Gladding Corp.

200 DECISIONS OF-NATIONAL LABOR RELATIONS BOARD Gladding Corporation; Gladding-Paris Corporation and United Furniture Workers of America, AFL-CIO. Case l-CA-7141 July 22, 1971 DECISION'- AND ORDER BY ,CHAIRMAN MILLER AND MEMBERS JENKINS AND KENNEDY 'On'' March 25, 1971, Trial -Examiner William J. Brown '- =issued his ^',Decision in the- above-entitled proceeding, finding that the Respondents had not engaged in- any -unfair labor practices, and recom- mending that -the', complaint be - dismissed in its entirety, as-set -forth in the attached Trial Examiner's Decision. Thereafter, the General Counsel, filed exceptions to the Trial Examiner's Decision and a supporting brief. The Respondents then filed an answering brief. Pursuant to the provisions of Section 3(b)' of the National Labor .'Relations Act, as amended, the National LaborRelations Board has delegated its powers in,conneotion with this case to a three-member panel., T. The r Bard has reviewed the rulings of the. Trial Examiner made at the a hearing , and finds that, no prejudicial error was committed.' The rulings are hereby affirmed. The Board has considered the Trial Examine 'S Decision, the exceptions and briefs, and the entire record in the case, and to the extent indicated below, hereby adopts the findings, conclu- sions, 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 orders that the complaint herein be, and it hereby is, dismissed in its entirety. 1 The General Counsel excepts to the Trial Examiner's admission of evidence submitted by the Respondents which describes Respondents' future plans for the South Paris facility. This evidence took the form of oral testimony, supporting , exhibits, and a posthearing, ex parte affidavit. While we believe the Trial Examiner erred in admitting this evidence, the error is not prejudicial, for we would reach the same result on the basis of the other- evidence in the case: 2 In adopting the Trial Examiner's conclusion that Respondents are not successor-employers of 'the `employees of Paris Manufacturing Company, hereinafter Pans, we• rely solely on the following factors: (a) on January 7, 1970, and, before Cladding Corporation appeared on the scene, Paris, a concern that had been failing financially for a number of years, was forced to initiate bankruptcy proceedings and effectively lost control over its own existence; (b) between January 22,A070, and February 27, 1970, control over the day-today operations of Paris was granted by the bankruptcy court to the Small Business Administration, a government agency; (c) after February 27, 1970, Paris ceased to exist as a going concern inasmuch as it ceased all manufacturing operations, shut down its machinery, laid off its employees, closed its doors, and surrendered the premises to its landlord; (d) in negotiating for a leasehold interest in the machinery and plant, Gladding Corporation dealt with the creditors and landlord of Paris, and not with Paris itself, because, by a series of financial transactions over a period of years, Paris had lost all title to the machinery and plant; (e) although between tebcuaty27, 1976, when Paris closed its doors, and may 6, 1970, when Gladding-Paris Corporation commenced operations-a hiatus of over 2 months--even former employees of Paris remained on the premises, they were engaged only in caretaking duties' and were paid by and were employees of the landlord, not. Paris, for this'period; and (f) Gladding-Paris, unlike Paris, is part of a multiplant, integrated enterprise., In the circumstances present herein , we believe the conclusion is' warranted that the nature and character ofthe,employing industry at, the South Paris, Maine, facility has been sufficiently altered so,that we cannot find, under applicable Board Precepts, that the Respondents are successor-employers to "Paris. Cf. Southland Manufacturing Corp., 186 NLRB No. 'I 11. Moreover, we note that.Gladding-Paris Corporation has only one customer in common with Paris and has obtained other 'customers from unrelated sources. While we do not believe this factor to be controlling , we regard it as a significant part of the total elements to be considered . Cf. Lincoln Prrvate Police, Inc., 189 NLRB No. 103. ' TRIAL EXAMINER'S DECISION WiLLum J. BROWN, Trial Examiner: This proceeding under Section 10(b) of the National Labor Relations Act, as amended, hereinafter referred to as the Act, came on to be heard-before me at South Paris, Maine, on January 12,13, and 14, 1971. The original charge of unfair labor practices was filed June 2, 1970,1 byr the Charging Party, United Furniture Workers of 'America, AFL-CIO, hereinafter sometimes ' referred to, as the Union, and the complaint herein was issued October 9 by the General Counsel of the National Labor Relations Board,' acting through the Regional Director for Region 1. Itallegedand the duly filed answer of the above-indicated Respondents, hereinafter sometimes referred to jointly as the Company, denied the commission of unfair labor practices , defined in Section 8(a)(5) and (1) 2 of the Act. At the hearing the parties appeared-.and participated as noted above with full opportunity to present evidence and argument on the issues. Subsequent " to the close of, the hearing written briefs were received from 'the General Counsel and the Company and have been fully considered. On the entire record herein and on the, basis of my observation of the witnesses, I make the following: FINDINGS OF FACT I. THE BUSINESS OF TILE RESPONDENT EMPLOYERS The pleadings and evidence establish and I find that Respondent Gladding Corporation, hereinafter sometimes referred to as, Gladding,v is a corporation organized under the laws of the State of New York with its principal office in South Otsilic, New York,, and engaged primarily in ,the manufacture and sate of sporting ' goods and recreational equipment; Gladding-Paps Corporation, hereinafter some- times referred to as, Cladding-Paris, a'Maine corporation,is a wholly owned subsidiary of Gladding-with its principal office in South Paris, Maine. Paris Manufacturing Compa- ny, hereinafter sometimes ,referred to as Paris, was a Maine corporation formerly engaged in th'e manufacture of winter 1 Dates hereinafter, unless otherwise, noted, relate Ito the calendar year 1970. 2 Specifically the complaint alleges the commission of unfair labor practices in the Company's refusal to recognize the Union and abide by the terms of a collective-bargaining agreement between the Union and an alleged predecessor; an amendment alleges unfair labor practices by unilateral changes in wage, seniority, and benefits provisions. 192 NLRB No. 40 GLADDING CORP. 201 sports 'equipment and dormitory, hotel, and motel furni- ture. Paris was party to a collective-bargaining agreement with the Union running for a term- from August 1, 1969, until August 1, 1971, and from year to year thereafter unless terminated-by either party on, 60-day notice. Paris' charter from the State of Maine was suspended December 2, 1970. II. THE LABOR ORGANIZATION INVOLVED The evidence, including a stipulation entered into at the hearing, establishesthat the Union is a labor organization within the purview of Section 2(5) of the Act. M. THE ALLEGED UNFAIR LABOR PRACTICES At least as early as 1964 Paris had mortgaged certain of its properties to the Small Business Administration and sometime in 1967 it deeded to and leased back from Oxford Hills Development Corporation, a local development corporation, its interest in the real , estate, machinery, and equipment constituting the industrial enterprise, here involved. On August 1, 1969 the Union, which had been certified as the collective-bargaining representative of employees in the unit here involved, all production and maintenance employees excluding office clericals, profes- sional employees, guards, watchmen and supervisors, the appropriateness of which unit has been established by Board and court decisions, entered into the aforementioned collective-bargaining agreement with Paris to run for a period expiring August 1, 1971, with automatic renewal from year to year thereafter in the absence of notice by a party of a desire to terminate. On January 7, 1970, Paris filed a petition in bankruptcy and from January 22 until February 27, 1970, the Small Business Administration, which had a subordinate interest in goods in process, finished goods, and accounts receivable, actively ran the operations of Paris. In this period operations continued to use the same work force on a diminishing scale with layoffs and transfers on a seniority basis except that seniority would be subordinated to the expeditious completion of finishing the work on those contracts selected for completion3 as most advantageous to Paris and its creditors. On February 27 production ceased and the premises were turned over to a small crew of seven watchmen and firemen who were paid by the Oxford Hills Development Corporation with funds provided by the Maine Industrial Building Authority. These seven were continued in employment after May 6 when Gladding- Paris commenced operations. On April 10 the Union wrote to the Company and, referring to the Company's forthcoming entry into manufacturing operations at the premises involved, re- quested that the Company abide by the existing labor agreement.4 Under date of April 20 the Company denied any successorship relation in the circumstances. On April 20 Oxford Hills Development Corporation transferred its interest in the plant to Maine Industrial Building Authority which on May 6, leased the realty, machinery, and equipment to Gladding-Paris; on the same date the Small Business Administration transferred its mortgage to Gladding-Paris. On May 6, Gladding-Paris commenced operations. F. Earl Martin, a Gladdinggroup vice president, became president and general manager of Gladding-Paris. Martin placed control of purchasing and production in the hands of Wayne Wood, former works manager of Gladding-Hedlund Manufacturing Company, a Gladding subsidiary engaged at Nokomis, Illinois, in the manufacture of toboggans, sleds, and water skis. Two months later Wood was succeeded by Kurt Franke who, like Wood, had no prior relationship with Pans. Reference has been made above to the product line of Paris. The evidence clearly indicates that, for some time preceding Gladding's acquisition of; the manufacturing facility here involved, the principal product of Paris had been, in the furniture line. Thus in its lasocomplete year of production, 1969, Paris' sales of furniture-dormitory, school, and hotel-represented some 70 percent-of total sales. Gladding-Paris operations, however, have reversed these figures -in, favor of recreational items and its sales indicate an application of a fundamental corporate-policy of the Gladding group to concentrate on capitalizing on the continued expended interest in recreational and 'leisure time items. The annual reports for fiscal years 1969 and 1970 clearly indicate the corporate philosophy in this regard. The Gladding management has also introduced substan- tial changes in the manufacturing equipment of the South Paris facility. In its sled manufacturing operations Paris had manufactured sled runners in its South Paris facility and attached them to the wooden frames in the same facility. In its ooperations thus far the sled runners of Gladding-Paris have been fabricated at another Gladding subsidiary, a Kalamazoo, Michigan, operation, and shipped to South Paris for attachment to sled bodies. The corporate program for production at South Paris call for the shipment to Gladding-Paris of some $34,000 worth of equipment from the Gladding subsidiary at Nokomis, Illinois; this is in addition to some $25,000 worth of equipment shipped to South Paris from the Gladding in Kalamazoo. The conclusion is inevitable that there have been substantial changes, from the very beginning of operations, in the production processes as compared with those of the former Paris operation. There occurred a substantial change in the composition of the work force at the South Paris operation. Without any indication of discrimination against former Paris employ- ees, there were, at the time of peak employment, November 25, 105 new employees and 62 former Paris employees. While it appears from Joint Exhibit 18, a listing of 24 officers and department heads under the old Paris operation, that some 14 continued in employment with Gladding-Paris, it also appears that of these 14 carryovers only 8 continued in their former assignments. It is not without significance that the Gladding management took immediate steps to erase any possibility of public identification of the Gladding operation as a continuance of the old Paris operation. Gladding's board 3 At this, stage operations were under the control of Harlan Choate, for completion. regional attorney for the Small Business Administration . His testimony is 4 The Union letter particularly referred to art. XXIV of the agreement that only those contracts assuring $2 return for each $1 spent were selected which states that it should bind the parties, their successors , or assigns. 202 DECISIONS OF NATIONAL LABOR RELATIONS IIOARD chairman, Mayer, immediately on the commencement of operations , ordered, new stationery, a new telephone number,--new signs, and a new post office - box.5' Two furniture vans owned by Paris and bearing the Paris name were'repainted by Gladding-Paris as soon as practicable. With respect ' to incoming purchases of materials and supplies , it appears from Joint Exhibit 15 that there has been a substantial change in the sources of such goods and, in some cases in the terms available, the sole exception being the case of hardwood logs which, inevitably, have continued to be °logging 'operators in the area within a 75- mile radius about the South Paris operation. With respect to identity of customers, any continuity appears` to be limited to a Nickerson Corporation, a supplier of school furniture who continued as a customer of'Gladding-Paris but for`,' a limited amount of business ' which cannot be regarded , as a developing line in view of Gladding-Paris concentration on recreational equipment. °' Onthe• basis of all the material evidence, outlined above, I' find -and conclude -that -it does not preponderate in favor of the conclusion , that Gladding-Paris and Cladding constitute,a successor to Pariswr that they have engaged in the unfair labor practices alleged in the complaint, See Southland Manufacturing Corp., 186 NLRB No. 111. I recommend that the complaint herein be dismissed. a - On the basis of the foregoing findings of fact and upon the entire record in this case Lmake the following: CONCLUSIONS OF LAW I. The Company, is an employer, engaged in commerce within the purview of"Section 2(6) and (7) of the_Act. 2. The Union is a labor organization within the purview of Section 2(5) of the Act. 3. The evidence does not ,preponderate in favor of the conclusion that the Company has engaged in the unfair labor practices alleged in the complaint. RECOMMENDED .ORDER On the basis of the foregoing findings of fact- and conclusions of law it is recommended that the complaint herein be dismissed. P For some unaccountable reason the change was not made in the post office box number until December 1.