Valley Nitrogen Producers, Inc.

208 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Valley Nitrogen Producers, Inc. and International Un- ion of Petroleum and Industrial Workers, Seafarers International Union of North America, AFL-CIO. Case 31-CA-3554 November 12, 1973 DECISION AND ORDER BY MEMBERS FANNING, KENNEDY, AND PENELLO On June 29, 1973, Administrative Law Judge George Christensen issued the attached Decision in this proceeding. Thereafter, Respondent filed excep- tions and a supporting brief, General Counsel filed cross-exceptions, and a brief in support thereof and in answer to Respondent's exceptions, and Charging Party filed a brief in support of Decision, findings, conclusions, and recommended Order of the Admin- istrative Law Judge. 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, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order as modified herein. 1. We find no merit in Respondent's exceptions to the Administrative Law Judge's conclusion that it is a successor employer. It is well established that an enterprise which continues the "employing industry" of a predecessor employer is properly regarded as a successor employer whenever it uses substantially the same facilities and work force to produce the same basic products for essentially the same customers in the same geographic area.' Utilizing these guidelines, Respondent fits the definition of a successor employ- er. The physical facilities utilized by Respondent are substantially those of A.F.C., Inc. (hereinafter AFC), the predecessor. Respondent purchased all of AFC's plant, equipment, and inventory, including its six production operations at North Bena, South Bena, and Edison. In the ensuing weeks of operation after 1 Ranch-Way, Inc., 183 NLRB 1271. 2 Respondent Plant Manager Baker testified that both before and after the takeover, 17 types of fertilizer were made at the AFC facilities. Although there have been some changes in the manufacturing procedures, these changes are not so substantial as to warrant a finding that Respondent's operation is so changed that it is not a successor employer. The record also reveals that a substantial amount of both Respondent's and AFC's retail sales consisted of pesticides, practically all of which were purchased from other sources and resold to users. 3 At least 60 percent before takeover; at least 75 percent after the takeover. 4 Respondent hopes to add more customers of its own when it takes over another fertilizer distributor and former rival of AFC. But even if this the January 11, 1973, takeover, Respondent contin- ued five out of the six manufacturing operations at these three locations. The record further shows that after the takeover, Respondent has used the AFC facilities primarily to produce components of fertiliz- ers, whereas AFC had produced primarily the finished fertilizer product. Thus, the, product pro- i duced by Respondent has varied somewhat in grade or chemical composition from the product produced by AFC. However, such relatively small variances are not sufficient to justify a finding that the employing industry has changed. Thus, we find that Respondent, in utilizing the predecessor's facilities, has substantially continued the predecessor's opera- tions of producing and selling fertilizers and fertilizer components.2 With regard to customers serviced, the record indicates that both before and after the takeover total revenue of AFC and Respondent was derived chiefly from sales to retail customers i.e., farmers and ranchers.3 And Respondent has retained nearly all of AFC's 500 active customers while adding on only 20 of its own.4 With regard to work force, there is a substantial identity between the employee complements of Respondent and its predecessor, AFC. Immediately upon takeover, Respondent hired 21 field service employees includ- ing all 20 of the field service employees who were working for AFC on January 10. By January 26, Respondent had hired 55 production and mainte- nance employees, the essential substance of its ultimate 62-man production and maintenance com- plement.5 Of these 55 employees hired by January 26, 50 were formerly AFC production and mainte- nance employees. Combining the field service and production and maintenance employees, Respon- dent, as of January 26, 1973, employed 76 unit employees, 70 of which had been employed in such unit by predecessor AFC.6 Finally, while the occupa- tional classification of these employees has changed, their actual duties have remained substantially unchanged since the takeover. For all the foregoing reasons, we find in agreement with the Administra- tive Law Judge that Respondent is a successor employer.? 2. We agree with the Administrative Law Judge's conclusion that Respondent, as a successor employ- takeover takes place, only 200 more customers are anticipated. 5 The remaining seven employees were hired by May 3. 6 The Administrative Law Judge's figures, which differ slightly, are hereby corrected. 7 In so concluding, we are not unmindful of the changes Respondent instituted in its operations after January 26. Specifically, two separate manufacturing operations at South Bena and Edison were permanently shut down on February 12 and 28, respectively, and equipment was altered within another manufacturing operation at South Bena on March 15 so that a different type of fertilizer could be produced. The closedowns at South Bena and Edison resulted in a layoff of 13 employees in late February. There is little evidence, however, indicating that such changes were contemplated by Respondent at the time of takeover of AFC. In fact, there 207 NLRB No. 41 VALLEY NITROGEN PRODUCERS, INC. 209 er, was obligated to bargain with the Union and failed to meet that obligation. As of January 26, 1973, as noted earlier, a representative complement of 76 employees had been hired,8 70 of them former AFC employees, and the duty to bargain with the Union therefore matured.9 At this point in time, only seven employees, at most, had communicated to Respondent Plant Manager Baker their hopes that the Union would not continue representing the unit employees-10 Baker also testified that he had learned from a couple of employees, prior to the takeover, that a rival union petition was being circulated among the employees. This information was then communicated to Respondent's Personnel Director Lloyd on January 3, 1973, a week before the takeover. The sum total of evidence of employee disaffection available to Respondent as of January 26, 1973, is insufficient to support Respondent's claim of doubt in the Union's majority status. The 7 cited instances of employee dissatisfaction with the Union are relatively insignificant given the 70-man contingent of ex-AFC employees who were hired by Respondent as of January 26. As for the alleged rival union petition, Respondent could not attach much weight to a hearsay report of the existence of the petition when it had no information as to the number of employees who actually signed the petition. We therefore conclude that at the time the duty to bargain with the Union matured the Respondent did not have a sufficient basis to doubt the Union's majority status among the unit employees. In so concluding, we need not analyze, as did the Administrative Law Judge, the evidence of employee dissatisfaction with the Union after January 26, 1973, as to its persuasiveness, reliability, or admissibility under the hearsay rule. Assuming, arguendo, such evidence was accurately gauged from impeccable sources, it was vitiated by Respondent's preexisting unlawful refusal to bargain with the Union, and will be accorded no weight whatsoever.[[ is substantial evidence tending to prove that the bulk of the operational changes were effected by Respondent due to subsequent unexpected developments beyond its control. Respondent's Plant Manager Baker testified that the February 28 shutdown of the Edison operation , the largest to be so terminated, was due to pollution control problems . Moreover, in a written announcement to its new employees on January 18, Respondent made no reference either to any future cessation or cutback of production. or to any future possibility of layoff. Even if there was substantial evidence that the changes made by Respondent were contemplated at the time of takeover, we do not regard them as so substantial as to take Respondent out of the status of successorship. Respondent is still in the business of producing and distributing fertilizer-related products and pesticides, and uses all three AFC manufacturing facilities to a greater or lesser extent Also, we do not regard the layoff of 13 employees. 8 of them ex-AFC personnel, as substantial given the 76-man work force as of January 26 3. Respondent has excepted to the Administrative Law Judge's conclusion that Respondent has violat- ed Section 8(a)(5) and (1) of the Act. We agree with the Administrative Law Judge that Respondent violated Section 8(a)(5) and (1) by refusing to bargain with the Union on demand on and after January 26, 1973, when Respondent had hired a representative complement of employees, the vast majority of whom were ex-AFC employees.12 We do not, however, accept the Administrative Law Judge's further finding of an 8(a)(5) violation in Respon- dent's unilateral changes in terms and conditions of employment subsequent to January 26, as such violations were not alleged in the complaint and not fully litigated at the hearing. We therefore find merit in Respondent's exception to the limited extent that the 8(a)(5) violation should not be grounded on any unilateral changes in working conditions after its duty to bargain had matured. 13 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, Valley Nitrogen Producers, Inc., Kern County, California, its officers, agents, successors, and as- signs, shall take the action set forth in the said recommended Order as modified herein. 1. Substitute the following for paragraph 1: 1. Cease and desist from failing or refusing to recognize, meet, or bargain collectively with the Union, upon request, as the exclusive bargaining representative of its production, maintenance, and field service employees. 2. Delete subparagraphs 2(a), 2(b), and 2(d) and reletter the remaining subparagraphs accordingly. 3. Substitute the attached notice for that of the Administrative Law Judge. N We need not decide whether Respondent had, in fact, hired a representative complement prior to that date 9 The Union was certified by the Board on April 15, 1970, and thereafter executed a contract with AFC. The second and last contract between the Union and AFC was executed on February 3. 1972, to be effective until January 14, 1974. The contract contained recognition and union-shop provisions. 10 Baker also testified that prior to the takeover "some" employees had informed him of their dissatisfaction with the present Union's representa- tion. However, no details were given as to the number of employees expressing this dissatisfaction or the names of such employees Ii Medo Photo Supply Corp v. N.L R B., 321 U S 678. 12 See N LR. B v. Burns International Security Services, Inc., 406 U.S. 272. 13 In so finding we are not making any judgment as to the merit of the charges which the General Counsel, in his brief, advised us are pending with regard to these alleged unilateral changes 210 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing in which all parties appeared and had the opportunity to offer evidence, findings have been entered that we violated the National Labor Rela- tions Act by failing to consult and bargain with the International Union of Petroleum and Industrial Workers, Seafarers International Union of North America, AFL-CIO. As a result of those findings, we have been ordered to do the following, and therefore: WE WILL recognize and bargain collectively with the International Union of Petroleum and Industrial Workers, Seafarers International Un- ion of North America, AFL-CIO, concerning the wages, rates of pay, hours, and working condi- tions of our production, maintenance, and field service employees and, ifif we reach agreement with that Union on these subjects, we shall reduce that agreement to writing and sign it. VALLEY NITROGEN PRODUCERS, 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 concerning this notice or compli- ance with its 'provisions may be directed to the Board's Office, Federal Building, Room 12100, 11000 Wilshire Boulevard, Los Angeles, California 90024, Telephone 213-824-7352. ' DECISION STATEMENT OF THE CASE GEORGE CHRISTENSEN, Administrative Law Judge: On May 16, and 17, 1973,1 I presided over a hearing at Bakersfield, California, to try issues raised by a complaint issued on March 30 on the basis of a charge and two amended charges filed by International Union of Petrole- um and Industrial Workers, Seafarers International Union of North America, AFL-C102 ON January 26, February 22, and March 7, respectively. The Complaint alleged that Valley Nitrogen- Producers, Inc.3 violated Section 8(a)(5) and (1) of the National Labor Relations Act, as amended (hereafter the Act), following purchase of the assets and business of AFC, Inc.,4 and hire of most of AFC's employees, 'by avoiding and, finally, denying the request of the Union (the representative of a unit of AFC's employees prior to the sale) for recognition and bargaining, and by changing the wages, rates of pay, hours, and working conditions of the unit employees without prior notice to or bargaining with the Union. VNP denies it is a successor employer within the meaning of the Act, denies the Union represented a majority of its employees within an appropriate unit when it requested bargaining, ' denies the unit sought to be represented by the Union is an appropriate unit for collective-bargaining purposes, denies it has failed or refused to bargain in good faith with the Union, and denies that it has violated the Act. The issues joined by the parties and litigated at the hearing are: 1. The appropriateness of the unit; 2. Whether the Union at times pertinent represented a majority of employees within such a unit; 3. Whether VNP was a successor employer to AFC as the term "successor" has been defined and applied under the Act; and 4. Whether VNP has failed or refused to bargain in good faith with the Union. The parties appeared by counsel at the hearing and were afforded full opportunity to adduce evidence, examine and cross-examine witnesses, argue, and file briefs. Briefs have been received from the General Counsel and VNP. Based upon my review of the entire record, observation of the witnesses, perusal of the briefs and research, I enter the following: FINDINGS OF FACT 1. JURISDICTION AND LABOR ORGANIZATION The Complaint alleged, the Answer admitted, and I find that VNP at all times material was an employer engaged in commerce in a business affecting commerce, and the Union was a labor organization, as those terms are defined in Section 2(2), (5), (6), and (7) of the Act. II. THE ALLEGED UNFAIR LABOR PRACTICES A. The Union Certification and Contract Negotiations On April 15, 1970, Region 31 ruled that all AFC production, maintenance, and field service employees, excluding all professional employees , office clerical em- ployees, guards, and supervisors, as defined in the Act, constituted a unit appropriate for collective-bargaining purposes within the meaning of Section 9 of the Act and certified that a majority of the employees in that unit, after i Read 1973 after all subsequent date references omitting the year. 3 Hereafter called VNP. 2 Hereafter called the Union . 4 Hereafter called AFC. VALLEY NITROGEN PRODUCERS, INC. 211 a secret-ballot election, had -selected the Union as their exclusive collective-bargaining representative.5 On or about August 24, 1970, AFC and the Union executed a collective-bargaining contract covering the unit employees for a term extending from August 24, 1970, through August 24, 1971. AFC and the Union executed a second contract on February 3, 1972, for a term extending from January 15, 1972, through January 14, 1974. The contract contained recognition and union-shop provisions. B. AFC's Operations For a number of years prior to January 10, AFC was engaged in the manufacture of fertilizers, both liquid and solid or dry, and the sale and distribution of such fertilizers, as well as pesticides,6 to farmers in Kern County, California.? AFC conducted its manufacturing operations in three areas called North Bena, South Bena, and Edison, all in Kern County. The former two areas were adjacent. AFC conducted its sales and field service operations from three locations within Kern County, namely, Edison, Buttonwil- low, and Delano. Immediately prior to January 10, AFC employed 16 production workers at North Bena, 28 production workers at South Bena, and 17 production workers at Edison. It also employed 5 auto mechanics, 17 maintenance men, 15 shipping and receiving department employees, and 2 liquid fertilizer employees at these locations. Twenty field service employees were assigned to'theEdison, Buttonwillow, and Delano locations, for a total of 120 employees within the certified and contract-covered unit. The production workers were classified as senior operator (plant), operator A (plant), operator B (plant), senior operator (liquid fertilizer), operator (liquid fertiliz- er), gyp farm operator, operator (dry mix), and plant helper. The maintenance employees were classified as leadman" (auto), mechanic (auto), leadman (repairman welder), repairman- welder, electrician, craft helper, and utility man. The shipping and receiving department employees were classified as yardman, inventory, scale- man, payloader drive, truckdriver, bagger, and bag stacker. The field service employees were classified as field servicemen, tank truckdrivers, kitman and pump & gauge repairman. At its North Bena operations, AFC partially processed raw materials secured from Swift and Company, Shell, Chevron, Collier, Stauffer, and like companies into sulphuric acid and phosphoric acid fertilizers which, for the most part, were then transferred either to South Bena or Edison for further processing. At South Bena, the acids were converted to single super fines (granules) and then single super pellets, sold as a dry fertilizer, a final product; ammonium sulphate was also produced, half of which went to Edison while the other half was sold as a liquid fertilizer, also a final product. At Edison, ammonium phosphate, a liquid fertilizer and a final product, was manufactured. Of the Edison final product, 50 percent was sold and delivered to AFC's farmer-customers and 50 percent was sold and delivered either to manufacturers who supplied raw materials to AFC (exchanges) or to other manufactur- ers. Of the South Bena final product, 10 percent was sold and delivered to AFC's farmer-customers and the balance to manufacturers on the basis just noted . Of the sulphuric acid produced by North Bena and treated as a final product 12 percent (the remaining 88 percent was sent to South Bena and Edison for further processing) was sold and delivered to AFC's farmer-customers. Pesticides were purchased in concentrated form and either diluted or blended at Edison to formulate a final product for sale to and use by AFC's farmer-customers. Approximately 60 percent ' of AFC's retail sales were fertilizers and 40 percent were pesticides. C. The Sale/Purchase Negotiations and Agreement In January, AFC and VNP engaged in negotiations for the sale of AFC's property, plants, equipment, and business to VNP. In the course of those negotiations (on January 3), AFC's plant manager, Raymond Baker, informed James Lloyd, VNP's director of personnel, of the AFC-Union contract. AFC and VNP agreed that AFC would cease to operate the business on January 10 and VNP would takeover on January 11. It was agreed that VNP would purchase AFC's proper- ties, plants, equipment, and inventory and take over its customer accounts. VNP did not assume any obligation with regard to the AFC-Union contract or AFC's employ- ees. D. The Terminations, Re-Hires and Business January 10-26 AFC terminated the AFC-Union contract and all its employees on January 10, paying them certain benefits accumulated under the contract to that date. On January 11, VNP hired' all the- former AFC supervisory, office clerical, sales, and field service employ- ees. Only the last category of employees were covered by the 1970 certification and the recognition provision of the 1972-74 AFC-union contract. Their wages, rates of pay, hours, and working conditions were unchanged. Their work was unchanged. On the same date, VNP began to interview and to hire production and maintenance employees. By January 26 (the date the original charge was filed by the Union), VNP had hired 75 production and mainte- nance employees. Of the 75, 69, were formerly-employed by AFC to perform the same or similar jobs for which they were hired by VNP. - While VNP conducted essentially the same operations, AFC had conducted at North Bena, South Bena,- and Edison, with essentially the same production and mainte- 5 Case 31-RC-1346. 6 AFC did not manufacture pesticides but purchased pesticide concen- trates and either blended or diluted them for field use by its customers. r Ninety-eight percent of AFC's retail (to farmer) sales were made in Kern County, California, to approximately 500 farmers. 212 DECISIONS OF NATIONAL LABOR RELATIONS BOARD nance employees AFC had employed during this period (January 10-26),$ it instituted an entirely different sched- ule of wages, rates of pay, hours, and working conditions, utilizing the job classification, wage rate, wage progression, fringe benefit, and shift system in effect at its plant at Helm, California.9 For the most part, the new wage and fringe benefits were a substantial improvement over those received by AFC's production and maintenance employees under terms of the AFC-Union contract. For example, three additional holidays were scheduled as paid holidays, for a total of nine paid holidays, instead of six specified in the AFC-Union contract; a superior vacation plan was placed in effect; a profit-sharing and retirement plan was offered (AFC had none); etc. Shift starting and ending times also were changed by VNP from those established under the AFC-Union contract. In instituting its Helm job classification system, VNP did not hire employees for the AFC-Union contract classifica- tions of leadman, auto; leadman, repairman/welder; and senior operator, liquid fertilizer and plant.t° Instead, it took these jobs out of the unit by classifying the employees hired to exercise the functions performed by the AFC employees in those classifications as supervisors. While VNP hired employees to perform the functions of AFC employees classified as gyp farm operator, plant operator A & B, liquid fertilizer operator, dry mix operator, plant helper, repairman-welder, electrician, auto mechanic, craft helper, scaleman, inventory man, yardman, bag stacker, bagger, payloader driver, truckdriver, and utility man, it classified the repairman-welders, electricians, auto mechanics, and craft helpers as maintenance A, B & C; the gyp farm operators, A & B plant operators, liquid fertilizer operators, dry mix operators, and plant helpers as operators B or C; and the scalemen, inventory man, yardman, bag stackers, baggers, payloader drivers, truck- drivers, and utility men as utilitymen A, B or C. E. The Union Bargaining Request Having learned of the impending sale/purchase of AFC's business, etc., on January 9 the Union directed a telegram to VNP noting its contract status as the recognized exclusive collective-bargaining representative of AFC's 'production, maintenance, and field service employ- ees and requesting that VNP meet and bargain concerning those employees' rights. VNP did not reply to the telegram, but on January 18 circulated a letter among its production, maintenance, and field service employees informing them VNP had not assumed any obligations under the AFC-union contract and suggesting they direct any inquiries they had concern- ing their rights under that contract to their former employer, AFC. By that date, VNP had hired a substantial and representative complement of production and mainte- nance employees composed almost entirely of former AFC production and maintenance employees and had also retained all of AFC's field service employees. On January 19, Park Orrison, a representative of the International union with which the Union was affiliated and the author of the January 9 telegram, telephoned Lloyd at VNP's headquarters. He referred to his telegram and asked when they could meet. Lloyd replied VNP was not fully staffed yet, but he had no objection to a meeting when staffing was completed. Orrison asked him to so state in writing. Lloyd agreed to do so. On January 23, not having received anything from Lloyd, Orrison addressed a letter to him essentially repeating his January 9 telegram , and followed this communication with the January 26 charge which led to this proceeding. F. The Company's Response On February 2, Lloyd acknowledged the January 19 telephone conversation with Orrison and his receipt of Orrison's January 23 letter renewing the Union's January 9 request to negotiate. Lloyd stated he was willing to meet with the Union when "employment conditions" were resolved, hopefully by February 15, but would neither recognize the Union as the bargaining representative of the unit employees nor negotiate with it concerning their wages, hours, etc. On or about February 7, VNP Attorney Morgan advised Union Attorney Steinsapir that VNP doubted a majority of the unit employees desired representation by the Union, that it was investigating this question, and that he would recommend that VNP recognize and bargain with the Union if the investigation disclosed that the Union represented a majority of the unit employees. On February 16, Lloyd telephoned and arranged to meet with Orrison on February 23 at Bakersfield. On the course of the telephone conversation, Orrison renewed his several January requests for bargaining. Lloyd replied by asking Orrison why he believed VNP was obligated to bargain with the Union. Orrison rejoined with a statement that VNP was legally obligated to do so and a suggestion that Lloyd consult with his attorney. Lloyd ended the conversa- tion by repeating his November 2 position. On February 22 the Union filed the first amended charge. The meeting occurred on schedule. In the course of the meeting, Orrison repeated his January requests. Lloyd replied in much the same fashion he had replied on February 2 and Morgan had stated on February 7. The meeting ended with a promise by Lloyd to notify Orrison, following completion of its alleged investigation into the question of the Union's representative status among the unit employees, whether or not VNP would recognize and bargain with the Union concerning those employees' wages, rates of pay, hours, and working conditions. There were no further contacts. between the Union and VNP. On March 2 Lloyd dictated a letter to Orrison rejecting the Union's repeated requests for negotiations; however, on advice of counsel, he did not send the letter.I I On or about March 5 VNP Attorney Morgan advised 8 VNP did not continue the production of ammonium sulphate at South 10 These were shift bosses under AFC. Bena when it assumed operations at South Bena on January 11 i i Lloyd testified he was incensed over Orrison's failure to advise him of 9 VNP's production and maintenance employees at Helm at times the Union filing of the first amended charge the day previous when they met pertinent were represented by the Chemical Workers Union and covered by on February 23 and this omission, plus his displeasure over having to a contract between VNP and that Union employ defense counsel as a result of Orrison's resort to unfair labor VALLEY NITROGEN PRODUCERS, INC. Region 31 that VNP desired to submit any questions concerning the Union's representative status among its employees for determination by a secret-ballot election. On March 7 the Union filed its second amended charge. On March 30 the complaint was issued. In early April Lloyd conducted a general meeting among the Company's unit employees at which he announced that the Union had asked VNP to recognize and bargain with it concerning their wages, etc., but the Company had decided not to do so unless and until an election was held and a majority of the unit employees voted for representation by the Union. G. Company Operational and Employee Charges Following Receipt of the Original Charge Over this same time period (between January 26, when the original charge was filed, and May 16, when the hearing in this proceeding was held), VNP made a number of changes affecting its operations of the former AFC facilities and the unit employees. On February 12, VNP discontinued the manufacture of single super fines at South Bena; on February 28, it shut down all manufacturing operations at Edison; on March 15, it shut down the manufacture of single super pellets at South Bena. As a result of these changes, there was a substantial layoff of production employees, a small reduction in the number of maintenance employees, and an increase in the number of receiving and shipping employees.12 The total unit was reduced from the 95 production, maintenance, and field service employees in VNP's service on January 26 to a unit of 80 of such employees. In March, VNP conformed the wages, rates of pay, hours, and working conditions of its field service employ- ees where they differed from its companywide provisions, i.e., with regard to profit sharing and retirement, health and welfare, holidays, vacations, etc. H. Analysis and Conclusions 1. The unit As noted heretofore, on April 15, 1970, the Union was certified by the Board as the exclusive collective-bargain- ing representative of all of AFC's production, maintenance and field service employees employed at North Bena, South Bena, and Edison and at its Edison, Buttonwillow, and Delano field service stations, excluding professional employees, office clerical employees, guards, and supervi- sors. Findings have also been entered that on February 3, 1973, AFC and the Union executed a second of two contracts wherein AFC recognized the Union as the exclusive collective-bargaining representative of its em- ployees within the unit just set forth, and that VNP was aware of this contract at the time it purchased the business practice charges, figured heavily in his decision to deny the Union's requests. 12 The former final processing operations at Edison were shifted to VNP's Helm plant, this necessitated shipment of the partially processed 213 of AFC and hired AFC's former production, maintenance and field service employees to continue the business. VNP contends, however, that the certified and recogniz- ed unit set out heretofore is inappropriate for collective- bargaining purposes under the Act on the ground field service employees should be excluded from the unit and relies upon the following as basis for its position: 1. Production and maintenance employees and field service employees are separately supervised. 2. The work stations of production and maintenance employees are separately located from the work stations of field service employees. 3. Production and maintenance employees and field service employees do not have the same lunch and rest break hours or facilities and have separate parking facilities. 4. There is no interchange between production and maintenance employees and field service employees. 5. Production and maintenance employees are hourly rated while field service employees are salaried. 6. Production and maintenance employees work regu- lar shifts while field service employees are on call and work wherever farmer-growers require their services. Based on these factors, VNP contends there is no community of interest between production and mainte- nance and field service employees. I find and conclude, however, based on the Board's certification, the contract recognition and the history of bargaining, that the production and maintenance and field service employees employed by VNP at North Bena, South Bena, Edison, Buttonwillow, and Delano, excluding professional employees, office clerical employees, guards, and supervisors as defined in the Act, constitutes a unit appropriate for collective-bargaining purposes within the meaning of Section 9 of the Act. 2. Union representation On January 9, VNP was apprised by the Union of its representative status under the contract with respect to the unit just set forth. On January 10, all the unit employees were members of the Union. On January 11, VNP hired all of AFC's field service employees within the unit, continuing in effect their previous (January 10) wages, rates of pay, hours, and working conditions. Beginning with January 11, by mid-or late January, VNP hired a workforce of production and maintenance employ- ees consisting, almost without exception, of AFC's former production and maintenance employees. When an employer continues in his employ a predeces- sor employer's workforce, continues the predecessor's business, and an appropriate unit of the predecessor's employees was the contract recognized exclusive collective- bargaining representative of those employees, a presump- tion arises that the Union's majority representative status with the unit continues unchanged, unless rebutted by Bena Products to Helm and return shipment of final products from Helm to Edison for delivery to the farmer-customers and a larger number of receiving and shipping employees to handle such shipments. 214 DECISIONS OF NATIONAL LABOR RELATIONS BOARD substantial evidence. (Barrington Plaza and Tragniew, Inc., 185 NLRB 962, plus cases cited therein.) VNP attempted to rebut this presumption through the testimony of Raymond Baker, who was AFC's general manager immediately before the sale/purchase and VNP's general manager immediately thereafter. Baker testified that in late January he had conversations with unit employees Junior Stokes, Louis Myers, Ken Barnett, Orris Beck, and Thomas Knowles, wherein each of these employees approached him and asked him what VNP was going to do about the Union, he replied he didn't know, and they closed the conversation by stating either they didn't support the Union, they didn't want to work under the Union contract, or words to similar effect. Baker also testified to conversations in February with unit employees Dwayne Stokes, Jim Ash, and Douglas Walden, in which the same exchanges occurred. Baker further testified to conversations either in late January or early February with unit employees Norm Davis and Fred Cornell, wherein similar exchanges occurred. Baker finally testified that sometime in mid-March he and the automotive shop supervisor, Harvey Naten, shipping supervisor, Pete Hall, North Bena supervisor, Marcus Riano, and field service manager , J. Weaver, constructed a chart or poll of employee union sentiment based on those and allegedly similar conversations between unit employees and the five supervisors. They concluded from the chart or poll that a majority of the unit employees were opposed to representation by the Union. Baker had the chart or poll reproduced and distributed to the supervisors, with instructions to circulate it among the unit employees. Such evidence of employee sentiment is unreliable, since an employee, when engaging in conversation with supervi- sory personnel regarding his union sentiments, will tend to make statements he believes management would like to hear. It is also apparent that any alleged conversations between Naten, Hall, Riano, and Weaver and any unit employees are pure hearsay (based on Baker's recollection of reports from Naten, et. al. ), and are based upon a very limited polling by Baker. Not only that, all the conversa- tions Baker engaged in occurred after VNP's January 18 notice to the unit employees that it would not honor or observe the rates of pay, etc., they had previously received under the AFC-Union contract, after VNP unilaterally instituted new, substantially different, and improved rates of pay, etc., and some of them occurred after VNP unilaterally shifted some of the operations to its Helm plant and laid off a substantial number of unit employees, while VNP was dangling before the Union the representa- tion that it might bargain with it concerning these matters, which are of vital concern to the unit employees. VNP's conduct just described could not do other than undermine employee support of the Union and make it impossible to determine whether or not the Union would have been supported by a majority of the unit employees when VNP assembled a representative workforce 13 of 13 Mid to late January. 14 Sixty-nine out of seventy -five. 15 N.L. R. B. v. Burns International Security Services, Inc., 406 U.S. 272 (1972). AFC's former employees within the unit, but for that conduct. Based on the foregoing, I find and conclude that VNP not only failed to rebut the presumption of the Union's continued majority representative status within the unit after the takeover, VNP also prevented by its conduct an uncoerced, accurate assessment of employee support of the Union thereafter. I, therefore, find and conclude that since January I I the Union has represented a majority of VNP's employees within the unit heretofore described. 3. The successor issue At the date the Union filed the original charge in this case, January 26, VNP met all the definitions of a successor employer to AFC. VNP had taken physical possession of AFC's property, plants, outlets, equipment, and inventory, it had taken over AFC's farmer-customers, it had a production and maintenance workforce composed almost entirely 14 of former AFC production and mainte- nance employees, and it continued practically unchanged the manufacturing, maintenance, sales, and field service operations formerly conducted by AFC. While VNP made changes in its operations and reduced the number of its production and maintenance employees thereafter, those changes and reductions are suspect, inasmuch as they occurred after the Union filed the original charge, after VNP had been apprised of the Union's representative status and its desire to negotiate with VNP concerning any changes in the rates of pay, etc., of the unit employees, and after VNP had hired a full complement of production, maintenance, and field service employees and resumed the same business operations formerly conducted by AFC. Under these circumstances, I find and conclude that at the time the original charge was filed, VNP was a successor employer to AFC as that term has been defined and applied in cases arising under Section 8(a) of the Act. 4. The unfair labor practice The Board has recently ruled that while a successor employer may unilaterally set initial terms and conditions of employment for its employees which differ from those established by its predecessor when it is not "perfectly clear that (the successor) planned to retain all of the employees in the unit," 15 the successor nevertheless violates Section 8(a)(5) and (1) of the Act when it subsequently initiates new or changed terms and conditions from those initial terms without prior notice to or bargaining with the union representing its predecessor's employees. t6 Findings have been entered heretofore that VNP, following its assembly of a representative workforce of production, maintenance, and field service employees by mid-January, made substantial changes affecting those employees' wages, rates of pay, hours and working conditions without prior notice to or bargaining with the 16 Ranch-Way, Inc., 203 NLRB No. 118. VALLEY NITROGEN PRODUCERS, INC. Union. On February 12, VNP discontinued the manufac- ture of single super fines at South Bena; on February 28, it shut down all manufacturing operations at Edison; on March 15, it shut down the manufacture of single super pellets at. South Bena; concurrently, VNP laid off or transferred a substantial number of its production and maintenance employees. In March, VNP instituted new or substantially changed previous benefits enjoyed by its field service employees. All the foregoing changes were made without prior notice to or bargaining with the Union, despite its repeated requests dating from January 9 for bargaining with respect thereto. I, therefore, find and conclude that VNP, by effecting changes in the rates of pay, wages, hours, and conditions of employment of its unit employees from those established initially, without prior notice to or bargaining with the Union, thereby violated Section 8(a)(5) and (1) of the Act, and, additionally, by virtue of the following conduct. Faced with a repeated union request for bargaining concerning any changes in the rates of pay, etc., of the unit employees from those prevailing under AFC and aware of the pending unfair labor practice charge and the implica- tions of the "successor" doctrine, VNP persistently avoided giving the Union a final answer to its request, first on the ground it was still hiring, then on the ground employment conditions had not been fully resolved, and finally on the ground it doubted the Union's majority representative status among the unitremployees and was investigating the question. Then in March, still without informing the Union, it advised the Region it was willing to submit the representation question for determination by a secret- ballot election and finally, in April, still without notice to the Union, informed its unit employees it would not bargain with the Union until and unless the Union won such an election. Meanwhile, VNP made a number of changes in its operations seriously affecting the employment opportuni- ties of the unit employees and avoided the Union's repeated bargaining requests. Only after thoroughly undermining the Union's support among the employees by demonstrating its ability to ignore the Union while making substantial changes in areas affecting its employees' job security, rates of pay, etc., did VNP finally and indirectly (by notice to employees at an April meeting), reject the Union's request. A clearer example of bad-faith bargaining would be hard to find. While stalling the Union over its request and dissuading it from taking any action by representing it might accede to the request, VNP at the same time demonstrated its ability, unilaterally, to distribute or retract benefits and security and the Union's impotence to influence these matters, thereby undermining employee support of the Union. Then when it became confident union support among the employees was effectively undermined, VNP declared it would not bargain with the Union until it won a secret-ballot election. By so conducting itself, I find and conclude that VNP further violated Section 8(a)(5) and (1) of the Act. CONCLUSIONS OF LAW 215 1. At times material VNP was and is an employer engaged in commerce in a business affecting commerce and the Union was a labor , organization, as those terms are defined in Section 2(2), (5), (6), and (7) of the Act. 2. At times pertinent, a unit consisting of all of VNP's production, maintenance, and field service employees, excluding professional employees, office clerical employ- ees, guards, watchmen, and supervisors, as those terms are defined in the Act, constituted and continues to constitute an appropriate unit for collective-bargaining purposes within the meaning of Section 9 of the Act. 3. At times pertinent, the Union has been and is the duly designated exclusive collective-bargaining representa- tive of a majority of the employees within that unit. 4. For purposes of the Act, at times pertinent, VNP was a successor employer to AFC. 5. By making changes in the wages, rates of pay, hours, and working conditions of its production, maintenance, and field service employees subsequent to the initial terms without prior consultation and bargaining with the Union concerning such changes, and by its failure and refusal to bargain with the Union at its request, VNP violated Section 8(a)(5) and (1) of the Act. 6. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6y and (7) of the Act. THE REMEDY It having been found that VNP engaged in unfair labor practices in violation of Section 8(a)(5 ) and (1) of the Act, I shall recommend that VNP be directed to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. In order to make the unit employees whole for any losses they may have suffered by reason of VNP's unfair labor practices, I shall recommend that VNP be directed to restore any rights, privileges, or benefits they enjoyed on January 26, to compensate the unit employees for any losses they may have suffered by the discontinuation or reduction of any such privileges, rights or benefits thereafter, for a period commencing on the date the changes were made and extending to the date employees are made whole for such losses, together with interest thereon at the rate of 6 percent per annum. VNP shall not be required to lower any of the wages, rates of pay, hours or working conditions which have been increased beyond the level which existed on January 26. I shall further recommend that VNP be directed to recognize the Union as the exclusive collective-bargaining representative of its production, maintenance, and field service employees, to negotiate with the Union concerning the wages, rates of pay, hours, and working conditions of such employees either to impasse or to agreement, to reduce any agreement reached to writing, and to execute same. I shall finally recommend that VNP be directed to desist from making any changes in the currently effective wages, rates of pay, hours, and working , conditions of its production, maintenance, and field service employees (other than those necessitated by this Order), except by 216 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreement with the Union or after an impasse has been reached after negotiations with 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 issue the following recommended: ORDER 17 VNP, its officers, agents, successors, and assigns, shall: 1. Cease and desist from changing the wages, rates of pay, hours, or working conditions of its production, maintenance, and field service employees without prior consultation with the Union. 2. Take the following affirmative action necessary to effectuate the policies of the Act: (a) Restore to unit employees all rights, privileges, and benefits they received on January 26 wherever such rights, privileges and benefits have been lowered or discontinued since that date. (b) Make whole the unit employees in the manner set forth in the Section of this decision entitled "The Remedy" for any losses in rights, privileges, or benefits they may have suffered by reason of any reduction or discontinuance thereof on and after January 26 from those previously received by unit employees, for the period set forth in `The Remedy." (c) Recognize the Union as the exclusive collective- bargaining representative of its production, maintenance, and field service employees, bargain or consult with the Union at its request concerning the wages, rates of pay, hours, and working conditions of such employees, and 17 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. continue in effect, except as required by this Order, the present wages, rates of pay, hours and working conditions of such employees until such time as VNP, after bargaining in good faith with the Union, has reached either an impasse or an agreement with the Union concerning wages, rates of pay, hours and working conditions of such employees- If an agreement is reached, VNP shall reduce such agreement to writing and execute it. (d) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, health and welfare payment records, pension payment records, personnel records and reports, and all other records necessary to analyze the amount of money or other payments or benefits due under the terms of this Order. (e) Post at its places of business in Kern County, California, copies of the attached notice marked "Appen- dix."18 Copies of said notice, on forms provided by the Regional Director for Region 31, after being duly signed by VNP's authorized representative, shall be posted by it immediately upon receipt thereof, maintained by it for 60 consecutive days thereafter, in conspicuous places, includ- ing all places where notices to employees are customarily posted. Reasonable steps shall be taken by VNP to ensure that such notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director for Region 31, in writing, within 20 days from the date of this Order, what steps VNP has taken to comply herewith. 18 In the event 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."