Crowell Collier and MacMillan, Inc.

442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD C. G. Conn, Ltd., a wholly owned subsidiary of Crowell Collier and MacMillan , Inc. and Interna- tional Union of Electrical, Radio and Machine Workers, AFL-CIO. Case 16-CA-4258 June 12, 1972 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND KENNEDY On October 26, 1971, Trial Examiner Marion C. Ladwig issued the attached Decision in this proceed- ing. Thereafter, Respondent filed exceptions and a supporting brief, and the General Counsel filed a brief in answer thereto. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the Trial Examiner's Decision in light of the exceptions and briefs and has decided to affirm the Trial Examiner's rulings, findings, and conclusions' and to adopt his recommended Order.2 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Trial Examiner and hereby orders that C. G. Conn, Ltd., a wholly owned subsidiary of Crowell Collier and MacMillian, Inc., Abilene, Texas, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's recommended Order. I NLR B v Burns International Security Services, 80 LRRM 2225 (May 15, 1972) 2 The Trial Examiner found , and we agree, that a pension plan established and maintained by the Respondent contained discriminatory provisions and that the Respondent thus violated Sec 8 (a)(1) of the Act However, in adopting the recommended remedy, we are not ordering the Respondent to institute the plan with respect to represented employees, but only to delete the discriminatory language contained therein For, inasmuch as we have found that Respondent is obligated to bargain with the Union, extension of the pension plan is not automatic and is a bargamable matter TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE MARION C. LADWIG, Trial Examiner: This case was tried at Abilene, Texas, on August 4, 1971.1 The charge was filed by the Union on February 5 and the complaint was issued on May 19. The Union was the certified bargaining representative of the production and maintenance employ- ees at the F. A. Reynolds Co., Inc., plant in Abilene. Following court enforcement of a Board order requiring 1 All dates are in 1971 unless otherwise stated Reynolds to bargain with the Union, the plant was purchased by the Respondent, herein called Conn or the Company, which denied that it was a successor-employer to Reynolds. The primary issues are whether Conn (a) unlawfully refused to recognize and bargain with the Union, and (b) unlawfully established and maintains at the plant a pension plan which excludes coverage of employ- ees, if they are represented by a union, in violation of Section 8(a)(5) and (1) of the National Labor Relations Act. Upon the entire record, including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed by the General Counsel and the Company, I make the following: FINDINGS OF FACT 1. JURISDICTION The Company, a wholly owned subsidiary of Crowell Collier and MacMillan, Inc., is a Delaware corporation engaged in the manufacture of band instruments at its plant in Abilene, Texas, where it annually ships products valued in excess of $50,000 directly outside the State. The Company admits, and I find, that it is engaged in commerce within the meaning of Section 2(6) and (7) of the Act, and that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. Background 1. Reynolds' 1969 plans to combine production Reynolds manufactured band instruments at two places. At its plant in Abilene, it produced the large background instruments: alto horns, baritones, mellophones, sousa- phones, and tubas. At its other plant in Fullerton, California, called the Olds plant, it produced French horns and trombones, and the smaller instruments, cornets and trumpets. Both plants used the labels of F. A. Reynolds Co., Inc., and F. E. Olds & Sons. In 1969, Reynolds decided to close the Olds plant and move the production of comets, trumpets, French horns, and trombones to the Abilene plant. It then increased production at the Abilene plant, building up its stock in the warehouse, in order to permit the employees to begin producing the comets, trumpets, and other horns when the Olds plant closed. 2. Negotiations to sell The 1969 plans did not materialize. About April 30, 1970, the decision was made to close down the Reynolds plant in Abilene. Meanwhile on April 9 (3 weeks earlier), the Fifth Circuit enforced, 424 F.2d 1068 (5 Cir. 1970), the Board's bargaining order in F. A. Reynolds Co, Inc., 173 NLRB 418, 428 (1968), requiring Reynolds, "its officers, agents, successors, and assigns," to bargain upon request with the Union as the collective-bargaining representative of the 197 NLRB No. 84 C G. CONN, LTD. production and maintenance employees at the Abilene plant. (The Union, after receiving a certification in 1966, had signed a 1-year agreement with Reynolds. The agreement expired in 1967 and was not renewed.) In May 1970, negotiations began to sell the Abilene plant to Conn, and Reynolds began laying off employees. By the end of June 1970, all but 6 of the 116 employees had been laid off. In July and August 1970, 16 employees were recalled to produce and assemble some comets, trumpets, and trombone bells for Conn. This contracted work (performed by the small staff, without a necessary boramatic machine for boring cornet and trumpet valves to meet Conn's concentricity specifications) was not success- ful and the plant was closed on September 3. It remained closed until January 18. Reynolds' scheduled production of 5,500 horns for 1970 had already been completed, because of the earlier increased production to make ready for the manufacture of cornets, trumpets, French horns, and trombones. In the meantime, Conn had negotiated an "Acquisition Agreement and related transactions" with Reynolds' parent corporation, Chicago Musical Instrument Co., herein called CMI. On July 21, 1970, the CMI board of directors "approved the sale of the Acquired Assets and authorized the execution and delivery of the Acquisition Agreement and related transactions." These agreements are discussed later. There is no direct evidence why Conn's parent corpora- tion waited until November 10, 1970, to approve the acquisition. (Reynolds informed the Union that an antitrust suit had been filed against Conn. As summarized in its brief, "Conn is a large, long-established manufacturer of musical instruments yet is but a part of its parents' musical instrument manufacturing activity, which also includes the Key Board Division, a manufacturer of organs, Schirl & Roth Company, which assembles violins, and the Artley Woodwind Company, a manufacturer of flutes and cornets." Conn itself has a plant at Elkhart, Indiana, and a distribution facility at Atlanta, Georgia.) On December 8, 1970, Conn and CMI executed the "Acquisition Agreement, a Musical Instrument Supply Agreement," and related papers. The "Closing Memoran- dum" was executed on January 13. B Alleged Successorship 1. Agreement to continue production In the Musical Instrument Supply Agreement, executed by Conn and CMI on December 8, 1970, Conn agreed "to maintain the Abilene Plant in satisfactory condition and to maintain an adequate staff of employees to enable it to perform all its obligations under this Agreement during the entire term" of 3 years (beginning on January 13), and from year to year thereafter until terminated. The agreement listed 33 models of alto horns , baritones, mellophones, sousaphones, and tubas to be manufactured by Conn under the Reynolds and Olds labels, plus baritone and tuba bells and 45 specified horn parts. The agreement set out the maximum quantities of these horns and bells which CMI may order in each of the first 3 calendar quarters of 1971, and a maximum of 5,595 horns and bells 443 which CMI may order from Conn annually. The agree- ment stated that "Conn shall use its best efforts to produce at the Abilene plant as soon as possible" all the listed instruments. The Acquisition Agreement, executed at the same time, specifically provided that the assets Conn was acquiring "will be sufficient to enable an owner thereof to produce the [band instruments ] of a quality and workmanship standard in the industry" and "of a quality, pitch, tonal characteristic, material and workmanship meeting the requirements of CMI" as required in the supply agreement. The acquired assets included the land, buildings, machinery, tools and tooling, raw materials, work in process, office equipment and supplies, all "patents, processes, designs, inventions, know-how and technology" used in the manufacture, all employee personnel and payroll records, and all files, records, and other tangible personal property at the plant, excluding business records relating to customers, marketing, sales, general accounting, and taxes. The Reynolds trade name was not excluded. Thus, Reynolds remained Conn's competitor, but Conn contracted to resume manufacturing the same band instruments and parts in the plant for sale to Reynolds. 2. Restaffing of plant a. Production and maintenance employees Although the Acquisition Agreement provided that "Conn shall have no obligation by virtue of this Agreement to employ any present employee of the Reynolds Division of CMI after the Closing," former Reynolds employees constituted a large majority of the production and maintenance employees initially hired by Conn. A single maintenance man (a former Reynolds employ- ee) was hired during the week of January 18 when Conn took possession of the plant. During the week of January 25-with over 400 applications for employment-Conn hired nine more Reynolds employees (referred to as old employees), and two new employees. Some production evidently began during that week because 8 of the 12 employees then on the payroll were production employees: three instrument mounters, one brazer , one ragger, one prebuffer, one finish buffer, and one fabrication setup leadman. In the next week beginning February 1 , Conn hired 10 old employees and 3 new ones-making a total of 20 old and 5 new employees in 19 classifications in the parts and stockroom, toolcrib, maintenance, toolroom , fabrication, assembly, finishing , and final assembly departments in all the departments except shipping and receiving, machine production, and fiberglass). These employees included two additional finish buffers , another instrument mounter, two fabricators, two production repairmen, an engraver, and a final assembler. In each of the succeeding 4 weeks, Conn hired from five to nine old employees. On March 5, after 6 weeks of production, there were 46 old and 25 new employees on the payroll-totaling 71 employees in 36 classifications in all departments. The remaining 70 of the 116 former Reynolds employees, whom the Union was seeking Conn to recall (as discussed later), had not been hired. 444 DECISIONS OF NATIONAL LABOR RELATIONS BOARD After March 5, very few old employees were fired. During the next 8 weeks, through April 30, Conn hired 2 old and 31 new employees. Yet, because of a high turnover of new employees, there continued to be a majority of old employees on the payroll. On April 30 there were 48 old and 45 new employees-totaling 93 employees in 39 classifications . None of the old employees, but 14 of the new employees had been terminated-1 in February, 9 in March, and 4 in April. Between April 30 and August (the time of trial), Conn hired 6 old employees and 41 new. (Three of the latter had previously worked for Reynolds, but had quit or had been terminated before the May 1970 layoffs. Conn also hired a former Reynolds employee as a salaried inspector on May 25.) Meanwhile, 3 old employees and an additional 20 new (totaling 34 new) employees had been terminated. Thus on August 2, Conn had hired 54 old and 100 new hourly employees, and there remained 51 old and 66 new employees on the payroll, totaling 117 employees in 39 classifications. In summary, the old (Reynolds) employees constituted a 10-to-2 (or 5-to-1) majority over new employees on January 29 after the first (partial) week of production, a 20- to-5 (4-to-1) majority on February 5 after 2 weeks of production, a 46-to-25 (almost 2-to-1) majority on March 5 after 6 weeks of production, and a 48-to-45 majority 8 weeks later on April 30, during which 8 weeks the employment of old employees had practically ceased. Thereafter, the new employees constituted a majority, which was 66 new to 51 old employees on August 2. Conn contends in its brief that "Applicants were selected on the basis of their skills and abilities along with the requirements of the plant," and cites the fact that the Union's separate charge, alleging that Conn discriminatori- ly refused to hire certain Reynolds employees, was withdrawn. (That charge, in Case 16-CA-4313, was filed on April 1 and alleged that Conn was discriminatorily refusing to hire 14 named Reynolds employees because of their union membership and activities. The charge was withdrawn with the Regional Director's approval on May 24. Only 2 of the 14 alleged discriminatees had been hired by the time of trial.) However, whether Conn was hiring employees on the basis of their skill and ability was not litigated in this proceeding, and I do not make any finding to that effect. (There is evidence which suggests the contrary. The hiring of Reynolds employees practically ceased after March 5, despite the high turnover among the new employees who were being hired. I note that among the '34 new employees who were terminated between February 17 and July 26, 1 was terminated on the first day of employment, 5 were terminated after 2 to 7 days, and a total of 22 were terminated before working as long as 6 weeks. At the time of trial,. 61 of the 116 experienced Reynolds employees had not been hired by Conn. Among the 54 Reynolds employees who were hired as hourly employees, 3 were terminated after working over 3, 4, and 5 months, respectively. There is no contention that any of the production and maintenance jobs required greater skills. There were similar employee classifications, with the same or compara- ble titles with minor exceptions. (Reynolds had a setup man in the receiving department and Conn had a classification of shipping and receiving clerk. BothlRey,n- olds and Conn had toolroom machinists, and Conn also had one machinist production employee. Reynolds had an automatic screw machine setup nian who became the machine shop setup leadman for Conn. Instead of Reynolds' hand bender, machine bender & crook maker, and material handler-departmental helper classifications in the fabrication department, Conn had fabricator A, B, and C classifications. Conn had two new, apparently lesser skilled classifications, grease wheeler and degreaser -clean- er, and did not have a separate classification of janitor.) Reynolds had a total of 42 production and maintenance classifications (including a separate classification of the top-rated setup man in both the fabrication and receiving departments), and Conn also had 42 classifications (plus the separate salaried classification of inspector , which was established in May and which I find should remain in the bargaining unit). Three of Reynolds' classifications were vacant at the time of its first large layoff on May 5, 1970 (as seen when comparing lists of active and laid-off employees prepared in May 1970, with a later Reynolds departmental seniority list), and three of Conn's classifica- tions (bell-branch maker, maintenance helper, and round up-burnisher) were vacant on August 2. The departmental setup was practically the same. Conn, like Reynolds, had maintenance, toolroom, machine production, fabrication, assembly, fiberglass, finishing, and final assembly departments. (Reynolds' assembly depart- ment was called assembly and repair, because of its former sizable horn repair service. This customer service had been largely discontinued in the summer of 1969. In May 1970, there remained in the assembly and repair department four repairmen, evidently working primarily or entirely on production repairs. Three of them were hired by Conn as production repairmen.) The record is not clear whether Reynolds' shipping and receiving departments, and its parts stockroom and toolcrib departments, were combined into single shipping and receiving, and parts and stock- room, departments. In May, Conn set up a separate quality control and inspection department with salaried inspectors. (The three lacquer sprayers apparently continued to work in the finishing department-as at Reynolds-until May 16, when a lacquer and fiberglass supervisor was trans- ferred in.) Accordingly, I find that Conn initially restaffed the plant with a large majority of former Reynolds employees, in substantially the same classifications and departments. I also find that the majority (of 5 to 1 on January 29 and 4 to I on February 5) continued until it was nearly 2 to I on March 5, when 71 employees were employed in 36 classifications, and until it was a simple majority of 48 to 45 on April 30, when 93 employees were working in 39 classifications (as compared to 116 employees working for Reynolds in 39 classifications on May 5, 1970, and 117 hourly employees working for Conn in 39 classifications on August 2). I therefore find that whether or not Conn was selecting applicants "on the basis of their skills and abilities" after March 5-by hiring only 8 of the remaining 70 experienced Reynolds employees (plus I as a salaried inspector) while hiring 72 new employees-a majority of C. G. CONN, LTD. 445 the production and maintenance employees working in the plant continued to be former Reynolds employees until April 30, when the plant had been substantially restaffed. b. Supervisors In July 1970, when Conn was negotiating to purchase the plant, Conn placed on retainer Reynolds' second highest plant official, Assistant General Manager and Controller Billy Collier. Beginning on November 1, 1970, Collier took an active part in making plans to reopen the plant. (Collier's superior, the general manager, was not hired.) On January 4, Conn hired Reynolds Production Superin- tendent Tom Lambert to be general foreman. On January 18, when Conn took possession of the plant, Collier hired three of Reynolds' production supervisors: R. D. Baker as subassembly supervisor, M. Ortiz as finish supervisor, and J. D. Gregory as machine production supervisor. With the exception of a shipping-receiving supervisor who was transferred from Conn's Indiana plant on February 9, former Reynolds supervisors Lambert, Baker, Ortiz, and Gregory were the only supervisors in the plant supervising the work. On February 28, Conn transferred in a production superintendent and production supervisor, and on March 1, hired a production control manager. Later, on April 29, it hired a rough mount supervisor who had worked for Reynolds about 2 years earlier, and on May 16, transferred in a lacquer and fiberglass supervisor. (I note that on March 5, after 6 weeks of production, there were seven instrument mounters, three lacquer sprayers, and eight fiberglass workers in the plant, working under former Reynolds supervisors.) Conn hired some of Reynolds' engineers and other office personnel , and hired or transferred in others, including the vice president of manufacturing, the top official in the plant.) Thus, during the first month of production, the pro- duction employees (a large majority of whom were 'former Reynolds employees) were being supervised in the plant by former Reynolds production supervisors. 3. Operation of reopened plant a. Start-up problems The resumption of production was delayed by the plant's unkept condition, resulting from the 4 1/2-month shut- down. The telephones were disconnected, the whole plant was dusty, and some of the idle equipment needed repairs. It was necessary to rearrange machinery, take an invento- ry, and order certain tools, parts, and equipment. Further- more, many records and drawings which Conn had purchased with the plant were missing and had to be obtained from Reynolds. Although there was no production during the first week, and although production did not resume thereafter as fast as it undoubtedly would have in the absence of a shutdown, Conn hired (as above noted) three instrument mounters and five other production workers during the second week. Evidently, with three employees in one classification, Conn began production that week. (Collier recalled generally that in January, employees were engaged in doing cleaning and make-ready work, and "if they did any it was very little production work.") Five weeks later, on March 5, 71 employees were working in 36 classifica- tions; and by April 30, as previously found, the plant was substantially restaffed, with 93 employees in 39 classifica- tions. The payroll rose to 124 on June 15 but dropped to 117 employees, in 39 classifications , on August 2 when production was estimated to be comparable to Reynolds' production in January 1970. That was when Reynolds had reached its peak production in preparation for assigning the employees to producing cornets, trumpets, and other horns when Reynolds' California plant was expected to close. b. Revisions in production In addition to resuming production of alto horns, baritones, mellophones, sousaphones, and tubas under both the Reynolds and Olds labels (for sale to Reynolds under the supply agreement) and also under the Conn label, Conn began manufacturing the smaller horns, comets and trumpets, as well as French horns and trombones (which Reynolds had planned to produce in this plant before deciding to sell it). In accomplishing this change in the production schedule, Conn introduced some new processes and installed some new items of equipment. It expanded the machine shop and the fabrication area ; supplemented the existing lathes; rearranged the incoming raw material area ; installed some automatic buffing machinery and a new boramatic machine; and changed the fiberglass process, installing a new gas-fired oven. At the time of trial , it was installing copper and chrome plating tanks and a new ultrasonic cleaner. Conn also installed a testing laboratory, hiring one tester in May and another in June . (The parties did not litigate whether or not these two salaried employees and the salaried chemist technician should be in the bargaining unit.) After considering (a) the large quantity of machines and equipment purchased from Reynolds and still used in the plant, as compared with the relatively few items added or changed by Conn, (b) the initial employment of a large majority of former Reynolds employees under former Reynolds production supervisors, (c) the continued proL duction of Reynolds band instruments , and (d) the fact that the added production was merely different types of band instruments, produced by employees with similar skills in substantially the same classifications and departments, I find that the revisions in production did not change the basic nature of the operation . It also appears that insofar as the former Reynolds employees were concerned, the changes in production were not far different from what the situation at the plant would have been if equipment had been brought (as originally planned) from the Olds plant in California, to begin production of the same types of horns Conn has added. c. Planned increases As former Reynolds Assistant General Manager (now Financial Analyst/Planner) Collier testified, production at the time of trial (August 4) was "Probably comparable, I would say" to Reynolds' peak production in January 1970. 446 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (Reynolds' peak annual production had been 6 ,800 of the large instruments, but the evidence does not disclose what the January 1970 production was.) Conn's production records show that in the 4-week period ending July 23, the plant produced a total of 1,332 horns, including 1,151 of the high volume small horns, cornets and trumpets, and 181 larger horns. (During that same 4-week period, Conn had a total of 2,240 Japanese import cornets and trumpets, which had to be checked out. Reynolds had not imported horns.) Thus, although Conn's production at the time of trial, with 117 hourly employees, was estimated to be compara- ble to Reynolds's peak production, the number of horns produced was higher because of the high volume cornets and trumpets. Conn introduced into evidence figures showing estimat- ed increases in the work force (to 180 employees by the end of 1971 and to 280 in 1972) and scheduled increases in production (to a total of 13,151 horns to be produced in 1971 and to 19,600, plus production for Reynolds, in 1972). Although noting these figures, I find that such evidence of future plans should be given little, if any, weight. Gladding Corporation, 192 NLRB No. 40, fn. 1. Although arguing that this evidence is worth noting, the Company concedes in its brief that it "recognizes that evidence of future production and work force may be given limited weight." (I have also noted that there had been a decrease in the work force since June 15. From then until August 2, Conn hired only 2 employees while terminating 9-reducing the hourly payroll from 124 to 117.) d. Other changes In addition to manufacturing horns at the plant, Reynolds also maintained a showroom and a storeroom for instruments and accessories, printed catalogs and sales documents, and shipped horns and accessories directly to customers. (Also, as previously noted, Reynolds formerly had a sizable horn repair service, which was largely discontinued in 1969.) Although Conn maintains no sales or printing services at the plant , shipping its production directly to Reynolds and to the Conn warehouse in Atlanta, these changes affected very few unit employees. 4. Conn's refusal to bargain Following the Fifth Circuit's April 9, 1970, decision, enforcing the Board's 1968 bargaining Order against Reynolds, "its officers, agents, successors , and assigns" (see sec. II, A, 2, above), the Union met with Reynolds several times until the plant closed. The evidence shows that Conn was fully aware of the bargaining order entered against Reynolds and its succes- sors. In the Acquisition Agreement (approved by Reyn- olds' parent corporation, CMI, on July 21, 1970, and liy Conn's parent corporation on November 10, 1970, and executed on December 8, 1970), the following indemnity provision was included: CMI agrees to indemnify and hold Conn harmless against any and all liabilities , damages, losses, claims, costs or expenses (including reasonable attorneys' fees) whatsoever arising out of activities or conduct of CMI and resulting from the decision and judgment of the United States Court of Appeals for the Fifth Circuit, dated April 9 and May 1, 1970, respectively, in the case entitled National Labor Relations Board v. F. A. Reynolds Co., Inc. or from the underlying decision and order of the National Labor Relations Board, dated October 29, 1968, in such case, or from any of the underlying facts or allegations involved in such case. The Union made oral requests to Conn for recognition and bargaining in December 1970 and on January 21, and repeated the requests in writing on January 22 and 25. In its January 25 letter , with which it enclosed lists of 116 former Reynolds employees, the Union stated that it was attaching "a roster of laid off employees from your plant," and requested "that these people be put on recall status immediately in accordance with their seniority and particular skills therein outlines." Conn responded by letter dated January 29, declining the written requests to meet and negotiate an agreement for the plant employees, asserting that "Conn is not the successor employer to F. A. Reynolds, and thus does not consider itself bound by the NLRB and court decisions to which you refer," and stating that it did not then employ a representative work force there. It concluded, "With respect to your demand that Conn hire certain named employees , the Conn policy is to hire the most qualified people applying for employment without consideration to their race, religion, color, sex, or union affiliation." 5. Concluding findings This is an unusual case, in which a manufacturer of band instruments purchased one of its competitor's plants, and contracted to maintain the plant with an adequate staff, and manufacture the competitor 's products for the compet- itor, to continue selling. Conn, the purchaser, reopened the Reynolds plant following a 4 1/2-month shutdown and, after some startup problems, began producing the same types of band instruments-under both its own and Reynolds' labels-as well as producing other types of band instruments solely for itself, including a large number of the small instru- ments, comets and trumpets . As found above, it initially hired, as a large majority of its work force , former Reynolds employees, in substantially the same classifica- tions and departments, working under former Reynolds production supervisors. On January 29, when Conn declined the Union's written requests to honor the Board's court-enforced bargaining order (addressed to Reynolds and its "successors") and to begin negotiations, the former Reynolds employees consti- tuted a 10-to-2 majority of the employees then on the payroll. A week later when the refusal-to-bargain charge was filed, the majority was 20 to 5 (a 4-to-1 majority). On March 5, the majority was 46 to 25 (nearly 2 to 1), and on April 30, when the plant had been substantially restaffed, the former Reynolds continued to constitute a majority, of 48 old to 45 new employees. The General Counsel contends that Conn is the legal successor to Reynolds, inasmuch as Conn took over the business without materially changing the employing industry . Conn denied that it is a successor-employer, C. G CONN, LTD. contending that it "purchased nothing more than a building tenanted by neglected equipment only partly adequate to its needs, empty file cabinets, and unused desks. To require Respondent to recognize and bargain with the Union merely because it once represented the employees of the past resident of the building would be unconscionable under any standard enunciated by the Board or Courts in this area of the law." Conn's primary arguments are, first, that a majority of its production and maintenance employees were not former employees of Reynolds at the time of trial (over 6 months after it refused to recognize the Union), "and, second, the fact that the Reynolds operation and organization ceased to exist more than four months before Respondent began operations at Abilene, and that Respondent did not bargain for, buy or take over a going concern." In determining the issue of successorship , we are faced with "the critical question: is the employing enterprise substantially the same." N.L.R.B. v. Alamo White Truck Service, 273 F.2d 238, 240 (5 Cir. 1959). Or as stated more recently, "The acquiring employer is the successor to the obligations of his predecessor if there is continuity in the business operation. `The crucial question in determining if the certification is binding on the successor employer is whether the employing industry remains essentially the same after the transfer of ownership.' " N L R.B. v. Zayre Corp., 424 F.2d 1159, 1162 (C.A. 5, 1970). A similar standard, stated by the D. C. Circuit in a case cited in Conn's brief, is "whether the acquired business retained its identity and continuity to a degree making it reasonable to require the successor employer to recognize the certified union." International Chemical Workers [Hackney Iron and Steel CO.] V N L R.B, 395 F.2d 639, 640 (D.C. Cir 1968).The Board recently held, "The key test in determining whether a change in the employing industry has occurred is whether it may reasonably be assumed that, as a result of transitional changes, the employees' desires concerning unionization have likely changed," citing N. L. R. B. v Armato,199 F.2d 800 (C.A. 10, 1952). Ranch- Way, Inc., 183 NLRB No. 116, enfd. 445 F.2d 625 (C.A. 10, 1971). I find that Conn is the legal successor to Reynolds. Despite the shutdown, Conn contracted to, and did, resume the production of the band instruments in the same plant, initially hiring a large majority of former Reynolds employees, working in substantially the same classifica- tions and departments, under former Reynolds production supervisors. The employing industry remained essentially the same, and the acquired business of manufacturing band instruments retained its identity and continuity in the plant. As found, the added production of different types of band instruments (requiring similar skills) and the changes in some of the equipment did not change the basic nature of the operation. Gerommo Service Co., 191 NLRB No. 88 (TXD sec. III, C); N.L R B v. Ideal Laundry Corp, 422 F.2d 801 (C.A. 10, 1970). On January 29, when it refused to recognize the Union, Conn was under contract to resume Reynolds' production, and had begun such resumption with a large majority of former Reynolds employees-all of whom were included in the Union's earlier request that the 116 Reynolds employ- 447 ees be placed on recall status. Although Conn never hired most of the 116 union -represented employees , the Union's majority of those hired continued through April 30 when the plant was substantially restaffed. The fact that they found themselves fewer in number than before warrants no implication that they no longer desired the union to represent them. Armato, supra, 199 F.2d at 803; Polytech, Inc, 186 NLRB No. 148 (TXD sec. III, A, 7). Moreover, here the former Reynolds employees were undoubtedly looking to the Union to protect, or reclaim, theirjobs in the plant. Being the successor of Reynolds, Conn was legally bound to honor the Union's certification and the Board's court-enforced bargaining order. Accordingly, I find that on and since January 29, Conn illegally refused to recognize and bargain with the Union, in violation of Section 8(a)(5) and (1) of the Act. Of course, the subsequent loss of the Union's majority (after April 30) is immaterial , in view of Conn's continuing unlawful refusal to bargain. C. Discriminatory Pension Plan When Conn began restaffing the plant in January, it gave to each employee a booklet entitled, "Your Pension Plan." The booklet stated, as a requirement for coverage under the pension plan, that the employee be full time and "not covered by a collective bargaining agreement." It further provided: NOTE: You will cease to be a participant in the Plan if, at any time . . . your salary and wages . . . are determined through collective bargaining with a recog- nized bargaining agent or agency (whether or not you are a union member). Conn contends in its brief that "The origin of this exclusionary clause is unknown to the present officials of Respondent," and refers to testimony that the provisions have not been enforced when employees of other subsidiar- ies of the parent corporation became organized. However, on its face, the pension plan unequivocally excludes coverage of employees if they are represented by a union and therefore tends to serve as a wedge against unionization . As held in Melville Confections, Inc. v. N.L.R.B, 327 F.2d 689, 691 (C.A. 7 1964), cert. denied 377 U.S. 933 (1964), "The conduct of the company in continuing to maintain the provision making union representation a disqualification for eligibility . . . consti- tuted a per se violation of Section 8(a)(1). It was employer conduct inherently destructive of rights guaranteed by Section 7." I therefore find that the Company, by establishing and maintaining these discriminatory provi- sions at the Abilene plant, coerced the employees in the exercise of their Section 7 rights, in violation of Section 8(a)(1) of the Act. CONCLUSIONS OF LAW 1. Conn is the legal successor to Reynolds at the Abilene plant. 448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. By refusing on and since January 29, 1971, to recognize and bargain with the Union as the exclusive representative of its employees in an appropriate unit of all production and maintenance employees at its Abilene, Texas, plant, including inspectors but excluding office clerical employees, guards, watchmen, professional em- ployees, and supervisors as defined in the Act, Conn engaged in unfair labor practices affecting commerce within the meaning of Sections 8(a)(5) and (1) and 2(6) and (7) of the Act 3. By establishing and maintaining provisions in its pension plan, excluding coverage of employees if they are represented by a union, Conn violated Section 8(a)(1) of the Act. REMEDY In order to effectuate the policies of the Act, I find it necessary that the Respondent be ordered to cease and desist from the unfair labor practices found and from like or related invasions of the employees' Section 7 rights, and to take certain affirmative action. Upon the foregoing findings of fact and conclusions of law, upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: 2 ORDER Respondent, C. G. Conn, Ltd., a wholly owned subsidi- ary of Crowell Collier and MacMillan, Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with International Union of Electrical, Radio and Machine Workers, AFL-CIO, as the exclusive representative of its employees in an appropriate unit of all production and maintenance employees at its Abilene, Texas, plant, including inspectors but excluding office clerical employees, guards, watchmen, professional employees, and supervisors as defined in the Act. (b) Limiting participation in its employee pension plan to employees who are not represented by a union. (c) In any like or related manner interfering with, restraining, or coercing employees in the exercise of their rights under Section 7 of the Act 2. Take the following affirmative action necessary to effectuate the policies of the Act: (a) Upon request, bargain in good faith with the Union as the exclusive representative of the employees in the above-described appropriate unit and embody in a signed agreement any understanding reached. (b) Amend the employee pension plan by deleting the requirement that eligibility for participation be limited to employees not covered by a collective that an employee's participation will cease if his wages and conditions of employment are determined through collective bargaining. (c) Post at its plant in Abilene, Texas, copies of the attached notice marked "Appendix." 3 Copies of the notice, on forms provided by the Regional Director for Region 16, after being duly signed by an authorized representative of the Respondent, shall be posted by the Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 2 In the event no exceptions are filed as provided by Sec. 10246 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Sec. 102 48 of the Rules and Regulations , be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 3 In the event that the Board's Order is enforced by a Judgment of the United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read: "Posted pursuant to a Judgment of the United States Court of Appeals enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD . An Agency of the United States Government The National Labor Relations Board having found, after trial, that we violated Federal law by refusing to recognize and bargain with the Union as the exclusive representative for our plant employees, and by having a pension plan which excluded coverage of employees represented by a union: WE WILL bargain upon request with International Union of Electrical, Radio and Machine Workers, AFL-CIO, and put in wnting and sign any bargaining agreement we reach covenng these employees: All production and maintenance employees at our Abilene, Texas, plant, including inspectors but excluding office clerical employees, guards, watchmen, professional employees, and supervi- sors as defined in the Act. WE WILL remove the pension plan rules which limit coverage to employees not represented by a union. C. G. CONN, LTD. a wholly owned subsidiary of CROWELL COLLIER AND MACMILLAN, INC- (Employer) Dated By (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered , defaced, or covered by any other material. Any questions concern- ing this notice or compliance with its provisions may be directed to the Board's Office, Federal Office Building, Room 8-A-24, 819 Taylor Street, Fort Worth, Texas 76102, Telephone 817-334-2921.