Mobil Oil Corp.

MOBIL OIL CORP. Mobil Oil Corporation and Alaska Roughnecks and Drillers Association. Case 19-CA-7181 July 25, 1975 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS JENKINS AND KENNEDY On February 6, 1975, Administrative Law Judge Richard J. Boyce issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions and a supporting brief ' and the General Counsel filed an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached 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. For the reasons stated below, we agree with the Administrative Law Judge's conclusions that Re- spondent is a joint employer with Santa Fe Drilling Company of the employees employed on the Mobil Granite Point Platform and as such was obligated to bargain, upon request, with the Union about the de- cision and effects of displacing the unit employees. We also agree with his conclusion that Respondent violated Section 8(a)(1) when one of its production foremen, William Barlett, stated to unit employees that: (1) Respondent was not going to have a union contractor on the platform and instead would cancel its contract with Santa Fe and bring in a nonunion contractor; and (2) if there was a strike, the contract would be canceled and a nonunion contractor brought in. We do not agree, however, with the Administrative Law Judge's conclusion that Respondent violated Section 8(a)(1) of the Act through a comment made by Production Foreman John Green, nor with his conclusion that V. E. Construction, Inc., is a joint employer with Respondent. Finally, the Administra- tive Law Judge's recommended remedy is modified in the manner described below. 1. The Administrative Law Judge's conclusion that Respondent and Santa Fe Drilling Company are joint employers is well supported by record evidence. In addition to the reasons offered by the Administra- 1 Respondent's request for oral argument is hereby denied, as the record and the briefs adequately present the issues and positions of the parties 511 tive Law Judge, we note several instances in which Respondent's production foremen exercised their au- thority to fire, promote, discipline, reassign, and re- classify unit employees. Indeed, even one of Santa Fe's own leadmen, Leonard Dunham, was promoted to this position by Mobil Production Foreman Bar- lett. As succinctly stated by the employees them- selves, Respondent's production foremen are "the quarterbacks of the team" and the "captains of the ship." In view of this daily control exercised by Respondent's production foremen over the employ- ees supplied by Santa Fe, we adopt the Administra- tive Law Judge's conclusion that Respondent is a joint employer with Santa Fe.2 2. We disagree, however, with the Administrative Law Judge's further conclusion that Respondent also is a joint employer with V. E. Construction, Inc. The contract which Respondent executed with V. E. Construction is similar to the contract which it there- tofore had with Santa Fe with one major exception- V. E. Construction is specifically identified as an in- dependent contractor and its employees are not to be considered as employees of Mobil. The Administra- tive Law Judge nevertheless concluded that "based upon the terms of its contract with V. E. Construc- tion, and despite that contract's characterization of V. E. as an independent contractor, the Respondent and V. E. are joint employers for purposes of this proceeding." Unlike the Administrative Law Judge, we find nothing in Respondent's contract with V. E. Con- struction which would negate that contract's estab- lishment of V. E. Construction as an independent contractor. In addition, no evidence was introduced regarding the manner in which the Respondent- V. E. Construction contract was actually implement- ed. Accordingly, we do not know whether the sub- stantial control which Respondent's production fore- men exercised over'the employees supplied by Santa Fe carried over to the employees supplied by V. E. Construction. In the absence of such evidence, we conclude that the Administrative Law Judge's find- ing that V. E. and Respondent are joint employers is not supported by the record. 3. A day or two after the union election on Janu- ary 23, 1974, unit employee Burton DePriest initiated a casual conversation with Production Foreman John Green. DePriest asked Green what he thought the possible consequences might be regarding the Union's recent victory. Green replied, " I imagine Mobil will put [the job] up for bid." The Administra- tive Law Judge found this reply violative of Section 8(a)(1) of the Act. Contrary to the Administrative Law Judge, we 2 Cf. Hamburg Industries, Inc, 193 NLRB 67 (1971) 512 DECISIONS OF NATIONAL LABOR RELATIONS BOARD find Green's simple response during a casual conver- sation with a single employee not to be a violation of Section 8(a)(1). The opinion espoused by Green was his own and was offered in reply to a question posed by DePriest. The casualness of the discussion is re- flected in DePriest's own testimony: I just made an off-the-cuff-remark of-after it was found out that the election had already been held-I mean the election had already been held and the vote was 10 to 1, I believe it was. And I said, I wonder what will happen now? And his remark was I imagine Mobil will put this up for bid. Considering the casualness of the particular con- versation, the fact that only a single employee heard it, and the apparent camaraderie of the men working on the platform derived from their close quarters and long working hours,3 we conclude that Green's reply to DePriest's inquiry did not violate Section 8(a)(1) of the Act. 4. In his recommended remedy, the Administra- tive Law Judge directed that: ... Respondent be ordered fully to restore the status quo ante by reviving its relationship with Santa Fe on the Granite Point Platform and in so doing offer reinstatement to the unlawfully displaced employees and make them whole for their monetary losses, from the July 17 date that V. E. Construction supplanted Santa Fe, occa- sioned by their displacement. It is further rec- ommended, should Respondent then wish to re- place Santa Fe, that it be required first to bargain with the Union over the decision and its effects on the employees subject to displace- ment. In our view, the recommended remedial order is excessively broad in scope. We agree that Respon- dent, as a joint employer, is obligated to bargain with the Union over the decision and effects of displacing the unit employees. We also agree that since Respon- dent failed to satisfy this obligation, backpay mea- sured from the date that V. E. Construction, Inc., supplanted Santa Fe is likewise appropriate. We do not agree, however, that reinstatement of the dis- placed employees and reinstitution of the Santa Fe contract is either necessary or warranted. As noted by the Administrative Law Judge, Respondent's contract with Santa Fe gave Respon- dent the privilege of termination upon 30 days' no- tice. Accordingly, neither the contract termination nor the actual displacement of unit employees occa- sioned thereby is alleged as a violation of the Act. In 3 Unit employees work shifts of 10 days on and 5 days off. addition, neither Santa Fe nor V. E. Construction, Inc., are parties to this proceeding. Adoption of the Administrative Law Judge's rec- ommendations, therefore, would require reinstitution of a legitimately terminated contract with an organi- zation (Santa Fe) which is not a party to this pro- ceeding and which has not been represented herein. Simultaneously, we would be abrogating Re- spondent's existing agreement with V. E. Con- struction, Inc., another organization not named as a party. In our judgment, it is unnecessary to tamper with the legal relationships of Santa Fe and V. E. Construction, Inc., since the bargaining order and backpay which we are directing is sufficient to reme- dy the violations which have been committed. Accordingly, in order to effectuate the purposes of the Act, we shall require Respondent to bargain with the Union concerning the decision and effects of dis- placing the unit employees and shall accompany our order with backpay designed to make whole the em- ployees for losses suffered. Thus, we shall order backpay computed in the manner recommended by the Administrative Law Judge for all displaced unit employees from July 17, 1974, until the occurrence of the earliest of the following conditions: (1) the date Respondent bargains to agreement with the Union on those subjects pertaining to the decision and ef- fects of the displacement of unit employees; (2) a bona fide impasse in bargaining; (3) the failure of the Union to request bargaining within 5 days of Respondent's notice of its desire to bargain with the Union; or (4) the subsequent failure of the Union to bargain in good faith.4 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its order the recommended order of the Administrative Law Judge as modified below and hereby orders that Respondent, Mobil Oil Corporation, Cook Inlet, Alaska, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended order, as so modified: 1. Substitute the following for paragraph 1(c): "(c) In any other manner interfering with, re- straining, or coercing employees in the exercise of the rights under Section 7 of the Act. 2. Substitute the following for paragraph 2(a): "(a) Give the displaced employees backpay for the period set forth in this Decision." 3. Substitute the attached notice for that of the Administrative Law Judge. 4 Jack L. Williams, D.D.S, d/b/a Empire Dental Co, 211 NLRB 860 (1974) MOBIL OIL CORP. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all parties had an opportuni- ty to present their evidence, the National Labor Re- lations Board has found that we violated the Nation- al Labor Relations Act, and has ordered us to post this notice and comply with its provisions. The National Labor Relations Act, as amended, gives all employees the following rights: To organize themselves To form, join, or support unions To bargain as a group through a representa- tive they choose To act together for collective bargaining or other mutual aid or protection To refrain from any or all such activities In recognition of these rights, we hereby notify our employees that: WE WILL NOT state to employees that we will cancel our contract with Santa Fe Drilling Com- pany, or with any other employer, rather than have a union contractor on the Granite Point Platform, or should the employees go on strike. WE WILL NOT refuse to bargain collectively with Alaska Roughnecks and Drillers Associa- tion as the exclusive bargaining representative of the employees in the bargaining unit set forth below by contracting out the work of those em- ployees or otherwise changing their wages, hours, and other terms and conditions of em- ployment without first bargaining with the above labor organization. The appropriate unit is: All employees of the Employer on the Mobil Granite Point Platform excluding office cleri- cal employees, professional employees, guards, and leadmen, relief leadmen and all other supervisors as defined in the Act. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exer- cise of the rights guaranteed to them under Sec- tion 7 of the Act. WE WILL give those employees displaced by our termination of the contract with Santa Fe backpay in accordance with the remedial order set forth in the Board's Decision. 513 WE WILL bargain collectively with Alaska Roughnecks and Drillers Association as the ex- clusive representative of our employees in the unit above with respect to wages, hours, and other terms and conditions of employment. MOBIL OIL CORPORATION DECISION STATEMENT OF THE CASE RICHARD J. BOYCE, Administrative Law Judge: This case was heard before me in Anchorage, Alaska, on December 19 and 20, 1974. The charge was filed July 5, 1974, by Alaska Roughnecks and Drillers Association (herein called the Union). The complaint issued October 31, was amend- ed in minor respects at the outset of the hearing, and alleg- es that Mobil Oil Corporation (herein called Respondent or Mobil) has violated Section 8(a)(1) and (5) of the Na- tional Labor Relations Act. The parties were given opportunity at the hearing to in- troduce relevant evidence, examine and cross-examine wit- nesses, and argue orally. Briefs were filed for the General Counsel and Respondent. Issues The issues are whether Respondent: 1. Violated Section 8(a)(5) and (1) when, in July 1974, it replaced Santa Fe Drilling Company (herein called Santa Fe) as contractor of labor on Respondent's Granite Point Platform without giving the Union a chance to bargain over the decision and its effects on the displaced employees (herein sometimes called the unit employees), whom the Union represented. 2. By its officials, in early 1974, informed unit employ- ees that it would terminate the contract by which Santa Fe provided labor for the Granite Point Platform if those em- ployees persisted in supporting the Union; violating Sec- tion 8(a)(1). I. JURISDICTION Respondent is a Delaware corporation engaged in sever- al States of the United States, including Alaska, in the pro- duction and distribution of petroleum products. Its annual gross income exceeds $500,000, and it annually causes products of a value exceeding $50,000 to be shipped across state lines. Respondent is an employer engaged in and affecting commerce within Section 2(2), (6), and (7) of the Act. II. LABOR ORGANIZATION The Union is a labor organization within Section 2(5) of the Act. 514 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Ill. THE ALLEGED VIOLATION OF SECTION 8(aX5) A. Facts 1. Background Respondent owns 75-percent interest in the Granite Point Platform, which is situated offshore in Cook Inlet, Alaska.' The remaining 25 percent is owned by Union Oil Corporation. Respondent is the "operator" of the plat- form, meaning that, between it and Union Oil, it is respon- sible for the platform's functioning. The platform was in- stalled in 1966. Its first 2 or so years were devoted to drilling for oil, since when it has been concerned mainly with production. In both the drilling and production phases, until sup- planted in July 1974 as detailed below, Santa Fe was under contract with Respondent to furnish labor for the platform. The complement furnished by Santa Fe during the drilling phase was about 100 employees; during the production phase, about 13. On January 31, 1974, following an NLRB election in Case 19-RC-6842, the Union was certified to represent this unit of platform employees: All employees employed by the Employer on the Mo- bil Granite Point Platform excluding office clerical employees, professional employees, guards, and lead- men, relief leadmen and all other supervisors as de- fined in the Act.2 Santa Fe was a named party to that proceeding; Respon- dent was not. 2. Respondent's relationship with Santa Fe Under its latest contract with Respondent, which be- came effective June 1, 1972, Santa Fe was obligated to furnish employees "as required by Mobil" in these classifi- cations: leadman, repairman, senior production operator, crane operator, production operator, utilityman, and roust- about. The contract set forth the wages to be paid by Santa Fe to employees in each classification , named the several employee fringe benefits to be given by Santa Fe,3 and permitted termination of the contract by either party on 30 days' notice. Among other provisions of the contract were these: 1. Wage rates "shall be renegotiable at such times as contractor's [Santa Fe's] labor pay scales are changed as a result of general industry pay scale change." 2. "[A]ny personnel whose qualifications or perfor- mance are unsatisfactory to Mobil will be promptly re- placed by Santa Fe." 3. "Crew change time and crew reporting time . . . will be designated periodically by Mobil." 4. "Mobil shall have the option to hire any Santa Fe employees furnished hereunder." Respondent's investment in the platform is about $50 million 2 It is concluded that this is an appropriate unit within Sec 9(b) of the Act. 3 Including paid vacations , a profit-sharing and retirement plan, a stock bonus plan, safety awards, and workmen' s compensation insurance. 5. "Mobil shall provide transportation for Santa Fe em- ployees . . . to work site and return." The contract provided that, in consideration for Santa Fe's services, Respondent make it whole for its wage out- lay, and in addition pay it a fixed amount or "mark-up" per employee per day to cover its fringe benefit and over- head expenses and allow for profit. The ranking Santa Fe personnel on the platform were its two leadmen. They had nominal power to hire and fire and meaningfully direct the work of the bargaining unit em- ployees." Santa Fe's leadmen in turn were subordinate to Respondent's two production foremen, at least one of whom was present on the platform at nearly all times. The leadmen in many ways were conduits between the produc- tion foremen and the unit employees. They seldom gave other than routine direction without first clearing with a production foreman; and their orders commonly were prefaced by comments indicating that they were being giv- en on the say-so of one of the production foremen. The production foremen often bypassed the leadmen altogether in dealing with the unit employees. Further indicative but not exhaustive of Respondent's control, the production foremen regularly interviewed prospective unit employees and advised whom Santa Fe should send to the platform;5 determined the classifica- tions of those subsequently hired based on interview im- pressions ; reclassified unit employees as circumstances dic- tated; prepared and posted work schedules for the unit employees ; sometimes discharged, demoted, and otherwise disciplined unit employees without consulting with the leadmen; independently approved requests by unit em- ployees for time off; authorized overtime for unit employ- ees and assigned them to tasks at a Mobil facility (the Tank Farm) off the platform; and, jointly with the leadmen, ap- proved promotions and vacations for unit employees and verified their timeslips. In this latter regard, the production foremen sometimes directed the leadman to alter and sometimes themselves altered timeslips which they believed had been padded. 3. The replacement of Santa Fe On February 4, 1974, which was a matter of days after the Union received NLRB certification to represent the unit employees, Santa Fe sent Respondent a letter asking that the daily markup in their contract be increased, and further stating: In the foreseeable future Santa Fe expects to begin [collective-bargaining] negotiations that could eventu- ally result in changes in both the basic hourly wages and benefit package earned by our employees working on the Granite Point Platform. In such event we would, once this negotiation is finalized, be requesting a further alteration in the agreed upon hourly rates billed to Mobil for the services rendered and an ad- justment in the "mark-up" to cover any such new ben- 4The leadmen were ruled ineligible to vote in the NLRB election on supervisory grounds As William Barlett, Respondent's senior production foreman on the platform, testified "I don't believe that they [Santa Fe's personnel manag- ers] were really well versed in the needs of the platform." MOBIL OIL CORP. 515 efit and overhead package. In addition there may well be some retroactive pay increases granted as part of the negotiations which we would expect Mobil to pay for. Respondent replied by letter dated March 7, refusing to increase the markup and withholding comment on the above-quoted portion of the Santa Fe letter. Respondent further responded, in the words of J. L. White, its produc- tion manager for Alaska, by electing "to canvass the mar- ket and find out whether or not this was as good an offer as I could get to operate the platform with respect to this mark-up." Accordingly, Respondent on March 22 invited four companies, plus Santa Fe, to submit bids in contem- plation of invoking the 30-day termination clause in the existing contract with Santa Fe. Santa Fe submitted a bid April 1. The other four declined to bid. Rather than accept Santa Fe's bid,6 in which Santa Fe had acknowledged that, "as a result of our present negotia- tions" with the Union, certain cost items could not be firm- ly quoted, Respondent permitted a belated bid from V.E. Construction, Inc. V.E. had not been included in the March 2 bid invitation. V.E.'s bid, submitted April 24, eventually was accepted. Respondent calculated that it would be more favorable than Santa Fe's by from $20,000-$50,000 per year. On June 14, Respondent formal- ly notified Santa Fe that its services were being terminated as of July 17. Respondent and V.E. executed a contract on July 12, calling for V.E. to begin July 17. This contract is nearly identical in most respects to that between Respon- dent and Santa Fe, including a 30-day termination clause. A conspicuous dissimilarity is the inclusion in the V.E. contract of this language: V.E.'s status hereunder is that of an independent con- tractor and neither V.E. nor any employees of V.E. are employees of Mobil. . . . Mobil is interested only in and shall specify the results to be achieved in connec- tion with the performance of the services under this contract, and the manner, means and details of achieving such results in a good and workmanlike manner are the responsibility of V.E. Meanwhile, Santa Fe and the Union bargained collec- tively from March until May 29, when the employees struck in support of the Union's demands.1 There is no evidence that Respondent played either an overt or a co- vert role in those negotiations .8 On June 21 , as a result of Respondent's June 14 termination notice to Santa Fe, John C. Kilroy, one of Santa Fe's negotiators , sent this letter to the Union: Mobil Oil Company has notified us that our contract to provide labor and service has been cancelled pur- suant to the terms of the contract. Therefore, our last 6 The bid invitation reserved to Respondent "the right to reject any and all bids." 7 The strike continued beyond V.E.'s replacement of Santa Fe. Respon- dent manned the platform with its own personnel until V E. began to per- form. There is no evidence that the strikers applied for reinstatement. 8 W.A. Hacklin, the Union's business agent, testified , however, that one of Santa Fe's negotiators, John C. Kilroy, stated during bargaining that Respondent had the option of getting rid of Santa Fe if it did not approve of the bargaining outcome. day for this Company to provide labor for the Mobil Granite Point Platform will be July 17, 1974. Because of this, we do not see how we are able to continue operations there; however, we are willing to bargain about both of these matters with you. Of course, if we are able to resume operations (Mobil Granite Point Platform) within the N.L.R.B. certifica- tion year, we will certainly, give you notice and bar- gain with you with respect to any relevant matters. If you have any questions concerning the contents of this letter, please feel free to contact me .9 Consequently, on June 26, the Union' s business agent, W. A. Hacklin, sent this letter to Lee Newton, Re- spondent's production superintendent in Anchorage: It has come to my attention that effective July 17, 1974 Mobil Oil Company will terminate the services of Santa Fe Drilling Company. It is my further under- standing that Mobil Oil Company will perform the services previously performed by Santa Fe. Accord- ingly, since you are a successor employer of Santa Fe Drilling Company, we hereby request that you meet and negotiate with us for the purposes of entering into a Collective Bargaining Agreement. Please respond to our request within ten (10) days of the date of this letter. Respondent did not respond in writing, but on July 1 its attorney, Risher Thornton, told Hacklin by telephone that Respondent would not bargain with the Union. As earlier mentioned, the Union filed its charge against Respondent on July 5. B. Analysis and Conclusions 1. Contentions The General Counsel contends that Respondent violated Section 8(a)(5) by displacing the unit employees on the Granite Point Platform without giving the Union a chance to bargain over the decision or its effects on those employ- ees. This contention is premised on the assumption that Respondent and Santa Fe were joint employers of the unit employees; therefore, that Respondent shared Santa Fe's bargaining obligation to the Union.10'Respondent takes an opposing position on all counts. 2. The joint-employer issue Respondent and Santa Fe plainly were joint employers 9 Also on June 21, Santa Fe sent a letter to Respondent acknowledging receipt of the termination notice and adding: While agreeing that Mobil is within their contractual nghts by giving us the required thirty (30) day contract cancellation notice, Santa Fe is disappointed that Mobil elected to cancel our Granite Point Labor Agreement after a tenure of almost eight years. 10 There is no contention that Respondent, by terminating the Santa Fe contract during the stnke, in effect discharged strikers in violation of Sec. 8(a)(3); nor is it contended, despite the 8(a)(1) statements considered later in this decision, that Respondent otherwise violated Sec. 8(a)(3) by displacing unit employees. 516 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of the unit employees. That Respondent possessed the re- quisite control over those employees is best shown by the contract between it and Santa Fe, which , as previously mentioned, empowered Respondent , among other things, to (a) dictate the size of the Santa Fe crew , (b) compel the replacement by Santa Fe of "any personnel whose qualifi- cations or performance are unsatisfactory to Mobil," (c) designate "crew change time and crew reporting time," (d) hire any of the Santa Fe crew, and (e) terminate the con- tract at will, the only limitation being 30 days ' notice. The contract required, in addition, that wage-rate changes pro- posed by Santa Fe be negotiated with Respondent. In practice, moreover, Respondent's control over Santa Fe and the unit employees went beyond the letter of the contract. Again as earlier noted , Respondent's production foremen (a) intruded themselves in Santa Fe 's hiring pro- cess to the extent of interviewing prospective platform em- ployees and advising Santa Fe which of them to send to the platform, (b) classified and reclassified the unit employees, (c) prepared and posted work schedules, (d) sometimes dis- charged, demoted, and otherwise disciplined unit employ- ees, (e) authorized time off for unit employees, (f) author- ized overtime for unit employees and assigned them to tasks at a Mobil facility away from the platform , (g) jointly with Santa Fe's leadmen approved promotions and vaca- tions for unit employees and verified their timeslips, and (h) often bypassed the Santa Fe leadmen when issuing or- ders to the crew. A fine-combing of the record would reveal yet other in- dicia of Respondent's control, but the point is abundantly made by the foregoing aggregate of factors that Respon- dent and Santa Fe were joint employers." It also is con- cluded, based on the terms of its contract with V.E. Con- struction , and despite that contract's characterization of V.E. as an independent contractor, the Respondent and V.E. are joint employers for purposes of this proceeding. See, e.g., Ref-Chem Company, 169 NLRB 376, 377, 379 (1968). 3. The bargaining implications of joint -employership The law seems settled, at least so far as the Board is concerned, that Respondent, as joint employer with Santa Fe of the unit employees, had an obligation coequal with Santa Fe's to recognize and bargain with the lawful bar- gaining representative of those employees. Ref-Chem Com- pany, supra at 380.12 The nature of the joint-employer rela- tionship is such that it is of no moment that the Union's status derived from Board representation proceedings in which Respondent was not a named party, as opposed, say, to a voluntary grant of recognition by Santa Fe. "As joint employers," to quote from Ref-Chem Company at 380, ..each is responsible for the conduct of the other." 11 A main argument of Respondent 's is that .joint-employershlp cannot be found to exist because Respondent has severed its relationship with Santa Fe This of course begs the ultimate question in the case. 12 Enforcement denied 418 F.2d 127 (C A 5, 1969). The Fifth Circuit, however, expressly withheld judgment on "the use of the joint employer doctrine to pass the obligation to bargain from one employer to another ... " 418 F.2d at 129 4. The duty to bargain over displacement of unit employees Relevant to the present case are Fibreboard Paper Prod- ucts Corp. v. N.L.R.B., 379 U.S. 203 (1964), and the copious body of case law that has arisen from it. Fibreboard in- volved an employer's contracting out of in-plant mainte- nance work, and the attendant discharge of its mainte- nance employees, without first permitting the employees' bargaining representative to discuss the matter. The rea- sons for the change were validly economic and free of an- tiunion taint. The Court held that "the replacement of em- ployees in the existing unit with those of an independent contractor to do the same work" was a mandatory subject of bargaining under Section 8(a)(5) and 8(d) of the Act, explaining (379 U.S. at 214): [I]t is contended that when an employer can effect cost savings . . . by contracting the work out, there is no need to attempt to achieve similar economies through negotiation with existing employees or to pro- vide them with an opportunity to negotiate a mutually acceptable alternative. The short answer is that, al- though it is not possible to say whether a satisfactory solution could be reached, national labor policy is founded upon the congressional determination that the chances are good enough to warrant subjecting such issues to the process of collective negotiation. [I]t is not necessary that it be likely or probable that the union will yield or supply a feasible solution but rather that the union be afforded an opportunity to meet management's legitimate complaints that its maintenance was unduly costly." Further to this point, and responsive to the concern stat- ed in Respondent's brief that "if bargaining was required prior to cancellation, the union would never agree to the termination of all its employees . . . [and] . . . it would seem to follow that the contract could never be cancelled," the Board observed in Ozark Trailers, Inc., 161 NLRB 561, 568: [A]n employer's obligation to bargain does not include the obligation to agree, but solely to engage in a full and frank discussion with the collective-bargaining representative in which a bona fide effort will be made to explore possible alternatives, if any, that may achieve a mutually satisfactory accommodation of the interests of both the employer and the employees. If such efforts fail, the employer is wholly free to make and effectuate his decision. Hence, to compel an em- ployer to bargain is not to deprive him of the freedom to manage his business.13 Implicit in Fibreboard, however, is the qualification that a contracting-out decision attended by considerations not 13 Or, as stated in The University of Chicago, 210 NLRB 190 (1974). It is well established that an employer may, after the necessary bargain- ing, terminate work done by the union's members at a particular loca- tion and subcontract it, transfer it elsewhere, or introduce different methods of operation at the same location, even though such action . results in the elimination or reduction in size of the unit involved. [Emphasis supplied.] MOBIL OIL CORP. 517 "suitable for resolution within the collective bargaining framework" need not be subjected to bargaining ritual. 379 U.S. at 213-14. The Board, following this lead, repeatedly has stated that it does not read Fibreboard "as laying down a hard and fast new rule to be mechanically applied re- gardless of the situation involved." Sucesion Mario Merca- do E Hijos, d/b/a Centra Refina 161 NLRB 696, 700 (1966); Westinghouse Electric Corp., 150 NLRB 1574, 1576 (1965); Shell Oil Co., 149 NLRB 305, 307 (1964). The Board thus has refused to find a violation where "it seems certain that no amount of give-and-take in bargaining ne- gotiations could have forestalled the Respondent's inevita- ble decision" (Sucesion Mario Mercado E Hyos, supra at 700); or where the decision involved such "a significant investment or withdrawal of capital [affecting] the scope and ultimate direction of an enterprise" as to "lie at the very core of entrepreneurial control." General Motors Corp., 191 NLRB 951, 952 (1971). Even when an employer' s unilateral subcontracting deci- sion is prompted by considerations "suitable for resolution within the collective bargaining framework," Section 8(a)(5) is not necessarily violated. The Board in Westing- house Electric Corp., supra, set forth several criteria, which if met more or less cumulatively nevertheless warrant com- plaint dismissal. They are if the contracting out was moti- vated solely by economic considerations, comported with the employer's traditional business operations and estab- lished past practice, did not have demonstrable adverse im- pact on the unit employees, and the union had had oppor- tunity in previous negotiation to bargain about the employer's subcontracting practices. See also Tellepsen Pet- ro-Chem Constructors, 190 NLRB 433, fn. 1 (1971). Whether an employer's subcontracting decision is of a nature entitling the union first to bargain-i.e., whether it is a mandatory subject of bargaining-turns, then, on the considerations attending that decision. If they were "suita- ble for resolution within the collective bargaining frame- work," the union is entitled unless the exonerating criteria of Westinghouse Electric Corp.. are met. If, on the other hand, those considerations were "at the very core of entre- preneurial control" or otherwise such "that no amount of give-and-take in bargaining negotiations could have fore- stalled the . . . inevitable decision," the union is not enti- tled to bargain over the decision itself. But even where the union is not entitled to bargain over the underlying deci- sion, the employer generally must give it a chance to bar- gain over the effects of the decision; i.e., "an opportunity to bargain over the rights of the employees whose employ- ment status will be altered by the managerial decision." Ozark Trailers, Inc., supra at 563, quoting from N.L.R.B. v. Royal Plating and Polishing Co., 350 F.2d 191, 196 (C.A. 3, 1965). See also Summit Tooling Company, 195 NLRB 479 (1972). Applying these principles to the present case, it must be concluded that Respondent was under a duty to bargain over the effects on the unit employees of its decision to replace them, whether or not under a duty to bargain over the decision proper. Summit Tooling Co., supra; Ozark Trailers, Inc., supra. It is further concluded, in the circumstances at hand, that Respondent was under a similar duty concerning the decision itself. The saving Westinghouse criteria do not ob- tain because of the harshly adverse impact of the decision on the unit employees, the absence of precedent-setting past practice, and the Union's lack of prior opportunity to bargain over Respondent's contracting-out practices. It is plain, furthermore, that the decision was triggered by the anticipated increased costs of continuing the relationship with Santa Fe, costs which necessarily were a function, at least in part, of employee wage and benefit levels-matters at once remote from the core of entrepreneurial control and uniquely appropriate for treatment within the bargain- ing framework. Respondent being under a duty to permit the Union to bargain not only over the effects of its decision to displace the unit employees, but the decision as well, it follows that its failure to do so and its rejection of the Union's request to bargain violated Section 8(a)(5) and (1) of the Act. IV THE ALLEGED INDEPENDENT VIOLATIONS OF SECTION 8(a)(1) A. Facts The NLRB election was held January 23, 1974. A day or two later, one of the unit employees, Burton DePriest, con- versed with John Green, one of Respondent's production foremen, about the election. DePriest said he wondered what would happen now that the Union had won, to which Green replied : "I imagine Mobil will put this up for bid." 14 At or about the same time, Respondent's other produc- tion foreman, William Barlett, stated in the presence of Santa Fe leadman Leonard Dunham and unit employees William Gray and Billy Mack Nichols that Respondent was not going to have a union contractor on the platform, and instead would cancel its contract with Santa Fe and bring in a nonunion contractor. Then in May, with the strike in prospect, Barlett stated to Dunham and unit em- ployee Glen Cowden that, if there were a strike, Respon- dent would cancel Santa Fe's contract and bring in a non- union contractor. . Barlett, in his testimony, admitted the substance of the statements attributed to him. As he put it: "Very likely I did raise these options . . . [that, if there were a strike] .. . we could shut down . . . [or] . . . we could replace them with one of the nonunion contractors." Barlett added: "I'm sure that everyone was aware that I was not speaking for Mobil, and that it was my opinion." B. Conclusions Green and Barlett, as Respondent's production foremen, were agents of Respondent and supervisors of the platform employees previously found to have been jointly employed by Respondent and Santa Fe. The one comment by Green and the two by Barlett set forth above, whether given as opinions or pronouncements from Olympus, necessarily would have tended to interfere with, restrain, and coerce the employees who heard them, violating Section 8(a)(1).I5 14 This is based on DePriest's uncontroverted testimony . Green did not testify. 15 Since none of the comments in question was spoken to Leadman Dun- ham out of earshot of persons who indisputably were employees under the Act, it is unnecessary to decide, as the General Counsel urges , that Dunham was an employee rather than a statutory supervisor. 518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD CONCLUSIONS OF LAW 1. Respondent is an employer engaged in and affecting commerce within Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within Section 2(5) of the Act. 3. The employees in the bargaining unit described in the certification of representative in Case 19-RC-6842 consti- tute a unit appropriate for collective bargaining within Sec- tion 9(b) of the Act. 4. Respondent and Santa Fe Drilling Company are the joint employers of the employees in the above unit. 5. The Union at all material times has been the exclusive collective-bargaining representative of the employees in the above unit within Section 9(a) of the Act. 6. By terminating its contract with Santa Fe and thereby displacing the employees in the above unit, without permit- ting the Union to bargain over the underlying decision or its effects on those employees, as found herein, Respon- dent engaged in unfair labor practices within Section 8(a)(5) and (1) of the Act. 7. By the utterances of Production Foremen Green and Barlett described herein, Respondent engaged in unfair la- bor practices within Section 8(a)(1) of the Act. 8. The aforesaid unfair labor practices affect commerce within Section 2(6) and (7) of the Act. REMEDY To effectuate the ?olicies of the Act, it is recommended that Respondent be -irdered to cease and desist from the unfair labor practice.. found. Affirmatively, des 'ite the difficulties inherent in "un- scrambling the egg" i cases of this sort, it is recommended that Respondent be ordered fully to restore the status quo ante by reviving its relationship with Santa Fe on the Gran- ite Point Platform a-d in so doing offer reinstatement to the unlawfully displa ed employees and make them whole for their monetary 1 ses, from the July 17 date that V.E. Construction suppla ted Santa Fe, occasioned by their dis- placement. It is further recommended , should Respondent then wish to replace Santa Fe, that it be required first to bargain with the Union over the decision and its effects on the employees subject to displacement. The inclusion in this recommendation of the backpay and reinstatement elements is not without awareness that the employees in question were on strike when their unlaw- ful displacement occurred , and of the Board policy stated in Astro Electronics, Inc., 188 NLRB 572, 573 (1971): It is the settled policy of the Board that striking em- ployees are not entitled to backpay while they are on strike. Their rights depend on the termination of the strike which is ordinarily signified by the strikers' ap- plication for reinstatement. Employees who are dis- charged while on strike [which in effect happened to the employees in question] also must indicate aban- donment of the strike and a willingness to return to work in order to establish their right to their jobs and resumption of wages unless there is a showing that such application would be rejected, i.e., that it would have been futile. [Emphasis supplied.] 16 Rather, it is concluded that Respondent's additional act of contracting out the work to V.E., after earlier terminating the Santa Fe contract, made application for reinstatement by the strikers so palpably futile as to satisfy the excep- tion-emphasized in the above passage-to the general rule. Nor is this recommendation unmindful that its imple- mentation would involve the Board in a reengineering of Respondent's contractual relationships with two entities who are not named parties herein , Santa Fe and V.E. Santa Fe and V.E. both being joint employers of Respondent for purposes of this proceeding, however, such involvement plainly would not exceed the Board's remedial powers; and, in all the circumstances , is essential to the achieve- ment of a meaningful remedy.17 Backpay shall be computed in accordance with F. W. Woolworth Co., 90 NLRB 289 (1950), and Isis Plumbing & Heating Co., 138 NLRB 716 (1962). 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'S Respondent, Mobil Oil Corporation, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Stating to employees that it would cancel its contract with Santa Fe Drilling Company, or with any other em- ployer, rather than have a union contractor on the Granite Point Platform, or should the employees go on strike. (b) Refusing to bargain collectively with Alaska Rough- necks and Drillers Association as the exclusive bargaining representative of the employees in the bargaining unit set forth in the certification of representative issued by the NLRB in Case 19-RC-6842; and from contracting out the work of those employees or otherwise changing their wages, hours, and other terms and conditions of employ- 16 See also Valley Oil Co, 210 NLRB 370 (1974), Royal Typewriter Com- pany, 209 NLRB 1006 (1974); Sea-Way Distributing, Inc, 143 NLRB 460 ( 1963), Happ Brothers Company, 90 NLRB 1513, 1518-19 ( 1950). 17 The Supreme Court expressly considered and approved a remedy of comparable scope in Fibreboard, 379 U.S. at 215-216 The Board in special circumstances, however, imposes gentler sanctions For instance in Empire Dental Co, 211 NLRB 860 (1974); Ozark Trailers, Inc, supra; Royal Plating and Polishing Co., 148 NLRB 545 (1964); and Carl Rochet, d/b/a Renton News Record, 136 NLRB 1294 ( 1962), it did not order resumption of the discontinued operations because intervening events or other extenuating factors made resumption seriously burdensome . Similarly, the Board in those cases relaxed or eliminated the backpay aspect of the remedy The present case, unlike those, is not one in which the policies of the Act would be served by a softened remedy. 19 All outstanding motions inconsistent with this recommended Order hereby are denied . 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. MOBIL OIL CORP. 519 ment without first bargaining with the above labor organi- zation. (c) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of rights under Section 7 of the Act. 2. Take the following affirmative action: (a) Revive its contractual relationship with Santa Fe Drilling Company on the Granite Point Platform; and, in so doing, offer reinstatement to those employees displaced by its termination of the contract with Santa Fe, without prejudice to their seniority and other rights and privileges, and make them whole for any loss of pay and other bene- fits suffered by them on and after July 17, 1974. (b) Bargain collectively with Alaska Roughnecks and Drillers Association as the exclusive representative of the employees in the aforementioned unit with respect to wages, hours, and other terms and conditions of employ- ment. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records neces- sary to analyze the amount of backpay due and the rights of reinstatement under the terms of this Order. (d) Post on the Granite Point Platform and its office in Anchorage, Alaska, copies of the attached notice marked "Appendix." 19 Copies of said notice on forms provided by the Regional Director for Region 19, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in con- spicuous places, including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by Respondent to ensure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 19, in writ- ing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 19 In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board