Van's Packing Plant

692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Van's Packing Plant and Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Local No. 368. Case 19-CA-6400 June 18, 1974 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS JENKINS AND KENNEDY On February 5, 1974, Administrative Law Judge Irving Rogosin issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief. 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 brief and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge.' THE REMEDY Having found that the Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, we shall order that the Respondent cease and desist therefrom, and take certain affirmative action designed to effectuate the policies of the Act. As a result of the Respondent's unlawful failure to bargain about the effects of its closing of its wholesale slaughtering operation, the displaced employees have been denied an opportunity to bargain through their collective-bargaining repre- sentative at a time when the Respondent was still in need of their services, and a measure of balanced bargaining power existed. Meaningful bargaining cannot be assured until some measure of economic strength is restored to the Union. A bargaining order, therefore, cannot serve as an adequate remedy for unfair labor practices committed. Accordingly, we deem it necessary, in order to effectuate the purposes of the Act, to require the Respondent to bargain with the Union concerning the effects of the closing of its wholesale slaughtering operation on its employees, and shall accompany our order with a limited backpay requirement2 designed both to make whole the employees for losses suffered i We find the remedy, Order, and notice to employees in Interstate Tool Co., Inc, 177 NLRB 686, to be applicable to this case in view of Respondent's failure to bargain with the Union over the effects of its closing of its wholesale slaughtering operation. Accordingly, we have modified the remedy, Order and notice to employees contained in the Administrative Law Judge's Decision in this case to conform with the Board's decision in Interstate Tool Co, Inc. 2 We have indicated that backpay orders are an appropriate means of 211 NLRB No. 81 as a result of the violation and to recreate in some practicable manner a situation in which the parties' bargaining position is not entirely devoid of econom- ic consequences for the Respondent. We shall do so in this case by requiring the Respondent to pay backpay to its employees in a manner similar to that required in Transmarine Navigation Corporation, and its subsidiary, International Terminals, Inc., 170 NLRB 389. Thus the Respondent shall pay employ- ees backpay at the rate of their normal wages when last in Respondent's employ from 5 days after the date of this Decision and Order until the occurrence of the earliest of the following conditions: (1) the date the Respondent bargains to agreement with the Union on those subjects pertaining to the effects of the plant shutdown on its employees; (2) a bona fide impasse in bargaining; (3) the failure of the Union to request bargaining within 5 days of this Decision, or 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 employees exceed the amount he would have earned as wages from March 23, 1973, the date on which the Respondent terminated its wholesale slaughtering operations, to the time he secured equivalent employment elsewhere, or the date on which the Respondent shall have offered to bargain, whichever 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.3 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Van's Packing Plant, Boise, Idaho, its agents, successors, and assigns, shall: 1. Cease and desist from refusing to bargain with Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Local No. 368, with respect to the effects on employees of its termination of operations. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Pay the terminated employees their normal wages for the period set forth in this Decision. remedying 8(a)(5) violations of the type involved herein even where such violations are unaccompanied by a discriminatory shutdown of operations. Cf. Royal Plating and Polishing Co., Inc., 148 NLRB 545, 548, and cases cited therein. 3 Transmarine Navigation Corporation, supra For the reasons he expressed in Transmarme, Member Jenkins does not adopt the guarantee of at least 2 weeks' backpay. VAN'S PACKING PLANT (b) Upon request, bargain collectively with Amal- gamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Local No. 368, with respect to the effects on its employees of its termination of operations, and reduce to writing any agreement reached as a result of such bargaining. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary or useful in checking compliance with this Order. (d) Mail an exact copy of the attached notice marked "Appendix" to Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO,; Local No. 368, and to all the employees who were employed at its former place of business on March 23, 1973. Copies of said notice on forms provided by the Regional Director for Region 19, after being duly signed by Respondent's authorized representative, shall be mailed immediately upon request thereof, as hereinabove directed. (e) Notify the Regional Director for Region 19, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. APPENDIX NOTICE To EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL, upon request, bargain collectively with Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Local No. 368, with respect to the effects of closing our wholesale slaughtering operation at Boise, Idaho, upon the employees who were employed there, and reduce to writing any agreement reached as a result of such bargaining. WE WILL pay the employees who were em- ployed at the Boise plant their normal wages for a period required by a Decision and Order of the National Labor Relations Board. VAN'S PACKING PLANT (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 bed altered, defaced, or covered by any other material. 693 Any questions concerning this notice or compli- ance with its provisions may be directed to the Board's Office, 10th Floor, Republic Building, 1511 Third Avenue, Seattle, Washington 98101, Tele- phone 206-442-4532. DECISION STATEMENT OF THE CASE IRVING RooosrN, Administrative Law Judge: The complaint, issued on September 17, 1973, alleges that Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) and Section 2(6) and (7) of the Act. Specifically, the complaint alleges that Respondent (1) on about March 23, 1973, discontinued its wholesale operation, resulting in the layoff or termination of a number of its employees, without prior notice to the Union, the exclusive bargaining agent of its employees in an appropriate unit, and without offering the Union an opportunity to bargain concerning said discontinuance and its effect upon the unit employees, and on about April 11, 17, and May 1, 1973, refused to recognize the Union as the exclusive bargaining agent of said employees or to apply the existing collective-bargaining agreement to its retail employees; and (2) on about March 26, 1973, through its owner and agent, Wayne DeChambeau, notified employ- ees that he would thereafter operate "non-union," and would not apply the subsisting collective-bargaining agreement to said employees." Respondent's answer admits the procedural and jurisdic- tional allegations of the complaint ; acknowledges the execution of a collective-bargaining agreement, as a member of a multiemployer association, effective between January 11, 1971, and January 11, 1974; admits that the Union was the duly recognized exclusive bargaining agent of all production and maintenance employees in the meat- packing plant operated by Respondent, between 1952 and March 23, 1973, but denies that the Union has been the exclusive representative of employees in the retail meat market operated by Respondent under the name of Van's Country Meats since March 23, 1973, and generally denies the substantive allegations of the complaint. Pursuant to due notice, a formal hearing was held before me on November 27, 1973 , at Boise, Idaho. The General Counsel was represented at the hearing by counsel; Respondent, by a labor relations consultant, and the Charging Party, by the business agent of the Union. All parties were afforded full opportunity to be heard, to examine and cross-examine witnesses , to introduce oral and documentary evidence relevant and material to the' I Designations herein as follows: The General Counsel, unless otherwise noted or required by the context, his representative at the hearing; Van's Packing Plant, Respondent, the Company, or the Employer; Amalgamated (Meat Cutters and Butcher Workmen of North America, AFL-CIO, Local No. 368, the Charging Party or the Union; the National Labor Relations Act, as amended (61 Stat. 136, 73 Stat. 519,29 U.S.C. Sec. 151, et seq.) the Act; the National Labor Relations Board, the Board. The charge was filed and served on May 4, 1973. Unless otherwise indicated;all events occurred in 1973. 694 DECISIONS OF NATIONAL LABOR RELATIONS BOARD issues, to argue orally, and to file briefs and proposed findings of fact and conclusions of law. At the close of the hearing, the parties discussed the issues informally on the record, and, pursuant to an extension of time duly granted, filed briefs on or before December 28, 1973. No proposed findings of fact or conclusions of law have been filed by any of the parties. Upon the entire record in the case, and based upon the appearance and demeanor of the witnesses, and the briefs of the parties, which have been carefully considered, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT The complaint alleges, Respondent's answer admits, and it is hereby found that, at all times material herein, Van's Packing Plant, a sole proprietorship, owned and operated by Wayne DeChambeau, at Boise, Idaho, has been engaged in the sale at retail of meat and meat products. During the 12 months preceding issuance of the complaint, a representative period of its annual operations, Respon- dent's gross income from said business exceeded $500,000. The complaint further alleges , Respondent's answer admits, and it is hereby found that, at all times material herein, Respondent has been an employer engaged in commerce and in operations affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Local No. 368, the Union herein, is, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Introduction For some 20 years prior to November 1, 1972, Respon- dent was primarily engaged in the slaughtering and dressing of cattle and packing of meat for wholesale distribution to customers. Since 1952, Respondent, as a member of Southern Idaho Meat Packers Association, Inc., of Boise, Idaho, an employer association consisting of various meat packing companies located in Boise, Idaho, and vicinity, has been a party to successive collective- bargaining agreements, the most recent of which covers the term January 11, 1971, to January 11, 1974, automatically renewable annually thereafter in the absence of specified notice.2 Under this agreement, the Union is recognized as the exclusive bargaining agent of all production and maintenance employees, as set forth in Exhibit A," attached to the agreement, setting forth the job classifica- 2 The agreement was signed by the Association, referred to therein as the Employer, the Idaho Employer's Council, and five employer -members, including Respondent, designated in the agreement as the Companies, and the Union 3 The employees involved were Erma Canfield, James Earl, Jim Furer, tions and applicable wage scales in a dozen separate categories. Prior to November 1, 1972, Respondent employed 15 unit employees, all covered by the union-security, volun- tary dues, and initiation fees checkoff provisions of the contract, and the Union's pension fund and health and welfare benefits under a group insurance program of the Southern Idaho Meat Packers Association , Inc.3 These employees (excepting Canfield, also known as Stark, Loucks, and Thomas, who were terminated in the interim), continued in Respondent's employ, receiving the same wage rates, pension, health, and welfare benefits, and subject to the voluntary checkoff, from November 1, 1972, to March 23, 1973. Until November 1, 1972, Respondent continued in the business of slaughtering and dressing cattle and packing and selling, principally at wholesale, though to a lesser extent, at retail, meat and meat products to customers located in the Southern Idaho area. During this period, Respondent's retail sales, primarily to the "drop-in" trade, constituted about 8 or 10 percent of its total sales . Between November 1 and March 23, 1973, while Respondent continued its slaughtering and packing plant operations, this phase of its business progressively declined , as its retail activities expanded to 20 or 30 percent of total sales. B. The Change in Operations On March 23, 1973, Respondent discontinued its slaughtering and packing plant operation altogether, and has since engaged in the wholesale and retail sale of meat and meat products, of which between 90 and 95 percent of the total consisted of retail sales. There is no allegation or contention that the change in operations was motivated by a purpose to avoid Respondent's obligations under the collective-bargaining agreement or by any reason other than economic exigencies. Admittedly, however, Respon- dent did not notify the Union in advance of his contemplated change in operations or afford the Union an opportunity to bargain concerning such change or its effect on the unit employees. With the discontinuance of the packing plant operation on March 23, Respondent terminated six unit employees,4 leaving McBride and Shrum, both driver-salesmen (who were subsequently terminated on March 31), and Ruby Talaraskie, who had been hired sometime in January. Woods and Lemmon, who apparently were also termi- nated on March 23, were rehired on March 24, and resumed working on March 26. After Woods was rehired, he was primarily occupied working behind the display counters, though he also sliced carcasses and boned, ground, and packaged meat, as he had done prior to March 23. Lemmon's duties, both before and after March 23, were primarily in the packaging of meat products, although on occasion she also performed boning , grinding, and scraping during the same periods.5 In this change in Arlee Lemmon, V. R Loucks, Marilyn Markham, LeRoy McBride, William McKay, Robert Porter, Elbert Shrum, Keith Snelson, John Richardson, Charles E. Thomas, Ray Wold, and Eddie Woods. 4 Earl, Markham, McKay, Porter, Richardson, and Snelson. 5 It was stipulated that, prior to November 1, 1972, and thereafter, until VAN'S PACKING PLANT operation, slaughtering was wholly discontinued and other "typical packing plant" activities, including the prepara- tion of certain meat products, were discontinued. Essen- tially, the business was converted to a retail meat market operation with Respondent purchasing boneless beef from outside sources. Custom slaughtering and cutting and wrapping of meat from Respondent's own slaughtering operations were eliminated prior to November 1, 1972, and thereafter, until March 23, 1973. When Respondent began to expand his retail business, in November 1972, he installed three meat display cases in the area formerly used for the preparation and sale of meat at wholesale. Customers purchasing meat at retail were required to pay a sales tax, and the proceeds of such sales were kept in a cash drawer. Business on Saturdays prior to November consisted almost entirely of retail sales to walk- in customers. Since discontinuing the packing plant operation on March 23, Respondent has operated his business as a retail meat market, under the firm name of Van's Country Meats, at the same location, with the same fixtures and equipment previously used while he was operating as Van's Packing Plant. It is unnecessary to consider whether the enterprise known as Van's Country Meats became the successor to Van's Packing Plant or its alter ego. DeCham- beau was the sole proprietor of both enterprises, occupying the same premises, at the same location, as a purveyor of meats and meat products, utilizing the same equipment (augmented by the display cases), but employing a greatly reduced crew of unit employees. The significant change in the character of the operation was the elimination of slaughtering and a reduction in wholesale business. The "kill floor" and other areas of the plant, previously devoted to the slaughtering and dressing of cattle, and the preparation and processing of meats remain unused. Three of the four telephone lines previously used for Van's Packing Plant were disconnected, Respondent retaining the same telephone number for the remaining line. Of five delivery vans and a pickup truck operated prior to March 23, Respondent continued to operate two vans for several weeks for the delivery of products to the greater Boise area. The vans were then sold, and Respondent was left with only the pickup truck. A sign bearing the name "Van's Packing Plant," affixed to the exterior of the plant building before the changeover, remained at the same place thereafter. With the changeover in late March, Respondent erected an additional sign over the entrance to the market, bearing the name "Van's Country Meats." A similar sign has been maintained on a wagon stationed on the approach from the highway to Respondent's place of business. Between November 1 and March 23, Respondent continued to maintain a single payroll for all employees, irrespective of whether they were employed in the slaughtering or wholesale or retail operation. All employees were paid by check drawn on the account of Van's Packing Plant. After March 23, employees remaining on the payroll March 23, 1973, Woods received a wage rate of $4.12 an hour. On March 23, his rate was reduced to $4.02. During the corresponding period, Lemmon received $3.52 an hour, which was reduced on March 23 to $2.50. 6 The so-called wholesale contract, the collective-bargaining agreement 695 were paid by checks drawn on the account of Van's Country Meats. DeChambeau has at all times remained the sole proprietor of the business enterprise, whether under the name of Van's Packing Plant or Van's Country Meats. As such, he has supervised the entire operation, formulating and implementing labor relations policies. In October and again in November 1972, before Respondent expanded the retail operation, Business Agent Leroy Niemeyer had occasion to visit the plant. He observed some remodeling of the plant premises. In November, he observed the retail meat display cases in place. Admittedly, however, DeChambeau did not notify Niemeyer of any contemplated change in operations or offer to bargain with the Union concerning the change and its effect upon the unit employees. When Respondent rehired Woods and Lemmon on March 26, he unilaterally had reduced their wage rates. In January 1973, DeChambeau had hired Ruby Talara- skie, a new employee, at $3 an hour, to wait on retail customers behind the display cases. Soon afterward, Niemeyer went to the plant to "sign [her] up" as a union member, and left cards for her to complete, which he was to pick up later. Shrum, who was behind the meat counter, asked Niemeyer what her job classification should be. Niemeyer said that she should be assigned the "packaging" rate. DeChambeau also asked Niemeyer the same question, and Niemeyer gave him the same answer he had given Shrum. DeChambeau stated that Talaraskie was being paid at the trainee rate, and wanted to know why she could not be paid at the retail wrapper rates Niemeyer rejected this proposal but after some discussion agreed to take the matter up with Secretary-Treasurer Sam Nettinga and let DeChambeau know the Union's decision. About a week later, DeChambeau called Niemeyer, at the Union's office in Nampa, to find out what decision had been reached regarding Talaraskie's job classification. Niemeyer told DeChambeau that, after discussing the matter with Nettinga, it had been decided that "because of the intermingling of [the packing house and retail opera- tions] . . . it should be left as it was," and there the matter rested. On March 23, Niemeyer received a telephone call from John Richardson, informing him that he and three other "kill floor" employees had been laid off. This was the first knowledge Niemeyer had received concerning Respon- dent's action. Later the same day, Niemeyer went to the plant and spoke to DeChambeau. Niemeyer told DeCham- beau that he had just learned that "kill floor" employees had been laid off, and asked him what was going on. DeChambeau expressed surprise that Niemeyer had learned of it so soon since the layoffs had only taken place a half hour ago. Niemeyer told him of the phone call he had received. DeChambeau then said that he` just couldn't make [a go of ] the business and ... was discontinuing the operation," except for the retail meat market, adding that he might continue to make some sausage for the retail involved here, contains no job classification of retail meat wrapper. This job classification is, however, contained in the area Retail Meatcutters' Agreement with the Union, to which Respondent is not a party. 696 DECISIONS OF NATIONAL LABOR RELATIONS BOARD trade. According to DeChambeau, Niemeyer merely said that "he felt sorry for [him]," and made no issue of Respondent's obligation to negotiate with the Union concerning the change in operation. Since March 26, when Woods and Arlee Lemmon were rehired, DeChambeau, his son, Woods, and David Lem- mon, Arlee's husband, have performed the work of cutting up carcasses. Thereafter, on occasions when boning meat, previously done by Earl and Shrum, was required, the work was performed primarily by Woods. The week following March 26, Respondent also utilized the services of three or four inmates of the state penitentiary at different times under a work-release program. (Respondent denied that he "hired" these inmates, asserting that he kept no personnel records on them. There was no showing as to any arrangement for compensation for these men.) According to DeChambeau, these inmates did "some boning and grinding" but no meat wrapping, and did not wait on walk-in customers. In about the latter part of May, Respondent hired Tony Zavolo for a period of about 6 weeks, primarily to do grinding and some cleanup work. On March 30, a Friday, Niemeyer received a telephone call from Snelson, who had gone to the plant looking for work, and had observed new employees working there. Niemeyer visited the plant soon afterward, where he discovered six or seven "new faces," all but one of whom were working in the area in which boning and cutting was done. The remaining employee, whose identity Niemeyer later learned, and who had been employed at another packing plant, was working in the retail market. Niemeyer asked DeChambeau why these persons were being em- ployed while former employees on layoff were out of work. DeChambeau said that he had fallen behind in his custom locker beef cutting, and had brought these persons in to "get caught up." After some discussion, DeChambeau told Niemeyer that these employees did not work Saturday, and that he would not have them return on Monday. On Monday, April 2, Niemeyer returned to the plant to ascertain whether the "new" employees were at work that day. According to him, he observed the same persons still working. Niemeyer told DeChambeau that since these employees were still at work, he had no alternative but to file a grievance. Niemeyer also took this occasion to tell DeChambeau that he had never received Talaraskie's union card. DeChambeau said that he would see to it that she joined the Union and that Niemeyer received her card. Niemeyer filed a grievance next day and, on April 11, met with Elbert Shaw at the Idaho Employers' Council's office to discuss the grievance. Shaw maintained that the packing plant operation had been discontinued prior to the date of the grievance, that the contract did not apply, and declined to discuss the grievance. Niemeyer contended that the retail market had been made part of the overall plant operation, that the Company had never raised any issue over the Union's representation of the retail employees, and that on two occasions Niemeyer and DeChambeau had discussed the rate of pay and classification applicable to Talaraskie. Shaw told Niemeyer that that was not his r Art. XVII, sec. 5 , provides, in relevant part: If the Union and the employer representatives cannot reach an understanding, and said that he would like to discuss the matter with DeChambeau and Hazzard. According to Niemeyer, he did not recall mentioning to DeChambeau that he would provide him with a copy of the Retail Meat Cutters' Agreement, although DeChambeau had ques- tioned him regarding the meat cutter rate. Told the amount of the rate, DeChambeau said that Shrum was already receiving more than that rate. On April 17, while Niemeyer was in the Council office to see the insurance administrator, Shaw asked him to talk to him and Hazzard. Niemeyer agreed. At this conference, both sides adhered to their previous positions. A final meeting was held on May 1, attended by International Representative Dan Ackley, Secretary-Treasurer Nettinga, and Niemeyer, on behalf of the Union, and Shaw, Hazzard, and DeChambeau, representing the Employer. The parties reiterated their respective positions, the union representatives asserting that the employees were "on dues check-off as per contract." In response to Shaw's query, "Under what contract," Niemeyer responded, "Under the Packinghouse Agreement, of course, because the retail operation had been made a part of the overall operation." According to Niemeyer, the management representatives acknowledged that they had notified the employees that the employer intended to operate "non-union," and that they would not receive the benefit of the pension fund. Niemeyer also testified that the union representatives were told that the Union did not represent the employees because the packing plant operation had been discontin- ued, that the Union did not represent the retail employees, and that if it wished to do so it should attempt to organize them first. The Employer representatives also told Niemey- er that if the Employer resumed the packinghouse operation, he would recognize the Union. Despite the Employer representatives' refusal to consider the grievance on the asserted grounds, the Union did not pursue the grievance to arbitration, because the Employer refused to recognize that the contract was applicable to the new enterprise.? Instead, it filed the unfair labor practice charge on which this proceeding is based. By letters, dated September 27, 1973, Shaw, of the Idaho Employers' Council, on behalf of Respondent, notified members of the Southern Idaho Meat Packers' Associa- tion, Inc., as well as the Union, of Respondent's withdraw- al from the Association and from future negotiations concerning possible renewal of the contract expiring January 11, 1974. On October 15, Hazzard, of the Council, on behalf of Respondent, reiterated the position that, due to the change in operation from a meat packing plant to a retail meat market, the Employer considered the contract inapplicable, and notified the Union of Respondent's intention to terminate the contract upon its expiration. The letter advised, however, that Respondent was willing to recognize and bargain with the Union if it were certified, as representative of the retail meat market employees in a Board-conducted election. On November 7, the Union formally notified Respon- dent of its intention to reopen the contract, and requested adjustment within five (5) days, upon request of either party, the grievance shall be submitted to a Board of Arbitration .. . VAN'S PACKING PLANT negotiations. The Council, on behalf of Respondent, replied on November 12, referring to its earlier letters of September 27 and October 15, and, denying that the Union was exclusive representative of the retail meat market employees, DeChambeau's sole business operation since March 23, 1973, rejected the Union's request. Contentions of the Parties; Conclusions The record establishes that at the time of the change in Respondent's operation there was in effect a valid, subsisting collective-bargaining agreement between the parties, covering the operation at Respondent's plant. Whatever change occurred on March 23, the General Counsel maintains, constituted an accretion or merger so that the existing contract remained applicable to the modified operation. Respondent, on the other hand, contends that the change in operation from what was essentially a meat packing plant to a retail meat market constituted such a complete change of operation as to render the existing contract, covering a unit of employees engaged in the meat packing operation, inapplicable, and that Respondent was thereby relieved of any duty to recognize and bargain with the Union as exclusive representative of the retail meat market employees. There is no dispute that Respondent, as a sole proprietor, conducted his business enterprise, both before and after March 23, at the same location, utilizing the same facilities and equipment. On about November 1, 1972, he expanded his retail business, installing three meat display cases in a portion of the area previously used for the preparation of meat at wholesale, while continuing the packing plant operation. Until March 23, the business continued in this manner, with sales predominantly wholesale but to a relatively minor extent at retail. On March 23, with wholesale business steadily declining, Respondent discon- tinued the slaughtering and packing plant operation altogether, and thereafter continued the venture as a retail meat market under the trade name of Van's Country Meats, to distinguish it from the packing plant operation conducted as Van's Packing Plant. Respondent has not since engaged in the slaughtering and dressing of cattle. The "kill floor" and other areas of the premises, previously used to prepare and process meats between November 1, 1972, and March 23, remain unused. While operating the packing plant, Respondent em- ployed between 12 and 15 employees during the period from November 1 to March 23. On November 1, with the decline of wholesale business and the expansion of retail sales, Shrum, a driver-salesman until then, was assigned to work inside the plant, preparing meat for sale at wholesale, and working at the retail counter when necessary. On March 23, when Respondent discontinued its slaughtering operation, he terminated 6 of the 12 employees working on " Sausage, including bulk sausage, links, wieners, frankfurters, and so- called luncheon meats. 9 As there is no evidence concerning any arrangement under which these persons were utilized, no determination is made as to whether they could properly be regarded as unit employees. 697 that date. McBride and Shrum were subsequently termi- nated on March 30 and April 6, respectively. The parties have stipulated that the 12 employees who continued in Respondent's employ between November 1 and March 23, received the wage rates, and pension and insurance benefits, and were subject to the dues checkoff provisions provided under the collective-bargaining agree- ment. In contending that the retail meat market operation merely constituted an accretion or merger, the General Counsel relies on the following factors: (1) Except for the termination of slaughtering and dressing of cattle, and increased retail sales, the operation has remained basically the same; (2) the retail meat market has been conducted at the same location and in the same plant; (3) until March 23, the date of the changeover, Respondent operated his business with the same employees, under the same terms and conditions of the collective-bargaining agreement; (4) Respondent maintained a single payroll and bookkeeping system for all employees, who were at all times under the supervision of DeChambeau, the sole owner of both enterprises, who determined labor relations policies; (5) Respondent has continued to display a sign over the entrance to his premises bearing the name "Van's Packing Plant," although during late in March, he added a sign reading "Van's Country Meats," and displayed a similar sign on the highway leading to Respondent's place of business. The General Counsel relies, too, on evidence that even before November 1, when Respondent increased his retail sales, he had made retail sales to walk-in customers of a variety of meat products,8 on which retail sales taxes were imposed, both before and after November 1972, and that his Saturday business consisted exclusively of sales to retail customers. Regarding the General Counsel's accretion or merger theory, it should be pointed out that the changeover to an essentially retail operation resulted in a contraction, rather than an expansion, of the bargaining unit. Thus, the number of employees in the unit was reduced from 12 or 15 on March 23 to, at first, half that number, and ultimately 2 employees, in addition to Respondent, his wife, and son, with the temporary, part-time use of the prison inmates, previously mentioned .9 The collective-bargaining agreement, upon which the General Counsel and the Union rely, containing some 12 broad general job classifications (in addition to trainees), with 14 subclassifications covering the "kill floor," clearly demonstrates that the contract was designed to apply exclusively to slaughtering and meat packing plant employ- ees. By contrast, the Retail Meat Cutters' Agreement, a separate agreement, to which Respondent is not a party, contains only two basic job classifications, meatcutters and meatwrappers (in addition to apprentices), neither of which are contained in the packing plant contract. The case here is analogous to G. T. & E.,10 in which, 10 G.T. & E. Data Services Corporation, 194 NLRB 719. Although that case also involved the successorship issue, the Board found that "many of the substantive provisions of the agreement were tailored to employees who form the complement of a large, publicly regulated, telephone enterprise, and could not, as a practical matter, be made applicable, as written to (Continued) 698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD under comparable circumstances, the Board concluded that it would be inappropriate to require the application of the contract to the new operation." In view of the substantial change in Respondent's operations from a slaughtering and packing plant to a predominantly retail meat market operation; the change and reduction in size of the employing unit; and the job classifications under the collective-bargaining agreement, which rendered it inappropriate to the changed operation, it is found that Respondent was not required to bargain with the Union as exclusive representative of the retail meat market employees after March 23, unless and until a majority of those employees designated the Union as their bargaining agent . It is, therefore, found that Respondent has not refused to bargain with the Union as exclusive representative of his employees in an appropriate unit by refusing to apply the contract to the retail market employees. There is no allegation, contention, or proof that Respondent's changeover was motivated by a desire to avoid his obligations under the contract, nor has there been any showing that Respondent's action was taken for any reason other than economic necessity. C. The Refusal To Bargain Concerning the Change"ver The allegation that Respondent unilaterally and without prior notice to the Union or opportunity to bargain concerning the decision to discontinue the slaughtering and packing plant operations, as well as the effect of the decision upon the unit employees, stands on a different footing. 1. The appropriate unit The complaint alleges that the following is an appropri- ate unit for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All production and maintenance employees em- ployed by the employer at its Boise, Idaho, location, excluding office clerical employees, guards, and super- visors as defined in the Act. This is substantially the unit described in the collective- bargaining agreement, to which a list of job classifications and wage schedules of the covered employees was attached. Respondent's answer does not specifically deny the appropriateness of the unit but alleges that Respondent has employed no production and maintenance employees since March 23, 1973. This does not meet the issue. It is clear that Respondent acknowledged the appropriateness of the unit as of January 11, 1971, when it executed the collective-bargaining agreement recognizing the Union. This agreement continued, and was in full force and effect, on March 23, 1973. The description of the unit is and could not, as a practical matter, be made applicable, as written to Respondent's operation." 11 In N.L.R.B. v Alamo-White Truck Service, 273 F.2d 238 (C.A. 5, 1959), a successorship case, the court denied enforcement of a Board Order, requiring the successor employer to bargain, noting that the successor, a subsidiary of a nationwide manufacturer of trucks, had been converted into a small independent service operation of a local character . Relying on the consonant with conventional units in this industry, and it is hereby found that the above-described unit constituted an appropriate unit as of March 23. 2. Majority representation The complaint alleges that, at least since 1952, and continuing to date, the Union has been the duly recognized exclusive representative of all Respondent's employees in the above-described unit within the meaning of Section 9(a) of the Act. Respondent's answer admits the status of the Union as exclusive representative of Respondent's packing plant employees from 1952 until March 23 but denies that the Union is majority representative of the retail meat market employees of Van's Country Meats, Respondent's sole operation since that date. It is found that the Union was, on March 23, 1973, the exclusive representative of Respondent's packing plant employees for purposes of collective bargaining and, by virtue of Section 9(a) of the Act, was on that date the exclusive representative of all the employees in the appropriate unit above-described. 3. The refusal to bargain It is undisputed that Respondent did not notify the Union in advance, prior to expanding its retail sales on November 1, 1972, or of its decision to discontinue the slaughtering and packing plant operation on March 23. Since the limited change in operations on November 1 did not entail any material change in the nature of the business or affect the jobs or wage rates of the unit employees, Respondent was not required to notify the Union in advance or afford it an opportunity to bargain regarding such changes. The discontinuance of the slaughtering and packing plant operation on March 23, however, involved not only a change in the nature of Respondent' s business but also the actual termination of unit employees whose jobs were affected by the change. The obligation to bargain regard- ing the discontinuance of a portion of an employer's operations, as in the case of partial plant closure, subcontracting, removal, or relocation, as well as the effect of such change upon unit employees, is well established.12 Nor is an employer relieved of this obligation merely because a union, after acquiring independent knowledge of a contemplated change in operation, neglects to make a demand for bargaining concerning the change and its effect upon unit employees. Thus, although Business Representative Niemeyer may have observed some remod- eling of the plant, and later saw new display cases in the retail meat market, he was not required to speculate as to the significance of these changes. Nor, in the absence of notice of the contemplated discontinuance of the slaugh- tering operation, was he under a duty to demand that change in the nature of the business and of the employer-employee relationship in a large corporation in contrast to the close personal relationship in a small local business , employing about half the number of the predecessor's employees, the court declined to enforce the Board's Order requiring the successor to bargain. 12 See, e.g., Ozark Trailers, Incorporated 161 NLRB 561, where the rationale has been explicated, and cases cited. VAN'S PACKING PLANT 699 Respondent bargain with the Union regarding the change or the effect of such change upon the unit employees. The fact that the collettiveAbargaining agreement contains no requirement that the Employer notify the Union in advance-of-any--deersien-regarding-closure or termination of a portion of its operations does not relieve Respondent of his statutory duty to bargain concerning the contemplat- ed change. It is, therefore, found that, by failing and refusing to bargain collectively with the Union, as the exclusive representative of the unit employees, concerning the discontinuance of the slaughtering and packing plant operation and the effect of such action upon the unit employees, and by taking such action unilaterally, without prior notice to the Union and an opportunity to bargain regarding such decision, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5), and, derivatively, Section 8(a)(1) of the Act. The complaint alleges that, on or about April 11, April 17, and May 1, 1973, the Union demanded that Respon- dent recognize it as exclusive representative of the employees working in the retail operation and acknowl- edge that they were covered by the collective-bargaining agreement, but that Respondent in each instance refused. Reference is to the three meetings between Respondent's representatives and the union representatives, discussed earlier. The General Counsel appears to contend that, since these allegations have been admitted in Respondent's answer, a finding of refusal to bargain on those dates is warranted. Niemeyer's testimony, on this aspect of the case, confirms that he demanded recognition on behalf of the retail meat market employees . Respondent's admission of these allegations is not unequivocal. Respondent's answer further alleged that he offered to recognize the Union if it were certified as exclusive representative of the employees of Van's Country Meats, following a Board- conducted election, and that he filed an RM petition to this end (Case 19-RM-1065) on May 4, 1973. This is entirely consistent with Respondent's position that he did not deem the packing plant contract applicable to the retail meat market employees. Since Respondent's contention in this respect has been sustained for reasons previously stated, it is found that Respondent did not unlawfully refuse to bargain with the Union as exclusive representative of the retail market employees on or about April 11, April 17, and May 1, 1973. D. Interference, Restraint, and Coercion The complaint further alleges that on or about March 26, DeChambeau told several employees that he would thereafter operate "non-union and would not apply the collective-bargaining agreement to them." This allegation relates to an unrefuted statement by DeChambeau to Woods and Lemmon when they were rehired on March 26. Respondent's answer, while admitting this allegation, further asserts that the "information was conveyed to the employees of Van's Country Meats, a retail meat market." Ordinarily, such a statement, made by an employer to employees covered by a subsisting collective-bargaining agreement, would be in derogation of the exclusive bargaining agent, and could arguably constitute conduct violative of both Section 8(a)(l) and (5) of the Act. The special circumstances of this case, however, including the absence of union animus or a purpose to avoid his obligations under the collective-bargaining agreement, indicate that in making those perhaps ill-chosen remarks DeChambeau was merely expressing his position that the contract was inapplicable to the employees of Van's Country Meats. Respondent's offer, through his represent- atives, to recognize the Union as exclusive bargaining agent of the retail market employees if the Union were designated in a Board-conducted election, and Respon- dent's filing of a representation petition for this purpose indicate the absence of any unlawful conduct. It is, therefore, found that, by DeChambeau's remarks to Woods and Lemmon on March 26, 1973, Respondent did not engage in unfair labor practices within the meaning of Section 8(a)(1) of the Act. There remains to be considered the issue of possible deferral to arbitration. Under the collective-bargaining agreement, "Any complaint, disagreement or difference of opinion between the employer and the Union and the employees covered by this agreement, which concerns the interpretations [sic ] or application of the terms and provisions of this contract shall be considered a grievance," to be resolved under the grievance and arbitration procedure. The contract was in full force and effect on March 23, 1973, the date of the change in Respondent's operation. In the General Counsel's view, the basic issue is one of accretion, and under guidelines issued on May 10, 1973, such issue is not amenable to deferral. Moreover, the General Counsel argues, since Respondent maintains that the contract is not applicable to Respondent's retail meat market employees, he cannot have recourse to the grievance and arbitration provisions of a contract which he is, in effect, disavowing. Respondent contends that, by failing to pursue the grievance and arbitration procedure, the Union has acquiesced in Respondent's position that the contract is inapplicable to the retail market employees. Nevertheless, while denying that the contract is applicable to this group of employees, Respondent asserts in his brief that, in the event the Board should reach an opposite conclusion, he is "not taking the position that [the] grievance is not arbitrable and is willing to give serious consideration to deferral to arbitration." The General Counsel denies that the Union failed to pursue the applicable procedure, pointing to the evidence that on three separate occasions Niemeyer demanded that Respon- dent adhere to the grievance procedure but that he refused, through his representatives, on each occasion to do so. The issues involved in this proceeding are, at the very least, arguably encompassed by the grievance and arbitra- tion procedure. Respondent's insistence that the contract was not applicable to the retail operation did not excuse the Union from pursuing the successive steps in the grievance procedure, culminating in a demand for arbitra- tion. The issue which the Union sought to resolve, i.e., the applicability of the contract to the retail employees, involved a dispute over the interpretation, application and alleged violation of the contract, cognizable under the 700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD procedures. In fact, the very issue of arbitrability of the dispute is a question determinable by the arbitrator. Respondent has not unequivocally expressed his willing- ness to arbitrate the dispute. Instead, he has indicated that, in the event of an adverse finding in this proceeding, he might be willing to consider arbitration , a none too subtle attempt to have "two bites at the apple." Moreover, such an approach defeats the whole concept of the deferral policy. Be that as it may, since the Board has held that, under Collyer, 13 disputes over a contractual obligation to include, in an existing bargaining unit, new facilities or operations acquired by the employer (accretion issues) are not appropriate for deferral to arbitration,14 it will not be recommended that the Board defer in this case. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent, set forth in section III, above, occurring in connection with the operations of Respondent, described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States , and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. THE REMEDY Having found that Respondent has engaged in unfair labor practices within the meaning of Section 8(aX5) and (1) of the Act, it will be recommended that he cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. It has been found that Respondent has failed and refused to bargain with the Union as exclusive representa- tive of his employees in an appropriate unit, by failing to notify the Union in advance of the contemplated change in operations and affording the Union an opportunity to negotiate regarding such change and its effect upon the unit employees. Since it has been found that the change in operations was prompted solely by economic exigencies rather than by union animus or by a purpose to avoid the obligations imposed by the collective-bargaining agreement , it will not be recommended that Respondent be required to resume the slaughtering and packing plant operation. Although Respondent appears to have no present intention of resuming that operation in the forseeable future, he has asserted his willingness to adhere to the collective-bargain- ing agreement, if and when such operation is resumed. It will, therefore, be recommended that Respondent place the employees who were discharged between March 23 and April 6, 1973, and who have not since been reinstated, on a preferential hiring list and thereafter offer them jobs as such jobs become available before hiring others for such work, and, if such positions no longer exist , to substantially equivalent positions ,15 without prejudice to their seniority or other rights and privileges. It will also be recommended that Respondent make each of said employees whole 16 for any loss of earnings and vacation pay, if any, which such employee may have suffered as a result of such discharge, from March 23, 1973, the date of Respondent's failure and refusal to bargain with the Union regarding the change in operations and the effect of such actions upon the unit employees, to the date on which Respondent commences bargaining with the Union in good faith regarding such change, less net earnings during such period, with backpay computed on a quarterly basis , and interest at 6 percent per annum, as prescribed in F. W. Woolworth Company, 90 NLRB 289, and Isis Plumbing & Heating Co., 138 NLRB 716. It will be further recommended that Respondent make the contributions on behalf of the discharged employees to the health and welfare, pension and trust funds, required by the collective-bargaining agreement , for the backpay period defined above. Respondent's assertion that he has paid each of the discharged employees all wages and fringe benefits provided for in the collective-bargaining agree- ment to the date of terminations does not satisfy his obligations under the recommended remedy. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Wayne DeChambeau, an individual and sole propri- etor, doing business as Van's Packing Plant, of Boise, Idaho, Respondent herein, is, and at all times material herein has been, an employer engaged in commerce and in an industry affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Local No. 368, the Union herein, is, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act. 3. All production and maintenance employees em- ployed by the employer at its Boise , Idaho, location, excluding office clerical employees, guards, and supervi- sors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times since January 11, 1971, Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Local 368, the Union herein, has been the exclusive representative of all the employees in the aforesaid unit for the purpose of collective bargaining within the meaning of Section 9(a) of the Act. 5. By unilaterally, and without prior notice to the Union as exclusive representative of the employees in the aforesaid unit, and opportunity to bargain concerning the change in operations of his business , on or about March 23, 1973, and the effects thereof on the unit employees, Respondent has engaged in, and is engaging in, unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order omitted from publication.] ,J Collyer Insulated Wire, 192 NLRB 837 ' See Southeastern Envelope Co., Inc eta!, 206 NLRB No. 115 14 Combustion Engineering, Inc, 195 NLRB 909. Cf Champlin Petroleum 1s See N L.R B. v. Southeastern Michigan Gas Co., 485 F.2d 1239 (C.A. 6, Company, 201 NLRB 83. 1973).