The Daneker Clock Co., Inc.

DANEKER CLOCK CO. 719 The Daneker Clock Company, Inc. and Local 75, United Furniture Workers of America, AFL-CIO. Case 5-CA-6256 June 18, 1974 DECISION AND ORDER By CHAIRMAN MILLER AND MEMBERS FANNING AND PENELLO On March 26, 1974, Administrative Law Judge Alvin Lieberman issued the attached Decision in this proceeding. Thereafter, the Respondent filed excep- tions 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 and to adopt his recommended Order. 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 and hereby orders that Respondent, The Daneker Clock Company, Inc., Fallston, Maryland, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. DECISION STATEMENT OF THE CASE ALVIN LIEBERMAN, Administrative Law Judge: The trial in this proceeding, with all parties represented, was held before me in Baltimore , Maryland, on January 29, 1974, I The complaint was issued pursuant to a charge filed on August 15, 1973, by Local 75, United Furniture Workers of America, AFL-CIO. 2 During the trial the answer was amended to admit pars . 2(a), 3, and 7 of the complaint. 3 Set forth below are the relevant provisions of the Act to which reference has been made in the text: Sec. 8(a)-It shall be an unfair labor practice for an employer- (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7; M t Y (5) to refuse to bargain collectively with the representatives of his employees ... . Insofar as pertinent, Sec. 7 is as follows: Sec. 7. Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through upon the General Counsel's complaint dated December 19, 1973,1 and Respondent's answer.2 In general, the issue litigated was whether Respondent violated Section 8(a)(1) and (5) of the National Labor Relations Act, as amended (Act).3 Particularly, the principal questions for decision are as follows: 1. Is Respondent a successor4 to Million-Rutherford Company, Inc. (Million)? 2. Assuming an affirmative answer to the foregoing question, is Respondent obligated to recognize and bargain with Local 75, United Furniture Workers of America, AFL-CIO (Union)? Upon the entire record, upon my observation of the witnesses and their demeanor while testifying, and having taken into account the arguments made and the briefs submitted,5 I make the following: FINDINGS OF FACTS 1. JURISDICTION Respondent, a Maryland corporation, is engaged at Fallston, Maryland, in the manufacture of clocks, plaques, and spinning wheels. From August 3, 1973,7 until January 29, 1974, Respondent sold merchandise valued at more than $50,000 to customers located outside the State of Maryland. Accordingly, I find that Respondent is engaged in commerce and that the assertion of jurisdiction over this matter by the National Labor Relations Board (Board) is warranted. Siemons Mailing Service, 122 NLRB 81, 85. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act. III. INTRODUCTION Briefly, this case is concerned with Respondent' s refusal to recognize and bargain with the Union, which had been certified as the collective-bargaining representative of Million's production and maintenance employees. The General Counsel contends8 that Respondent is Million's successor ; that as such it is obligated to recognize and bargain with the Union; and that its refusal to do so is violative of Section 8(a)(5) of the Act. Respondent, on the representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities . . 4 When used in this Decision "successor" and related words will be deemed to have the special technical meanings attributed to them in the field of labor management relations law. See, in this connection , N.LR.B. v. Burns International Security Services, Inc., 406 U.S. 272 ; Simcox, 178 NLRB 516; Johnson Ready Mix Co., 142 NLRB 437; and Downtown Bakery Corp., 139 NLRB 1352. 5 Although all the arguments of the parties and the authorities cited by them, whether appearing in their briefs or made orally at the trial, may not be discussed in this Decision, each has been carefully weighed and considered. 6 Respondent's motion made at the conclusion of the trial, upon which I reserved decision, is disposed of in accordance with the findings and conclusions set forth in this Decision. 7 All dates hereinafter mentioned without stating a year fall within 1973. 8 As the contentions of the General Counsel and the Union are similar, they will be referred to hereinafter as the General Counsel 's contentions. 211 NLRB No. 108 720 DECISIONS OF NATIONAL LABOR RELATIONS BOARD other hand, argues that it is not Million's successor; that the Union does not represent any of its employees; and that, therefore, it is not required to deal with the Union. IV. PRELIMINARY FINDINGS AND CONCLUSIONS9 A. Million's Business For some 30 years, ending on about December 28, 1972, Million operated a plant in Fallston, Maryland, for the manufacture of clocks, plaques, and spinning wheels..The buildings occupied by Million and the land on which they stood were owned by Charles Daneker, Sr., and his son Million Daneker, both of whom held stock in Million. Million's principal product was clocks. These and the other items it manufactured were merchandised under the trade name of "Daneker." This name was plainly imprint- ed on the face of all clocks made by Million and also appeared on its plaques and spinning wheels. At the time Million went out of business it employed a work force of about 60 production employees. Also at that time there was in Million's plant a substantial inventory of raw material and supplies. B. The Union's Certification On December 18, 1972, the Union was certified as the exclusive collective-bargaining representative of Million's employees in the following unit: All production and maintenance employees, including group leaders, employed by [Million] at its Fallston, Maryland location; but excluding all office clerical employees, guards and supervisors as defined in the Act. It does not appear that this certificate was ever revoked or rescinded. Nor does it appear that Million ever bargained with the Union. C. Respondent's Business Respondent was incorporated on July 26, 1973. Its president and vice president are, respectively, Charles Chian and Bancroft Livingston. On August 1, Respondent bought from Million all of the latter's machinery, material, supplies, equipment, furniture, and the right to use the "Daneker" trade name for 5 years. On the same date Respondent purchased from Charles Daneker, Sr., and Million Daneker, the buildings in which Million had conducted its operations and the land on which they stood. On August 3, Respondent started to manufacture clocks in the buildings which had formerly been occupied by Daneker. In doing so it utilized the machines, equipment, materials, and supplies it had acquired from Million. At a 9 The purpose of these findings is to furnish a frame of reference within which to consider the facts relating to respondent's alleged unfair labor practices and the conclusions to which they may give rise. To the extent that the contentions of the parties relate specifically to the findings made here they will be treated here, although they as well as the findings, may again be considered in other contexts. 10 G.C. Exh. 5. 11 In this connection, it should be borne in mind that, as has been found, later date, and in the same premises, Respondent began to produce plaques and spinning wheels. As was the case with Million, clocks constitute Respon- dent's principal product. These, like the clocks made by Million, bear the "Daneker" trade name. Concerning the items manufactured by Respondent, the equipment it uses, and the place in which its business is carried on, Chian, Respondent's president, stated in an affidavit10 that Respondent "produce[s] essentially [the] same product, using the same equipment at the same location as did Million." Chian could also have said, as the evidence indicates and as I find, that Respondent also follows Million's production method. Between August 3 and 10, Respondent hired 26 production and maintenance employees. Of these, 21 had worked for Million. By August 28 Respondent's comple- ment of production and maintenance employees had grown to 40, 25 of whom were former Million employees. A substantial number of the latter performed for Respon- dent work identical, or similar, to that which they did for Million. D. The Relationship Between Respondent and Million As noted in the introductory portion of this Decision, the General Counsel contends that Respondent is Million's successor and Respondent argues that it is not. Respon- dent's argument is based principally on two facts. The first is that it employs fewer than 50 percent of the employees who had formerly worked for Million.tt The second fact relied on by Respondent is that there was a 7-month hiatus between Million's closing and the commencement of Respondent's operations. Whether an employer is another's successor turns upon the continuation of what has come to be known as the "employing industry." As was recently stated, in this regard, the "continuity of the employing industry . . . is the keystone of [the Board's] successorship doctrine" Spruce Up Corporation, 209 NLRB No. 19. Where one employer purchases the plant and physical assets of another the employing industry is continued and the purchaser is deemed to be the seller's successor if the "purchaser continues its predecessor's business from the same location, handling the same products, and employing its predecessors employees." Downtown Bakery Corp., 139 NLRB 1352, 1354, enfd. in this respect 330 F.2d 921 (C.A. 6, 1964). The third criterion mentioned in Downtown Bakery, is satisfied if a majority of the second employer's comple- ment of employees consists of people who formerly worked for the first in the unit concerned. Johnson Ready Mix Co., 142 NLRB 437, 441.12 It is also satisfied if the second employer hires all or a majority of the first's work force. John Wiley & Sons, Inc. v. Livingston, etc., 376 U.S. 543, within a month after Respondent became a going concern a majority of its production and maintenance employees had been in Million's service. 12 See also, to the same effect, N.L.R.B. v. Polytech, Incorporated 469 F.2d 1226, 1230 (C.A. 8, 1973); Tom-a-Hawk Transit, Inc. v. N.L.R.B., 419 F.2d 1025, 1027 (C.A. 7, 1969); Makela Welding Inc. v. N.LR.B., 387 F.2d 40, 46 (C.A. 6, 1967); N.LR.B. v. John Stepp's Friendly Forit, Inc., 338 F.2d 833, 836 (C.A. 9, 1964); N. L. R. B. v. Lunder Shoe Corp., 211 F.2d 284, 287 (C.A. 1); Hecker Machine Inc., 198 NLRB No. 161; Tellakson Forth Inc., 171 DANEKER CLOCK CO. 551; Spruce Up Corporation, 209 NLRB No. 19. According- ly, as a majority of Respondent's employees were formerly employed by Million the argument made by Respondent that it is not Million's successor because it did not hire a majority of Million's employees is rejected. Also rejected is the argument that Respondent is not Million's successor because of the lapse of time between Million's closing and the commencement of Respondent's operations. To be sure, a hiatus, such as occurred here, between the closing of a plant by a seller and its reopening by a buyer is relevant to the question of whether the buyer is the seller's successor. This element, however, is not to be taken in isolation. As was made plain in Norton Precision, Inc., etc., 199 NLRB 1003, "also to be considered [in determining whether there was a continuity of the employing industry] is whether the changes in the methods of production, the type of market supplied, and the kind of products produced substantially altered the nature of the employing industry." In several cases where a hiatus was deemed significant in determining that there was no successorship there were other factors present which, when considered together with the time lapse, seemed to break the continuity of the employing industry. Thus, for example, where the products of the second employer were different from those of the first employer, or were of a substantially different mix; where the second performed only a fraction of the first's manufacturing operations; where the second engaged in a business different from that carried on by the first; where the second made substantial changes in the first's pro- duction process and machinery; or where there was a bankruptcy proceeding initiated by the first employer accompanied by disruptions in its business operations, the Board also relied on the existence of a hiatus in holding that the second employer was not the first's successor.13 On the other hand, in cases where, as here, the second employer, after a hiatus, manufactured the same products as the first employer in the plant used by the first, followed the first's production process, and hired a complement of workers, a majority of whom had worked for the first, the Board held, despite the hiatus, that the second employer was the first's successor. C. G. Conn, Ltd., 197 NLRB 442, enfd. 374 F.2d 1344 (C.A. 5, 1973); Cf., Polytech, Incorporated, 186 NLRB 984, 990, enfd. in this respect 469 F.2d 1226 (C.A. 8, 1973). I have found that Respondent purchased from Million its machines, equipment, inventory of supplies and materials, and trade name; it acquired the land and buildings occupied by Million; it manufactured in those buildings with the machinery and equipment it bought from Million the same products as Million had manufac- tured, using the production process followed by Million; and within a month after Respondent started in business a majority of its employees were people who had been employed by Million, a substantial number of whom NLRB 503, 504; Rohlik, Inc., 145 NLRB 1236, 1239, 1242; Colony Materials, Inc., l30 NLRB 105, 106, 110, 112; Royal Brand Cutlery Company, 122 NLRB 901, 904, 908-909; Northwest Glove Co., Inc., 74 NLRB 1697,1699-1700. 13 See Radiant Fashions, Inc„ 202 NLRB 938; Norton Precision, Inc., 199 N LRB 1003; Gladding Corporation, 192 NLRB 200; Ellary Lace Corp., 178 NLRB 73, 78. 721 performed for Respondent the same work they had formerly done for Million. In view of these factors, strongly militating in favor of a judgment that the employing industry originated by Million was continued by Respondent, the hiatus in time between Million's closing and Respondent's opening pales into insignifi- cance. Accordingly, I conclude that Respondent is Million's successor. V. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts Concerning Respondent 's Alleged Violations of Section 8(a)(5) and (1) of the Act The complaint alleges that by refusing to recognize and bargain with the Union Respondent has violated Section 8(a)(5) and (1) of the Act. The facts bearing on these allegations are not in dispute. Accordingly, they will be briefly stated. As will be remembered, on December 18, 1972, the Union was certified as the exclusive collective-bargaining representative of Million's production and maintenance employees. Referring to the certification, the Union, on August 8, 1973, requested, in writing, that Respondent bargain with it. Although the receipt of this request was acknowledged by Respondent on August 10, Respondent has never bargained with the Union, nor has it ever recognized the Union. B. Contentions and Concluding Findings Concerning Respondent's Alleged Violations of Section 8(a)(5) and (1) of the Act To justify its failure to recognize and bargain with the Union Respondent makes two claims. Respondent first argues that not being Million's successor it is a stranger to the Union.14 Respondent's second contention is that the Union no longer represents a majority of its employees and that, therefore, it is not required to bargain with the Union.15 The obligation of a successor to bargain with the certified representative of his predecessor's employees is no longer open to question. N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272, 281 (1972). It having been found that Respondent is Million's successor, Respondent's duty to recognize and bargain with the Union is clear, unless there is substance to Respondent's second contention. As noted, this argument is grounded on evidence that as of January 29, 1974, the Union lacked representation among Respondent's employees. However, the critical date for determining a union's majority status is the date on which the union's request for bargaining is received by the 14 Respondent having been found to be Million's successor, this phase of Respondent's defense will not again be adverted to except to the extent of discussing a successor's obligation to bargain with the union which represented its predecessor's employees. 15 This contention is based on testimony given by a representative of the Union that as of the date of the trial, January 29, 1974, the Union did not represent any of Respondent's employees. 722 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employer. Federal Stainless Sink Div. etc., 197 NLRB 489. In this case that date is August 10, 1973.16 It is well settled that absent "unusual circumstances" a union's majority, memorialized by a Board certificate, is conclusively presumed to continue for a year following the certification and that during this period the "certification ... must be honored." Brooks v. N.L.R.B., 348 U.S. 96, 98. It is equally well settled that "a mere change of employers or of ownership in the employing industry is not such an 'unusual circumstance' as to affect the force of a Board's certification within the normal operative period if [as here] a majority of employees after the change of ownership or management were employed by the preced- ing employer." N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272, 279 (1972). The foregoing principles nullify Respondent's majority argument. Having been certified on December 18, 1972, as the bargaining representative of the employees of Respon- dent's predecessor in the unit here involved, the Union's status as the representative of a majority ofiRespondent's employees on August 10, 1973, the date on which the Union's bargaining request was received by Respondent, may not be questioned. Furthermore, any loss of majority after December 18, 1973, the anniversary date of the Union's certification is immaterial, as, in the context of this case, such a loss may have been brought about by Respondent's failure to bargain with the Union. Cf. Franks Bros. Company v. N.L.R.B., 321 U.S. 702,704-705. Accordingly, I conclude that by not bargaining with the Union pursuant to its request Respondent violated Section 8(a)(5) and (1) of the Act. VI. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section V, above, occurring in connection with its operations de- scribed in section I, above, have a close, intimate, and substantial relationship 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. VII. THE REMEDY Having found that Respondent engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, my recommended Order will require Respondent to cease and desist therefrom and to take such affirmative action as will effectuate the purposes of the Act. To insure that Respondent's employees enjoy the benefits of repre- sentation by the Union for the full period provided by law, my Order will also provide that the initial year of the Union's certification shall be deemed to begin on the date Respondent starts to bargain in good faith with the Union. Farah Manufacturing Company, Inc., 203 NLRB No. 78. 16 Although no evidence was adduced concerning the date on which Respondent received the Union 's bargaining request, I will assume that it was received on August 10, the day on which its receipt was acknowledged by Respondent. 17 In the event no exceptions are filed as provided by Sec. 102.46 of the Upon the basis of the foregoing findings of fact, and upon the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. Respondent is an employer within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent is Million's successor. 4. All production and maintenance employees, includ- ing group leaders, employed by Respondent at its Fallston, Maryland, location; but excluding all office clerical employees, guards and supervisors as defined in the Act constitute a unit appropriate for collective bargaining. 5. Since the Union's certification, the Union has been the exclusive collective-bargaining representative of all employees in the unit set forth in Conclusion of Law 4, above. 6. By failing and refusing to recognize and bargain with the Union as the exclusive collective-bargaining represent- ative of the employees in the unit set forth in Conclusion of Law 4, above, Respondent has engaged, and is engaging, in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 7. The unfair labor practices engaged in by Respon- dent, as set forth in Conclusion of Law 6, above, affect commerce within the meaning of Section 2(6) and (7) of the Act. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER 17 Respondent, The Daneker Clock Company, Inc., its officers, agents, successors, and assigns shall: 1. Cease and desist from: (a) Failing or refusing to recognize Local 75, United Furniture Workers of America, AFL-CIO, as the exclusive collective-bargaining representative of its employees in the following appropriate unit: All production and maintenance employees, includ- ing group leaders, employed by it at its Fallston, Maryland, location; but excluding all office clerical employees, guards and supervisors as defined in the National Labor Relations Act, as amended. or failing or refusing, upon request, to bargain with Local 75, United Furniture Workers of America, AFL-CIO, re- presenting rates of pay, wages, hours, or other terms or conditions of employment of its employees in the aforesaid appropriate unit. (b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of their rights to self-organization, to form, join, or assist labor organizations, to bargain collectively through representa- tives of their own choosing, or to engage in other concerted 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. DANEKER CLOCK CO. 723 activities for the purpose of collective-bargaining, or other mutual aid or protection, as guaranteed in Section 7 of the National Labor Relations Act, as amended, or to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment in conformity with Section 8(a)(3) of said Act. 2. Take the following action which, it is found, will effectuate the policies of the National Labor Relations Act, as amended: (a) Upon request, bargain with Local 75, United Furniture Workers of America, AFL-CIO, as the exclusive collective-bargaining representative of the employees in the aforesaid appropriate unit respecting rates of pay, wages, hours, or other terms or conditions of employment and, if an understanding is reached, embody such understanding in a signed agreement. (b) Post at its premises, in Faliston, Maryland, copies of the attached notice marked "Appendix." 18 Copies of said notice, on forms provided by the Regional Director for Region 5, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and 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 Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 5, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. IT IS FURTHER ORDERED that for the purpose of determining the effective period of duration if the Certification of Representative issued on December 18, 1972, by the National Labor Relations Board in Case 5-RC-8246, the initial year of certification shall be deemed to begin on the date Respondent starts to bargain in good faith with Local 75, United Furniture Workers of America, AFL-CIO, as the exclusive collective-bargaining represent- ative of the employees in the aforesaid appropriate unit. 18 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a trial in which all parties had the opportunity to present their evidence, the National Labor Relations Board has found that we violated the law and has ordered us to post this notice and we intend to carry out the Order of the Board and abide by the following: WE WILL NOT refuse to recognize or bargain with Local 75, United Furniture Workers Union as your union about your rates of pay, wages, working hours, and other matters connected with your work. WE WILL, if we are asked to do so by Local 75, United Furniture Workers Union, recognize and bargain with it as your union about your rates of pay, wages, working hours, and other matters connected with your work. If we come to an agreement about any of these things with Local 75, United Furniture Workers Union WE WILL put that agreement in writing and sign it. THE DANEKER CLOCK COMPANY, 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 compliance with its provisions may be directed to the Board's Office, Room 1019, Federal Building, Charles Center, Baltimore, Mary- land 21201, Telephone 301-962-2822.