National Wood Products Co.

812 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Pittsburgh Reflector Company d/b/a National Wood Products Company and National Store Fixture and Equipment Company and United Brotherhood of Carpenters and Joiners of America, Millmen's Local Union 1160, AFL-CIO. Case 6-CA-4127 June 30, 1969 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS JENKINS AND ZAGORIA On January 9, 1969, Trial Examiner Frederick U. Reel issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices within the meaning of the National Labor Relations Act, as amended, and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision and a supporting brief. The General Counsel filed cross-exceptions limited to the Trial Examiner's failure to issue a cease-and -desist order, and a brief in support of this exception. 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, the exceptions and the briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner except to the extent inconsistent herewith. In October 1967, the Respondent purchased the plant of the National Store Fixture and Equipment Co. and the National Wood Products Co., both of which were losing money and had defaulted on a bank loan. For 2 months the Respondent continued operations, completing only work in progress; it claims that high labor costs, which the Unions refused to lower, prevented it from bidding successfully for new orders. During this period, the Respondent formally refused to assume some of the terms of its predecessors' contracts with the Unions but agreed to pay the existing wage rates and fringe benefits for the temporary work. Between October 11 and November 29, at various meetings described in the Trial Examiner's Decision, the Respondent's representative attempted to negotiate for a lower wage rate and warned the Unions that it might have to close the plant if it could not cut labor costs. According to testimony credited by the Trial Examiner, on more than one occasion the Unions' representative replied that he did not care if the plant closed down as he had plenty of work for his men. In November, the Respondent was informed that it would no longer secure a month-to-month lease on the plant but would have to sign for a longer term. In early December, having been unsuccessful in its attempts to lower labor costs and to secure new orders, the Respondent permanently closed the operation. The Trial Examiner dismissed allegations that the Respondent had failed to notify the Unions that it was contemplating closing the plant on the ground that it had duly warned the Unions in the meetings; but he found that the Respondent had violated Section 8(a)(5) of the Act by unilaterally changing certain "terms and conditions of employment." Specifically, the Trial Examiner found that the Respondent had violated the Act by failing to make the following payments in the 2-month period prior to the closing: 1 week's contribution to the health and welfare funds; personal holiday and vacation pay for certain employees; vacation payments accrued at termination; certain benefits accrued under the Respondent' s predecessor; some elements of severance pay and a raise of 10 cents per hour due December 1 by the terms of a predecessor's contract with Local 1160.' We find merit in the Respondent's exceptions. The Trial Examiner cites, as one ground for his holding, Hackney Iron & Steel Co., 167 NLRB No. 84, presently before us for decision on remand from the United States Court of Appeals, District of Columbia Circuit (395 F.2d 639). Even were we to view the instant case in the light most favorable to the General Counsel, i.e., that Hackney will be decided in such a way as to bind a successor to its predecessor' s collective-bargaining contracts, we would nonetheless be constrained to dismiss the unfair labor practice allegation in question. The 10-cent wage increase would have been effective for only about 1 week before Respondent ceased operations. The remaining alleged violations are at most minimal and isolated breaches of contract, not of a continuing nature and not sufficient to constitute a unilateral modification of the contract within the meaning of Section 8(d) of the Act. In the peculiar circumstances of this case, including the brevity of operation ( 2 months ), the Respondent's severe financial difficulties and the fact that it generally fulfilled its bargaining obligation, we do not believe that it would effectuate the policies of the Act to find a refusal to bargain or to issue a remedial order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor 'There was no proof or finding as to the specifics of these matters, but only a general finding by the Trial Examiner that some payments were not made. The plant was closed I week after the pay raise of 10 cents per hour was due to go into effect 177 NLRB No. 57 PITTSBURGH REFLECTOR COMPANY Relations Board hereby orders that the complaint be, and it hereby is, dismissed. TRIAL EXAMINER' S DECISION STATEMENT OF THE CASE FREDERICK U. REEL, Trial Examiner : This proceeding, heard at Pittsburgh, Pennsylvania, on November 26, 1968, pursuant to a charge filed December 26, 1967, and a complaint issued October 16, 1968, presents questions as to whether Respondent, herein called the Company, violated Section 8(a)(5) and (1) of the Act (a) by refusing to honor contracts which the Charging Party and another labor organization had executed with a prior operator of the business, (b) by changing terms and conditions of employment without notice to or bargaining with the representatives of the employees, and (c) by refusing to bargain over the termination of operations and over the impact of such termination on employees . Upon the entire record, including my observation of the witnesses, and after due consideration of the briefs filed by General Counsel and by Respondent , I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT AND THE LABOR ORGANIZATION INVOLVED The Company, a New Jersey corporation engaged in the metal fabrication of various products at plants in Pennsylvania, annually purchases goods and materials from outside the State for use at those plants, and is admittedly engaged in commerce within the meaning of the Act. The alleged unfair labor practices in this case relate, however, not to those plants but to an operation which the Company conducted for approximately 2 months late in 1967 in a separate location , which it has since abandoned, in Pittsburgh. Some of the employees at this location were represented by the Charging Party, herein called Local 1160, and some of them were represented by the Carpenters District Council of Western Pennsylvania, herein called the District Council. Both Local 1160 and the District Council are labor organizations within the meaning of Section 2(5) of the Act. 11. THE ALLEGED UNFAIR LABOR PRACTICES A. Background For a number of years prior to the events in this case a concern known as National Store Fixture and Equipment Company was engaged in the production of store fixtures at a shop on Preble Avenue in Pittsburgh . This company, together with a number of other employers known as the Wood Manufacturers Council, Inc. and Associate Members, entered into a contract with Local 1160 covering the carpenters employed at the various establishments. Because some of the work at the Preble Avenue establishment did not require the full skill of a journeyman carpenter or cabinetmaker, a separate company was created known as National Wood Products Company to manufacture laminated doors and gas station equipment. This new company entered into a contract with the District Council covering these less-skilled employees at different wage rates and with other terms different from those set forth in the contract with Local 813 1160 covering the National Store Fixture employees. Both companies, National Wood and National Store Fixture, continued to operate under a common ownership at Preble Avenue until the events described below . In the fall of 1967, when National Wood and National Store Fixture ran into financial difficulties, their respective contracts with the District Council and with Local 1160 ran until May 31, 1968, and April 30, 1970, respectively. B. The Company Takes Over the Business at the Preble Avenue Plant In the late summer of 1967, National Wood Products and National Store Fixture and Equipment Company defaulted on a loan they had obtained from the Union National Bank of Pittsburgh. The bank, on October 2,' exercised its lien on the assets of National Wood and National Store Fixture. On that same day the bank entered into an agreement with the Company to transfer to the latter "all of the right, title, and interest" of the bank in the property in question. This transfer was formally executed on October 6, effective October 9. It included, inter alia: All claims now in existence for monies due and to become due under any contracts ... now existing, together with the proceeds from any and all such contract rights. All accounts receivable... . All inventory... . All of the equipment... . According to the testimony of Company President Oswald and Plant Manager Klepacz, the employees were notified over the weekend of October 7 and 8 that they were not to report for work on Monday, October 9, and they did not return to work until October 16. General Counsel adduced some testimony placing the date of the temporary shutdown as I week later, after the Company had formally taken over the business. Another conflict in testimony concerns a notice which company witnesses testified was posted on the plant bulletin board on October 13 and remained there until the plant finally closed on December 8. The three employees called as witnesses by the General Counsel testified that they had never seen the notice although they had occasion to look at the bulletin board. The notice introduced into evidence bore the date of October 13, was addressed to "Pittsburgh Reflector Company All Temporary Employees," and was signed by Company President Oswald. The text was as follows: Your former Employer, the Union National Bank, has sold all of the assets including machinery, inventory and work in progress at this plant, to Pittsburgh Reflector Company. There is no connection between our Company and National Store Fixture Company or National Wood Company. After studying the situation and discussing it with your union leaders, it was decided to complete some of the work already started. Accordingly, you will work on jobs assigned to you and we will study the costs involved in accomplishing the work. Since we have no labor contract with any of the three unions representing you we have agreed to use union rates for this temporary work. If you have any questions on above, will you please contact me or the plant manager. 'All events hereinafter described occurred in the last 3 months of 1967. 814 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Company retained the plant manager and other supervisors who had performed those functions for National Store Fixture and National Wood, retained the same employees, and completed the unfinished orders, which were in the plant when the Company took it over. The Company in making reports and payments to the Carpenters' Health and Welfare fund identified itself as "National Store Fixture & Equipment Division" (or "National Wood Products Division") "Pittsburgh Reflector Company." In the light of these facts, and even accepting the Company's version of the disputed facts concerning the notice and the timing of the layoff, I find that the Company was a "successor" to National Store Fixture and National Wood within the meaning of Overrate Transportation Company v. N.L.R.B., 372 F.2d 765, 768 (C.A.4), and the cases there cited. C. The Company's Relations with the Unions Prior to the Closing According to Union Representative Cuda, he and representatives of other unions representing employees in other occupations at the Preble Avenue plant met with Company President Oswald and Plant Manager Klepacz on October 16, at which time Oswald agreed to honor the existing contracts and pay the fringe benefits therein contained. Cuda also testified that at this meeting "there was no discussion whatsoever" of lowering the existing wage rates, and Oswald made no request to discuss wages. According to Oswald's testimony, the meeting took place on October 11, and he did initiate a discussion of wage rates but the Unions insisted that he continue to pay the going rates. He further testified that he told Cuda the Company could not assume the existing contracts but that the Company would "sit down and work out a working agreement with them." According to Cuda he did not see Oswald again until November 10, at which time the Company took the position that it would not pay fringe benefits owed for the period before the Company purchased the assets, but would pay them for the future. Oswald, however, testified that he and Cuda met at the plant on October 25, at which time Oswald tried to negotiate for lower wage rates, stating that he might have to close the plant if he could not cut labor costs. To this Cuda replied (according to Oswald) that he could get lots of jobs for his men in the Pittsburgh area, but when Oswald asked that Cuda place the men elsewhere and let the Company employ men at a rate it could afford, Cuda flatly refused. Oswald further testified that on November 9 in a telephone conversation with Cuda, Oswald again discussed "the wage situation and the fact that we were going to have to close the plant unless we can do something about it," but that Cuda again said he had lots of work and that Oswald should not "worry about it." Cuda denied that any such conversation occurred. With respect to the meeting on November 10, Cuda testified that it lasted about 10 minutes and was concerned solely with the fringe benefit matter. Oswald testified that it lasted about 2 hours, that he again raised the question of closing the plant because the high labor costs prevented his being awarded jobs which he had bid, and that Cuda replied that he had lots of jobs for all the men. Oswald further testified that he met Cuda at the plant on November 22 and told him that the plant would have to be closed in the near future, and that Cuda suggested he get in touch with a Mr. Laskey, who was interested in buying the business. Oswald pursued the Laskey matter without success. Cuda denied having any meeting with Oswald in which the latter said anything concerning the future operation of the business. On November 29, according to Oswald, he called Cuda, "told him that the decision had been made that we would no longer be able to operate the plant and that he knew the reasons why and asked him again if he had anything he could do." Cuda replied, according to Oswald, "Don't worry about it I got lots of work for these fellows. Whenever you have finished, we will pick it up." On December 1 the Company laid off six or seven employees in the "National Wood" aspect of the business, and the remaining three or four were laid off on December 6. On December 7 all but six of the employees in the "National Store Fixture" division were laid off, and the rest of that group was laid off on December 8. Cuda testified that he learned of the December 1, 7, and 8 layoffs by telephone, and that he tried in vain to reach Oswald by telephone on December 9 and 11, because he was "kind of perturbed that there was no official notification coming from the Company, the plant manager or anybody, notifying the union that these men. . .were to be laid off." Again Oswald's testimony sharply contradicts Cuda's for Oswald testified that Cuda was at the plant on the morning of December 8, that Oswald told Cuda "how sorry we were that we had reached the end of the line," that Cuda had replied, "that's all right. We've got lots of work for these people," and that Cuda then proposed "a deal" whereby Local 1160 would postpone for 6 months a 10-cent wage increase due under the contract, but that Oswald replied that this was totally insufficient to meet the problem.' General Counsel called witnesses whose testimony supported Cuda's version of the above events, and the Company called witnesses in support of Oswald's version. For example, Union Attorney Rainero substantiated Cuda's recital of the November 10 conference, while Company Attorney Clark supported Oswald's account. Similarly the Company called several witnesses to support Oswald's story of a December 8 meeting with Cuda at the plant, but General Counsel produced rebuttal testimony which, if credited, would discredit the corroboration offered by the Company. I have on previous occasions expanded my views on the problem presented by what I can only regard as deliberately false testimony by one side or the other (see, e.g ., Liberty Scrap Materials, Inc., 152 NLRB 480, 484, 488 - 489, enfd. 64 LRRM 2686 (C.A. 6); Louis Fatigati, 144 NLRB 460, 463 - 464), and little purpose would be served by a repetition here. Basically, a determination of this issue can only be made from a consideration of the whole record and from somewhat undefinable impressions conveyed during the course of the hearing. To single out specific items as influencing the determination is to do less than justice to the whole case as it minimizes the contribution made by less definable factors. Nevertheless, I should note that although Rainero 'Oswald's exact testimony on the point is as follows He said, "I'll tell you what I will do I'll give you - I'll make a deal with you." I said, "Fine What kind of a deal will you make9" He said , "Well, you're supposed to raise the price of wages on December Ist I'll put that off for 6 months" I said, "Good heavens, Mr Cuda, you're not giving us anything We didn't give it to you - the 10 cents anyway 10 cents isn't the margin we need to do this job We need like $2.00 We need different people " He said , "That's as far as we're going to go " I said , "Well, I'm sorry That is not very much of a proposition." PITTSBURGH REFLECTOR COMPANY 815 did support Cuda' s account of the November 10 meeting, Rainero admitted that at that meeting Oswald had said, "If it [the Preble Avenue business] doesn't go, I'll have to get rid of it." Also I note Cuda's volunteered statement on the witness stand that "Had I known that this place was going to close I would have taken those men and found jobs for them, which I did," a comment which at least suggests that Cuda might have voiced a similar sentiment as to the ready availability of carpenter jobs - a sentiment attributed to him not only by Oswald but also by each of the other four witnesses called by the Company. On the other hand, the date of October 13 appearing on the notice discussed above leads me to question the testimony of Oswald and Klepacz that the plant was closed during the week commencing October 9 and did not reopen until October 16, a fact not important in itself but perhaps bearing on the credibility of several witnesses. On the whole record, however, I am inclined to credit the testimony of Oswald as to his conversations with Cuda. I therefore find that the Company did advise Cuda from time to time that the plant would be forced to close unless Cuda agreed to modify the wage structure, and that Cuda repeatedly refused to do so and expressed no concern over the closing but stated he was certain the employees would be promptly hired elsewhere. D. The Failure to Observe the Contracts The parties stipulated that the Company continued to pay the wage rates in effect when it took over the Preble Avenue operation, and that it neither raised nor lowered wages. Also, according to Plant Manager Klepacz, the Company paid for "several vacations and so forth" because "otherwise Mr. Cuda would have shut us down." The Company also continued to make health and welfare payments under the contracts although it apparently made none for the final week. The evidence establishes, however, that the Company did not made certain payments provided for in the contracts which National Store Fixture and National Wood had made with Local 1160 and the District Council, respectively. Local 1160's contract provided, inter alia , for paid vacations, a paid "personal holiday," and a 10-cents-per-hour general wage increase to become effective December 1, 1967. It also provided for certain termination pay, including any vacation due at the time of termination and holiday pay for holidays occurring within a specified number of days after termination. The District Council's contract provided, inter alia, for wage increases after specified periods of employment, and also for accrued vacation pay in the event of termination. The record is clear that the Company did not give the wage increases provided for in the contracts, and that at least some of the "personal holiday" and vacation payments were not made. E. Concluding Findings General Counsel contends that the Company violated Section 8(a)(5) and (1) of the Act by closing the Preble Avenue facility and terminating the employment of the employees represented by the District Council and by Local 1160 without giving those Unions "prior notice of its intention to do so, and without affording them an opportunity to bargain over its decision or over the effects such decision had on employees. ." I reject this contention and dismiss this allegation because I credit the testimony of Oswald rather than that of Cuda, and accordingly find that the Company gave ample notice of its intentions and that the Unions, through Cuda, disclaimed any desire to negotiate. General Counsel also alleges that the Company violated Section 8(a)(5) and (1) of the Act in that it "unilaterally, and without affording [the Unions] the opportunity to bargain about the matter, changed existing terms and conditions of employment, including the elimination of vacations and holiday benefits . and "refused to assume and maintain in effect the collective-bargaining agreements" referred to above. On this aspect of the case I sustain the position of the General Counsel for two reasons, either one of which standing alone furnishes sufficient basis for the result. The Company admits that it did not grant the wage increases specified in the contracts and argues that, as a matter of law, it was not obligated to honor the contracts. This poses an important question of labor law and policy suggested by the Supreme Court's decision in John Wiley & Sons, Inc. v. David Livingston, etc., 376 U.S. 543, and now pending before the Board in Hackney Iron & Steel Co., Cases 23-CA-2505 and 2554, on remand from the District of Columbia Circuit, 395 F.2d 639. As the reach of this doctrine will be decided at higher level, I deem it sufficient to note my full agreement with the views stated by Trial Examiner Frey in the Hackney case, 167 NLRB No. 84, TXD. I would hold the successor company obligated under the contracts, noting that, as this case illustrates, the union which holds the contract might prefer not to insist on adhering to its terms as the successor employer might choose to discontinue operations. Assuming, however, that the contracts are not binding in this case, this means that the Company could propose changing the terms of employment, that the Unions would be obligated to- bargain over such changes, and that if an impasse were reached after good-faith bargaining the Company could lawfully institute the proposed changes rejected by the Unions. On this record, however, it is clear that the Company proposed no changes in the contracts, and indeed honored several of the terms. As I view the matter, the provisions for accrued vacation pay on termination , provisions for prospective wage increases on specific dates (or on dates readily calculable based on length of service), and other existing previsions of the contracts are just as much existing terms of employment as the wage rates in effect at the time the Company assumed operations at Preble Avenue. Even if the Company was not obligated to honor the contracts until they expired, it was obligated under settled principles to maintain existing conditions until it proposed and bargained over changes. In my view existing conditions include promised future benefits, such as paid holidays which occur after the new owner takes over, severance pay, vacation benefits, and even wage increases already contracted for, as an employee works today in part because of the contractual assurance of a wage increase or other benefits tomorrow. I therefore find that the Company violated Section 8(a)(5) and (1) of Act by changing existing terms and conditions of employment without giving the Unions notice and opportunity to bargain. The Company argues that the case should be dismissed insofar as it concerns the contract between National Wood and the District Council because the only unfair labor practice charge on file identified only Local 1160 as the Charging Party. That charge, however, named the party charged as "Pittsburgh Reflector Company d/b/a 816 DECISIONS OF NATIONAL LABOR RELATIONS BOARD National Wood Products Company and National Store Fixture and Equipment Company." Indeed, letters were sent by the Board's Regional Office serving copies of the charge, and the one accepted by the Company's plant manager, Klepacz, was addressed "Pittsburgh Reflector Company, d/b/a National Wood Products Company." The Company was thus on notice from the outset of the case that the litigation concerned the "National Wood" as well as the "National Store Fixture" aspect of the Preble Avenue plant. The General Counsel was therefore well within both constitutional and statutory confines by including the National Wood employees represented by the District Council within the scope of the complaint. Barney Wilkerson Construction Company, 145 NLRB 704, 710, fn. 3. CONCLUSION OF LAW The Company by failing to make certain wage, vacation, holiday, and health and welfare payments provided for in the contracts which covered certain employees in the Preble Avenue plant, without notice to or bargaining with the employees' statutory representatives, engaged in an unfair labor practice affecting commerce within the meaning of Section 8(a)(5) and (1) and Section 2(6) and (7) of the Act. THE REMEDY I shall recommend an order directing the Company to make the payments to the employees and the Unions which were owing under the contracts. As already indicated, this relief follows whether the contracts be held binding as contracts or merely as setting terms of employment which the Company could have changed after bargaining but could not change without notice and opportunity for bargaining. As the Preble Avenue plant is long since closed, as the Company in its other operations does not employ the persons involved at Preble Avenue or deal with the Unions there involved, as the Preble Avenue venture was an undertaking totally foreign to the Company's regular and continuing business , and as the violations found arose out of a situation peculiar to the Company's takeover of another business, I see no purpose to be served in the issuance of a cease-and-desist order or in the posting of a notice. There is no likelihood of future violations, and there are no present employees who need reassurance as to their statutory rights. [Recommended Order omitted from publication.]