Ellary Lace Corp.

ELLARY LACE CORP. Ellary Lace Corp. and Amalgamated Lace Operatives of America . Case lO-CA-7443 August 14, 1969 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS JENKINS AND ZAGORIA On May 15, 1969, Trial Examiner Leo F. Lightner issued his Decision in the above-entitled proceeding, finding that the Respondent had not engaged in certain unfair labor practices alleged in the complaint, and recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, the General Counsel and the Charging Party filed exceptions to the Trial Examiner's Decision, and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. 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 hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE LEO F. LIGHTNER, Trial Examiner : This proceeding was! heard before me in Athens , Tennessee, on December 4, 1968, and March 12, 1969, on the complaint of General Counsel, as amended , and the answer, as amended, of Ellary Lace Corp., herein called the Respondent.' The amended complaint alleges violations of Section 8(a)(5) and (1) and Section 2(6) and (7) of the Labor Management Relations Act, 1947, as amended , 61 Stat. 136, herein called the Act . The parties waived oral argument and briefs filed by the General Counsel, Charging Party, and Respondent have been carefully considered. 'A charge herein was filed on August 6, 1968, and amended on August 26, 1968. A complaint was issued on October 23, 1968, and amended during the hearing herein. 73 Upon the entire record, and from my observation of the witness, ' I make the following: FINDINGS AND CONCLUSIONS 1. THE BUSINESS OF THE RESPONDENT Respondent is a Tennessee corporation, maintaining an office and plant at Sweetwater, Tennessee, where it is engaged in the manufacture and sale of lace products. Respondent, on a projected basis over a period of 12 months, from its initial entry into business, on July 8, 1968, a representative period, will sell and ship products valued in excess of $50,000 from its Sweetwater, Tennessee, plant directly to points located outside the State of Tennessee. The complaint alleges, the answer denies,' and I find Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act.4 II. THE LABOR ORGANIZATION INVOLVED Amalgamated Lace Operatives of America, herein referred to as the Union , is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES The Issue The principal issue raised by the pleadings and litigated at the hearing are whether Respondent is a "successor," within the meaning of Board decisions, to Tennessee Valley Fabrics Corporation, herein referred to as TV, and, by reason thereof, was required to bargain with the Union, pursuant to the request of the latter, on and after July 24, 1968. Respondent denies the commission of any unfair labor practices. Background There is no dispute as to the background facts herein set forth. TV began operating a plant, at Sweetwater, Tennessee, in 1950, where it manufactured lace. The two categories of lace are described as coarse gauge , which is manufactured from cotton and cotton goods , and fine gauge, which is manufactured from nylon . Subsequently, in April, 1965, TV opened. a subsidiary plant at"Tellico Plains, Tennessee. At all times, during the operation of these plants, the officers of TV were: C. J. Mozur, president; Herb Rubin, vice president; Mrs. Mozur, secretary; Carole Kustrup, treasurer; and Marion Register , assistant treasurer. The board of directors was comprised of those named with the exception of Register. On May 19, 1966 , United Steelworkers of America, AFL-CIO, filed a Petition for Election , Case 10-RC-6712, for the P & M unit, at TV's Sweetwater plant. The unit approximated 111 employees.' A consent election agreement was entered into on June 10, 1966, and approved by the Regional Director on June 13. A tally of ballots, indicating a majority voted for the Union, on July The bulk of the record is by stipulation of facts and exhibits . Only one witness was called. 'While the original answer denied the commerce allegations , during the hearing, by stipulation, Respondent admitted them. 'Siemons Mailing Service . 122 NLRB 81. 'While of no consequence, TV employed approximately 50 in the Tellico plant, in P & M work. 178 NLRB No. I I 74 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1, resulted in a certification being issued on July 12, 1966. No objections were filed. Inconclusive negotiations ensued and, in February 1967, the Union commenced an economic strike. Picketing, at the Sweetwater plant, has continued ever since. Subsequently, after the employees voted to disaffiliate from Local 6638, United Steelworkers of America, and to affiliate with the Amalgamated Lace Operatives of America, the Union filed a petition for amendment of certification, on May 1, 1967. Pursuant to a notice to show cause, the Employer filed a statement in opposition. On May 29, 1967, the Regional Director granted the requested amendment of certification, substituting the Union herein, as the collective-bargaining representative. No motion for reconsideration was filed. In November, 1967, TV notified the Union that it was ceasing manufacture at the Sweetwater plant. TV ceased manufacturing, at both plants, on or prior to December 1, 1967. Termination notices were issued to all striking and non-striking employees, on December 1, except two watchmen, noting "ceased operations." Prior to December 1, 1967, TV owned and occupied the entire plant at Sweetwater and no other company had space or offices at that plant. Prior to December 1, 1967, while TV had a subsidiary at Tellico Plains, the main office for the two plants was at Sweetwater. On approximately December 1, 1967, an organization identified as Tellico Laces Corporation' leased the Tellico Plains plant. It also leased a portion of the Sweetwater plant, described as 2,250 sq. ft. in the machine shop, 550 sq. ft. in the drafting room, 2,500 sq. ft. in the warping space, a total of 5,300 sq. ft., in a plant with a total of approximately 50,000 sq. ft. Tellico vacated the warping space in July, 1968, after Respondent herein commenced operations, and the drafting space the following month, but continues to lease the machine shop. Tellico produces coarse gauge lace only. Prior to December 1, 1967, TV had 19 coarse gauge machines at Sweetwater, and 10 at Tellico.' TV also had 12 fine gauge lace machines, on December 1, 1967, 10 of which were in Sweetwater and 2 in Tellico. While one of the latter was, thereafter, converted to coarse gauge, both are in storage at Sweetwater. Two lace mending, or sewing machines, are also in storage at Sweetwater, in space not rented by Respondent. However, it is inferred they are used by Respondent, as explicated infra. Tellico purchased inventory, raw material and supplies, from TV, in a total amount approximating $135,000, over a 7-month period. It is undisputed that Tellico hired some of the former TV employees, while the strike was continuing at Sweetwater, including some who had been engaged in the fine lace manufacture, for the manufacture of coarse lace at Tellico. General Counsel asserted the work done by Tellico, at Sweetwater, was work formerly performed by 'While the identity of the owners of Tellico Laces Corporation, herein referred to as Tellico, is obscure, it is noted that the statement of Harold M. Humphreys, one of the attorneys for Mozur, identified the organization as being headed by a Mr Charles Hall, who is described as mayor of Tellico Plains. Absent evidence to the contrary, I find it reasonable to infer that the purchasers were strangers to the sellers, and that the sale was an arm's length transaction. 'Since it is undisputed that TV presently has in storage, at Sweetwater, coarse gauge machines, winders, bobbins, pattern cards and yarn, in space not rented by Tellico or Respondent, it is inferred the coarse gauge machines in storage number 19. members of the Union' s bargaining unit . However, a charge filed by the Union, in Case 10-CA-7203, asserting that Tellico was the alter ego of TV was dismissed, by the Regional Director, after investigation, and, upon appeal, the dismissal was sustained. Another charge, alleging a violation of Section 8(a)(5), by Tellico, identified as Case 10-CA-7319, resulted in a dismissal, by the Regional Director. This action was likewise appealed, and the dismissal was sustained.' It is inferred that the action of the Regional Director in both cases preceded the advent of Respondent herein, although at least one of the appeals was not decided until October 18, 1968. The demise of C. J. Mozur occurred on April 18, 1968. The office of president of TV has since remained vacant. Mozur and his wife were the sole stockholders of TV. Mrs. Mozur and the Trenton National Bank of New Jersey were named executors of the Mozur estate. Respondent commenced operations, at the Sweetwater plant, on July 8, 1968. Respondent is owned by its four officers, who are identified as: Sheffield Novik, president, Thomas Elliott, vice president; Benjamin Silverberg, secretary; and Sal Lavore, treasurer. The four named are the board of directors. On July 1, 1968, Respondent leased, from TV, 7,800 sq. ft., in the south end of the building, 800 sq. ft. of the office area, with provision for ingress and egress, and use of restrooms, lunchroom, and parking areas. Respondent also leased, with an option to purchase, 10 fine gauge machines' together with spares and two lace mending machines. The leased portion, in the plant, is separated from the balance of the plant by a black barrier sheet. Respondent is engaged solely in the production of fine gauge lace. It is undisputed that the owners and officers of Respondent are strangers to the owners and officers of TV. In December, 1967, TV posted two 4 by 8 foot signs, at its Sweetwater plant, advertising that its building and all machinery were for sale, that a prospective purchaser should contact C. J. Mozur, at Mozur Laces Corporation, and listing the telephone number in New York City, New York. These signs were removed on approximately the same date that Respondent began its operation. TV also listed its machinery for sale with dealers in used textile machinery, as their sales agents. TV formerly and Respondent, since its inception, employed Mozur Laces Corporation as their exclusive sales agent , or outlet.10 Marion H. Register, identified supra as assistant treasurer of TV, was general manager or plant manager of TV, at Sweetwater, commencing August, 1966, until the plant closure . Karl Yena, manager of the TV plant at Tellico, was Register's assistant, until December 1, 1967, and thereafter became plant manager for Tellico. After December 1, 1967, Register remained on TV's payroll, in a caretaker capacity, at a salary of $25 a week . Between the dates of December 1, 1967, and July 5, 1968, Register also worked for Tellico as a consultant . Commencing July 8, 1968, Register became general manager or plant 'I find of no consequence General Counsel 's assertion that an 8(a)(3) and (I) charge, involving the discharge of 18 employees , by TV, was dismissed by the Regional Director, whose action was affirmed on appeal. 'Identified as machine Nos 21, 22, 25, 26, 27, 28, 29, 30, 31, and 32. "While General Counsel asserted the same law firm represented TV and Respondent, I fail to perceive how the identity or continuity of outside counsel constitutes a factor or should be given any weight , as evidence of probative value, in determining the existence or absence of a "successorship," under the principles enunciated by the Board No misconduct, by counsel, is asserted ELLARY LACE CORP. 75 manager for Respondent, at Sweetwater. Since the plant closure, TV has continued the employment of two watchmen, for the protection of the unleased portions of its Sweetwater plant. When TV was in operation, it had five office employees, consisting of Register and four clerical employees, and did its bookkeeping and had a teletype facility at Sweetwater. After closure, TV retained its office at Sweetwater for the limited purpose of back correspondence. Commencing July 8, 1968, Respondent leased a portion of the office space, and two desks. Respondent's bookkeeping is done in New York City, but its payroll is paid at Sweetwater. The office complement of Respondent consists of Register and one secretary. After the closure of the TV plant, either Register or Allen, identified as the maintenance engineer for TV and, later, for Respondent, were available to show the premises. More recently, inquiries relative to leasing the remainder of the plant are directed to the attorney, in Chattanooga, who is a law partner of the attorney for the Respondent herein. TV shares office space in New York City with Mozur Laces Corporation, sales agent for Respondent. Respondent's office in New York City is at a different location. When TV ceased operations there were no unfilled customer orders. There is no contention that Respondent filled any customer orders for TV. In July and August 1968, Respondent purchased $30,583.73 worth of yarn from TV. When Respondent attempted to make its first purchase of yarn from a supplier, it found it had not established its credit. Thereupon, TV purchased the yarn and resold it to Respondent. Since that time Respondent has purchased its own yarn. Respondent manufactures the same fine gauge products which TV formerly manufactured at Sweetwater. The production methods used by Respondent have been improved, over the production methods used by TV, at Sweetwater, to achieve a better operation by employing new techniques. TV operated both at Sweetwater and Tellico, but all drafting and warping for both facilities was performed at Sweetwater. After December 1, 1967, Tellico hired those employees of TV who had been on TV's payroll, in drafting and warping, and these employees continued to be employed at Sweetwater, in the space provided for drafting and warping under Tellico's lease from TV, as it related to the Sweetwater plant, on a month-to-month basis . Respondent uses no drafting employees, but has a contractual arrangement whereby Respondent's drafting is done by the employees of Tellico. However, this work is limited to correcting patterns, making work sheets and punching pattern cards. Respondent receives patterns from its customers, together with instructions. These are transmitted to Tellico, and are transposed, by Tellico employees, on to IBM cards, or pattern cards, by punching holes into the cards. These cards, or patterns, are then sent to Respondent and placed on the machines for manufacture. This is done subject to a contract between Respondent and Tellico, as Tellico is the only one in the area with the essential machines to accomplish this work. No designing is done by Respondent, nor by Tellico for Respondent. When TV operated, at Sweetwater, its employees were paid on an hourly base rate, plus an incentive. Respondent operates on a similar pay schedule . However, while the base rates of Respondent's employees are only slightly higher than the last base rates for TV employees, the incentive rates are substantially higher than TV's last incentive rates, and result in approximately 25 percent getting gross pay for fine gauged machine operators." During the year of 1967, TV, at Sweetwater, had a fine gauge lace production approximating 15 percent of its total production, and its man hours requisite for that production was in approximately the same percentage. Prior to 1967 the percentage may have been as low as 10 percent, for both categories. While TV's Tellico plant operated two 10-yard fine gauge machines, Respondent has not operated these two machines. At the time TV closed its plant, at Sweetwater, it was employing approximately 45 to 50 employees, all but 8 of whom were members of the bargaining unit, or appropriate unit. It is reasonable to infer that these 37 to 42 employees were crossing the picket line, which existed at that time. Twenty-three of the employees, employed at the time of TV's plant closure, commenced working for Tellico at Tellico Plains, and of these 19 were in the appropriate unit. When Respondent commenced operations, in July 1968, these 23 employees returned to work at the Sweetwater plant, for Respondent.12 The Alleged Refusal to Bargain Successorship It is undisputed that on July 24, 1968, the Union, by its attorney, by letter, advised Respondent that the Union represented a majority of the P & M employees of TV, having been designated as bargaining agent, as the result of the Regional Director's action of May 29, 1967, supra. The Union asserted that it considered Respondent to be a successor, or alter ego, of TV and therefore obligated to bargain with the Union for a collective-bargaining agreement covering the designated employees of TV. The letter concluded by requesting a meeting for the purpose of negotiations. The Union's letter was received, by Respondent, on July 27. Respondent made no response to the demand. Respondent did not institute RM "Respondent, in my view , correctly urges it did not participate in TV's negotiations with the Union in June and November 1967, and had no knowledge of a disagreement over the economic package, including incentive pay. General Counsel asserted the relevancy and materiality relate to his amendment to par. 16, of the complaint, in which it is alleged that Respondent's refusal to bargain converted the economic strike to an unfair labor practice strike. "The employees, prior to employment, successively filled out applications for employment by Tellico, and later for employment by Respondent. General Manager Register related that he acquired employees for Respondent, in part, by advising Yena, manager at Tellico, and Register's former assistant, that Register desired to employ some of the employees who had formerly worked at the Sweetwater plant and were at that time working at the Tellico plant. Yena agreed to cooperate, by advising the employees interested to make application at the Sweetwater plant . Register related that as a result of the assistance of Yena "word got around town," in Sweetwater, and he received applications from former TV employees who were not working at Tellico and also from individuals who had never worked for TV or Tellico. Register acknowledged that no notice was placed either at the plant, or in any newspaper, or transmitted to the Union, that Respondent was seeking applications for employment . Register acknowledged that Respondent did not take any steps to notify former TV employees who had not crossed the picket line of the availability of employment. Register acknowledged that union representatives were stationing themselves outside the plant, at the time of this hiring . In Register's words they were not carrying picket signs, except spasmodically , but the pickets, inferentially with picket signs, were sitting in cars outside the plant. Register acknowledged that he contacted one or two individuals who had never worked for TV or Tellico, who were subsequently employed. 76 DECISIONS OF NATIONAL LABOR RELATIONS BOARD proceedings, or request the Union to institute RC proceedings. Respondent made no other representations to the Union. Specifically, Respondent never communicated to the Union its asserted doubt as to whether the Union represented a majority of Respondent's employees. The complaint alleges, and General Counsel and Charging Party urge, as a unit appropriate for the purposes of bargaining, within the meaning of Section 9(b) of the Act, the following: All production and maintenance employees, including plant clerical employees and quality control employees of Tennessee Valley Fabrics Corporation, employed at its plant at Sweetwater, Tennessee, but excluding office clerical employees, guards and supervisors as defined in the Act. In view of the prior action by the Regional Director, in Case l0-RC-6712, supra, there is no doubt the unit described was an appropriate unit while TV continued in operation. The existence of the unit, as described, under Respondent's operation is a different question, for reasons explicated infra. The existence of majority representation, by the Union, is predicated upon the Board's presumption of continuing majority, according to General Counsel and Charging Party. The complaint alleges that Respondent- purchased property and equipment from TV; uses equipment formerly used by TV; is engaged in substantially the same business of manufacturing and selling lace products; and employs the same employees and supervisors. The evidence relative to these allegations appears as follows. TV's production was 85 percent coarse gauge lace and 15 percent fine gauge lace in 1967, with a ratio of 90 percent and 10 percent, respectively, in prior years Respondent produces only fine gauge lace. TV used 19 coarse gauge machines at Sweetwater and 10 at Tellico, it also used 10 fine gauge machines at Sweetwater and 2 at Tellico. Respondent uses the 10 fine gauge machines at Sweetwater. In the Sweetwater plant, TV had 50,000 sq. ft. of space, which may have included office space for five employees. Respondent uses 7,800 sq. ft. in the plant and 800 sq. ft. of office space, under its lease. In addition, Respondent uses 30 sq. ft. in the shipping department, and 40 sq. ft. in the mending area. The size of the Tellico plant is obscure. TV had warping, drafting, and machine-shop employees. These functions were taken over by Tellico, and the space used for them, in Sweetwater, was rented by Tellico, on a month-to-month basis. Tellico discontinued use of the warping and drafting space shortly after Respondent commenced operations. Respondent does no drafting or warping. Respondent receives patterns from customers, which are transposed to IBM cards, by Tellico for Respondent. TV had a nonsupervisory complement of approximately 111 to 115 at the time of the election, July 1, 1966, at Sweetwater. This number was reduced, by reason of the strike, to between 37 and 42," unit employees, when TV ceased operations, on December 1, 1967. TV had 50 nonsupervisory employees at Tellico. Respondent, on July 27, 1968, the date of the Union's request for bargaining, had 17 nonsupervisory employees doing work formerly performed by unit employees.1° Employee classifications, to the extent used in the fine gauge lace operations, remain the same "While the parties stipulated this fact, Joint Exhibit (8) lists only 28 who returned during the strike, and 5 hired as replacements. No charge was filed asserting that Respondent engaged in discriminatory conduct, violative of Section 8(a)(3), in its selection and hiring of employees, in July 1968.15 TV had 12 supervisors, when it ceased operations, including Register. Respondent has 7 supervisors, including Register. Register, F. W. Lovin, Paul Stallcup, and Mabel Kelley were supervisors at TV, and have been supervisors for Respondent, since the promotion of Kelley, supra. J. D. Thomas, Mildred French, and Betty Colquitt, were unit employees for TV, and are supervisors for Respondent. Thus, only 4 of 12, who were supervisors for TV, are supervisors for Respondent. Mozur Laces, whose New York office is at the same location as TV's New York office, was and is the sole sales outlet for the products of TV, Tellico, and Respondent. Neither TV nor Respondent used or use a trade name for their merchandise. Contentions of the Parties and Concluding Findings The Board has recently summarized some of the factors to be considered in determining "successorship," in the Will Coach case.16 The Board noted that it has long been established that a change in ownership in an enterprise does not automatically extinguish the rights of employees or their representatives, or absolve the new owner from any duty to recognize the union which represented its predecessor's employees, or to comply with any of the terms of a labor contract, covering those employees, since it is the "employing industry" which the Act seeks to regulate. N.L.R.B v. Colten, d/b/a Kiddie Kover Mfg., Co., 105 F.2d 179, 183 (C.A. 6). The predecessor's obligations may devolve on the successor in certain circumstances. Critical questions in determining the extent of the new employer's obligations are whether there has been a "substantial continuity of identity in the business "Of these 17 4, E J Borden, Nelson, Haun, and Mabel Kelley, had been supervisors when employed by TV, (Kelley was promoted to supervisor in September 1968); 4, Boyd Clark, Carolyn Clark, H G Borden, and Dixon, were new employees; 1, Sara Ann Colquitt, was hired by TV, as a replacement, during the strike; 1, Walker Humphreys, returned to work at TV during the strike, his name has a line drawn through it, from which, I infer, he quit before TV ceased operations, 6, James Tallent, James Filyaw, Edgar Raby, Pearl Jenkins, Georgia Gabrel, and Sam Wiseman , returned to work at TV during the strike and were employed when TV ceased operations, 1, Mary Gallant, inferentially went, on strike and did not return to work prior to December 1, 1967 Thus, 9 of! 17, were former supervisors, new employees, or hired as a replacement! during the strike In addition, I quit before TV ceased operations All of these employees were hired on July 8, 15, 22, or 24, 1968. It is reasonable to infer , from the undisputed assertions of Register , that most or all of the former TV employees had been employed by Tellico, at Tellico Plains, in the interim period or a substantial portion of it "Some 24 other individuals, including 10 who had worked for TV, filed applications for employment by Respondent, and were not employed On May 7, 1968, Charging Party, by letter, asserted, with concurrence of counsel for General Counsel and Respondent, that the 24 applications were submitted between the dates of June 12 and July 17, 1968, that none "of the individual applicants" came to the plant or crossed the picket line during the period covered by the dates of their applications; and Respondent's plant did not open for operations until July 8, 1968 Since those working on and after July 8, 1968, did cross a picket line, according to undisputed evidence, I must infer the amendment to the stipulation , which relates to a Joint Exhibit listing applicants who were not employed by Respondent, is confined to that group, and does not encompass applicants who were employed 1 bWill Coach Lines, Inc., 175 NLRB No. 87 I am not unmindful of the fact that the Board has recently conducted extensive oral argument in a series of cases involving successorship. The facts in the cases under consideration appear distinguishable from the facts in the within case. ELLARY LACE CORP. enterprise" or "the enterprise remains substantially the same," after the change in ownership. John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543; Cruse Motors, Inc., 105 NLRB 242, 247. The basic question has also been described as "whether Respondent continued essentially the same operation, with substantially the same employee unit " Maintenance, Incorporated, 148 NLRB 1299, 1301, Glenn Goulding, d/b/a Fed Mart, 165 NLRB No. 22. In attempting to answer these critical questions and determine whether a new employer is a "successor employer" obligated to bargain with the union which represented his predecessor's employees, the Board and the courts consider many factors. What combination of factors is controlling is not always easy to determine, but 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. Overnight Transportation Company v. N.L.R.B., 372, F.2d 765 (C.A. 4); Randolph Rubber Company, Inc, 152 NLRB 496; Firchau Logging Company, Inc., 126 NLRB 1215, 122. In the Thomas Cadillac case" the Board found an absence of "successorship" where two separate purchasers began separate businesses with only a small fraction of the predecessor's employees. The Board found merit in Respondent's contention that they were new and independent business entities, markedly different from the former operation, which encompassed a multibranch unit. The Board found that neither of the new employers employed a significant number of the predecessor's employees and that the supervisory hierarchy bears little resemblence to that formerly existing. General Counsel, in his brief, relies on cases in which the Board found a successorship by reason of continuity of the "employing industry." These cases are inapposite.1e Charging Party, in urging a finding of successorship, relies on Maintenance, Inc., supra, Randolph Rubber Co., 152 NLRB 496, and Die Supply Corp., 160 NLRB 1326. I find these cases inapposite." "Thomas Cadillac, Inc, 170 NLRB No 92 "E.g. Johnson Ready-Mix Co., 142 NLRB 437 (Board certification I week before bankruptcy of predecessor, 3-day break in operations, successor employed majority of predecessor's unit, and non-unit, employees, in same classifications, successor continued same business, serving same customers, no substantial changes in the operating entity.); Maintenance, Inc. supra (90 percent of work force were employed by predecessor, substantially identical operations, servicing the same facilities for the same customer in substantially the same manner at the same work situs, "The critical question is not whether Respondent succeeded to [predecessor) corporate identity or physical assets, but whether Respondent continued essentially the same operation , with substantially the same employee unit whose duly certified bargaining representative was entitled to statutory recognition at the time Respondent took over "); Northwest Glove Co , 74 NLRB 1697 (Hiatus of 1 month , while partnership dissolved, succeeded by one partner as corporate owner; same plant, equipment, and product; employees recalled, as needed, according to seniority.); Downtown Bakery Corp, 139 NLRB 1352 (Successor employed all employees and supervisors of predecessor , predecessor's business continued at same location , handling same products, no doubt of union majority raised in good faith.) "See preceding footnote re Maintenance, Inc. In Randolph Rubber respondent: by purchase, acquired all the physical assets of predecessor, and hired all of predecessor's employees, later recalling some from layoff; it continued manufacture of the same product , using the same machinery, it also employed some of predecessor's supervisory staff In addition, the Board found the union had established its majority by obtaining new checkoff authorization cards Id at 499 Die Supply was primarily a matter involving plant relocation. 77 General Counsel urges that the hiatus, between TV's closure and Respondent's commencement is insufficient to destroy the continuity of the "employing industry." Cases cited in support of this contention are inapposite.20 Charging Party urges: " ... the time interval did not affect any of the factors required to establish the substantial continuation of a successor employer status." The factors are enumerated as place, equipment, supervisory staff, employees, work classifications, pay schedules, product, operation, suppliers, and sales outlet. Charging Party asserts they all remained the same, after Respondent commenced operations. This premise is contrary to the undisputed facts set forth supra. General Counsel also urges that Respondent discriminatorily hired only former employees of the predecessor who had not struck. No allegation of discriminatory hiring appears in the complaint. No such contention was litigated herein." I find no merit in General Counsel's assertion that Register and Novik, by reason of picketing, were aware that "the strikers continued (to) claim" their jobs. Likewise, since it was neither alleged, nor litigated, as a violation, I find no merit in the assertion of General Counsel that Respondent unilaterally raised wages far in excess of what TV had offered the Union during negotiations.22 Charging Party asserts it represented a majority in the bargaining unit, when demand for bargaining was made, on July 27, 1968. Charging Party correctly cites the Board's well-established presumption of continued majority during the certification year, which expired herein in July 1967. It is also clear that this presumption is rebuttable thereafter. Celanese Corporation of America, 95 NLRB 664, 672-673. 23 The undisputed facts are that when TV ceased operations some of the employees obtained employment at Tellico, having made application therefor. When Respondent commenced operations, 7 months later, it obtained applications from former TV employees and others, and selected employees on a nondiscriminatory basis insofar as this record reveals. I have found, supra fn. 14, that 8 of 17 employees were "E.g. John Wiley & Sons, Inc. v Livingston , 376 U.S. 543, 548, treats with the duty of a successor , where two corporations are merged, to arbitrate under an existing collective-bargaining agreement between a union and the former employer; Chemrock Corporation, 151 NLRB 1074, treats with the efforts of a successor to replace an existing collective-bargaining agreement with individual bargaining . Neither case involves the matter of hiatus "I believe General Counsel, unfortunately and inadvertently, misinterprets a statement of Register . He asserts in his brief, page 17, that "Register admitted contacting a few people who were never separated from the TV payroll (tr. 67) " The statement actually appears at it. 62. However, Joint Stipulation 10 includes. TV retains two watchmen on its payroll to watch its portion of the Sweetwater plant facility. (tr. 94) Joint Stipulation 19 is. In December 1967, TV sent or otherwise distributed termination notices to all employees of TV's striking and non-striking employees with the exception of the two watchmen who continued in the employ of TV Each termination slip which was dated December 1, 1967, read ceased operations . (tr. 102) Since this stipulation followed the appearance of Register , I must infer those "never separated," who are unidentified, were supervisory and not unit employees. "For the reasons stated , I find it unnecessary to treat with Charging Party's similar assertions, in its brief. I am unable to infer , or find, from the evidence that Respondent "went out of its way to avoid employing union supporters by making no offer of employment to the union workers and keeping from them knowledge of job opportunities ." Rand McNally, Standard Highway Mileage Guide , reports Tellico Plains population as 794, Sweetwater as 4,145. Only 50 employees appear to have been the complement at Tellico. Cf Wiese Plow Welding Co , Inc, 123 NLRB 616, Small Plant Doctrine "The Board held, inter alia. Competent evidence may be introduced to demonstrate that, in fact, the union did not represent a majority of the 78 DECISIONS OF NATIONAL LABOR RELATIONS BOARD former supervisors and new employees, and one was hired, as a replacement during the strike. I am unable to find an absence of a basis for a good-faith doubt by Respondent under these circumstances." I find no evidence of probative value which would support a finding that the strike, which started on February 20, 1967, was prolonged by Respondent's unlawful refusal to bargain on and after July 27, 1968, as alleged in the amendment to paragraph 16 of the complaint. I will, accordingly, recommend dismissal of those allegations. Respondent correctly urges that the Board has held that to find successorship supporting a bargaining obligation, the totality of the circumstances must warrant a finding that the purchase-sale transaction was merely a change in the ownership of an existing and continuing business operation. Northwest Galvanizing Co., 168 NLRB No. 6 Respondent correctly calls attention to the variations and modifications between the former operation of TV and the present operation of Respondent, as well as the substantial diminution in plant space, machines, work force, supervisory staff, and total production in dollar value. I agree, for reasons explicated by General Counsel, in his brief, that Respondent is foreclosed, by Board Regulations, from litigating the question of the propriety of the Regional Director granting an amended certification to the Union herein, on May 29, 1967 25 General Counsel and Charging Party have proceeded on an erroneous premise set forth as allegations in paragraph 4 of the complaint that, inter alia: Respondent is engaging in substantially the same business, as was formerly conducted by TV, actually fine lace production, in dollar volume, was only 10 percent of TV's total business, except 1967 when it was 15 percent, Respondent employs substantially the same employees and supervisors, actually TV employed 1 l 1 to 115 at Sweetwater and 50 at Tellico, prior to the strike, and 37 to 42 unit employees at Sweetwater when it ceased operations, Respondent employed 17 nonsupervisory employees on the date of the demand for recognition, the supervisory staff of 12 at TV was reduced to 7 by Respondent, with substantial changes in identity. General Counsel and Charging Party inaccurately assert, by reliance on cases involving "substantial continuity" that Respondent is a successor of TV, by reason of the 66 employing industry " doctrine of the Board No case is cited where, as here, there was a complete and final closing of business , by TV, including discharge and termination of all employees , except a caretaker and two watchmen , and a hiatus of 7 months. Thereafter, a new operation was commenced by an arm's-length purchaser, who: confined the space used to approximately one-sixth of the plant area, machines which produced only 10 percent of predecessor ' s business, in dollar volume; did no warping, drafting, pattern making, or machine repair, formerly performed by TV; reemployed , as supervisors , only 4 of 12 former supervisors, and only 17 employees as compared to the former complement of I 1 1-115. On the basis of the entire record , for the reasons set forth, I find Respondent is not a successor to Tennessee Valley Fabrics Corporation , and was not , as a successor, under a duty to bargain with the Union , on and after July 27, 1968, and did not by reason of its failure to bargain engage in conduct violative of the provisions of Section 8(a)(5) and (1) of the Act.26 Upon the foregoing findings of fact and upon the entire record in the case, I make the following: Conclusions of Law 1. Respondent is an employer within the meaning of Section 2(2) of the Act and is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Amalgamated Lace Operatives of America is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent did not unlawfully refuse to bargain, on and after July 27, 1968, and did not, thereby, convert the economic strike, which commenced February 20, 1967, into an unfair labor practice strike. 4. Respondent is not a successor to Tennessee Valley Fabrics Corporation and has not engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, as alleged in the complaint. employees at the time of the alleged refusal to bargain . A direct corollary of this proposition is that after a certificate is a year old , as in cases where there is no certificate, the employer can, without violating the Act, refuse to bargain with a union on the ground that it doubts the union 's majority, provided that the doubt is in good faith td. at 672 The Board explicated its meaning of an employer questioning a union's majority in good faith, as It can only be answered in the light of the totality of all the circumstances involved in a particular case But among such circumstances, two factors would seem to be essential prerequisites to any finding that the employer raised the majority issue in good faith in cases in which a union has been certified There must, first of all, have been some reasonable ground for believing that the union had lost its majority status since its certification . And, secondly, the majority issue must not have been raised by the employer in a context of illegal antiunion activities, or other conduct by the employer aimed at causing disaffection from the union or indicating that in raising the majority issue the employer was merely seeking to gain time in which to undermine the union Id , at 673 RECOMMENDED ORDER Upon the basis of the above findings of fact and conclusions of law, I recommend that the complaint be dismissed in its entirety. There is not a scintilla of evidence herein of Respondent engaging in illegal antiunion activity, or seeking overtly or covertly to undermine the Union 24Cf Tallakson Ford, Inc, 171 NLRB No 67 21N.L R B Rules and Regulations, Series 8, as amended, Sec 102 67(f), provides The parties may, at any time, waive their right to request review. Failure to request review shall preclude such parties from relitigating, in any related subsequent unfair labor practice proceeding , any issue which was, or could have been, raised in the representation proceeding "Cf Lori-Ann of Miami, Inc, 137 NLRB 1099, 1108, 'ett seq.