Allis-Chalmers Corp.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Allis-Chalmers Corporation and International Union, United Automobile, Aerospace & Agricultural Im- plement Workers of America, UAW. Cases 15- CA-5732 and 15-CA-6006 January 20, 1978 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND MURPHY On July 19, 1977, Administrative Law Judge Robert E. Mullin issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions and a supporting brief,' and counsel for the General Counsel filed a brief in support of the Administrative Law Judge'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 attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings,2 and conclusions of the Administrative Law Judge with certain modifications,3 and to adopt his recommended Order, as modified herein.4 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 Administrative Law Judge, as modified below, and hereby orders that the Respon- dent, Allis-Chalmers Corporation, East Jackson, Mississippi, its officers, agents, successors, and as- signs, shall take the action set forth in the said recommended Order, as so modified: 1. Substitute the following for paragraph 2(b): "(b) Rescind all unilateral changes in the terms and conditions of employment in the SDO Department made since March 31, 1975, and make no further changes without consulting the aforesaid Union. However it is provided that nothing herein shall be construed as requiring Respondent to revoke the wage increases or benefits heretofore granted." 2. Substitute the attached notice for that of the Administrative Law Judge. t Respondent has requested oral argument. This request is hereby denied as the record, the exceptions, and the briefs adequately present the issues and positions of the parties. 2 Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an Administrative Law Judge's resolutions with respect to credibili- ty unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dry Wall Products, Inc., 91 234 NLRB No. 67 NLRB 544 (1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have carefully examined the record and find no basis for reversing his findings. 3 In his Conclusions of Law the Administrative Law Judge stated that Respondent has refused to bargain in good faith with the Union herein since March 21, 1975. While the record indicates that this was the date of the third representation election, in which the Charging Party received a majority of the valid ballots cast, there is no evidence that Respondent at that time or prior to about March 31, 1975, committed any acts which were violative of Sec. 8(aX5) of the Act. On that date, Respondent, through Supervisor Pilgrim, unilaterally modified the working conditions of unit employees in violation of this section of the Act. Mike O'Connor Chevrolet-Buick-GMC Co., Inc., et al., 209 NLRB 701 (1974). Accordingly, we find that Respondent has refused to bargain in good faith with the Union as the exclusive representative of unit employees since March 31, 1975. 4 In his recommended Order, the Administrative Law Judge ordered Respondent to cease and desist from unilaterally changing the terms and conditions of employment of unit employees without appropriate bargaining and to rescind all unilateral changes in terms and conditions for certain employees made after March 21, 1975. Respondent excepted to these findings and requested, inter alia, that it not be required to rescind wage increases and other improvements in fringe benefits granted after this date. We find merit in Respondent's request that it not be required to rescind the increases in wages and benefits, and we shall modify the Order accordingly. In addition, in the section of his Decision entitled `The Remedy," the Administrative Law Judge stated that one of the conditions limiting Respondent's backpay liability would be "the date the Respondent bargains to agreement with the Union." This condition should be modified to read "the date Respondent bargains to agreement with the Union on these subjects pertaining to the effects of the terminations in the DSO Department in April and June 1975." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL, upon request, bargain collectively in good faith with International Union, United Automobile, Aerospace & Agricultural Imple- ment Workers of America, UAW, as the exclusive representative of all the employees in the appro- priate unit, defined below, for the purpose of collective bargaining with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment, and, if an understand- ing is reached, embody such understanding in a signed agreement. The appropriate unit is: All hourly paid production and maintenance employees at the East Jackson, Mississippi, plant, excluding office clericals, technical employees, professionals, guards and super- visors as defined in the Act. WE WILL NOT institute changes with respect to the terms and conditions of employment of our employees in the appropriate bargaining unit, defined above, without prior consultation and bargaining with the aforesaid Union as the exclusive collective-bargaining representative. WE WILL rescind all unilateral changes in the terms and conditions of employment made after March 21, 1975, in the SDO Department and 350 ALLIS-CHALMERS CORP. make no further changes without consulting the aforesaid Union, but nothing herein shall be construed as requiring that we revoke any wage increases or other benefits heretofore granted. WE WILL make whole the following employees for wages lost when we terminated them, for a period required by this Decision and WE WILL establish a preferential hiring list for those whom we cannot reemploy immediately. Tommy C. Adams Daniel Allen Jerry D. Burkes James E. Carter Jerry Wayne Cooper Alfred Davis George E. Davis Freddie Edwards Charlie Foster Paul David Foster Jack N. Gardiner M. C. Gayden Joe N. Henderson Buddy Hillard Edward Jackson Joseph Jackson, Sr. Clarence C. James James M. Jones George Kelly Johnny L. Kitchens L. L. Lampkin James Otis Lee Randy L. McCarty Donald G. Moore Mark Neely Robert Joe Pierce Charles Powell Rickey Powell Robert G. Quimby Tymon Rankin Walter J. Redd Ornemus Reed Willie Robbins Billy J. Runnels Percy Robert Smith Danny Sturgis Thomas Thornton Joe Walker Cory D. Williams Henry T. Williams John R. Williams V. A. Wolverton Norman A. Woodthorpe Floyd L. Young, Jr. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of their rights to self-organization, to form, join, or assist the above-named Union, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities. ALLIS-CHALMERS CORPORATION DECISION STATEMENT OF THE CASE ROBERT E. MULLIN, Administrative Law Judge: An order consolidating the above-numbered cases and a notice of hearing were issued in this matter on September 28, 1976. In the consolidated complaint it was alleged that the Respondent had violated Section 8(a)( 1) and (5) of the Act. An amendment to the complaint was issued on October 8, 1976.' In its answer and amended answer, duly filed, the Respondent conceded certain facts with respect to its business operations, but it denied all allegations that it had committed any unfair labor practices. 2 The hearing of these consolidated matters was held on January 4 and 5, 1977, in Jackson, Mississippi. At the hearing all parties were represented. All were given full opportunity to examine and cross-examine witnesses, and to file briefs. Oral argument was waived. At the close of the hearing the parties agreed upon an arrangement whereby certain company records would be reviewed by the Gener- al Counsel with a view toward stipulating to a posthearing exhibit that would be offered in evidence. Counsel for the General Counsel and for the Respondent prepared two exhibits, numbered Joint Exhibits I and 2, and on April 14, 1977, they were submitted to me along with a motion that they be received in evidence and made a part of the record. The Charging Party, although not a participant in the preparation of these exhibits, voiced no objection to their introduction. The aforesaid motion is now granted, and the joint exhibits are received in evidence.3 On April 15, 1977, a brief was received from the Respondent, and on April 18, a brief was submitted by the General Counsel. On May 4, 1977, the Respondent submitted a reply brief. On May 17, 1977, the General Counsel filed a motion to strike the Respondent's reply brief. By order dated May 23, 1977, this motion was denied, and the General Counsel and the Charging Party were given an opportunity to submit answering briefs. 4 On June 10, 1977, the General Counsel submitted a brief in response to the issues which the Company had raised in its reply brief. Upon the entire record, including all the briefs of counsel, and from his observation of the witnesses, I make the following: I The charge and amended charge in Case 15-CA-5732 were filed on June 26, 1975. and March 25, 1976, respectively. The charge in Case IS- CA-6006 was filed on February 6,. 1976. 2 On December 21, 1976, the Respondent filed a motion to dismiss certain allegations in the complaint on various grounds. By order, dated December 23, 1976, Administrative Law Judge Melvin J. Welles denied this motion. This motion, subsequently renewed, was denied by the undersigned at the outset of the hearing. In its brief, the Respondent has asked that this ruling be reconsidered. Upon reconsideration, the motion is again denied. 3 On January 14, 1977, the General Counsel submitted a motion to reopen the hearing for the purpose of taking additional evidence and testimony with respect to the Respondent's economic defense. This motion was never ruled on since the parties subsequently indicated that they were preparing a joint stipulation which would obviate the need for any further heanng. Although the General Counsel never withdrew this motion, it is evident that with the receipt in evidence of the above-described joint exhibits, the aforesaid motion to reopen is now moot. 4 Sec. 102.42 of the Board's rules (Rules and Regulations and Statements of Procedure, National Labor Relations Board, Series 8, as amended) makes no provision for reply briefs. Neither does it prohibit them. Whether such briefs are to be permitted in a specific case appears to lie within the discretion of the Administrative Law Judge. Presumptively, the ruling of the latter must be made with due regard for that other section of the Rules which places on the Administrative Law Judge the duty "to inquire fully into the facts." Sec. 102.35. Cf. Leatherwood Drilling Corpany, 180 NLRB 893 (1970). 351 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The Respondent, a Delaware corporation, has approxi- mately 25 plants in the United States and Canada, and about a dozen additional plants in other countries through- out the world. Only its plant in East Jackson, Mississippi, is involved in this proceeding. At the latter facility the Respondent is engaged in the manufacture of electrical equipment, particularly power circuit breakers for use in electricity generating plants. In the year preceding issuance of the complaint, a representative period, the Respondent sold and shipped goods valued in excess of $50,000 directly to points located outside the State of Mississippi. During the same period, it purchased goods and materials valued in excess of $50,000 directly from out-of-State. Upon the foregoing facts, the Respondent concedes, it is now found that Allis-Chalmers Corporation is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The Respondent concedes, and it is now found that the International Union, United Automobile, Aerospace & Agricultural Implement Workers of America, UAW (here- in Union or UAW), is a labor organization within the meaning of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background The Respondent's East Jackson plant was relocated from Boston, Massachusetts, in 1973. Almost immediately after operations began at the new location organizational efforts commenced among the employees. In March 1974, the International Union of Electrical, Radio and Machine Workers, AFL-CIO-CLC (herein IUE), filed a representa- tion petition in Case 15-RC-5364 seeking to represent a unit of the Company's hourly paid production and mainte- nance employees at the plant. Thereafter, the UAW and the International Brotherhood of Electrical Workers, AFL-CIO-CLC (herein IBEW), intervened. After the parties entered into a Stipulation for Certification Upon Consent Election, such an election was conducted on April 25, 1974. Out of 174 ballots cast, none of the participating labor organizations received a majority. As a result, a runoff election was scheduled for May 16, 1974. In the runoff election, out of 180 ballots cast, 87 were for the UAW, 91 ballots were against it, and 2 ballots were challenged. Thereafter, the UAW filed timely objections to conduct affecting the results of the runoff election. After a hearing on these objections and the issuance by a hearing officer of a report and recommendations, on February 7, 1975, the Board directed that the runoff election be set aside and that a second runoff election be held. The latter election was held on March 21, 1975. Out of approximately 303 eligible voters, 299 ballots were cast. 5 The facts as found in the preceding three paragraphs are as found in Allis-Chalmers Corporation, 224 NLRB 1199 (1976), a case involving the There were 171 ballots for the UAW, 127 ballots against, and I challenged ballot. Thereafter the Company filed timely objections to conduct affecting the results of this election. After an investigation, on August 25, 1975, the Regional Director issued a report wherein he overruled the Company's objections. On December 30, 1975, the Board affirmed the Regional Director's recommendations, over- ruled the Respondent's objections, and certified the Union. Allis-Chalmers Corporation, Case 15-RC-5364.5 As found in the representation proceeding cited above, and now found by me, the appropriate unit for the purposes of collective bargaining within the meaning of Section 9(b) of the Act, is as follows: All hourly paid production and maintenance employees at the East Jack- son plant, excluding all clericals, technical employees, professionals, guards and supervisors as defined in the Act. Further, on the basis of the certification issued by the Board in the foregoing representation matter, it is now found that since March 21, 1975, the UAW has been the representative for the purposes of collective bargaining of the employees in the unit described above, and by virtue of Section 9(a) of the Act has been the exclusive representa- tive of the employees in that unit. B. The Alleged Violations of Section 8(a)(5) and (I), Findings of Fact and Conclusions of Law with Respect Thereto In a letter dated April 15, 1975, the UAW requested that the Respondent bargain with it as the duly designated majority representative for the appropriate unit. In a written response dated April 18, 1975, John L. Platner, general manager for the Respondent, declined the Union's request for the stated reason that the Respondent's objec- tions to the election were still pending. In a letter dated January 9, 1976, and after the Board had overruled the Respondent's objections to the election, International Representative Gene Kenum renewed the Union's request that the Respondent meet and bargain with the Union. In a letter dated January 20, General Manager Platner again refused to bargain. On or about April 4, 1975, the Respondent, without notice to, or consultation with, the Union, terminated the following employees in its SDO Department: Tommy C. Adams Alfred Davis George E. Davis Freddie Edwards Paul David Foster M. C. Gayden Buddy Hillard Edward Jackson Joseph Jackson, Jr. Clarence C. James George Kelly L. L. Lampkin James Otis Lee Randy L. McCarty Mark Neely Robert Joe Pierce Charles Powell Rickey Powell Robert G. Quimby Tymon Rankin Ornemus Reed Willie E. Robbins Billy J. Runnels Thomas Thornton Joe Walker Cory D. Williams John R. Williams same parties here involved, which is now pending on enforcement proceed- ings in the Court of Appeals for the Fifth Circuit. 352 ALLIS-CHALMERS CORP. On or about June 20, 1975, the Respondent, without notice to, or consultation with, the Union, terminated the following employees in its SDO Department: Daniel Allen Jerry D. Burkes James E. Carter Jerry Wayne Cooper Charlie Foster Jack N. Gardner Joe N. Henderson James M. Jones Johnny L. Kitchens Donald G. Moore Walter J. Redd Percy Robert Smith Danny Sturgis Henry T. Williams V. A. Wolverton Norman A. Woodthorpe Floyd L. Young, Jr.6 In July 1975 the Respondent closed the SDO Depart- ment and then, in September of that year, reopened it. Although it has hired a number of new employees for that department, at the time of the trial, it had rehired only four of the above-named former employees, viz, Tymon Rankin, Walker J. Redd, Percy Robert Smith, and Henry T. Williams. Moreover, all of the last named were hired as new employees and without any of the seniority rights or benefits which they had acquired as the result of their prior employment with the Respondent. On June 23, 1975, the Respondent unilaterally granted to all employees in the unit a 30-cent-an-hour across-the- board pay increase along with additional workmen's compensation benefits. On February 2, 1976, the Respon- dent granted a 23-cent-per-hour across-the-board pay increase as well as a new sick leave program for the unit employees. At the hearing the Respondent acknowledged that all of the foregoing actions, the terminations and the limited recalls, as well as the effectuation of the wage increases and the other benefits, were taken by the Respondent without notice to, or consultation with, the Union. It was also alleged that subsequent to the election of March 21, 1975, the Respondent unilaterally initiated the enforcement of previously unenforced work rules. In support of this allegation the General Counsel presented several witnesses who testified that about a week after the aforesaid election, Supervisor Jerry Pilgrim of the SDO Department called all of the employees together and announced that henceforth they would have to adhere to a number of shop rules that previously had not been enforced. According to the credible testimony of employee Walter J. Redd, on this occasion Pilgrim told them that from that time forward the employees would be required to comply with each of the following rules: (1) stay within departmental yellow lines during worktime; (2) refrain from washing up in the restroom prior to any break period; (3) avoid going to the nurse's station for anything less than a serious emergency; (4) refrain from using the telephone during worktime without the explicit permission of their 6 In the complaint the General Counsel also alleged the termination of one Roy Lee Rogers, on June 20, 1975. In its amended answer the Respondent denied that Rogers was terminated or laid off. The General Counsel presented no affirmative evidence to establish the contrary and did not refer to this name in its brief. Consequently, it will be recommended that the allegations of the complaint as to Roy Lee Rogers be dismissed. T The quoted word is from Maxey's testimony. s See Interstate Circuit, Inc. v. United States, 306 U.S. 208, 226 (1939), where the Supreme Court stated: "The failure... to call as witnesses those supervisor; and (5) engage in no talking with one another even during periods of nonwork and after a job was completed. Redd, as well as employees Jerry Burkes, Percy Smith, and Broward Sturgis III, credibly testified that rules such as the foregoing were never enforced prior to the election, but that after Pilgrim's speech on the subject, compliance with all of them was required. Redd, Burkes, and Sturgis credibly testified as to instances during the postelection period when each of them, or a coworker, was orally warned or reprimanded for an infraction of one of the foregoing rules which in the preelection period had been ignored. The Respondent denied that there had been any change in the enforcement of work rules after the election. John D. Maxey, the Respondent's supervisor of employment and safety, testified as to the records of reprimands and warnings which were on file in his office. However, nothing in his testimony established that the rules described in the preceding paragraph had been enforced in the SDO Department prior to the election. Even Maxey conceded that the fact that Supervisor Pilgrim called a special meeting of the employees in the SDO Department to tell them about his forthcoming enforcement of the rules was "unusual." 7 Notwithstanding Maxey's testimony about the company practices with respect to plant discipline in general, the Respondent did not call Pilgrim as a witness, or offer any explanation for not calling him. Since Pilgrim was the preeminent witness to establish the Respondent's case in this connection, the fact that the Respondent did not have Pilgrim take the stand may be construed to mean that, had he done so, his testimony would have been damaging to the Respondent's position.s In any event, and on the basis of the credible testimony of employees Redd, Percy, Sturgis, and Burkes, it is now found that subsequent to the election the Respondent initiated a program of strictly enforcing the work rules, enumerated above, in the SDO Department, and that this action was taken unilater- ally and without consultation with the Union.9 Howard Equitz, director of employee relations for the Respondent, testified that all of the above-described changes in the employees' working conditions were based upon objective business conditions. Thus, according to Equitz, the wage increases were given pursuant to wage surveys which the Respondent conducted in the area and the sick leave improvements were effectuated to keep the Respondent competitive with other companies, as well as because of employee demands for these changes which were voiced during the period in question. He did not, however, give any specific reason for the added workmen's compensation benefits which the Respondent put into effect on June 23, 1975. Apart from Equitz' testimony, the Respondent offered no documentary evidence of wage surveys or other studies which would tend to corroborate officers who did have authority to act . .. is itself persuasive that their testimony, if given, would have been unfavorable .... The production of weak evidence when strong is available can lead only to the conclusion that the strong would have been adverse.... Silence then becomes evidence of the most convincing character." 9 International Representative Gene Keenum credibly testified that the UAW was never notified that the Employer planned any change as to the enforcement of its work rules. The Respondent never denied this testimony. 353 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the testimony of that witness. In view of the findings set forth above, it is now found that the Respondent had no compelling economic reasons for unilaterally changing the working conditions of the employees in the appropriate unit by the wage increases, the institution of sick leave benefits, the improvement in its workmen's compensation program, and Supervisor Pilgrim's new policy of enforcing previously unenforced work rules in the postelection period.l° Concluding Findings The General Counsel contends that the Respondent was under an obligation to bargain with the Union from the time the latter won the election of March 21, 1975, whereas the Respondent contends that it was under no such duty during the period when objections to the results of the election remained unresolved. In Mike O'Connor Chevrolet-Buick-GMC Co., Inc., Pat O'Connor Chevrolet-Buick-GMC Co., Inc., 209 NLRB 701 (1974), the Board reaffirmed the principle that an employer is not free to make unilateral changes in the working conditions of employees in the unit during the pendency of postelection challenges. There, the Board stated (209 NLRB at 703): The Board has long held that, absent compelling economic considerations for doing so, an employer acts at its peril in making changes in terms and conditions of employment during the period that objections to an election are pending and the final determination has not yet been made. And where the final determination on the objections results in the certification of a representative, the Board has held the employer to have violated Section 8(a)(5) and (1) for having made such unilateral changes. [Footnotes omitted.] The Board has also held that it was "immaterial that when the Respondents acted unilaterally the Board had not yet certified the Union, and the Union itself had not yet requested the Respondents to bargain. After the election the Respondents knew that the Union had won the election and represented a majority of their employees. They could act unilaterally thereafter only at their peril." Laney & Duke Storage Warehouse Co., Inc., and Laney & Duke Terminal Warehouse Co., Inc., 151 NLRB 248, 266-267 (1965), enfd. in relevant part 369 F.2d 859, 868-869 (C.A. 5, 1966). See also: Keystone Casing Supply, Inc., 196 NLRB 920, 927 (1972); Zelrich Company, 144 NLRB 1381, 1383 (1963), enfd. 344 F.2d 1011 (C.A. 5, 1965); Fleming Manufacturing Company, Inc., 119 NLRB 452, 464-465 (1957). Consequently, and in view of the earlier finding that the Respondent had no compelling economic reason for effecting unilateral changes in the working conditions of employees in the unit, it is now found that the Respondent 10 In Allis-Chalmers Corporation. 224 NLRB (1976), the Board affirmed a finding by Administrative Law Judge Itkin, who heard that case, that the Company's announcement on June 24, 1975, of a wage increase and improved workmen's compensation benefits was motivated by economic considerations rather than by an antiunion purpose. In that case, however, neither the Administrative Law Judge nor the Board was called upon to consider whether, under Sec. 8(aX5), the Respondent was free to take this action. Since that is the allegation now under consideration, it is my finding violated Section 8(a)(5) of the Act: on about March 31, 1975, when Supervisor Jerry Pilgrim commenced enforcing previously unenforced work rules in the SDO Department; and on or about June 23, 1975, when the Respondent granted unit employees a 30-cent-an hour across-the-board increase in pay, along with additional workmen's compen- sation benefits. It is well established that once a union is certified by the Board, the employer is no longer free to alter the working conditions of the employees in the represented unit without first bargaining with the majority representative. On January 9, 1976, the Union renewed its request for bargaining conferences with the Respondent. Notwith- standing this request, on about February 2, the Respondent unilaterally granted employees in the appropriate unit a 23- cent-an-hour across-the-board increase in pay and imple- mented a new sick leave program for them. It is now found that by such conduct the Respondent violated Section 8(a)(5) and (1) of the Act. Moreover, the Board has held that such unilateral actions are violative of the Act even when they are made, as the Respondent contends here, pursuant to an established company policy and with no antiunion motive. Chatham Manufacturing Company, 172 NLRB 1948, 1949 (1968). The Respondent acknowledges that it has refused to recognize or bargain with the Union because it proposed to test the validity of the Board's certification. While it is manifest that the Respondent has this right, it is likewise clear that in the meantime, if the certification is sustained by a court of appeals, the Employer has been guilty of a violation of Section 8(aX)(5) from the time of its initial refusal to bargain with the Union. Nor does the pendency of the proceedings to review the Board's certification suspend the Employer's duty to bargain with the majority representative of its employees. Section 10(g) of the Act, 29 U.S.C.A. 160(g); N.LR.B. v. Winn-Dixie Stores, Inc., 361 F.2d 512, 516 (C.A. 5, 1966), cert. denied 385 U.S. 935; Dixon Distributing Company, Inc., 211 NLRB 241, 244 (1974); Corral Sportswear Company, 156 NLRB 436, 438- 443 (1965). C. The Issues as to the Terminations and Recalls; Findings and Conclusions With Respect Thereto In their brief, counsel for the General Counsel contend that the terminations" of April 4 and June 20, 1975, admittedly unilateral, were discriminatorily motivated. The Respondent denies these allegations and contends that these separations were dictated solely by economic consid- erations. Equitz, the Respondent's principal witness, testified that the terminations resulted from a decline in the demand for SDO power breakers which was precipitated by the 1973- 74 recession in the housing industry. According to Equitz, the decline in customer orders became apparent in January that, in view of the evidence introduced in the present case the Respondent offered no compelling economic justification for ignoring the employees' majority representative and effectuating the changes in question unilateral- 'i These separations were referred to at various times as "layoffs" and at other times as "terminations." On the basis of Equitz' testimony, however, it is clear that the latter term is more accurate and it will be used hereinafter. 354 ALLIS-CHALMERS CORP. 1975 and continued through the first 6 months of that year, falling off to the point that in the third quarter there were no orders at all. Production was discontinued in July 1975 and, according to Equitz, it was resumed later that year on only a limited basis. At the time of this resumption in the late summer and fall of 1975, as found earlier, the Respondent rehired four of the employees whom it had terminated the preceding April and June. '2 These were hired, however, only as new employees and without any of the benefits which had accrued to them prior to their termination the preceding spring. Equitz acknowledged that, in addition, to these former employees, the Respon- dent hired a number of new employees for work in the SDO Department who had had no experience with the Company. The General Counsel contends that the data as to the orders on hand disclosed that after the first year of the plant's operations the number of orders declined almost continually until the first half of 1975 when the termina- tions occurred. 13 On the other hand, because of the large number of orders that were received immediately after the plant opened, the Respondent experienced no immediate decrease in work volume. The General Counsel contends that in the period after both the first and second runoff elections the Respondent increased its production and reduced its backlog of orders. The statistics on the number of SDO breakers manufactured and the backlog of orders bear out this contention. 4 It is, of course, evident from the tables set forth in the footnotes that while the Respondent was experiencing a decline in customer orders, it increased its production of SDO breakers. This inevitably reduced the backlog and decreased the need for those employees who were engaged in the production of SDO breakers. The decline in the backlog of orders started in June 1974 when it stood at 253 and continued to fall until July 1975 when it dropped to 0. (See attached Appendix A, Table C.) During that period the production of SDO breakers rose from 42 per-month from January through June 1974 to an average of 54 per- month from July through December 1974 and a monthly average of 47 from January through June 1975. (See attached Appendix A, Table A.) This, of course, occurred while the objections to the runoff elections of May 1974 and March 1975 were being investigated. On the basis of this data the General Counsel contends that the Respon- dent deliberately stepped up its production at a time when customer orders were falling off so that it could reduce its backlog and, thus, eliminate the need to keep the employ- ees who were involved in the production of SDO breakers. Finally, the General Counsel argues that by its termination of the 44 employees whom the Respondent separated in April and June 1975, it reduced both the total number of employees as well as the Union's margin of victory in the election of March 1975, which had been only 44 votes. 12 These were Tymon Rankin, Walter J. Redd, Percy R. Smith, and Henry T. Williams. 13 The average number of SDO breakers ordered per month, by b-month periods was as follows: The General Counsel's argument is not entirely convinc- ing, for it is evident that the Respondent did, in fact, experience a decline in orders for SDO breakers. This inevitably led to a decrease in the volume of work for the department manufacturing that equipment and dictated some reduction in the number of employees there. On the other hand, it is equally manifest that if the Respondent had honored the Union's request for bargaining confer- ences, the terminations of April 4 and June 20 might have been avoided, at least to some extent, by resort to transfers and other alternatives. In addition, in the fall of 1975, when the Respondent resumed production, had it consulted with the Union as the employee representative, it is unlikely that it would have rehired only 4 of the 44 SDO employees whom it had terminated earlier that year. It is now found that although the Respondent may have had economic justification for the layoff of a substantial number of the employees in the SDO Department during the spring of 1975, it clearly had a duty to bargain with the UAW as to the effects of such layoffs on the unit employees and also on the manner and order in which those employees would be recalled to duty when production was resumed. Trans- marine Navigation Corporation, and its Subsidiary, Interna- tional Terminals, Inc., 170 NLRB 389 (1968); Stanley Oil Company, Inc., 213 NLRB 219, 225 (1974); Interstate Tool Co., Inc., 177 NLRB 686, 687 (1969); but see: Sunstrand Heat Transfer, Inc. v. N.LR.B., 538 F.2d 1257 (C.A. 7, 1976). Accordingly, it is now found that the Respondent had a statutory obligation to meet and bargain with the Union as to both the terminations it effected in the SDO Department on April 4 and June 20, 1975, and that it had a further obligation to meet and bargain with the UAW as to the manner in which it would recruit old and new employees later in the year when it resumed production in that department. In failing to do so, the Respondent violated Section 8(aX5) and (1) of the Act. CONCLUSIONS OF LAW 1. The Respondent is engaged in commerce and the Union is a labor organization, all within the meaning of the Act. 2. All hourly paid production and maintenance em- ployees at the Employer's East Jackson, Mississippi, plant, excluding office clericals, technical employees, profession- als, guards and supervisors as defined in Section 2(11) of the Act, constitute an appropriate unit for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 3. At all times material herein the Union has been the exclusive collective-bargaining representative of the Re- spondent's employees in the aforesaid unit within the meaning of Section 9(a) of the Act. 4. By refusing, since March 21, 1975, to bargain collectively in good faith with the Union as the exclusive Honths 1973 1974 1975 1976 Jan.-June 54 4O 12 28 July-Dec. 49 36 14 28 i4 See Appendix A, attached hereto. 355 DECISIONS OF NATIONAL LABOR RELATIONS BOARD representative of its employees in the aforesaid unit, by terminating 44 members of the above-described unit without reference to the Union, by recalling certain of those individuals only as new employees, and by engaging in other unilateral changes in the terms and conditions of employment the Respondent has engaged, and is engaging, in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 5. By interfering with, restraining, and coercing its employees in the exercise of rights guaranteed in Section 7 of the Act, the Respondent has engaged, and is engaging, in unfair labor practices within the meaning of Section 8(aX)(1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices, it will be recommended that the Respondent be ordered to cease and desist therefrom and that it take certain affirmative action designed to effectuate the policies of the Act. In their brief, counsel for the General Counsel have proposed that in the event it is found that the terminations were justified, at least in part by economic considerations, the Respondent should be required to remedy the effects which stemmed from its unlawful refusal to bargain with the Union over the effect of the termination of the 44 unit employees it separated in the spring of 1975 and the failure to recall those employees upon the subsequent reopening of the SDO Department. There is merit to that position. Because of the Respondent's unlawful unilateral termina- tion of the employees in the SDO Department the strength of the bargaining agent there has been largely dissipated. Consequently, in order to assure some measure of mean- ingful bargaining to the Union, the type of remedial order adopted by the Board in Transmarine, supra, and related cases,15 will be recommended here. Thus, the Respondent should be ordered to bargain with the Union, upon request, and, in particular, it must bargain about the effects of the terminations in the SDO Department in April and June 1975. Further, it will be recommended that the Respondent be ordered to pay those employees who were terminated during the latter period1 6 amounts at the rate of their normal wages when last in the Respondent's employ from 5 days after the date of this Decision until the occurrence of the earliest of the following conditions: (I) the date the Respondent bargains to agreement with the Union; (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 Respon- dent's 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 is Walter Pape, Inc., 205 NLRB 719, 720-721 (1973); Summit Tooling Company, et al., 195 NLRB 479, 480 (1972); Interstate Tool Co., Inc., 177 NLRB 686, 687-688 (1969). 16 The names of these employees are set forth in Appendix B, attached hereto. 1T In the event no exceptions are filed as provided by Sec. 102.46 of the employees exceed the amount he would have earned as wages from the date of his termination to the time he secured equivalent employment, or the date on which the Respondent shall have offered to bargain, which ever 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. Further, to effectuate the purposes of the Act, it will be recommended that, for all those employees not reinstated to their former jobs in the SDO Department, the Respon- dent be ordered to establish a preferential hiring list, following the system of seniority, if any, used in the conduct of its business, and if the skills of the terminated employees are needed in any part of the Respondent's facilities, at that time the Respondent shall offer reinstate- ment to those employees. Summit Tooling Co., ibid, Thompson Transport Company, Inc., 165 NLRB 740, 747- 748 (1967). In view of the nature and extent of the unfair labor practices which the Respondent has committed, it is also recommended that the Respondent be ordered to cease and desist from interfering in any other manner with the rights of its employees to enjoy the statutory guarantees of self-organization. Upon the foregoing findings of fact, conclusions of law and the entire record, and pursuant to Section 10(c) of the Act, there is issued the following recommended: ORDER1 7 The Respondent, Allis-Chalmers Corporation, East Jack- son, Mississippi, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing and refusing to bargain with International Union, United Automobile, Aerospace & Agricultural Implement Workers of America, UAW, in the unit found appropriate herein. (b) Unilaterally changing the terms and conditions of employment of its represented employees without bargain- ing with their representative. (c) In any other manner interfering with, restraining, or coercing its employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Upon request, bargain with the aforesaid Union, as the exclusive representative of all employees in the appro- priate unit, and, if an understanding is reached, embody such understanding in a signed agreement. The appropriate unit is: All hourly paid production and maintenance employ- ees at the East Jackson, Mississippi, plant, excluding 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. 356 ALLIS-CHALMERS CORP. office clericals, technical employees, professionals, guards and supervisors as defined in the Act. (b) Rescind all unilateral changes in the terms and conditions of employment in the SDO Department made since March 21, 1975, and make no further changes without consulting the aforesaid Union. (c) Make whole the employees in the SDO Department who were terminated on April 4 and on June 20, 1975, in the manner set forth in the section of this Decision entitled "The Remedy." (d) Preserve, and, upon request, make available to the Board, or its agents, for examination and copying, all payroll records and reports, and all other records necessary to analyze the amount of backpay due. (e) Post at its plant in East Jackson, Mississippi, copies of the attached notice marked "Appendix." 18 Copies of said notice, on forms provided by the Regional Director for Region 15, after being duly signed by the Respondent's authorized representative, shall be posted by it for a period of 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are custom- arily posted. Reasonable steps shall be taken by the Respondent to ensure that said notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director for Region 15, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. '8 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 read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX A The average production and ship- rents of SDO breakers by 6-month periods is set forth below: Table A Average Monthly SDO Production and Shipments by 6-month Periods Months Jan.-June July-Dec. 1973 25 1974 1975 42 47 54 8 1976 24 24 The following table illustrates the decline in tle backlog of SDO orders from the time plant went into operation until the end of 1976: Table B Backlog of SnO Orders ?Months Jan .-June July-Dec. 1975 1976 61 29 23 25 The monthly backlog statistics are set forth below: Table C Monthly Backlog of SDO Orders " onths Jan. Feb. Mar. Apr. may Jun e July Aug. Sept. Oct. Nov. Dec. 1973 49 88 10 103 108 114 121 1974 1 46 206 252 269 273 253 239 206 188 146 132 114 1975 106 79 61 64 31 26 0 0 9 38 40 54 1976 48 29 18 24 31 22 22 28 20 10 33 37 APPENDIX B Table I SDO Employees terminated Apr. 4, 1975 Tommy C. Adams Alfred Davis George E. Davis Freddie Edwards Paul David Foster N. C. Cayden Buddy Ilillard Edward Jackson Joseph Jackson, Jr. Clarence C. James Ceorge Kelly L. L. Lampkin James Otis Lee Randy L. 11cCarty MHark Neely Robert Joe Pierce Charles Powell Rickey Powell Robert G. Quinby Tymon Rankin Ornemus Reed Willie Robbins Billy J. Runnels Thomas Thornton Joe Ualker Cory D. Williams John R. Williams Table II snO Employees te: Tin 9Af 1( Daniel Allen Jerry ). Burkes James E. Carter Jerry Wayne Cooper Charlie Foster Jack I1. Gardner Joe N. Henderson James Nl. Jones Floyd L. 1973 1974 - 233 106 171 rminated Q7t Jonny L. Kitchens Donald C. M-foore Walter J. Reed Percy Robert Smith Danny Sturgis Henry T. Williams V. A. Wolverton Norman A. Woodthorpe Young, Jr. 357