a contract by good-faith bargain- ing with the Union but, on the contrary, en- couraged members of Local 454's bargaining com- mittee to bypass the International and negotiate a contract by assurances of an early resumption of operations. 445 Citing the Darlington case , supra, the Company contends that its decision to close the plant if the Union rejected the "Memorandum of Agreement" was in effect a decision to go out of business. It ar- gues in support of this contention that reopening the plant would be the same as opening a new busi- ness because of the time and expense required to renovate and modernize the plant . President Steg- gles told members of Local 454's bargaining com- mittee that the Company would move promptly to recall employees upon execution of a contract. Steggles repeated this remark when negotiations were resumed on June 14. The June-August negotiations were clearly so premised , as the Com- pany asked for a 4-year contract, instead of the 3- year contract demanded before the shutdown, on the ground that it would now take longer to put the plant on a sound economic basis . As it thus appears that the Company made no final decision to go out of business but was prepared at all relevant times upon signing of a contract to resume operations as soon as practicable on essentially the same basis as before the shutdown, I reject the Company's claim that its decision to close the plant was tantamount to a decision to go out of business. I conclude that the Company violated Section 8(a)(1), (3), and (5) of the Act by threatening to close the plant if its contract demands were not met and by locking out the employees represented by the Union on and after March 8 to compel ac- ceptance of these demands . I further conclude, as the Company's layoff of other employees was the proximate result of the unlawful lockout, that these layoffs were violative of Section 8(a)(3) and (1) of the Act. The Great Atlantic and Pacific Tea Co., 145 NLRB 361, 365-367, reversed in this respect, 340 F.2d 690 (C.A. 2).18 I also conclude that the Company violated Sec- tion 8(a)(1) after the shutdown by encouraging employees in March and April to bargain without the International. I find, however, that the Com- pany bargained in good faith during the June-Au- gust negotiations. It substantially modified its posi- tion during these negotiations and, on the critical issue of wages, countered a union request for an- nual increases of 5, 8, and 9 cents an hour plus a cost-of-living clause with an offer of 2, 3, and 5 cents an hour. The Company's "hard position" on a pension plan was met by an equally hard union position and warrants no inference of bad -faith bar- gaining. IV. THE REMEDY Having found that the Company engaged in cer- tain unfair labor practices , I shall recommend that it cease and desist therefrom and take certain affir- mative action designed to effectuate the policies of the Act. '" I follow the Board 's decision as it does not appear that the Board has accepted the Second Circuit's contrary view. 446 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Although the Company first resorted to illegal pressure to get the contract it wanted , it sub- sequently reopened contract negotiations and bar- gained in good faith with the Union. The Com- pany's conduct does not indicate a fundamental op- position to the principle of collective bargaining, and it would be unrealistic in the circumstances of this case to order the Company to resume operations without a contract . I shall therefore recommend that, if the Company resumes operations at the Vin- cennes plant, it shall as soon as practicable recall its employees without prejudice to their seniority or other rights and privileges . I shall further recom- mend that the Company make each employee whole for any loss of pay suffered by reason of the discrimination against him from the date he was locked out or laid off until August 19, the date on which a bargaining impasse was reached. Cf. N.L.R.B. v. Central Illinois Public Service Company, 324 F.2d 916 (C.A. 7), enfg. 139 NLRB 1407. Backpay shall be computed in the manner set forth in F. W. Woolworth Company, 90 NLRB 289, and in Isis Plumbing & Heating Co., Inc., 138 NLRB 716. The General Counsel contends that the Company and Guardian constitute a "single employer" under the Act and that Guardian may be held liable for the Company 's unfair labor practices. The Board holds that for two or more legal entities to con- stitute a single employer for purposes of assessing liability for unfair labor practices , a sufficient degree of common ownership and common control of labor relations and operations must be shown so that it may be said that they are engaged in a com- mon enterprise . Dearborn Oil and Gas Corp., 125 NLRB 645. While the record establishes that Wil- liam Davidson dominates both the Company and Guardian with respect to labor relations and manu- facturing operations,'9 he owns only -15.3 percent of Guardian's capital stock. A sister and each of four cousins own approximately the same percent- age of stock. The balance of the stock is owped by Davidson 's personal attorney ( 7 percent) and by an aunt (.005 percent). As Davidson and members of his immediate family do not have a controlling in- terest in Guardian, and as the Guardian stockhol- ders other than Davidson have no direct financial investment in the Company, I find that Guardian and the Company are not engaged in a common en- terprise so as to make Guardian liable for the Com- pany's unfair labor practices.20 RECOMMENDED ORDER Upon the foregoing findings of fact and conclu- sions of law , and upon the entire record in the case, it is recommended that Respondent , Davidson Glass Works, Inc., its officers, agents , successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with United Glass and Ceramic Workers of North America, AFL-CIO-CLC, as the exclusive representative of the employees in the bargaining unit set forth in paragraph 7(a) of the amended complaint. (b) Discouraging membership in United Glass and Ceramic Workers of North America, AFL-CIO-CLC; Window Glass Cutters League of America; or any other labor organization, by locking out or laying off any of their employees, or discriminating in any other manner in regard to their hire, tenure of employment, or any term or condition of employment. (c) Threatening its employees with a lockout or layoff in order to force acceptance of its contract proposals. (d) Encouraging employees represented by United Glass and Ceramic Workers of North Amer- ica, AFL-CIO-CLC, to bypass that labor organiza- tion and enter into contract negotiations for them- selves. (e) In any like or related manner interfering with , restraining , or coercing employees in the ex- ercise of the rights guaranteed by Section 7 of the Act. 2. Take the following affirmative action in order to effectuate the policies of the Act: (a) If Respondent resumes operations at the Vincennes plant, it shall recall the locked-out and laid-off employees without prejudice to their seniority or other rights and privileges. (b) Make each locked-out or laid-off employee whole for any loss of pay he may have suffered by reason of the discrimination against him, in the manner set forth in the section of this decision enti- tled "The Remedy." (c) Preserve and make available to the Board or its agents, upon request for examination and copy- ing, all payroll records , social security records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due. '" As the owner of the Company , and as president of Guardian, Mr Davidson exercises ultimate control over the labor relations policies of both companies and no collective -bargaining agreement may be executed without his approval He freely uses the resources of each corporation to aid the operation of the other. Upon purchasing the Vincennes plant, he brought down Production Manager Steggles and several engineers from the Guardian plant in Detroit to work for the Company. Steggles and the en- gineers returned to Guardian 's employ after the shutdown During 1966, $40,000 worth of glass , including $7,700 before the shutdown, was shipped from the Vincennes plant to the Guardian plant and, after the shutdown, machinery was shipped on approval from the Vincennes plant to the Guar- dian plant. $0 In view of my finding that Guardian is not liable for the Company's un- fair labor practices, I find it unnecessary to pass upon Guardian 's conten- tion that proceedings against it are barred by the 6-month limitations proviso in Section I0(b) of the Act. GUARDIAN GLASS CO., INC. 447 (d) Mail to each locked-out or laid-off employee at his last known address a signed copy of the at- tached notice marked "Appendix." ' The said notice shall also be posted in conspicuous places at the Vincennes plant , including all places where notices to employees are customarily posted. Co- pies of said notice , to be furnished by the Regional Director for Region 25 of the National Labor Rela- tions Board , after being signed by Respondent, shall be posted by it immediately upon receipt thereof and maintained by it for 60 consecutive days thereafter in such conspicuous places . Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 25, in writing , within 20 days from the receipt of this Decision, what steps have been taken to comply herewith.22 Q1 In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner " in the notice . In the further event that the Board 's Order is enforced by a decree of a United States Court of Appeals, the words " a Decree of the United States Court of Ap- peals Enforcing an Order " shall be substituted for the words "a Decision and Order." u In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read : "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES Window Glass Cutters League of America, and Apprentices of the Window Glass Cutters League of America. WE WILL NOT discourage membership in the aforesaid labor organizations, or any other labor organization, by locking out or laying off any of our employees, or by discriminating in any other manner in regard to their hire, tenure of employment, or any term or condi- tion of employment. WE WILL NOT threaten our employees with a lockout or layoff in order to force acceptance of our contract proposals, or encourage em- ployees represented by the United Glass and Ceramic Workers to bypass that labor or- ganization and enter into their own contract negotiations , or in any like or related manner interfere with, restrain, or coerce our em- ployees in the exercise of rights guaranteed by Section 7 of the Act. If we resume operations at the Vincennes plant, WE SHALL RECALL our locked-out and laid-off employees without prejudice to their seniority or other rights and privileges. Such recall shall be without prejudice to the rights of any employee presently serving in the Armed Forces of the United States. WE WILL make whole each locked-out or laid-off employee for any loss of pay suffered by him as the result of our discrimination against him from the date he was locked out or laid off to August 19, 1966. DAVIDSON GLASS WORKS, INC. (Employer) Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board and in order to effectuate the policies of the Na- tional Labor Relations Act, as amended, we hereby notify our employees that: WE WILL NOT refuse to bargain collectively with United Glass and Ceramic Workers of North America, AFL-CIO-CLC, as the exclu- sive representative of our production and maintenance employees, exclusive of office and clerical employees, watchmen, guards, professional and technical employees , and su- pervisors, and exclusive of members of the Dated By (Representative ) (Title) This notice must remain posted for 60 consecu- tive days from the date of posting and must not be altered, defaced, or covered by any other material. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 614 ISTA Center, 150 West Market Street, Indianapolis, Indiana 46204, Telephone 633-8921.