Emerson Electric Co.

744 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Emerson Electric Company and United Steelworkers of America, AFL-CIO. Case 8-CA-4907 June 17, 1969 DECISION AND ORDER By CHAIRMAN MCCULLOCH AND MEMBERS BROWN AND JENKINS On October 24, 1968, Trial Examiner George J. Bott issued his Decision in the above -entitled case, finding that Respondent was a successor to Pace, Inc. (hereinafter referred to as Pace) and recommending that Respondent be required to remedy Pace's unfair labor practices under Section 8(aX3) of the National Labor Relations Act, as amended , by reinstating, with backpay from the date of discharge to the date of the offers of reinstatement, the four employees whom Pace had discriminatorily discharged .' He further found that Respondent did not refuse to bargain with the Union in violation of Section 8(a)(5) of the Act, and should not be required to remedy Pace's Section 8(aX5) violation, and in this regard he recommended that the complaint be dismissed . Thereafter, the General Counsel, the Charging Party, and Respondent, respectively, filed exceptions to the Trial Examiner' s Decision together with supporting briefs. The General Counsel's and Charging Party's exceptions were limited to the Trial Examiner's dismissal of the complaint's Section 8(aX5) allegations and to his failure to recommend a bargaining order directed to Respondent. Subsequently, the Charging Party and the General Counsel requested permission to withdraw their exceptions. On January 17, 1969, the Board granted their requests and, in the absence of outstanding exceptions, adopted pro forma the Trial Examiner's dismissal of Section 8(aX5) allegations. Pursuant to the provisions of Section 3(b) of the Act, the National 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, Respondent's exceptions and brief, and the entire record in this case , and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the addition and modification set out below. As appears more fully from the Trial Examiner's Decision , this proceeding was instituted to determine inter a/ia. Respondent's successorship responsibility, if any, for remedying unfair labor practices committed by Pace against certain employees of the business enterprise which Pace then owned and ' See Pan, Inc.. 167 NLRB No. 160. operated, but which has since been acquired by Respondent. The relevant facts are as follows: In Pace, Inc., supra, decided December 1, 1967, the Board found that on June 6 , 1966, Pace discriminatorily discharged four employees in violation of Section 8(ax3) and (1) of the Act. The Board's Order directed, inter alia, that Pace offer immediate and full reinstatement to the four discriminatees and make them whole for any loss of pay suffered by reason of the discrimination against them. On October 28, 1966, subsequent to the conduct of the hearing in the Pace proceeding, Respondent entered into a contract to purchase Pace's facilities and business as a going concern. Pursuant to that agreement, Respondent took over the business on December 1, 1966. It then transferred to its payroll all the rank-and-file employees who had been on Pace's payroll immediately before the changeover and commenced operating the business at the same location without essential change. There was no interruption in the production activities as a result of the changeover. Respondent admits that it was informed sometime before the contract of sale was executed that unfair labor practice proceedings were pending against Pace. It also admits that certain provisions in that contract anticipated and were intended to impose on Respondent an obligation to assume Pace's liabilities, if any, to the four employees involved as alleged discriminatees in the then pending unfair labor practice proceeding. It claims, however, that the liabilities it thus assumed were limited to Pace's pecuniary obligations. Respondent more specifically contends that it neither contemplated nor in fact assumed any obligation to provide the four alleged discriminatees with jobs equivalent to those from which they were discharged, or to make them whole for the period from the date of the sale to the date of reinstatement: It has no objection to paying the employees for any loss of pay they incurred up to the date of the changeover. The Trial Examiner found that Respondent's contention as to the limited intent of its contractual undertaking is wholly unsupported by the terms of the contract.' Our examination of the record persuades us that the Trial Examiner was correct in that finding. Thus the contract provides that as part of the consideration to be paid to Pace for the business, Respondent would assume "all" of Pace's liabilities other than those specifically excepted. Pace's contingent liabilities in connection with the then pending Board proceeding are not among those specifically excepted. The contract does set a 'Asappe appears from the Trial Examiner's Decision, Respondent also rested its contention at least in part, on a Letter of understanding dated March 27, 1%7, some 5 months after the contract of sale and after the hearing in the Pace case. The Trial Examiner found that this purported clarification of the parties' intent "was not much more than an intra-office, self serving declaration," and of no probative value in overcoming the clear terms of the contract which had been earlier signed . We agree. 176 NLRB No. 98 EMERSON ELECTRIC COMPANY monetary ceiling on certain types of "excluded" liabilities . But these are defined as: (1) liabilities which Pace "incurred" after July 31, 1966; (2) those "incurred" prior to that date but only if not disclosed on any schedule or writing delivered to [Respondent] prior to the date of the sales agreement; and (3 ) all undisclosed liabilities, if any, arising out of "breach" by Pace of any "federal, state, or local law." The liabilities here involved were incurred at the time the unfair labor practices were committed, which was prior to July 31, 1966. And, as the Trial Examiner notes, documents either appended to the contract or incorporated therein by reference expressly mention the unfair labor practice charges filed on behalf of the four discriminatees in listing the contingent liabilities of which Pace had informed Respondent. Thus in schedule C of the agreement reference is made to two items of "pending or threatened litigation covered in the 1965-1966 Fiscal Report." One of these is then described in the contract as "the possible obligation which may be ruled by NLRB on the charges filed by four employees." The fiscal report, in describing this charge, states in relevant part: ". . . there are unfair labor practice charges filed by the United Steelworkers against Pace , Inc.," with the NLRB "which could result with [sic] backpay ordered from June 8, 1966, if United Steelworkers is successful in the reinstatement of four employees." Upon the foregoing facts, we find, as did the Trial Examiner, that the Respondent's relationship to the employees of the business enterprise it acquired from Pace was that of a successor employer who had knowingly assumed by contract "all" of the obligations arising from Pace' s 8(a)(3 ) violations in discharging the four employees. We therefore concur in the Trial Examiner's holding that Respondent's responsibility for remedying the aforesaid unfair labor practices is governed by the rule which the Board declared and applied in Liberty Electronics Corporation, 143 NLRB 605, namely, that a successor who has contractually agreed to assume all of its predecessor' s potential liabilities for 8(a)(3) violations must bear responsibility for fully remedying its predecessor' s unlawful conduct, both with respect to reinstatement and backpay. The Trial Examiner supported his holding not only on the rule of Liberty Electronics, but also on the broadened principles subsequently declared by the Board in Perma-Vinyl, 164 NLRB No. 119, enfd . 397 F.2d 544 (C.A. 5). In the latter case, decided May 24, 1967, the Board announced that, without regard to whether there was a contractual understanding to do so, it would thenceforth hold a successor employer responsible for remedying its predecessor's violations of Section 8(aX3) of the Act if the successor acquired the business with knowlege that proceedings based on such unfair labor practices were then pending against its predecessor. Insofar as the Trial Examiner's Recommended 745 Order directs Respondent to reinstate the four discriminatees, we agree with him that Perma-Vinyl commands such action - and this even though it be assumed arguendo, as Respondent asserts, that Respondent's contractual assumption of Pace's contingent and potential liabilities for the 8(a)(3) violations contemplated only financial liabilities, and not reinstatement as well. Contrary to Respondent's contention, our reliance on Perma- Vinyl insofar as it involves Respondent's legal obligation to reinstate the four discriminatees, involves no retroactive application of new policies first declared after Respondent acquired Pace's business. The direction for reinstatement is prospective in application and Respondent has been afforded full opportunity via this proceeding to be heard on that issue.3 The question of whether the Trial Examiner was correct in giving retroactive effect to Perma- Vinyl as an alternative basis for finding Respondent responsible for the full backpay of the four employees is one, however, on which we do not pass. We do not need to do so in view of the clear proof present here that Respondent contractually bound itself to assume at the very least all financial obligations that might flow from the 8(a)(3) violations. Resort to Perma- Vinyl would therefore add nothing of substance in this particular case to the earlier, and still applicable remedial principle exemplified by the Liberty Electronics case, which we find controlling in any event. We have considered in this connection Respondent's further argument that the intent of its contractually assumed financial obligation should be interpreted by the Board in the light of the Board's case law and policies as they existed at the time of sale rather than as later enlarged upon. Respondent suggests that under then existing law the Board would not have imposed a reinstatement order on Pace once Pace had divested itself of the business, and that in the absence of a reinstatement obligation the Board would not have extended Pace's liability beyond the date Pace sold its business. Proceeding from that premise, Respondent contends that the measure of liability it assumed should be deemed no greater, since it had a right to rely on then applicable law in framing the applicable provisions of its contract. The difficulty with that contention, however, is that it is based on a faulty premise. It ignores the principle declared and applied in American Auto Felt Company, 158 NLRB 1628, a case which issued on June 7, 1966, some months before Respondent executed the sale agreement. In that case, the Board ordered an employer who had discriminatorily discharged an employee some time before it sold its business as a going concern, to pay 'In Perma.Vinyl itself, the Board, although withholding retroactive application of its newly announced policies with regard to a successor's liability for backpay, did order the successor in that case to offer reinstatement to the discriminatees on request . We note that Respondent in this case concedes that a request for reinstatement has heretofore been made on behalf of the four employees involved. 746 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the discriminatee backpay from the date of the discharge until the date she obtained or was offered substantially equivalent employment elsewhere.' The board based that decision on reasoning that had the employee not been unlawfully discharged, she would have been offered employment by the successor employer, as were the other employees on the predecessor's payroll at the date of the changeover, and that the pay she lost accordingly extended beyond the date of the sale. See Ibid. pp. 1632 and 1641. As the circumstances under which the changeover in operations was effected in the instant case are strikingly similar in all relevant respects to those in American Auto Felt, the reasoning of that case is equally applicable here.' Accordingly, we find no merit in Respondent's apparent claim that it was misled by the state of the law as it existed at the time of the sale and that in equity its assumed obligation for backpay should not be deemed to extend beyond the date Pace transferred its business to Respondent.' In view of all the foregoing considerations, we conclude, as did the Trial Examiner, that Respondent is responsible as a successor to Pace, Inc., for remedying the unfair labor practices committed by Pace against the four employees of the business enterprise in the manner set forth in the Order herein.' 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 the Respondent, Emerson Electric Company, Mansfield, Ohio, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order, as herein modified: 1. Add the following as paragraph (2) and renumber the following paragraphs accordingly: 'The rule stated in American Auto Felt was subsequently restated and reaffirmed in Perma-Vinyl, supra 'The fact that several months clasped in the present case between the discharge dates and the date of sale would not, in our opinion , significantly effect the degree of probability that the discriminatees would have voluntarily remained on the payroll in the interim period . We take note in this connection that, in its brief Respondent represents that it in fact voluntarily offered the four discriminatees employment on November 18, 1968, in the positions they had held before Pace discharged them , and that all four had accepted the offer. 'Our conclusion in this respect is not affected by the fact that the remedial order in the Pace case is silent as to Pace's obligation for beckpay after the date it sold its business. The hearing in the Pace case was completed before the date of the sale and the record before the Board when that case was decided did not disclose Pace's intervening divestiture of its business. 'As indicated, supra. Respondent has stated in its brief to us that on November 18, 1968, it voluntarily offered the four discriminatees employment at their former or substantially equivalent jobs , and that all four accepted that offer . If this is iio, the backpay period will of course terminate as of the date of Respondent 's offer of reinstatement. "(2) Notify the above-named employees if presently serving in the Armed Forces of the United States of their right to full reinstatement upon application in accordance with the Selective Service Act and the Universal Military Training and Service Act, as amended, after discharge from the Armed Forces." 2. Delete the paragraph beginning "IT IS FURTHER RECOMMENDED ..."" 3. Add the following as the last indented paragraph of the notice: WE WILL notify the above-named employees if presently serving in the Armed Forces of the United States of their right to full reinstatement upon application in accordance with the Selective Service Act and the Universal Military Training and Service Act, as amended, after discharge from the Armed Forces. 'As above set forth, the Board, by Order dated January 17, 1969, has already adopted the Trial Examiner's recommendation that the 8(a)(5) allegation in the complaint be dismissed. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE GEORGE J. BOTT, Trial Examiner: Upon a charge of unfair labor practices filed by the United Steelworkers of America, AFL-CIO, herein called the Union, on January 26, 1968, against Emerson Electric Company, herein called Emerson or the Respondent, the General Counsel of the National Labor Relations Board issued a complaint and notice of hearing on April 17, 1968, alleging that Respondent had engaged in unfair labor practices in violation of Section 8(a)(l) and (5) of the National Labor Relations Act, as amended, herein called the Act. The complaint also alleged that Respondent was a successor to Pace, Inc., an Ohio corporation which has been disolved, and obligated to remedy the Section 8(a)(1),(3), and (5) unfair labor practices which the Board in a Decision and Order issued on October 27, 1967, found that Pace, Inc., had committed.' Respondent filed an answer admitting certain allegations of the complaint but denying the commission of any unfair labor practices and also disclaiming any liability for remedying any unfair labor practices committed by Pace, Inc. The hearing in this matter took place before me in Mansfield, Ohio on September 4, and all parties were represented by counsel. Subsequent to the hearing, General Counsel and Respondent filed briefs which I have carefully considered. Upon the entire record' in the case and from my observation of the witnesses, I make the following: 'Pace,, Inc., 167 NLRB No. 160. 'Respondent's motion to correct transcript of testimony is hereby granted except with respect to the proposed correction of Carto's testimony at p. 62, I. 2, of the transcript, which is the only correction opposed by General Counsel The significance of Carto's answer "Yes," instead of "No," as suggested by counsel for Respondent, will be discussed in the body of this Decision in considering the question of the purchaser's knowledge of the unfair labor practices of the seller. The transcript is probably garbled on p. 113, 1. 6, 8 and 9, as General Counsel states, but the suggested changes are ununportant, and, in view of the difficulty of reconstructing the exchanges which took place during the discussion of legal theory , I think the transcript should remain as it is. The Trial Examiner also makes these changes on his own motion: P. 6, 1. 17, change "intricate" to "intergral"; p. 7, I. 1, "formal" should be EMERSON ELECTRIC COMPANY 747 FINDINGS OF FACT 1. JURISDICTION OF THE BOARD Respondent is a Missouri corporation and as part of its operations it maintains in Mansfield, Ohio, a plant known as Pace Division of White- Rodgers, where it is engaged in the manufacture and sale of thermostats for electricial appliances. Annually, Respondent ships from its Mansfield, Ohio, plant directly to points outside of Ohio products valued in excess of $50,000. Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 11. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Basic Findings For several years prior to December 1, 1966, Pace, Inc. (herein Pace), an Ohio corporation, now dissolved, operated a plant in Mansfield, Ohio, at which it manufactured thermostats for electrical appliances. On July 25 , 1966, the Board issued a complaint of unfair labor practices in Case 8-CA-4266 alleging that Pace had violated Section 8(a)(l) and (3) of the Act. The 8(a)(3) allegations were based on the discharge of four employees during the Union's campaign to organize the employees of Pace at Mansfield. On August 9, 1966, an election was conducted under the supervision of the Regional Director for Region 8 of the National Labor Relations Board among Pace's production and maintenance employees on a petition filed by the Union in Case 8-RC-6375. Of the valid votes counted in said election , 28 votes were cast for and 39 votes were cast against the Union . On August 12, the Union filed objections to conduct of Pace affecting the election. In Case 8-RC-6375, seven of the Union's objections were overruled by the Regional Director, and five were referred by him to the Trial Examiner for resolution, pursuant to a Supplemental Decision and Order of September 20, 1966. On September 22, 1966, a complaint issued in Case 8-CA-4330 alleging that in June 1966, Pace had refused to recognize and bargain with the Union as bargaining representative of Pace' s production and maintenance employees,' and, in July and August, made promises of pay raises to employees and engaged in interrogation and other restraints of employees in connection with voting at the representation election in order to destroy the Union's majority, in violation of Section 8(a)(l) and (5) of the Act. Pursuant to an order consolidating cases 8-CA-4266, 8-CA-4330 and 8-RC-6375, a hearing was held before me "normal"; page 18, line 9, "Acting" should be "As bearing"; page 25, line 16, "sent" should be "accept"; page 27, line 19, "bring" should be "identify," and "in" should be deleted ; page 35, lines I and 10, "Mr. McKnight" should be "The Witness" in both cases; page 55, line 6, delete "re" before transfer; page 59, line 5, "Mr. Falcone" should be "Trial Examiner." 'The refusal to bargain allegation of the complaint was based on the Bernet Foam theory. Bernet Foam Products Co.. Inc . 146 NLRB 1277. in Mansfield, Ohio, on October 18, 19, 20, 1966, on the allegations of the complaints and the Union's Objections to the election. Willis Carlo was president of Pace until December 1, 1966, and he is now president of the Pace Division of White-Rodgers, which is a division of Respondent Emerson. Carlo participated in numerous meetings with representatives of Respondent which resulted in a sales agreement signed by the parties on October 28, 1966. Carlo testified that negotiations for a sale of Pace' s assets to Respondent were approved by Pace's board of directors in May 1966, and Respondent was advised at that time that Pace was willing to discuss the matter. By the middle of August 1966, a "letter of intent" covering the basic elements of an agreement whereby Respondent would acquire Pace's assets was prepared, and this outline was finally signed by Pace on October 10, 1966. The letter of intent was the foundation of the sales agreement, called a "Plan and Agreement of Reorganization," executed by the Respondent and Pace on October 28, 1966. Basically, the agreement provided for the acquisition by Respondent of all of Pace's assets and an assumption of its liabilities (except as therein specifically provided) in exchange for shares of Respondent's stock. As provided by the agreement, the closing of the transfer of assets from Pace to Respondent took place on November 30, 1966, and on December 1, 1966, Respondent began operations at the plant where Pace had formerly operated. Pace's last date of operations was November 30, 1966, and, as provided by the sales agreement, it dissolved on December 29, 1966. Prior to December 1, 1966, Pace manufactured small thermostats in its plant at Mansfield and employed approximately 75 production and maintenance employees. A separate corporation owned and controlled by Carlo and other officers of Pace owned the land and buildings, but in accord with the sales agreement, Emerson acquired a lease to the premises and the manufacturing continues at the same site. On December 1, 1966, Respondent Emerson began production with essentially the same employees employed by Pace the day before, and, in addition to other lines of thermostats brought in by it, continues to manufacture the same products manufactured by Pace and to service and supply the former customers of Pace. Although Respondent employed practically the same employees Race had employed just before the sale, there had been a substantial turnover in Pace's unit employees between June 17, 1966, when the Union demanded bargaining and established its majority by union cards, and November 30, the last day of operations. In addition, by August 31, 1968, the last payroll before the hearing in the instant case, Respondent's employment had risen to approximately 130 production employees. Respondent hired the office employees employed by Pace on November 30 when it acquired and began to run the factory on December 1, 1966. Respondent also acquired some of Pace's supervisors and higher executive talent when it bought Pace. Prior to the sale, Willis Carlo was president of Pace and its chief executive office, A. S. Irvine was vice president in charge of sales, John Hoffman was vice president in charge of engineering and D. L. Reffel was Pace's factory superintendent. These gentlemen signed employment contracts with Respondent prior to the sale, and Carlo is now president of the Pace Division of White-Rodgers, Irvine is vice president in charge of sales, Hoffman is in engineering and Reffel is factory manager. In addition. Supervisors Thoman and Ream° had no break dam seems to have been an accountant or controller. 748 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in service as a result of the sale, although Respondent employs more line supervisors now than Pace did before the sale. On the other hand, none of Pace's officers became officers of Respondent Emerson , and none of Emerson's officers were officers of Pace. Similarly, none of Pace' s board of directors are on Respondent's board, and Respondent owned no stock in Pace. On April 26, 1967, the Trial Examiner for the Board in Cases 8-CA-4266, 8-CA-4330 and 8-RC-6375 issued his Decision in which he found that Pace had, ever since June 17, 1966, refused to bargain with the Union in an appropriate unit in violation of Section 8(a)(5) of the Act, and had engaged in various acts of interference, restraint, and coercion in violation of Section 8(aXl) of the Act. The Examiner also found that Pace had discriminatorily discharged employees Ellen Kidd , Carol Yirga, Margaret Clinton, and Rosemary Sheeks on June 6, 1966, in violation of Section 8(aX3) of the Act. On October 27, 1967, the Board issued its Decision and Order affirming the Trial Examiner. It was stipulated at the hearing in this case that Respondent Emerson was not a party to and did not, prior to December 1, 1967, participate in any of the proceedings which resulted in the Decision of the Board regarding Pace. There is also no claim by anyone that Respondent actively participated in the unfair labor practices of Pace found by the Board in the above cases. On December 21, 1966, which was after the hearing in the above cases but before the Trial Examiner's Decision, Emerson wrote the Union and, after advising that Respondent had purchased Pace, whose employees were now employees of Emerson, asked if the Union claimed to represent a majority of the employees in a described production and maintenance unit. The Union's counsel replied to the above letter on January 6, 1967, stating that "it is our understanding that Emerson Electric Company, as the successor to Pace, Inc., has succeeded to all the rights and liabilities of Pace, Inc. with respect to its relationship with the employees of the Mansfield plant and United Steelworkers of America . ... The writer noted that those "rights and liabilities" would soon be defined by the Board in the pending cases against Pace, and he suggested that Emerson contact its attorney, F. Rush McKnight, who appeared for Respondent in this case. After the Trial Examiner's Decision in the case against Pace, the Union wrote Pace and asked for bargaining. Subsequently, on May 5, 1967, it wrote Emerson Electric Company and Pace jointly, requesting bargaining of "the operating entity in control of the operations at the Mansfield, Ohio, plant hitherto operated by Pace, Inc." Emerson answered the Union's May 5 demand on June 5, 1967, in a letter in which it rejected the Union's request on a number of grounds. The Union's counsel made another request for collective bargaining of Pace and Emerson by letter on October 31, 1967, after the Board had issued its Decision and Order in Pace, and, on November 9, 1967, Emerson again turned it down in a letter in which it stated that Emerson took the position that it was not a "successor" to Pace, and that even if it were, it ought not be required to remedy the unfair labor practices of Pace on the facts of this case. The communications between the Union and Pace and Emerson noted above apparently related only to the asserted obligation to bargain with the Union. On July 18, 1967, however, counsel for the Union wrote Emerson requesting it to "restore . . . to employment" the four employees the Board had found had been discriminatorily discharged by Pace . Counsel for Emerson answered this request in a letter dated August 6, 1967, in which he stated, among other things, that Respondent would pay backpay to the discriminatees for the period from their discharges until Pace ceased operations , because Emerson assumed this obligation when it purchased Pace, but he added that Emerson assumed no obligation to reinstate these individuals or to remedy Pace's unfair labor practices in any other respect. Respondent Emerson has not recognized or bargained with the Union and neither it nor Pace has offered the discriminatees reinstatement. It was also stipulated that at no time since December 1, 1966, have the four discriminatees personally applied for or personally sought employment with Respondent, and have made no application for reinstatement with Respondent except through efforts made by the Regional Office of the Board to have Respondent comply with the Decision and Order of the Board relating to Pace. B. Analysis, Additional Findings and Conclusions 1. The successorship issue The complaint alleges that Respondent independently violated Section 8(ax5) of the Act by refusing the Union recognition when it demanded it of Respondent in October 1967, and that "In addition to seeking the usual remedy for Respondent's own unfair labor practices ...," General Counsel seeks an order requiring Respondent , as successor to Pace, to remedy Pace's violations of Section 8(a)(l), (3), and (5) of the Act. An essential element in both theories, however, is successorship , for if Respondent is not a successor to Pace, its refusal to recognize the Union without some proof of majority status would not have been an unfair labor practice. The successorship doctrine is founded on the principle that "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 has long been established that a change in ownership in an enterprise does not automatically extinguish the rights of employees or their representatives and absolve the new owner from any duty to recognize the union which represented his predecessor's employees or to comply with the terms of a labor contract which covered those employees. To the contrary, the rule as developed by the Board and courts is that when after a sale or other change in ownership it can be said that there is nevertheless a "substantial continuity of identity in the business enterprise" or "the enterprise remains essentially the same,"' then the obligation of the prior employer devolves upon the successor in title and the purchaser in such a situation is a "successor employer." In determining whether after a transfer of ownership the "employing industry" remains substantially the same, the Board and the courts have considered certain factors, such as: whether the new employer uses the same or substantially the same work force performing substantially the same operations; whether there has been a transfer of supervision; whether the same machinery and methods of production are utilized in manufacturing the same 'N.L.R.B. v. Cohen, d/b/a Kiddie Kover Manufacturing Company, 105 F.2d 179, 183 (C.A. 6). 'John Wiley & Sons, Inc. v. Livingston , 376 U.S. 543; Cruse Motors, Inc., 105 NLRB 242, 247. EMERSON ELECTRIC COMPANY 749 product; whether there has been a substantial continuity of operations; whether operations continue at the same location ; whether the new employer had employees prior to the transfer who are now commingled with the employees of the old employer ; whether there is a labor organization representing the employees in the group with which the predecessors employees are merged ; and other considerations not particularly significant here.' Although no one of these considerations is necessarily controlling, prime considerations are the continuation of the business without substantial interruption , in such a form as to make the bargaining unit readily discernible , with some or all of the former employees employed at their old jobs. This, in my opinion, is what we have in this case. The complement of employees that constituted the bargaining unit on November 30, 1966, when Pace operated the business appeared on Respondent's payroll on December 1, 1966, when it began to run the factory, and there was, of course , no interruption in operations because of the change in ownership . Stated differently, the bargaining unit which the Board found was appropriate for Pace' s operations remained the same after Respondent began production. Although employment rose after the purchase because of the introduction of added products and increased sales, the bargaining unit was unchanged. The principal officers, owners, and managers of the seller became officers and managers of the division of Respondent in direct charge of local operations, and continuation of their tenure without interruption was arranged by contract as part of the sales agreement. In addition , at least one line supervisor went to work for Respondent. Respondent manufactures essentially the same products in the same factory that Pace did ; relatively small thermostats . Pace manufactured thermostats for electric appliances and Respondent continued Pace's line and added new lines of its own , but in the same general field.' Respondent , according to Carto, sells to essentially the same customers that Pace did. In support of its contention that it is not a successor to Pace, Respondent points to certain factors, such as the relative sizes of Pace and Emerson , financially and in 'Some of the leading cases involving contract obligations of the successor which arose in private actions are: Wiley v. Livingston, supra Wackenhut Corp. v. International Union , United Plant Guard Workers, 332 F.2d 954; United Steelworkers v. Reliance Universal. Inc.. 335 F.2d 891 (C.A. 3); Piano & Musical Instrument Workers v . W. W. Kimball Co.. 379 U.S. 357; McGuire v. Humble Oil & Refining Company, 355 F.2d 352 (C.A. 2) United States Gypsum Company v. United Steelworkers of America, AFL-CIO, 384 F.2d 38 (C.A. 5). Leading cases which primarily involved the question of whether a union remained the exclusive bargaining representative and which arose administratively are: N.L.R.B. v. Cotten d/b/a/ Kiddie Kover Manufacturing Company, 105 F.2d 179, 183 (C.A. 6); N.L.R. B. v. Albert Armato and Wire & Sheet Metal Specialty Co., 199 F.2d 800 (C.A. 4); N.L.R.B. v. Hoppes Manufacturing Company, 170 F.2d 962, 964 (C.A 6); N.L.R.B. v. Downtown Bakery Corp.. 330 F .2d 921 (C.A. 6); N. L.R.B. v. Auto Ventshade. Inc., 276 F.2d 303 (C.A. 5k N.L.R.B. v. John Stepp's Friendly Ford, Inc., 338 F.2d 833, 835 (C.A. 9x N.L.R.B. v. Lunder Shoe Corp., d/b/a Bruce Shoe Co.. 211 F.2d 284 (C.A. Ik Overnite Transportation Co. v. N. L.R.B.. 372 F.2d 765 (C.A.4k Stonewall Cotton Mills, 80 NLRB 325; Cruse Motors. Inc., 105 NLRB 242; Maintenance. Incorporated, 148 NLRB 1299; Johnson Ready Mix Co., 142 NLRB 437; Skaggs Drug Centers. Inc.. d/b/a Payless Drug Stores , 150 NLRB 518; Chemrock Corp., 151 NLRB 1074; Randolph Rubber Company. Inc., 152 NLRB 496; Valleydale Packers, Inc., 162 NLRB No. 139. 'Respondent's Representative Nusbaum, who participated in preliminary negotiations to buy Pace, said the products incorporated into Pace's line "matched" theirs. regard to the numbers of employees employed, and to various changes made by Emerson with respect to purchasing, sales, planning, forecasting, budgeting, record keeping, labor policy and other controls. Broad labor policy, for example, is made at a higher level in Emerson Electric Company, but, of course, it is executed at the plant level and, as a matter of fact, by the same officers who made it while Pace was in existence . Pace also uses Emerson's financial sources and resources and, as indicated , Emerson's more sophisticated techniques in the planning and record keeping field. Also, as suggested earlier, there has been an increase in sales . Although all of these are factors which may be considered, they are only the normal incidents of the takeover by a large company of a smaller and cannot override or defeat the primary considerations that have been found. I conclude on the basis of the facts found that there has been a substantial continuity of identity in the "employing industry" which constitutes Respondent a successor employer within the meaning of the cases and not excused from recognizing the Union or remedying Pace's unfair labor practices by any circumstance connected with the transfer of operations as such.' 2. Respondent's own refusal to bargain with the Union As set out earlier, the Union advised Respondent as early as January 1967 that it considered it to be a successor to Pace, and on May 5 , and October 31, 1967, the Union requested Respondent to bargain collectively with it. These requests were refused by Respondent for a number of reasons, principally because it considered itself not a successor and because it doubted that the Union represented a majority of its employees. I have found that Respondent is a successor to Pace , Inc., and I also find that the Union's demand, made in a unit which the Board had earlier found appropriate for collective bargaining for Pace's employees, was for an identical and appropriate unit of Respondent's employees. There remains then the question of the Union's majority and Respondent's alleged doubt about its existence. The Union has never claimed to in fact represent a majority of Respondent's employees at the times it made its demands for recognition. Its claim for statutory recognition is dependent on its majority established among Pace's employees on June 17, 1966, and Respondent's successor status. The General Counsel's and the Union's position is that Pace's obligation to bargain devolved upon Respondent. I find that it did not in the circumstances of this case. The Union was not a certified or incumbent representative of employees of Pace when Respondent took it over on December 1, 1966, and although it is well established that certification after an election is not the only method by which a union may establish itself as a bargaining representative, at the time of the takeover the Union had in fact lost an election, and Pace's duty to bargain, as Respondent could reasonably view it, was only potential and contingent upon a resolution of the question of Pace's mental state when it refused the Union recognition. The General Counsel had issued a complaint at the time in which he sought to require Pace to bargain with the Union, but this obligation, if any, would not become more apparent until Pace's unfair labor practices other than the alleged refusal were established and until 'Cases cited fn. 7, supra. 750 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the election case, which had been consolidated with the unfair labor practice case, resulted in a finding that the election should be set aside. When Respondent assumed possession and began operating, the hearing on these issues had just recently been concluded, but it was not until April 26, 1967, that there was a finding that the Union was the majority representative of employees on June 17, 1966, by virture of authorization cards in its possession, and that the employer had refused to recognize the Union in bad faith. The Union established its majority in the case against Pace by approximately 43 authorization cards in a unit of approximately 80 persons, but by December 1, 1966, 6 months later, when Respondent became the employer, approximately 20 of the card signers had left Pace's employ and had been replaced by others. There was also a turnover in employment in addition to the 20 card signers before December 1, which continued after December 1. Moreover, by August 1968, just before the hearing in this matter and over 2 years after the Union obtained its authorization cards and demanded bargaining of Pace, Respondent employed almost twice as many employees in the appropriate unit. In fixing an obligation to bargain on an employer with a union which has lost an election the Board is fully aware that authorization cards are not the ideal method of determining majority status, and so it weighs the possible burden on the employer and on those employees who may not have actually designated the union against the fact that the employer has made a fair election impossible. I do not think, however, as I read the cases, that the Board will invoke the so-called Bernel Foam doctrine in a successorship case merely and automatically because the purchaser is a successor, but rather will consider other matters as well. In my opinion, the factors which I have noted, such as the large turnover in the bargaining unit, including half the card signers , the substantial increase in the size of the unit since the refusal to bargain, the remoteness of the refusal from the purchase and from the present, the absence of a noncontingent determination of the predecessor's obligation before the sale, and lack of any knowledge on the purchaser's part that the Union in fact represented a majority at any time before or after the sale will tip the scales in the successor's direction. I find and conclude, contrary to the allegations of the complaint, that Respondent did not refuse to bargain with the Union in violation of Section 8(a)(5) of the Act when it questioned its majority status and refused to recognize it." 3. Respondent's responsibility for remedying Pace's unfair labor practices In order to effectuate the policies of the Act, Respondent may still be held responsible, as a successor to Pace, for remedying Pace's unfair labor practices even though Respondent committed none of its own." However, there is no rule that a successor is automatically obligated to remedy his predecessor's unfair labor practices, but the remedy will be invoked only when the circumstances of the case justify it.'I "See Ramada Inns. Inc. 171 NLRB No. 115; cf. Makela Welding. Inc and Kemp Welding. Inc. v. N L R B.. 387 F.2d 40 (C.A. 6). "Perma Vinyl Corporation, Dade Plastics Co. and United States Pipe and Foundry Company, 164 NLRB No. 119, enfd. sub nom . United States Pipe and Foundry Company v. N.L.R.B 398 F.2d 544 (C.A. 5), Ramada Inns. Inc.. 171 NLRB No. 115. "Ramada Inns, Inc., supra. "109 NLRB 146 In Perma Vinyl, the Board found that: "U.S. Pipe acquired Perma Vinyl' s business with knowledge of the unfair labor practice proceeding against that company. Upon consummation of the sale and transfer of assets to it, U.S. Pipe continued to operate the former facilities of Perma Vinyl without substantial change. The operation was continued at the same location. Essentially the same personnel were employed and they worked under the direction and control of supervisors who had been on Perma Vinyl's payroll. Sorosky, president of Perma Vinyl, who had personally participated in that company's unlawful activity, became plant manager under U.S. Pipe. In that capacity he made a speech to the employees in opposition to the Union." In requiring U.S. Pipe to remedy Perma Vinyl's unfair labor practices, the Board reversed Symns Grocer Co.," and, reevaluating its position in the light of Wiley," where the court required a successor company to arbitrate grievances under its predecessor's contract, returned to its policy it had established in 1948 in Alexander Milburn Company" that the successor employer who acquired the business with knowledge of the existence of the unfair labor practices proceeding is responsible, jointly and severally with its predecessor, for remedying the unfair labor practices. The unfair labor practices have not been remedied. Pace is out of business, and the discriminatees have not been reinstated by it or offered employment by Respondent and made whole for loss of earnings, although Respondent has offered to make good their losses up to the time that Pace ceased business and Respondent began to operate. The Respondent has of course, as noted above, refused the Union the recognition which the Board found in the Pace case that it was entitled to. I have found that Respondent is a successor to Pace, and although there are some common elements in Perma Vinyl and the present case which indicate that the policies of the Act might be effectuated by requiring Respondent to recognize the Union which Pace illegally refused to recognize and to reinstate the discriminatees with full backpay as well, there are differences in the cases which lead me to conclude that Respondent should be required only to remedy the unfair labor practices under Section 8(a)(3) of the Act and not be required to recognize the Union as the statutory representative of its employees under Section In Perma Vinyl the purchaser knew of the pendency of the unfair labor practice proceeding against the seller when it acquired the business, and contrary to Respondent's contention, I find that Respondent here too knew what Pace's potential liability was when it took possession on December 1, 1966. Respondent argues that it knew only that there were charges of discrimination under Section 8(a)(3) of the Act when it bought the business. It must concede this much because the sales agreement refers to these charges and this contingent liability, although it does not refer to the complaint of refusal to bargain and the hearing on it which took place shortly before the sales agreement was executed. Carto, former president of Pace, Inc., who became president of the Pace Division of the White-Rodgers Division of Respondent, testified that to his knowledge Respondent completed the purchase of Pace without checking or knowing the breath of the proceeding against Pace." "John Wiley & Sons, Inc. v. Livingston. et al , 376 U.S. 543, 549. "The Alexander Milburn Company, 78 NLRB 747. "On p. 62, I. 2, of the transcript appears Carto' s answer "Yes" to the EMERSON ELECTRIC COMPANY 751 Contrary to Carto' s suggestions that Respondent may have been ignorant of the possibility that Pace might be ordered to bargain with the Union, I find that its asserted ignorance is impossible to accept in the circumstances. Carto was president of Pace and fully aware of the implications of the General Counsel's complaint and the hearing held on it in October 1966. He attempted 20 or more meetings with representatives of Respondent at which the details of the sales agreement were arranged, and Respondent was given complete access to all of Pace, Inc.'s record after the "letter of intent" in early October, or in any case no later than October 28, 1966, when the agreement was executed. Clearly, Respondent acquired Pace in circumstances sufficient to put it on notice of the pending Section 8(a)(1),(3), and (5) charges against Pace. Absent a denial or a more adequate explanation from a representative of Emerson about their knowledge of the refusal to bargain charge, the complaint and hearing against Pace, and about why they chose to ignore Pace's or its attorney's labor relations files, which admittedly contained documents which would have put it on notice, I find that they actually knew of the pendency of the complete unfair labor practice proceeding against Pace." Respondent then was a successor with knowledge when it acquired Pace, and Carto and other officers of Pace, who knew of and were responsible for Pace's unfair labor practices, became officers and managers of Respondent's Pace Division. Despite these important resemblances to the facts in Perma Vinyl, however, for essentially the same reasons which led me to the determination that Respondent did not violate Section 8(a)(5) of the Act when it questioned the Union's majority and refused to bargain with it on demand, I conclude that an order to Respondent to cure Pace's refusal to bargain by recognizing the Union as majority representative of its present complement of employees would not be appropriate. Regardless of Respondent's knowledge of the extent of the proceeding against Pace when it purchased that company, Pace's obligation to bargain , as stated earlier, was potential and contingent, depending on the resolution of such matters as Pace's good faith, the extent of its unfair labor practices, its interference with the election, and the Union's proof of majority by authorization cards. Although Pace's liability to pay backpay and reinstate employees in the discrimination portion of the proceeding was also dependent on a subsequent finding that it had improperly discharged certain employees, Respondent could protect itself against such liability by provisions in the sales agreement, but there was no practical way that it question of whether a representative of Respondent asked to see Pace, Inc.'s "labor relations file," which contained all formal papers, such as charges and complaints, prior to the closing of the sale. Contrary to 'Respondent's position in its motion to correct the transcript, this is the way I recall Carto answering, but I agree that the answer is inconsistent with most of his previous testimony . In my view, he was confused and intended to answer "No." However, as set out in the body of this Decision, I do not believe that Respondent was ignorant of the extent of General Counsel's case against Pace. "William Nusbaum , who participated in some of the negotiations as a Emerson Electric representative, did not participate in all of them, and he testified that his "role" in the negotiations tapered off in the latter part of August. He also said that labor relations was completely out of his field. I do not, therefore, consider his testimony that he did not remember any reference to "pending unfair labor practice charges" by Pace representatives during the negotiations to be an adequate denial by Respondent that there was none and that it had no knowledge of the scope of the unfair labor practice proceeding against Pace. could protect itself against the refusal to bargain charge or against a charge of unfair labor practices against itself if it recognized the Union and the Board subsequently dismissed that portion of the case against Pace. I have also found that the Board did not issue its final order against Pace until October 27, 1967. As found above, approximately half of the card signers had left Pace's employ between the Union's demand for bargaining in June 1966 and the transfer of ownership in December 1966, and there had also occurred some other turnover in employment. Moreover, Respondent has employed additional personnel in the unit since it acquired Pace. In addition to the uncertainty and remoteness of Pace's bargaining obligation and the existence of employee turnover, Respondent's own officers had no connection with Pace and committed no unfair labor practices, and so there appears no good reason that a fair election cannot be had among Respondent's present employees to decide whether they presently wish to be represented by the Union. On the basis of these factors, and "balancing the equities," I will not recommend that Respondent be required to bargain with the Union.'8 There are, however, no counterbalancing equities which should excuse Respondent from remedying the effects of Pace's discrimination against four employees, and I shall recommend that Respondent be required to offer Ellen Kidd, Carol Yirga, Margaret Clinton, and Rosemary Sheeks immediate and full reinstatement to their former or to substantially equivalent positions without prejudice to seniority and other rights and privileges, and make them whole for any loss of earnings they may have suffered as a result of the discrimination against them by payment to them of a sum of money equal to that they would have earned as wages from the dates they were discharged and discriminated against by Pace to the dates of offers of reinstatement to them by Respondent less interim earnings, and in a manner consistent with Board policy set out in F. W. Woolworth Company, 90 NLRB 289. Interest on backpay shall be computed in the manner set forth in Isis Plumbing & Heating Co., 138 NLRB 716. Although at the opening of the hearing General Counsel, but not the charging Party, stated that he was seeking backpay from Respondent only from the date of the Board's Decision and Order in Perma Vinyl to the dates of the offers of reinstatement, because the Board in that case indicated that the principles announced were those that would guide it in "future cases," General Counsel now takes the position in his brief that he was in error in making this concession and that backpay should run as I have recommended. I find no prejudice to Respondent by this change in position. First, it involves not a factual but a legal issue to be resolved by the application of Board policy found in Board's decisions, and second, the Union, one of the parties to the proceeding, did not concur in General Counsel's position. In support of his position that the discriminatees should be reinstated by •Respondent with full backpay from the date of their discharges General Counsel relies principally on Perma Vinyl and Liberty Electronics Corp." In my "Ramada Inns. Inc, supra See Perma Vinyl Corporation, supra. Perma Vinyl did not involve the question of the purchaser 's obligation to remedy the seller's refusal to bargain. However, Alexander Milburn , supra, to which the Board returned in Perma Vinyl, did, but in that case the union had been certified by the Board, recognized by the employer, and a contract executed before the sale. "143 NLRB 605. 752 DECISIONS OF NATIONAL LABOR RELATIONS BOARD opinion, these cases command the requested remedy. In Perma Vinyl the Board overruled Symns Grocer Co.30 which held that a bona fide purchaser with knowledge of unfair labor practices of its predecessor is not responsible for remedying the unfair labor practices. But even while the Symns doctrine was the Board policy the Board also continued in certain situations to require the purchaser to remedy the seller's unfair labor practices even if it did not participate in them. In Liberty Electronics, the Board held the successor liable for its predecessor's 8(a)(3) violations because the purchaser had contractually agreed to assume the predecessor' s liabilities arising from its violation of the Act. In this case, Respondent clearly agreed to assume Pace's liabilities except as specifically provided in the agreement of the parties. This appears from the preamble of the October 28, 1966, sales agreement and paragraph one thereof. Moreover, Schedule C of the agreement specifically refers to the "possible obligation" which may be decided "by the NLRB on the charges filed by four employees." Finally, Pace's 1965-66 Fiscal Report, which was in Emerson's possession prior to the sale, stated, at page 12, that the discrimination charges "could result with [sic] backpay ordered from June 8, 1966, if United Steelworkers is successful in the reinstatement of four employees." Respondent then, with knowledge of possible reinstatement and backpay, assumed Pace's liability without express limitation when it acquired Pace. Respondent makes various arguments, which I reject, to support its contention that it should not be required to reinstate the discriminatees or pay them more than the wages they lost from the dates of discrimination against them until Pace went out of business. First of all, I disagree with its argument that it was not intended by the parties to sales agreement that Respondent should be liable for any of Pace's unfair labor practices beyond a monetary obligation up to the time Pace went out of business. I do not think that Carto's March 24, 1967, written acknowledgement of that asserted intention, written in order to "clarify and confirm the intentions of the parties" in their earlier agreement can overcome the clear terms of the earlier agreement . It also should be noted that when the "clarification" of intent was made Carlo was then employed by Respondent, and in effect the "clarification" was not much more than an intraoffice, self-serving declaration. In any case, nothing in the sales agreement as such could excuse Respondent from offering reinstatement to the four employees, for the rule in Perma Vinyl applies regardless of an assumption of liabilities. I find nothing in the sales agreement to relieve Respondent from reinstating the employees and paying them full backpay. Respondent's other contentions in support of its position that it need not reinstate the employees and pay them full backpay have been decided against it by the Board in other cases. Its argument that it cannot be bound by the Board's Order in the Pace case because of the procedural requirements of Rule 65(d) of the Federal Rules of Civil Procedure was considered in Liberty Electronics, supra," and found to be without merit because the Board was not predicating a decision against the successor on the ground that it had violated the Act, and because the alleged successor had been given notice of and fully participated in the proceedings relating to the issue of its successorship. Here, of course, Respondent Emerson is not being charged with an unfair labor "109 NLRB 346. practice in not reinstating the employees and making them whole, and it fully participated in this proceeding involving its status as a successor. Upon the basis of the foregoing findings of fact and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Respondent Company is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization as defined in Section 2(5) of the Act. 3. Respondent did not refuse to bargain with the Union in violation of Section 8(aX5) of the Act. 4. Respondent is a successor employer to Pace, and responsible for remedying Pace's unfair labor practices only to the extent found and recommended herein. RECOMMENDED ORDER Upon the foregoing findings of fact and conclusions of law, and upon the entire record herein, it is recommended that Respondent, its agents, successors, and assigns, shall: (1) Offer to Ellen Kidd, Carol Yirga, Margaret Clinton, and Rosemary Sheeks immediate reinstatement to their former or substantially equivalent positions and make them whole in the manner set forth in this Decision. (2) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary for determining the amount of backpay due under the terms of this Decision. (3) Post at its Mansfield, Ohio, plant, copies of the attached notice marked "Appendix."" Copies of said notice, on forms provided by the Regional Director for Region 8, after being duly signed by Respondent or its representatives, shall be posted by Respondent 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 Respondent to insure that said notices are not altered, defaced, or covered by any other material. (4) Notify said Regional Director, in writing, within 20 days from the receipt of this Decision, what steps Respondent has taken to comply herewith." IT IS FURTHER RECOMMENDED that the allegations of the complaint that Respondent refused to bargain with the Union in violation of Section 8(a)(5) be dismissed. 11143 NLRB 605; Sinko Manufacturing and Tool Company. 154 NLRB 1474; Perma Vinyl Corporation, supra. "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 Appeals Enforcing an Order" shall be substituted for the words "a Decision and Order." "In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read : "Notify the Regional Director, for Region 8, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith." EMERSON ELECTRIC COMPANY APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL offer to Ellen Kidd , Carol Yirga, Margaret Clinton , and Rosemary Sheeks full reinstatement to their former or substantially equivalent positions and make them whole for any loss of pay suffered as a result of their discharges by Pace, Inc., in June 1966. Dated By EMERSON ELECTRIC COMPANY (Employer) 753 (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. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 1695 Federal Office Building, 1240 East Ninth Street, Cleveland, Ohio 44199, Telephone 216-522-3715.