Interstate Tool Co., Inc.

686 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Interstate Tool Co., Inc. and District No. 8, International Association of Machinists and Aerospace Workers, AFL-CIO. Case 13-CA-8515 June 30, 1969 DECISION AND ORDER By CHAIRMAN MCCULLOCH AND MEMBERS BROWN AND ZAGORIA Upon charges filed by District No. 8, International Association of Machinists and Aerospace Workers, AFL-CIO, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 13, issued a complaint dated September 27, 1968, against Interstate Tool Co., Inc., the Respondent, alleging that it had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Sections 8(a)(5) and (1) and 2(6) and (7) of the National Labor Relations Act, as amended. Copies of the charge, complaint, and notice of hearing were duly served on the Respondent and the Union. With respect to the unfair labor practices, the complaint alleges, in substance, that since on or about May 28, 1968, and at all times thereafter, the Respondent has refused to bargain collectively with the Union about the effect on employees of closing its plant and liquidating its business, notwithstanding that the Union was and is now the duly designated exclusive collective-bargaining representative of the employees. Respondent's answer admits in whole or in part certain allegations of the complaint, but denies the commission of unfair labor practices. On November 25, 1968, the parties to this proceeding entered into a stipulation of facts and a motion to transfer proceeding to the Board. They agreed that the charge, complaint, answer, and the stipulation of facts constitute the entire record in this case, and waived a hearing before a Trial Examiner, the making of findings of fact and conclusions of law by a Trial Examiner, and the issuance of a Trial Examiner's Decision. The parties agreed to submit the case for findings of fact, conclusions of law, and order directly by the Board. By order of the Board dated December 2, 1968, the stipulation of the parties was approved, this proceeding was transferred to the Board, and permission was granted to the parties to file briefs. Thereafter, the Respondent and the General Counsel filed briefs. Upon the basis of the stipulation, the briefs of the parties and the entire record in this case, the Board makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent is an Illinois corporation with its principal office and place of business at Chicago, Illinois, where it has operated a machine shop. In the operation of its business, the Respondent annually shipped finished products or rendered services valued in excess of $100,000 from its plant directly to customers located outside the State of Illinois. The parties stipulated, and we find, that the Respondent was, at all material times, engaged in commerce within the meaning of Section 2(6) and (7) of the Act, and we conclude that it will effectuate the policies of the Act to assert jurisdiction herein. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization as defined in Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES The Respondent's machine shop normally employs eight men, all covered by a collective-bargaining agreement. The Respondent had been operating on an extremely marginal basis for some time. In April 1968, several employees notified the Respondent that because of their concern about crime and civil unrest in the area of the plant, they would quit unless the plant were moved. As a result, solely for economic reasons, the Respondent decided to go out of business. In mid-May, the Respondent notified the Union that it would close the plant on or about June 30. On June 24, by letter dated that day, the Union requested the Respondent to meet and bargain with it about the effects of closing on the employees, specifically, severance pay. The collective-bargaining agreement is dated January 1, 1967, and runs for 3 years. It contains no provision regarding severance pay, nor was that issue ever discussed during contract negotiations. The Union, however, in connection with its demand for bargaining on the effects of closing, proposed a plan for severance pay to each employee based on his number of years with the Company. The Union threatened to picket the plant and prevent the sale of machinery if severance pay were not forthcoming; however, there was never any picketing. The Respondent has refused to meet with the Union and discuss the effect of closing on its employees. It closed the entire operation of the plant on June 30, 1968, permanently abolishing all unit jobs, and subsequently has sold all its assets and has gone into liquidation. The issue presented in this case is whether under the circumstances the Respondent had a duty to bargain about the effects on employees of its 177 NLRB No. 107 INTERSTATE TOOL CO., INC. decision to go out of business.' We have held that an employer must nofity its employees' collective-bargaining representative of a decision to close part of its operation so the union can bargain about the effects of the closing on displaced employees. Royal Plating and Polishing Co., Inc., 160 NLRB 990. So, too, where an employer sold its entire business, eliminating employees' jobs, we have, with court approval, required notice and bargaining about the effects. Transmarine Navigation Corporation, 170 NLRB No. 412 See also New York Mirror, Division of the Hearst Corporation, 151 NLRB 834, 838-839. In New York Mirror, we held that the effects of a termination of operations is a manadatory subject of bargaining. Id. at 838, footnote 4. As indicated in that case, the requirement to bargain turns not on the means whereby, or the extent to which, the employer terminates operations, but rather on the fact that the elimination of unit jobs is within the statutory phrase "other terms and conditions of employment." See also Order of Railroad Telegraphers v. Chicago & N. W. Ry. Co., 362 U.S. 330, 336; Fibreboard Paper Products Corporation v. N.L.R.B., 379 U.S. 203, 210. And in Transmarine, although the employer reinvested the proceeds of the sale as a minority partner in another business at a new location, the result of the sale of the business was, as in the instant case, to terminate the existing operations and the unit employees. In our view, the present case is controlled by the reasoning in Transmarine and New York Mirror. As the Ninth Circuit said in Transmarine, once a decision is made to close, the union must be given the opportunity to bargain over the rights of employees whose employment status will be altered. "Such bargaining over `effects' of the decision on the displaced employees may cover such subjects as severance pay, vacation pay, seniority, and pensions, among others, which are necessarily of particular importance and relevance to the employees." N.L.R. B. v. Transmarine Navigation Corporation, supra, 939; Royal Plating and Polishing Co., 350 F.2d 191, 196 (C.A. 3). A primary purpose of the National Labor Relations Act is to promote the peaceful settlement of industrial disputes by subjecting them to the mediatory influence of negotiation. Fibreboard Paper Products Corporation v. N.L.R. B., supra. We note that beneficial discussion is especially likely where, as here, there is considerable collective-bargaining history. We hold that Respondent was under a continuing duty to bargain about the effects of its decision to close, and that it violated Section 8(a)(5) of the Act by refusing to do so, upon the Union's request. N.L.R.B. v. Transmarine Navigation Corporation, supra. 'As the General Counsel makes no contention that the Respondent had any duty to bargain about the decision itself, we find that it would be inappropriate for us to discuss or pass on that issue here 'See N L.R B v. Transmarine Navigation Corporation, 380 F.2d 933 687 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in connection with its operations described in section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, we shall order that the Respondent cease and desist therefrom, and take certain affirmative action designed to effectuate the policies of the Act. As a result of the Respondent's unlawful failure to bargain about the effects of its shutdown, the displaced employees have been denied an opportunity to bargain through their collective-bargaining representative at a time when the Respondent was still in need of their services, and a measure of balanced bargaining power existed. Meaningful bargaining cannot be assured until some measure of economic strength is restored to the Union. A bargaining order alone, therefore, cannot serve as an adequate remedy for the unfair labor practices committed. Accordingly, we deem it necessary, in order to effectuate the purposes of the Act, to require the Respondent to bargain with the Union concerning the effects of the shutdown on its employees, and shall accompany our order with a limited backpay requirement' designed both to make whole the employees for losses suffered as a result of the violation and to recreate in some practicable manner a situation in which the parties' bargaining position is not entirely devoid of economic consequences for the Respondent. We shall do so in this case by requiring the Respondent to pay backpay to its employees in a manner similar to that required in Transmarine, supra. Thus the Respondent shall pay employees backpay at the rate of their normal wages when last in Respondent's employ from 5 days after the date of this Decision and Order until the occurrence of the earliest of the following conditions: (1) the date the Respondent bargains to agreement with the Union on those subjects pertaining to the effects of the plant shutdown on its employees; (2) a bona fide impasse in bargaining; (3) the failure of the Union to request bargaining within 5 days of this Decision, or to commence negotiations within 5 days of the Respondent's (C A. 9) remanding 152 NLRB 998. 'We have indicated that backpay orders are appropriate means of remedying 8(a)(5) violations of the type involved herein , even where such 688 DECISIONS OF NATIONAL LABOR RELATIONS BOARD notice of its desire to bargain with the Union; or (4) the subsequent failure of the Union to bargain in .good faith; but in no event shall the sum paid to any of these employees exceed the amount he would have earned as wages from June 30, 1968, the date on which the Respondent terminated its operations, to the time he secured equivalent employment elsewhere, or the date on which the Respondent shall have offered to bargain, whichever occurs sooner; provided, however, that in no event shall this sum be less than these employees would have earned for a 2-week period at the rate of their normal wages when last in the Respondent's employ. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Interstate Tool Co., Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from refusing to bargain with District No. 8, International Association of Machinists and Aerospace Workers, AFL-CIO, with respect to the effects on employees of its termination of operations. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Pay the terminated employees their normal wages for the period set forth in this Decision. (b) Upon request, bargain collectively with District No. 8, International Association of Machinists and Aerospace Workers, AFL-CIO, with respect to the effects on its employees of its termination of operations, and reduce to writing any agreement• reached as a result of such bargaining. (c) Preserve and, upon request, make available to the National Labor Relations Board or its agents, for examination and qopying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary or useful in checking compliance with this ,Order. violations are unaccompanied by a discriminatory shutdown of operations. Cf. Royal Plating and Polishing Co., Inc., 148 NLRB 545, 548, and cases cited therein. 'Transmarine Navigation Corporation, supra. (d) Mail an exact copy of the attached notice marked "Appendix," to District No. 8, International Association of Machinists and Aerospace Workers, AFL-CIO, and to all the employees who were employed at its former place of business on June 24, 1968. Copies of said notice on forms provided by the Regional Director for Region 13, after being duly signed by Respondent's authorized representative, shall be mailed immediately upon receipt thereof, as hereinabove directed. (e) Notify the aforesaid Regional Director, in writing, within 10 days from the date of this Order, what steps have been taken to comply herewith. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order 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, upon request, bargain collectively with District No. 8, International Association of Machinists and Aerospace Workers, AFL-CIO, with respect to the effects of closing our Chicago, Illinois, operation upon the employees who were employed there, and reduce to writing any agreement reached as a result of such bargaining. WE WILL pay the employees who were employed at the Chicago plant their normal wages for a period required by a Decision and Order of the National Labor Relations Board. INTERSTATE TOOL CO. INC. (Employer) Dated By (Representative) (Title) If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 881 U.S. Courthouse and Federal Office Building, 219 South Dearborn Street, Chicago, Illinois 60604, Telephone 312-353-7570.