Milwaukee Engine & Equipment Corp.

MILWAUKEE ENGINE & EQUIPMENT CORP. Milwaukee Engine & Equipment Corp. (Formerly M. H. Equipment, Inc.) and Lodge 1553, International Association of Machinists and Aerospace Workers, AFLr-CIO. Case 38-CA-1243 July 21, 1972 DECISION AND ORDER By MEMBERS FANNING, JENKINS, AND KENNEDY On November 8, 1971, Trial Examiner Paul E. Well issued the attached Decision in this proceeding. Thereafter, the Respondent filed exceptions and a supporting brief, and the General Counsel filed a brief in support of the Trial Examiner's Decision. 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,andi conclusions' as modified herein. The Trial Examiner, relying on Burns,2 found that Respondent is a successor-employer and that by failing and refusing to recognize and bargain with the Union it violated Section 8(a)(5) and (1). The Trial Examiner further found that as a successor- employer Respondent was required to honor its predecessor's contract with the Union for the contract's term and that its failure to do so also constituted a violation of Section 8(a)(5) and (1). In Burns, the Second Circuit3 enforced the Board's order insofar as it related to the Board's findings that Burns was a successor and was, therefore, obliged to bargain with the union. However, it further held that the Board had exceeded its powers in ordering Burns to honor the collective-bargaining agreement of its predecessor, Wackenhut. The Supreme Court af- firmed the Second Circuit's decision-.4 " In light of the Supreme Court's holding that a successor-employer is not obliged to honor the collective-bargaining agreement executed by its predecessor, we find that the Respondent did not violate Section 8(a)(5) by refusing to honor the contract entered into by its predecessor, M. H. Equipment, and the Union. We shall therefore modify the Trial Examiner's findings, conclusions, and recommendations accordingly. I The Respondent's request for oral argument is hereby denied as, in our opinion, the record, exceptions, and bnefs adequately present the positions of the parties 2 William J Burns International Detective Agency, Inc, 182 NLRB 348 CONCLUSIONS OF LAW 345 1. All full-time and part-time lift truck mechan- ics, service men, helpers, field service men, parts men, and working foremen employed at Respon- dent's Rockford facility, excluding all other employ- ees, office clerical employees, guards, professional employees and supervisors, as defined in the Act, constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. 2. By failing and refusing on July 9 and thereafter to recognize and bargain with the Union as exclusive bargaining representative of its employees in the above-described appropriate unit, Respondent has engaged in and-is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 3. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the mean- ing of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in unfair labor practices violative of Section 8(a)(1) and (5) of the Act, we shall order that it cease and desist therefrom and take certain affirmative action de- signed to effectuate the policies of the Act. We shall order Respondent to bargain, upon request, with the Union, and, if any understanding is reached, embody such understanding in a signed agreement. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended the National Labor Relations Board hereby orders that Respondent, Milwaukee Engine & Equipment Corp., Rockford, Illinois, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to recognize and bargain, upon request, with the Union as the exclusive bargaining representative of its employees in the above-de- scribed unit. (b) In any like or related manner interfering with, restraining, or coercing employees in the tights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action which it is found will effectuate the policies of the Act: (a) Upon request, bargain with the Union as the exclusive representative of its employees in the 3 441 F 2d 911 (C A 2, 1971) 4 Affd sub nom N LR B v Burns International Security Services, Inc, 404 U S 822 198 NLRB No. 56 346 DECISIONS OF NATIONAL LABOR RELATIONS BOARD appropriate unit and, if an understanding is reached, embody such understanding in a signed agreement. (b) Post at its Rockford, Illinois, operation copies of the attached notice marked "Appendix." 5 Copies of said notice, to be furnished by the Officer-in- Charge for Subregion 38, after being duly signed by Respondent's representative, shall be posted by it immediately upon receipt thereof and maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employ- ees are customarily posted. Reasonable steps shall be taken by it to assure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Officer-in-Charge for Subregion 38, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply here- with. 5 In the event that this Order is enforced by a Judgment of a 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 WE WILL bargain collectively upon request with Lodge 1553, International Association of Ma- chinists and Aerospace Workers, AFL-CIO, as the exclusive bargaining representative of our employees in the following appropriate unit, and embody in a signed contract any agreement reached: All full-time and part-time lift truck me- chanics, service men, helpers, field service men, parts men and working foremen employed at our Rockford facility , excluding all other employees, office clerical employ- ees, guards, professional employees and supervisors, as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights to join or assist the Union or any other labor organization, or otherwise engage in activities protected by the Act. MILWAUKEE ENGINE & EQUIPMENT CORP. (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 concerning this notice or compli- ance with its provisions may be directed to the Board's Office, Savings Center Tower, 10th Floor, 411 Hamilton Boulevard, Peoria, Illinois 61602, Telephone 309-673-9061, Ext. 282. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE PAUL E. WEIL, Trial Examiner: On August 21 Lodge 1553, International Association of Machinists and Aero- space Workers, AFL-CIO, hereinafter called the Union, filed a charge with the Officer-in-Charge of Subregion 38 of the National Labor Relations Board, hereinafter called the Board, alleging that Milwaukee Engine & Equipment Corp., hereinafter called MEE, successor to M. H. Equipment, Inc., hereinafter called MH, violated Section 8(a)(1) and (5) of the Act by refusing to recognize the Union as the bargaining representative of its employees in Rockford, Illinois. On August 20 the General Counsel, by the said Officer-in-Charge, issued a complaint and notice of hearing alleging that MEE violated Section 8(a)(5) of the Act by refusing to recognize and bargain with the Union and by refusing to honor the collective-bargaining agree- ment entered into by the Union with MH, the predecessor to MEE. By its duly filed answer MEE admitted the jurisdictional facts, but denied that it is a successor to MH, and denies that it has any duty to bargain with the Union. On the issues thus joined, a hearing was held before me on September 21, 1971, at Rockford, Illinois. All parties were present and had an opportunity to call and examine witnesses, to adduce relevant and material evidence, to argue on the record and to file briefs. Briefs have been received from the General Counsel and Respondent. On the entire record in the case and in consideration of the briefs I make the following: FINDINGS OF FACT 1. THE BUSINESS OF MEE MEE is a Wisconsin corporation doing business in Wisconsin and in Rockford, Illinois, engaged in the sales and service of material-handling and construction equip- ment. At the Rockford facility, which MEE has occupied since July 9, 1971, MEE has a reasonable expectation of annually selling material-handling and construction equip- ment and performing services valued in excess of $500,000 and of purchasing and receiving such equipment valued in I All dates herein are in the year 1971. MILWAUKEE ENGINE & EQUIPMENT CORP. 347 excess of $50,000 transported directly to the Rockford /facility from States other than the State of Illinois. MEE admittedly is and has been at all times material herein an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES Background Until July 8 MH operated a facility in Rockford, Illinois, at which it sold and serviced material-handling equipment, primarily that manufactured by the Hyster Company. It also sold and serviced secondhand equipment. The employee complement at the time consisted of an office girl, a working foreman, a parts man and four servicemen. The Union was recognized as the collective- bargaining representative of a unit consisting of all full- time and part-time lift truck mechanics, servicemen, helpers, field servicemen, parts men, and working foremen, excluding all other employees, office clerical employees, guards, professional employees and supervisors. The unit thus described is, in effect, an all employee unit, and at the Rockford facility only the office clerical employees were thus excluded. In June 1971 Hyster Company awarded the franchise for a territory theretofore served by MH consisting of five counties in northern Illinois to MEE. MH not only relinquished the franchise but moved out of the building it occupied and turned over to MEE documents relating to customers who had purchased Hyster equipment on which MH had service policies. In addition, Respondent hired all of the employees formerly employed by MH, and retained the working foreman as service manager. The employees continued to do the same type of work using the same equipment in the same place under the same working foreman. On June 25 MH notified the Union that it was closing its facility and terminating the employees at the close of business July 8. The employees notified the Union which immediately met with MH and reached agreement with it to pay the holiday, vacation and other benefits called for by the contract, but not to pay anything in the nature of termination pay because MH had been informed by MEE that it would take over the entire complement of employ- ees. Thereafter the Union, on June 25, met with the employees and secured from each of them a new signed authorization card directed to MEE and dated July 9. The following day, June 26, five of the employees were taken by MEE to its Milwaukee plant where they met the personnel, including members of the management of MEE. Sometime thereafter, for reasons not explicated on the record, the shop steward took a poll of the five employees in the unit and determined that they did not wish to be further represented by the Union. The Union demanded recognition of MEE and demand- ed that the contract be adopted by it as a successor to MH. On July 12 MEE, by its general manager, wrote a letter to the Union stating that it was not a successor to MH, which was continuing its business in other places, and other business in Rockford2 and stating that he had been notified by the employees at Rockford that they had had a meeting and concluded that "they will ask you to represent them." The Union wrote back on July 15 accepting recognition and offering to meet and negotiate regarding changes which might be mutually agreeable. On July 21 MEE Secretary Vandenburg wrote back to the Union stating that the general manager who had signed the letter of July 15 was no longer connected with the Company and that he was not correct in his representation of the attitude of the employees, stating further that from the investiga- tion conducted by Secretary Vandenburg, "it is quite clear that our employees at Rockford do not want to be represented either by the IAM or by any other union." The letter further suggested that there was no connection between MEE and MH, that MEE does not consider the contract binding on it and suggesting that the question of representation be determined by a Board election. The Union responded by filing the instant charge. The record reveals that after the employees started working for MEE at least one of them received a wage increase of 5 cents an hour, although there was no change in his duties. Further, although, from the testimony of the sole employee called as a witness by MEE, it is not clear when it took place, the employees were advised that they would be included in the profit-sharing plan already in force among MEE's other employees. Discussion and Conclusions The General Counsel contends that MEE is a successor- employer to MH and as such is obligated to honor the collective-bargaining agreement negotiated by its predeces- sor covering the employees here concerned. The Board in William J Burns International Detective Agency, Inc., 182 NLRB No. 50, held that "absent unusual circumstances the Act imposed such an obligation" on a successor employer. MEE contends first that it is not a successor-employer within the meaning of the Board's decisions in that field, and second, that if it were a successor-employer unusual circumstances exist which vitiate its duty to recognize the Union or adopt its contract with the predecessor. It is clear that MEE is a successor-employer within the definition of that term which the Board has adopted and applied in many cases. The "employing industry" is unchanged. MH conducted what was in effect a Hyster Company sales franchise in Rockford using a place of business, a group of employees, the sole supervisor on the premises and doing the same activities of selling and servicing Hyster equipment and related equipment that was taken over by Respondent on July 9. No facet of the "employing industry" is shown to have changed except that the manager for MH, who was not based in Rockford, 2 There is no evidence that MH has had any business interest in Rockford since July 8 348 DECISIONS OF NATIONAL LABOR RELATIONS BOARD has been replaced by the manager for MEE, who also is not based in Rockford. The sole supervision continues to be the working foreman who now bears the title of service manager, but does the same work. MEE, by its evidence, showed that all of its sales of new equipment have been Hyster products; there is no showing that any product is offered by MEE that was not offered theretofore by MH and no services performed by MEE that were not theretofore performed by MH. Under the circumstances there can be no question that the employing industry has remained the same and that MEE in taking it over, has added nothing but top management; in this respect the case is precisely like that in William J. Burns, etc., supra. With regard to the exceptional circumstances raised by MEE, i.e., the determination by the employees not to be represented any further by the IAM, the record reveals that on July 9 when MEE had taken over the enterprise in Rockford, the Union demanded recognition and in fact furnished cards to support its claim of representation. These cards had been filled out by the employees on June 25 but dated July 9, the day that the takeover was accomplished. The then manager, Harmon, checked the cards and acknowledged that they were signed by the employees which had been hired by MEE, but declined to go forward until he had had an opportunity to check out to his own satisfaction the employee sentiment. Thereafter, on July 12, Harmon addressed a letter to the Union stating that he had been notified by his employees that they had a meeting and concluded that they "will ask you to represent them." MEE contends that the letter was incorrect, that a negative was inadvertently left out of the quoted sentence by Harmon. However, so such claim was made to the Union, nor does it appear to have been raised at any time prior to the hearing. On the contrary, on July 21 after Harmon's connection was severed, Secretary Vandenburg of Respondent wrote to the Union stating "Mr. Harmon was not correct when he told you of the attitude of the MEE employees of Rockford about wanting to be represented by a union. From my own investigation it is quite clear that our employees at Rockford do not want to be represented either by the IAM or by any other union." Vandenburg stated that he never talked with the employees prior to July 30, so the investigation he referred to must have taken place on that date or on the 21st. I see no warrant for interpolating a negative into Harmon's letter as Respondent would have me do. MEE contends that the employees decided before July 9 that they would not be represented by the Union. This is supported by the testimony of employee Leffler, who stated that after the visit of the employees to MEE's Milwaukee plant they held a meeting within a few days, at which the shop steward polled the employees about their desire. One employee was not present and was telephoned and agreed to go along with the rest. If I find this account to be correct, that this took place within a few days, it would have been before the first of July, yet Harmon, on July 9, stated that he would himself ask the employees, and on July 12, stated that he had done so and that they wished to be represented by the Union. Accordingly I discredit the testimony of employee Leffler that the meeting took place before July 1. The record does not reveal what caused the employees to change their minds after June 25 when they all signed new cards asking the Union to represent them. I could infer that the wage rates and the possibility of profit sharing may have entered into their calculations. I find it hard to believe that Leffler did not know he was getting a wage raise until he found it in his check, as he testified. I note that in testifying about the employee meeting at which the employees decided not to be represented by the Union Leffler was asked by Respondent's counsel "now what happened at this meeting?" and answered: Well, we all got together, they wanted to know if we wanted-they wanted to know if we wanted to keep the Union in-keep the Union and we all voted no. Leffler was not asked who "they" were that wanted to know if "we," obviously referring to the employees, wanted to keep the Union. He could not have been referring to the Union since the last contact with the Union had resulted in all five of the employees signing authorization cards. It might not be stretching to infer that "they" refers to MEE. It is notable that there is no evidence that any employee ever asked to have his card back or informed the Union that he no longer wished to be represented by it. I have concluded that MEE is a successor-employer. I conclude further that MEE was not faced with circum- stances warranting a refusal to continue recognition of the Union. In fact, recognition was afforded by MEE when Harmon checked the cards and wrote the letter on July 12. It was not until July 21 that Respondent declined recognition of the Union. The situation thus is no different from the situation of any employer with a union contract who is notified of the disaffection of employees from their union. For the term of the contract (or for the term of a certification year in some cases) the recognition cannot be withdrawn. Under the authority of the Burns case cited above, I find that MEE is a successor-employer and is required to honor the contract with the Union for its term. MEE, by failing and refusing to recognize the Union or to honor the contract, has violated Section 8(a)(5) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES The activities of MEE set forth in section III, above, have a close, intimate and substantial relation to trade, traffic and commerce among the several States, leading to labor disputes, burdening and obstructing commerce and the free flow thereof. CONCLUSIONS OF LAW 1. All full-time and part-time lift truck mechanics, servicemen, helpers, field servicemen, parts men, and working foremen employed at MEE's Rockford facilities, excluding all other employees, office clerical employees, guards, professional employees and supervisors, as defined in the Act, constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. 2. By failing and refusing on July 9 and thereafter to recognize and bargain with the Union as the exclusive bargaining representative of its employees in the above- described appropriate unit, and by failing to honor, adopt MILWAUKEE ENGINE & EQUIPMENT CORP. and enforce the existing contract between MH and the Union, MEE has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 3. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that MEE has engaged in unfair labor practices violative of Section 8(a)(1) and (5) of the Act, I shall recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. I shall recommend that MEE be ordered to bargain upon request of the Union, and, if any understanding is reached, embody such understanding in a signed agreement. I recommend further that MEE be ordered to honor, adopt and enforce retroactively to July 9 the collective-bargain- ing agreement between MEE as successor to MH and the Union. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: 3 ORDER Respondent, Milwaukee Engine & Equipment Corp., its officers, agents, successors and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively upon request from the Union as the exclusive bargaining representative of its employees in the above-described unit. (b) Refusing to adopt, honor, and enforce its contract with the Union as successor to MH Equipment Co., Inc. (c) In any like or related manner interfering with, restraining or coercing its employees in the exercise of their rights to join or assist the Union or otherwise engage in activities protected by the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Bargain collectively upon request with the Union and, if any understanding is reached, embody such understanding in the signed agreement. (b) Honor, adopt, and enforce the contract between MEE as successor to MH Equipment Co., Inc., and the Union giving retroactive effect to all clauses of said contract. (c) Post at its Rockford, Illinois, operation copies of the attached notice marked "Appendix." 4 Copies of said notice, on forms provided by the Regional Director for Subregion 38, after being duly signed by MEE's authorized representative, shall be posted by it 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 it to ensure that such notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Subregion 38, in writing, within 20 days from the date of the receipt of this 349 Decision, what steps the Respondent has taken to comply herewith.5 3 In the event no exceptions are filed as provided by Sec 102.46 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 a In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 5 In the event that this recommended Order is adopted by the Board after exceptions have been filed, this provision shall be modified to read- "Notify the Regional Director for Subregion 38, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith" APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively upon request with Lodge 1553, International Association of Machinists and Aerospace Workers, AFL-CIO, as the exclusive bargaining representative of our employees in the following appropriate unit: All full-time and part-time lift truck mechanics, service men, helpers, field service men, parts men and working foremen employed at our Rockford facility, excluding all other employees, office clerical employees, guards, professional employ- ees and supervisors, as defined in the Act. WE WILL NOT refuse to adopt, honor and enforce our contract as successor to M. H. Equipment, Inc., with the above-named Union and covering the above- described unit. WE WILL NOT in any like or related manner interfere with, restrain or coerce our employees in the exercise of their rights to join or assist the Union or any other labor organization, or otherwise engage in activities protected by the Act. WE WILL, as successor to M. H. Equipment, Inc., honor, adopt and enforce our collective-bargaining contract with Lodge 1553, International Association of Machinists and Aerospace Workers, AFL-CIO, and give effect to all clauses in the said contract retroactive to July 9, 1971. MILWAUKEE ENGINE & EQUIPMENT CORP. (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. 350 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Any questions concerning this notice or compliance with yard, Peoria, Illinois 61602, Telephone 309-673-9061, its provisions may be directed to the Board's Office, Extension 282. Savings Center Tower , 10th Floor, 411 Hamilton Boule-