Frito-Lay, Inc.

FRITO-LAY, INC. Frito-Lay, Inc. and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, Laundry, Dry Cleaning and Dye House Workers' International Union, Local No. 1. Cases 6-CA-8255 and 6-RC-7090 September 30, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND MURPHY On May 18, 1976, Administrative Law Judge Ivar H. Peterson issued the attached Decision in this proceeding. Thereafter, General Counsel filed limit- ed exceptions and a supporting brief, and Respon- dent filed cross-exceptions, a supporting brief, and a brief in answer to General Counsel's limited excep- tions. 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, cross- exceptions, and briefs and has decided to affirm the rulings, findings,' and conclusions of the Administra- tive Law Judge, as modified herein.2 1. The Administrative Law Judge found that Respondent violated Section 8(a)(1) of the Act "substantially in the respects alleged in the General Counsel's complaint." We agree. Specifically, we find that Respondent engaged in the following unlawful acts in violation of Section 8(a)(1): unlawful interro- gations; threats of discharge or other types of reprisal; creating the impression of surveillance; granting and implementing a wage increase; 3 and threats to close the plant. In finding the above violations, we rely on the testimony of Collenette, Sandor, and Hunter, all of whom are credited (specifically or inferentially) by the Administrative Law Judge. At the end of February 1975, Collenette was asked by Team Leaders Kettlehut and Riley4 whether he knew anything about the Union and was told that he "had better take a look at the benefits that we had under the O.D. System and think it over twice" and "that if the union came in Frito-Lay officials might decide to I Respondent has excepted to certain credibility findings made by the Administrative I aw Judge. It is the Board's established policy not to overrule an Administrative Law Judge's resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dry Wall Products. Inc.. 91 NLRB 544 (1950). enfd. 188 F.2d 362 (C.A. 3, 1951). We have carefully examined the record and find no basis for reversing his findings. 2 Respondent's request for oral argument is hereby denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties. 232 NLRB No. 119 close the plant and pull out the machinery." Sandor testified that Team Leader Riley conducted a meeting in late February or early March at which he asked the seven members of the team why they wanted the Union and told them if the Union came in "it would represent the failure of the open system, or the Sharon system" and, accordingly, Respondent would have to "re-evaluate the plant, solely on economic grounds" and that "the chances were that there would be layoffs, or some sort of slowdown, or possibly even a shutdown at Sharon" because the product was more inexpensively produced in Dallas, Texas.5 The Administrative Law Judge specifically credited the testimony of Hunter who testified, inter alia, that on February 12, 1975, Plant Manager Mclnvale informed him that he understood that Hunter was trying to form a union and that Hunter would be fired if Mclnvale heard any further rumors about Hunter's "starting a union"; that, in the first week of March, Team Leader Riley told Hunter that if the Union came in Hunter and Collenette would be the first two employees fired; and that Vice President of Labor Relations Clegg stated at a meeting attended by the employees that "the plant was only experimental, and if [the employees] threw the system out, IRespondent] could shut the plant down and make munchos in Texas, because it was cheaper to make them there, than it was here." Based on the above testimony, we find that Respondent violated Section 8(a)(1) of the Act by engaging in the unlawful activity described above. 2. The Administrative Law Judge apparently found that the closure of the facility was economical- ly justified since Respondent, before the Union's organizational efforts were well under way, came to the tentative conclusion that the facility should be closed. General Counsel contends that the Adminis- trative Law Judge erred in this finding. We agree. Initially, contrary to the Administrative Law Judge, we do not agree that the decision to close was "reasonably firm" on January 15, 1975. Respon- dent's director of industrial engineering, Wheless, and the senior vice president, Kickhamr both testified that the decision to close the facility was made in April. Although Respondent began consideration of closing the facility as early as January 1975, Wheless wrote a memorandum on February II to Kickham reflecting their decision to keep open the facility "for 3 The Administrative Law Judge concluded that Respondent violated Sec. 8(aX3). as well as Sec. 8(aX 1). of the Act by granting unit employees a wage increase on February 21, 1975. We agree that such action was in violation of Sec. 8(aXI ) of the Act, but do not adopt his finding that it also violated Sec. 8(ai)3). 4 The Administrative Law Judge found, and we agree, that Team Leaders Kettlehut, Riley. Sineath. and Pitts are agents of Respondent. 5 The Administrative Law Judge also found that the vice president of labor relations made substantially the same statement on a number of occasions at employee meetings on March 3 and 4. 753 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the near future" due to an increase in the growth rate. Since the Union requested recognition and filed a representation petition on February 7. it is clear that Respondent had not reached a "reasonably firm determination" to close the facility before the organizational efforts of the Union were well under way. We further find that the closure was unlawfully motivated. Although Respondent introduced evi- dence indicating that the product could be more cheaply manufactured in Dallas, Texas (where the work was subsequently transferred), we believe that the economic grounds asserted were pretextual and that, in fact, Respondent closed the facility because the Union threatened its open management system, also referred to herein as the innovative system. It is clear that the open management system was a crucial factor in opening the plant. Thus, Kickham testified that the plant was opened because he "was very anxious to try this system," and Plant Manager Mclnvale testified "that the open system was extremely important to resolve, it was one of the primary missions of the Sharon plant, to test that system." The record is replete with examples indicat- ing the great concern of management with the innovative system. Kickham decided to utilize the concept at the Sharon facility.6 Mclnvale, who possessed a significant background in the innovative system, was appointed plant manager by Kickham and, due to the unique nature of the system as well as Kickham's very strong personal interest in it, reported directly to him.7 Managers and employees were screened to determine their attitudes and aptitudes regarding the open management system. Additionally, Respondent opened the Sharon facility at a time when not only was the forecast for its product not encouraging, but Respondent knew that the product could be made less expensively in Texas. Accordingly, it is clear that the open management system was the primary consideration in opening the Sharon facility. It is also clear that Respondent, subsequent to the advent of the Union, began evaluating the facility for the first time solely by an economic standard. In fact, the economic conditions giving rise to the plant closure were not significantly different from the conditions existing at the time the facility began production. Kickham testified that he had estimated it would take approximately a year for the system to work out and explained to Mclnvale that it was understandable that the Texas facility initially could produce the product less expensively than the Sharon facility but that Kickham expected improvement to the point where the Sharon facility would equal the H' Respondenl's facility referred to in the record and herein as the "Sharon facililt" is located, in fact, in West Middlesex. Penns)lvania. cost in Texas "at some time in the future." Notwith- standing this expectation that it would take some time to work out the new system and despite the $3.5 to $4 million investment in the new facility, the decision to close the plant was made in April, only 7 months after the plant began production in Octo- ber-and only 2 months after the Union demanded recognition. In addition, as found by the Administrative Law Judge, Respondent made numerous threats to employees that a unionized plant would represent a failure of the open system and would require it to reevaluate the plant solely on economic grounds. As Respondent's facility in Texas was able to produce the product for less than it could be produced in Sharon, a threat to evaluate the Sharon plant solely on economic grounds was tantamount to a threat to close. The relationship between the advent of the Union and the closing of the plant was specifically explained by Team Leader Kettlehut after the plant's shutdown was announced, when he told Hunter that closing the plant is "what it is to try to get a union in a non-union shop." Accordingly, although obviously Respondent was concerned with the economic wisdom of maintaining the plant, it is clear that Respondent's emphasis shifted with the advent of the Union from concern with the innovative system to concern only with the financial justification for maintaining the plant. In our opinion, the above evidence shows that Respondent unlawfully closed down its production facility in Sharon based on union considerations, transferred the unit work to its Texas plant, and terminated the employment of the Sharon production operation employees in violation of Section 8(a)(3) of the Act. 3. Based on the above violations, we find that Respondent's conduct not only precluded the hold- ing of a fair election, but, in our judgment, was of a sufficiently pervasive and extensive character to have undermined the Union's preexisting majority. There- fore, we shall set aside the election, dismiss the petition, and vacate the proceeding in Case 6-RC- 7090. We further find that the lingering effects of Respondent's past coercive conduct render uncertain the possibility that traditional remedies can insure a fair election. We therefore conclude that the Union's card majority, obtained before the unfair labor practices occurred, provides a more reliable test of employee representation desires and better protects employee rights than would a rerun election. Accord- ingly, we find that by refusing to recognize and bargain with the Union and by engaging in the aforesaid unfair labor practices Respondent violated Section 8(a)(5) and (1) of the Act and the policies of 7 Mclnvale was the only plant manager directly reporting to Kickham. 754 FRITO-LAY, INC. the Act will best be effectuated by imposition of a bargaining order to remedy such violations." Accord- ingly, we also find that Respondent refused to bargain with the Union in violation of Section 8(aX5) of the Act. In making these findings, we are aware that the United States Court of Appeals for the Third Circuit has indicated 9 that, under its interpretation of Gissel, the Board must indicate specifically under which of the first two Gissel categories ° it has classified the unlawful practices and is required to "clearly explicate its reasons for issuing a bargaining order and include findings as to why a fair election cannot be held." In recognition of the possibility that the instant case could be appealed to the United States Court of Appeals for the Third Circuit, we make the following detailed analysis: Clearly, the above unlawful practices, for reasons stated specifically below and in numerous other cases, are "outrageous," "pervasive," and of a sufficiently serious nature that traditional remedies cannot eliminate their coercive effects. However, even if Respondent's activities cannot be so de- scribed (and we emphasize, again, that they can), the record indicates that the Union possessed an authori- zation card majority on February 7, 1975, when it made its demands on Respondent. Accordingly, it is not necessary for us to resolve whether Respondent's unlawful acts fall into the first or second category described by the Gissel Court. However, we note that Respondent engaged in unlawful interrogations; threats of discharge or other types of reprisal; creating the impression of surveillance; granting and implementing a wage increase; threats to close the plant; unlawful closure of the production facility; and termination of all the Sharon production operating employees. Obviously, at the very least, such unfair labor practices are sufficiently serious and pervasive to have the tendency to undermine majority strength and impede the election processes. Certainly this conduct renders slight the possibility of erasing the effects of the past practices and of ensuring a fair election by the use of traditional M N.L.R.B. v. Gissel Packing Co.. Inc.. 395 U.S. 575 (1969). As set forth above, by threatening Hunter on February 12, 1975, Respondent embarked on a course of unlawful conduct which dissipated the Union's majority status. Accordingly. we find that Respondent's bargaining obligation commenced as of that date. Trading Port, Inc., 219 NLRB 298 (1975). Chairman Fanning would find that Respondent's obligation to bargain commenced as of the date the Union attained a majonty and demanded (and was refused) recognition-February 7. 1975. (See his concurring and dissenting opinion in Drug Package Company. Inc.. 228 NL RB 108 (1977).) 9 See N. L. R. B. v. Armcor Indurstries. Inc., 535 F.2d 239 (C.A. 3. 1976): Hedstrom Co., a subsidiary of Brown Group, Inc., 558 F.2d 1137 (C.A. 3, 1977), to See Gissel, 395 U.S. at 613-615. I" The Board and the courts have long recognized that threats to close down a facility because of union activity are among the most serious and flagrant forms of interference with the free exercise of employee rights. Irving N. Rothkin dibia Irv's Marker., 179 NLRB 832 (1969), enfd. 434 F.2d remedies and establishes that employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order. Respondent not only threatened to close the plant," but, in fact, closed the entire production operation thereby terminating approximately 40 employees employed therein in violation of Section 8(a)(3) of the Act. Such conduct "goes to the very heart of the Act"12 and has consequences clearly crippling to the free exercise of Section 7 rights.13 Obviously, the enthusi- asm for union activity formerly displayed by the employees who signed authorization cards was, and will continue to be, dampened by the recollection of Respondent's unlawful practices which will be, or already have been, related to new employees.' 4 Based on the foregoing explication of the effects of Respondent's unlawful practices and the ineffec- tiveness of a remedy other than a bargaining order, we have made the foregoing findings and shall provide the following remedy. THE REMEDY Having found that Respondent engaged in certain unfair labor practices, we shall order it to cease and desist therefrom and take certain affirmative action which we find necessary to effectuate the policies of the Act. Having found, contrary to the Administrative Law Judge, that Respondent unlawfully shut down its production operation and terminated the personnel therein in violation of Section 8(a)(3) of the Act, we shall amend the recommended Order accordingly. Thus, we shall order Respondent to restore the status quo ante by reopening the Sharon facility, restoring the production facility therein,'5 and recalling the terminated employees to the positions they held before their unlawful termination without prejudice to their seniority and other rights and privileges.' 6 We shall further order Respondent to make these employees whole for any loss of earnings and other benefits resulting from Respondent's unlawful termi- nation of them, computed in accordance with the 1051 (C.A. 6, 1970). Textile Workers Union v. The Darlington Mfg. Co., 380 U.S. 263 (1965). Moreover, as the Supreme Court has indicated, threats to close or transfer plant operations are among the most effective unfair labor practices for destroying election conditions for a longer period of time than others. See Gissel, 395 U.S. at 611. fn. 31. 12 N. LR.B v. Entwistle Manufacturing Co., 120 F.2d 532, 536 (C.A. 4. 1941). i3 See Armcor Industries, Inc., 227 NLRB 1543 (1977). 4 See Armcor, supra, E.S. Merrirnan d Sons. Merriman Managemenr Services, Inc., 219 NLRB 972 (1975), and cases cited therein at 973. is Member Murphy believes that the Board should order reopening and resumption of an operation only in the most extreme circumstances. She finds, however, that the facts in this case as recited above fully justif) this type of remedial order here. ie Gerald F Hinkle d/b/a Akron Noveliy Manufacturing Companyv. 224 NLRB 998 (1976); Krebs and King Toyota, Inc., 197 NLRB 462 (1972). 755 DECISIONS OF NATIONAL LABOR RELATIONS BOARD formula stated in F. W. Woolworth Company, 90 NLRB 289 (1950), with interest computed in the manner set forth in Florida Steel Corporation, 231 NLRB 651 (1977).17 Having further found that Respondent violated Section 8(a)(1) of the Act by certain unlawful conduct as set forth above, we shall order Respondent to cease and desist therefrom. Having found that Respondent refused to bargain in good faith with the Union in violation of Section 8(a)(5) and (1) of the Act, we shall order that it cease and desist therefrom, and, upon request, bargain collectively with the Union as the exclusive represen- tative of all employees in the appropriate unit1 8 concerning wages, hours, and other terms and conditions of employment, and, if an understanding is reached, embody such understanding in a signed agreement. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Frito-Lay, Inc., West Middlesex, Pennsylvania, its officers, agents, successors, and assigns, shall: I. Cease and desist from: (a) Questioning employees concerning their union sympathies or concerted activities. (b) Discharging or threatening employees with discharge or with any other type of reprisals or more onerous working conditions if they select the Union as their collective-bargaining representative. (c) Refusing to bargain with the International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America, Laundry, Dry Clean- ing and Dye House Workers' International Union, Local No. 1, as the exclusive bargaining representa- tive of the employees in the appropriate unit. (d) Granting and/or implementing wage increases or other benefits without bargaining with the Union. (e) Threatening employees with plant closure. (f) Creating the impression of surveillance. (g) In any other manner interfering with, restrain- ing, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action in order to effectuate the policies of the Act: (a) Restore the production operation to the Sharon facility and reinstate unlawfully terminated employ- ees to the positions they held before their unlawful termination without prejudice to their seniority or other rights or privileges and make them whole for any loss of earnings or other benefits resulting from Respondent's unlawful termination of them in a manner set forth in the section of this Decision entitled "The Remedy." (b) Upon request, bargain collectively in good faith with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Laundry, Dry Cleaning and Dye House Workers' International Union, Local No. 1, as the exclusive bargaining representative of the employees in the appropriate unit described above with respect to 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. (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 to analyze the amount of backpay due under the terms of this Order. (d) Post at its plant in West Middlesex, Pennsylva- nia, copies of the attached notice marked "Appen- dix." 1 9 Copies of said notice, on forms provided by the Regional Director for Region 6, after being duly signed by Respondent's authorized representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including 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. (e) Notify the Regional Director for Region 6, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply here- with. IT IS FURTHER ORDERED that the election conducted on May 18 and 19, 1975, in Case 6-RC-7090 be set aside, that the petition therein be dismissed, and that the proceeding in Case 6-RC-7090 be vacated. 17 See, generally, Isis Plumbing& Heatring Co., 138 NLRB 716 (1962). i" All formulation employees, processing employees, packaging employ- ees. maintenance employees, support employees, shipping and receiving employees and plant clerical employees employed at the Employer's West Middlesex, Pennsylvania, location, excluding all office clerical employees, salesmen, drivers, and professional employees and guards and supervisors as defined in the Act. I9 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." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse, upon request, to bargain collectively in good faith concerning rates of pay, 756 FRITO-LAY, INC. wages, hours, or other terms or conditions of employment with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, Laundry, Dry Cleaning and Dye House Workers' International Union, Local No. 1, as the exclusive bargaining representative of the employees in the following unit: All formulation employees, processing em- ployees, packaging employees, maintenance employees, support employees, shipping and receiving employees and plant clerical em- ployees employed at the Employer's West Middlesex, Pennsylvania, location, exclud- ing all office clerical employees, salesmen, drivers, and professional employees and guards and supervisors as defined in the Act. WE WILL NOT threaten our employees with discharge, or with any other types of reprisals because they support a union. WE WILL NOT grant employees wage increases without bargaining with the Union. WE WILL NOT unlawfully question employees concerning their union membership, activities, or desires. WE WILL NOT threaten employees with plant closure because of employee support of a union. WE WILL NOT create the impression of surveil- lance of union activities. WE WILL NOT layoff or discharge employees because they selected the Union as their collec- tive-bargaining representative. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of their rights guaranteed under Section 7 of the Act. WE WILL, upon request, bargain collectively and in good faith with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Laundry, Dry Cleaning and Dye House Workers' International Union, Local No. i, as the exclusive bargaining representative of the employees in the appropriate unit described above with respect to 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. WE WILL restore the production operation to the Sharon facility and reinstate unlawfully terminated employees in the appropriate unit described above to the positions they held before their unlawful terminations, without prejudice to their seniority or other rights or privileges, and WE WILL make them whole for any loss of earnings or other benefits resulting from our unlawful termi- nation of them, with interest. -FRITO-LAY, INC. DECISION STATEMENT OF THE CASE [VAR H. PETERSON, Administrative Law Judge: This case was heard in Sharon, Pennsylvania, on 8 days commencing on November 11 and concluding on December 3, 1975, based on the complaint issued by the Regional Director for Region 6, on August 28, whicW in turn was based on a charge, filed by International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Laundry, Dry Cleaning and Dye House Workers' Interna- tional Union, Local No. I, herein called the Union, on April 24, amended on August 19. On September 2, the Regional Director issued an order directing hearing on objections, filed by the Union on March 25, with respect to a consent election held on March 18 and 19.1 By order dated September 5, the Acting Regional Director directed that these cases be consolidated for the purpose of hearing. Briefly stated, the amended complaint, as further amended at the outset of the hearing, alleged that Respondent, by the conduct of various supervisors and agents, had engaged in conduct violative of Section 8(a)(1) of the Act on various dates from February through the middle of March, and that, at all times since on or about February 7, Respondent had failed to bargain collectively with the Union as the representative of the employees in an appropriate unit in which the election was held and that, on or about June 1, Respondent unlawfully terminated the employment of all of its employees in that unit and thereafter refused to reinstate them to their former or substantially equivalent positions for the reason that they had engaged in activities on behalf of the Union and in other protected concerted activities, thereby violating Section 8(a)(3), (5), and (1) of the Act. In its answer, dated September I 1, Respondent admitted certain allegations of the complaint but denied that it had engaged in any conduct violative of the Act. On the entire record in the case,2 including my observation of the demeanor of the witnesses as they testified, and after considering the briefs filed with me by counsel for the General Counsel and counsel for Respon- dent on or about February 2,3 1 make the following: I The results of the election showed that. of approximately 39 eligible voters. 17 votes were cast for the Union and 22 were cast against the Union. 2 The unopposed motions of counsel for the General Counsel and counsel for Respondent to correct the transcript in certain respects are granted. 3 On February 23. I received a rather lengthy letter from counsel for Respondent. dated February 20. in which he took issue with what he termed some "apparently inadvertent erroneous, unsupported or misleading assertions" contained in the brief of counsel for the General Counsel. to whom a copy of the letter was sent. On February 27. 1 received a letter from counsel for the General Counsel., dated February 24. in which he "strenuously" objected to "the substance of counsel for Respondent's letter" to me, and to "his characterization of General Counsel's brief as unsupported and/or misleading." He concluded by stating that the letter of (( oninued) 757 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT I. JURISDICTION Respondent, a Delaware corporation with its principal offices in Dallas, Texas, is engaged in the manufacture, distribution, and nonretail sale of food products. It operates a facility in West Middlesex, Pennsylvania, which is the only facility here involved, generally called the Sharon plant, at which it admittedly received goods and materials valued in excess of $50,000 directly from points outside the Commonwealth of Pennsylvania, during the 12- month period preceding issuance of the complaint and that, during the same period, it shipped goods and materials valued in excess of $50,000 from the West Middlesex facility to points outside the Commonwealth of Pennsylvania. It is admitted and I find that Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act and comes within the Board's jurisdictional standards, and that the Union, at all material times, has been a labor organization within the meaning of Section 2(5) of the Act. It is admitted and I find that the following individuals occupy the positions set opposite their names and are agents of Respondent: Leonard B. Clegg Gerald D. Mclnvale Victor H. Coffman Mark H. Sineath Steven M. Riley Robert E. Kettlehut Tommy Dean Pitts Vice Pres. of Labor Relations Plant Manager Production Manager Team Leader Team Leader Team Leader Team Leader Respondent denies that one Stanley Hailey, alleged to have been a supervisor, occupies that position. I find, however, that he is a supervisor inasmuch as he was in charge of personnel functions in the Great Lakes zone and had the responsibility to recommend settlement or adjust- ment of grievances and did in fact do so. II. THE ALLEGED UNFAIR LABOR PRACTICES A. Introduction Respondent has 37 manufacturing plants all located in States of the continental United States and operates through a franchise arrangement in Hawaii. Eighteen of these are organized. Leonard Clegg, vice president in charge of labor relations, testified it has 78 agreements with some 6 or 7 different labor organizations, approximately three-fourths of which are with the Teamsters. Respondent employs approximately 15,000 persons. Its Sharon plant got underway in September 1974. 4 However, as John counsel for the Respondent was "in fact an answering brief which is not provided for by the Board's Rules and Regulations, and therefore should not be taken into consideration in your determination of the case." Under date of February 27, I wrote to counsel for Respondent, with a copy to counsel for the General Counsel and counsel for the Union, stating that inasmuch as I had read his letter and "thus can not wholly disregard its purport, and considering also the important issues raised in this case, it appears to me that in these circumstances the fair thing to do is to afford counsel for the General Counsel a reasonable opportunity to respond, if he Kickham, Respondent's senior vice president in charge of manufacturing and support functions, testified, officials of Respondent, early in January 1975, began considering closing the Sharon facility. According to Mark Wheless, Respondent's director of industrial engineering, a feasibili- ty study was prepared prior to the opening of the Sharon plant. He further testified that a number of other facilities of Respondent were closed in 1975, and that, when he recommended that the Sharon plant be closed, he had no information concerning organizational activity among the Sharon employees. He related that a decision to close the Sharon plant was made between March 31 and April 10. Kickham testified that it was more expensive for Respon- dent to make its products in Sharon than in the Texas plant, and that the decision to close the Sharon plant was made in April. He further testified that Respondent located in Sharon because it had owned the building for some time and was of the view that shipping costs would be more favorable as compared with the Texas plant. Frank Scalish, the Union's business representative, related that organizational activity began in the latter part of December 1974 and was further activated in February, when he met with employees in Sharon and received a number of authorization cards. He asked management for recognition on February 7, which was refused, and then filed a representation petition on the same date. He testified that, by February 20, the Union had 28 signed authorization cards from the approximately 40 employees of Respondent at the Sharon plant. Under date of February 21, Respondent, by letter posted on the bulletin board, advised the employees that following a wage survey all job rates at the Sharon facility would be increased by 25 cents effective February 23 and would appear in their paychecks on March 14. In his letter, Mclnvale stated that Respondent's "commitment was to resolve and announce the wage survey during February" and stated that it would have been completed earlier "but the Employee Relations Department has to research and prepare our position so that we can not be accused of an 'Unfair Labor Practice' in granting this increase during the period prior to the election." In granting and implementing this wage increase, Respondent did not consult with the Union. McInvale testified that, at the time the wage increase was implemented, he was aware that the Union was organizing the employees but that he did not discuss the wage increase with any union representative. In his brief, counsel for Respondent states "the evidence shows unambiguously and indisputably that the Company had decided on its wage increase before the Union's demand, and that the employees were advised of and expecting the increase. By failing to implement the increase," so he argues, Respondent would have violated Section 8(a)(1) so desires." I then allowed counsel for the General Counsel until March 15 to file a further brief with me. On March 15, I did receive an answering brief from counsel for the General Counsel. I In 1972 Respondent purchased land and a large building in Sharon. expecting to convert it to producing a new product. However, this did not materialize and, when Respondent realized its need to expand facilities to produce more Muncho pellets, the intermediate product from which Muncho potato cnsps are made, the Sharon facility became the logical place in which to conduct the new operation. 758 FRITO-LAY, INC. and (3) and the "implementation of the wage increase was not in violation of" Section 8(a)(1). Counsel for the General Counsel delineates the following issues: (a) whether Respondent engaged in certain acts and conduct which constitute violations of Section 8(aXI) of the Act; (b) whether Respondent closed its Sharon facility, transferred bargaining unit work to the unorganized Texas plant, and terminated the Sharon employees in violation of Section 8(a)(3) of the Act; (c) assuming that the answers to the foregoing are in the affirmative, whether a bargaining order, as well as an order to reopen the Sharon facility, should be issued to remedy the foregoing violations; and (d) whether Respondent violated Section 8(a)(5) of the Act by certain acts and refusals to bargain. On the other hand, Respondent contends, in essence, that its decision to close the Sharon facility was solely motivated by economic considerations and, while coinciding with the Board election, was originated and implemented pursuant to its decisions made long before it became aware of any union activity among its employees. It is apparent that the issues raised in this case involve very substantial amounts of money, in terms of possible backpay to employees, relocation costs to Respondent, and other incidental obligations. B. Interference, Restraint, and Coercion In the latter part of June 1974, Respondent instituted its process for hiring production and maintenance employees for the Sharon facility. It had received something more than 900 job applications and, through a three-step procedure, it hired 41 individuals. The hiring process involved the following steps: First, applicants were sepa- rated into groups of approximately 50. Mclnvale made a presentation to these groups, lasting some 15 minutes, concerning the job, the open management system, and employee benefits. Thereafter, those applicants who were interested were asked to fill out a standard employment application and questionnaire. The purpose of the ques- tionnaire was to endeavor to explore the subject of the open system and to obtain opinions on that matter. Thereafter, there was a "screening" interview, lasting some 10 minutes, by a member of management, during which the questionnaire filled out by the applicant and his applica- tion were reviewed. Such applicants as did not indicate a liking for the open management system or, as it was customarily referred to, the O.D. System, were not chosen. There is testimony that several applicants were ques- tioned by the person interviewing them, as to their attitudes with respect to unions. Thus. Kenneth Hunter, who was hired, testified that the interviewer told him that she noticed that his last place of employment was with Sharon Steel and that she then inquired how he felt about the O.D. System and that he told her he thought it was a good idea and that she thereupon inquired whether he did not think, in his words, it was "a better idea than to pay union dues out every month." He further related that Supervisor Pitts interviewed him, basically asking the same questions and inquired what he thought about a union, to which he responded that he was against them. He stated that, in the course of the interview with a Miss Cobb, she stated, in his words, "that we would be working on a team concept, that the union wasn't there, we'd make our own decisions, we wouldn't have to have a union make our decision for us." Michael Cooke, another applicant who thereafter was hired, testified that, in his initial interview conducted by Team Leader Steve Riley, the latter inquired of him where he had worked and also about unions, and that he responded by stating that he had worked in a union establishment previously at Sharon Steel. The final step in Respondent's hiring process consisted of a so-called in-depth interview which was conducted by teams consisting of three management representatives. Applicants who were regarded as worthy of further consideration following the screening interview were given a written description of the O.D. System and then scheduled for the more extensive interview which lasted some 30 minutes and, as the evidence discloses, was designed to explore the person's attitudes toward the O.D. System. The applicants, so they testified, were also questioned about their feelings concerning any affiliations, if any, with unions. For example, Joe Sandor, an employee, testified that during his interview he was asked about his former employment and that he answered he had worked in union shops, whereupon he was questioned as to his feelings about union shops and unions. He related that he said that he thought at times unions were beneficial but at other times they were not. He further stated that he answered the question in that manner because he "assumed that that was the answer that they were looking for, and I desired the job." He also stated that during his second interview he was questioned about how he felt about a union and that he said he "was against them, I lied so I could get the job." Richard Collenette testified that during his second interview he was asked if he understood the O.D. System, which the interviewer characterized as the relationship between the management and the employees, without a third party. He asked the interviewer, "Did he mean union, and he said yes, he did. And he asked me how I thought this kind of plan would work in this area because the Shenango Valley was so heavily unionized." Collenette answered that he "thought it would work and that I wanted to be part of it." Rebecca Gordon related that the subject of unions was brought up at her second interview, and that she was "asked if I had worked at any place where there was a union," and that she said that she had, and, in response to inquiry to her feelings about unions, she "told him at this particular place where I was working at, which was at Mercer County Home, I said that I felt very strongly for the Union because of the conditions" at the time she was there. In response to further inquiry as to her feelings in general concerning unions, she replied that "there's certain places where there's a definite advantage to have a union, there is also places where that there's a possibility where unions were good there as not having them or having them." Finally, Tony Fall testified that he was asked about unions by Karen Cobb, a member of Respondent's personnel department, how he thought the O.D. System would work "in place of the union," and that he answered that "it sounded like it could work and that it should be given a chance." 759 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Witnesses produced by Respondent concerning the above matters related by General Counsel witnesses either denied that the incidents occurred or gave different versions. Counsel for Respondent, in his brief, in particular takes issue with the testimony of Hunter, characterizing it as "the most bizarre produced during the hearing" and asserting that it is not credible. He argues that Hunter's testimony is full of internal inconsistencies and cites as an example Hunter's testimony as to how he learned about Respondent's decision to close the Sharon facility. Thus, Respondent notes that on direct examination he stated that he learned of that decision from a fellow employee, Michael Cooke, inasmuch as he had not attended the meeting summoned to announce that decision in order that he might take his child to the hospital. On cross-examina- tion, however, Hunter testified that he learned of his decision from Plant Manager Mclnvale, in a conference room. In addition, Hunter testified that he encountered Mclnvale during the first week of March and that on that occasion Mclnvale observed that Hunter was obtaining employee addresses for a union meeting and made some remarks, of an allegedly intimidatory nature, concerning his union activities. Mclnvale denied that this incident ever occurred. Counsel for Respondent suggests that "it seems significant that the General Counsel's evidence established that the last of the two union dinner meetings had been held several weeks before the time of this alleged confron- tation." Hunter also testified that he had been warned by his team leader, Kettlehut, on the same day he encountered McInvale in early March, to the effect that he should be careful about his union activity, for the reason that "they" were out to get him. In this regard, counsel for Respondent suggests that it seems unlikely that any such conversation "could have taken place in that after February 22, 1975, Hunter was assigned to the early week schedule," consist- ing of Sunday, Monday, Tuesday, with alternating Satur- days, whereas Kettlehut, as indicated by uncontradicted testimony, was assigned to the late week schedule during the entire period and, as counsel states, "would not have been in the plant at the same time as Hunter." As a further example of what counsel states should be "the caution with which Hunter's testimony must be approached" is his testimony that, on a Thursday or Friday during March, Team Leader Riley threatened that he and fellow employee Collenette would be the first to be terminated in the event the Union came in. Hunter stated that at the time in question he was a member of Sineath's team in the shipping and receiving department; however, counsel for Respondent points out that the timecards of Hunter disclose that he was then assigned to a production team working the early part of the week and, moreover, that he did not work on a Thursday or a Friday during the entire month of March. Not only did Riley deny that such a conversation occurred but there is no dispute that he was then assigned to a late week production team and would not have been in the plant at the same time as Hunter, who was on the early week team. Counsel for Respondent refers to another alleged interchange between Hunter and Kettlehut which Hunter testified involved a discussion of union dues and, on the part of Kettlehut, some rather uncomplimentary remarks regarding Scalish. According to Hunter, he was, at the time of this alleged conversation, "positive he was in shipping and receiving" under Sineath. However, counsel for Respondent points out that Hunter's timecards "reveal at this time Hunter was working on an early week production team for Tom Pitts," whereas Kettlehut "always worked on late week production shifts," and, that Kettlehut denied that this incident occurred. There is also the contention that, during the first or second week of May, Kettlehut and Hunter were supposedly involved in a conversation, during the course of which Kettlehut expressed the opinion as to why the plant closed. According to Hunter, Kettlehut was his team leader for the day. However, counsel for Respondent points out that the timecards of Hunter show that he was then working on an early week production team, whereas Kettlehut consistently worked on a late week production team. The serious challenges to Hunter's veracity will be considered in a later section of this Decision; suffice it to note here that counsel for the General Counsel, in his answering brief, has carefully examined this matter. After being hired, employees were given an intensive 4- week training program, consisting of technical and non- technical instruction. The technical training consisted of teaching employees the skills they would need for their particular jobs, while the nontechnical training consisted of imparting to them knowledge concerning the O.D. System, emphasizing problem solving through the team concept and open communication. Because of delays occasioned by late delivery of certain equipment, actual production did not start until September 1974. Shortly before that time, the demand for Munchos fell off considerably. The Dallas plant, which theretofore had been operating three full lines making Muncho pellets, reduced its operation. Although it appears that consumer demand did not warrant opening the Sharon facility, it was, nevertheless, opened inasmuch as Vice President Kickham wished to "test the open management system." Between Christmas and New Years, employee Leslie Svarny contacted the Union's business representative, Scalish, and advised him that the employees desired union representation. Scalish suggested that they wait until after the holiday season and that the Union would then commence organizational activities. During the first week of February 1975, the Union held several meetings at restaurants in the Sharon area, and authorization cards were distributed by union representatives as well as by employees. Between February 2 and 6, it appears that 21 production and maintenance employees had signed union authorization cards and on February 7 the Union demand- ed that Respondent recognize it as the employees' collective-bargaining representative. On February 4, Collenette was approached by Team Leaders Riley and Kettlehut at his work station, where they questioned him, as he testified, concerning his knowledge about the Union. Collenette related that he was asked what he knew about the Union and that he replied that he was aware of the Union's efforts and was told "that I had better take a look at the benefits that we had under the O.D. System, and think it over twice." On February 7, 760 FRITO-LAY, INC. Scalish and another union representative went to the Sharon facility where they met with Plant Manager McInvale, advising him that the Union represented a majority of Respondent's production and maintenance employees, offered to submit authorization cards to an impartial third party for inspection, and presented Mcln- vale with a recognition agreement. Mclnvale refused all three proposals, stating that it would be necessary for him to take up the matter with his superiors in Texas. On the same date, February 7, the Union filed a petition with the Board. On the morning of February 12, employee Hunter was told by Team Leader Sineath that Mclnvale wished to see him. At the interview in Mclnvale's office, Mclnvale "informed me that he understood that I was trying to form a union" and, when he asked Mcinvale who told him, Mclnvale stated that "an individual told him that I was passing out union cards, and I denied it" and that Mcinvale then stated if Hunter, "was going to start any trouble down there, there would be trouble for me, about forming a union." Rebecca Gordon, who had been off work because of illness, returned to the plant on February 12. She was then summoned into Team Leader Sineath's office. Sineath asked her if she knew about a forthcoming union meeting and, when she replied that she did, he stated that he wished to go to the meeting "to find out their side of it" and also asked her why employees desired a union, to which she replied that in her opinion they wanted job security. During February, employee Tony Fall had two conversa- tions with Team Leader Riley at his work station. At the first, he stated that Riley asked him what he thought the Union could give him that Respondent's present system could not, and that he replied "by saying I thought two major things was better benefits and job security." Riley assertedly stated that in his view the employees had not given the O.D. System sufficient time to demonstrate what it could do. At the second meeting, Riley related that at an establishment near his hometown in Texas, an effort was made to unionize and the employer stated that in such event the plant would be closed down. Union Representative Scalish telephoned Vice President Clegg on February 18, at Clegg's office in Dallas, concerning arrangements for the Board election. Scalish advised Clegg that the Union represented a majority of the production and maintenance employees in the Sharon facility, and requested that Respondent recognize the Union as the exclusive representative on the basis of a card check. Clegg refused this request and stated that he would prefer to proceed with the election. On February 18 and 20, the Union held two meetings at restaurants in the Sharon area. Employees were notified of these meetings by mail and, during the course of these meetings, seven additional authorization cards were obtained. Thus, as of February 20, the Union had signed authorization cards from 28 of the unit employees at the Sharon facility. Respondent notified all employees on February 21, by letter, that they were to receive a 25-cent across-the-board increase, which increase would be effective on February 23 and would be reflected in the paychecks they received on March 14. Respondent did not consult with the Union concerning the granting or implementation of this increase. Late in February or early in March, Team Leader Riley conducted a meeting of his production team, and there inquired concerning the effects of unionization. According to employee Sandor, Riley asked why the employees wanted a union, and stated that he felt unions were unnecessary, and added, so Sandor related, "that if the Union came in, it would represent the failure of the open system, or the Sharon system" and Respondent "would have to reevaluate the plant, solely on economic grounds"; in this connection he stated that the product was produced at the Dallas plant for 5 cents less per pound and that "the chances were that there would be layoffs, or some sort of slowdown, or possibly even a shutdown at Sharon, because they produced it cheaper in Dallas." Sandor related that he and Riley had frequent conversations at his work station from late February until the election, and that the substance of these was that Riley said there was no need for a union in Sharon, that more could be accomplished by other means, that the O.D. System was not being given a fair chance, and that he felt "that the time was inoppor- tune, that the Union was the wrong Union, and that we were taking a big risk." In his bulletin to employees under date of February 21, Mclnvale, in announcing the 25-cent-per-hour wage increase, stated that Respondent's "commitment was to resolve and announce the wage survey during February" but that it was not done earlier because the Employee Relations Department "has to research and prepare our position so that we can not be accused of an 'Unfair Labor Practice' in granting this increase during the period prior to the election." In his letter to employees dated March 4, Mclnvale stated that there had been "some questions about overtime in relation to the 12-hour production work shifts" and reminded employees that Respondent's current policy was to pay overtime for hours worked "outside the schedule, for hours worked over 40 in a week, and for the sixth consecutive workday," while work on a seventh consecutive workday would be paid at a double-time rate. He stated that in the event "overtime for over 8 hours in a day is an issue, then in any future contract, of course, that would be a negotiable item" but that Respondent would "then have to reexamine ways of covering a 7-day continuous schedule to avoid this extra cost of doing business," and attached an example of one method of operating "without 12 hour shifts and without daily overtime." He added that the question of overtime after 8 hours "would certainly be a negotiable issue if you elect to be represented by a union," but that the "right to schedule work would remain a management responsibility," and that the alternative work schedule he attached to his memorandum might not be liked by employees "as well as the present system with its three and four day work weeks." After receiving his copy of the March 4 letter, employee Sandor had a conversation with Team Leader Riley concerning the proposed work schedule. Sandor testified that Riley asked him if he would like to work such a schedule, to which Sandor replied that he would not. Sandor related that Riley then said that, if the Union came in, Sandor "might possibly have to accept such a schedule 761 DECISIONS OF NATIONAL LABOR RELATIONS BOARD along with other hypothetical things such as a super- seniority for union officials." Employee Hunter testified that, during the first week of March, Plant Manager McInvale approached him concern- ing his participation in union activities. According to Hunter, the conversation occurred in the plant near the sales cage, where Hunter was talking to a group of employees. Hunter's version is that McInvale said that he understood Hunter was getting addresses for a union meeting and that he told McInvale that that was true. Hunter related that Mclnvale then said that if he heard any more rumors about Hunter's starting a union "that he would have my job." Hunter testified that the same day Team Leader Kettlehut told him that he had heard that Mclnvale "chewed you out for trying to form a union," that he did not reply, and that Kettlehut then added that Hunter should shut his mouth "about trying to get a union down here because they are out to get you." Hunter further related that later in the same week, following a conversa- tion he had had with a fellow employee, Collenette, in the cafeteria, he asked Team Leader Riley if he would quit in the event the Union came in. According to Hunter, Riley replied that if a union came in then Hunter and Collenette would be the first to be fired. Vice President Clegg, in charge of Respondent's labor relations, came to the Sharon plant on March 4. On that and the following day he conducted group meetings with different teams of employees. Other representatives of management, including Haley and Production Manager Coffman, were in attendance. Clegg testified at some length concerning his remarks to the employee groups. He began by stating that unions were like a business, and that they had to have money to operate on and were more interested in the masses than they were in individuals. He asked them to consider what a union could do for them and said that it would make promises to them and, if such did not materialize, it would either accept the situation or ask the employees to go on strike. In the latter event, the employees ought to investigate what the union's strike benefits were and realize that such did not equal wages. He also stated that it was much easier to get into a union than to get out, illustrating this by referring to a situation in Respondent's Denver plant where a decertification petition had been filed and was still being processed after a period of 7 months. He then invited the employees to consider what would happen if the Union won the forthcoming election. In that event, Respondent and the Union would bargain and that wages, hours, and working conditions would be open for discussion. In that connection, he stated that there was a possibility that the Union might negotiate a contract that would do away with the open management system, with the result that there would be no way the employees could make proposals for change as they were then permitted to do. If that occurred, he stated that "then the need for that plant would have to be evaluated on the need for the product and the economic basis rather than continue to keep it open on the basis of an experiment in manage- ment." He also referred to the fact that the employees had been told by the Union that there would be no reduction in benefits, but pointed out that the Union might be wrong in this respect, and referred to a situation in the Cleveland plant where Respondent and the Union had negotiated a reduction in the premium contribution to a pension plan, transferring the money to wages. This, he stated, adversely affected retirees and employees about to retire. He also referred to the fact that at the Sharon plant the employees were paid on the basis of the skills they had rather than on the particular job they were doing. However, if a contract were entered into providing for job classifications, that would constitute a "very rigid set up" and "would probably also have a very specific rate for that job classification," which would mean that the employee "would be paid for the job he was doing and not for the job that he could do or other jobs he could do in this system." The result would be that some employees might have to take a reduced rate while others might receive an increase. He also told the employees that in his experience there had been situations where the differences between a company and a labor organization did not particularly affect employees but were over issues such as a checkoff or union shop or supersen- iority or extra pay for stewards. In such a situation, he said, employees might have to go on strike in order to obtain the Union's objective, "even though the employees themselves may not have had any specific interest," and he suggested that the employees should "take a look at the Union treasury." He then compared benefits achieved by the Union in the Cleveland area with those then existing at the Sharon plant, concluding that in all respects except in the area of overtime the Sharon plant's benefits were equal to or better than the benefits provided in the Union's contract. He said that Respondent's operations provided for 12-hour shifts and overtime thereafter; the customary provision in union agreements provided for overtime after 8 hours and, if the Union were successful and achieved an overtime after 8 hours clause in an agreement, the Company "would then review the method of operating the plant in order to determine how they could save making overtime and, in all probability, would change our method of operation so that the hours would be eight hour shifts rather than twelve hour shifts." In this connection, he pointed out that some employees were happy with the 12- hour shift arrangement but that others would rather have a 40-hour workweek. Hc told the employees that if they voted for the Union "they were gambling" because the Union "didn't know anything about the food industry," and they would be asking an inexperienced organization to represent them in dealing with Respondent which, so he stated, was "very successful in the food industry." He testified that he also pointed out that Respondent's interest and the employees' interests were the same, namely, "the success of the product, manufacturing a quality product," and that Respondent had endeavored to treat employees as individuals "with responsibility [for] working out our own problems on a friendly basis, pleasant working conditions, no picket lines, no assessments or fees, nothing like that." He concluded by stating that if they liked such conditions their opportunity would come at the election and he urged them to vote against union representation "based on the fact that it was going to be much easier to stay out of the Union than it was to get out of the Union if they had once gotten in." 762 FRITO-LAY, INC. Clegg returned to the Sharon plant on March 17. Prior thereto, literature prepared under his supervision was distributed to employees, including a letter comparing the Union's pension plan with Respondent's and another comparing Respondent's health and welfare plan with the Union's plan. Respondent also reproduced and circulated the Union's report filed with the Bureau of Labor Management Reports of the United States Department of Labor, with side comments such as noting that the cash the Union had on hand at the close of the year 1973 "will only last the Sharon employees 5 weeks in a strike if they give you $99 a week." In addition, a small booklet was distributed at the close of the March 17 meeting, by Hailey, entitled "What The Union Can Do For You" which, on the inside, contained blank pages. This booklet, so Clegg testified, "caused some fury." A number of employees testified concerning what was said by management representatives at the group meetings. Sandor, as well as other employees who were members of the group teams of Team Leaders Riley and Kettlehut, attended a meeting conducted by Clegg. According to Sandor, Clegg "said that the Teamsters had been responsi- ble for threats and violence and vandalism, in the past," and that he had no reason to believe that this was not possible in Sharon. Sandor also stated that Clegg said that if a union came in, it would represent a failure of the O.D. experiment. Hunter testified that Clegg said the Union had nothing to offer the employees, all it could do was strike and take the employees' money. He also testified that if the employees threw the O.D. system out Respondent "could shut the plant down and make munchos in Texas, because it was cheaper to make them there, than it was here." Hunter also testified that Clegg "said if a union does come in, and when it comes time to negotiate, the plant will be shut down" and that during that period the employees would not be able to receive unemployment compensation "because we're not really laid off." Employee Klingensmith testified that Clegg said that he did not like unions and that he did not know whether the Union "was legally able to represent us because of the fact that we weren't in the dry cleaning business or anything like that." In addition, Klingensmith said that Clegg told the employees that the Sharon plant was experimental and that if the Union came in "there might be a change, that we might even go to Texas because they can make their product cheaper down there. I think he quoted a nickel cheaper to make it in Texas." Klingensmith further related that approximately 2 weeks before the election he accepted a ride with Production Manager Kaufman, inasmuch as his car was broken down. During the course of the ride, so Klingen- smith related, Kaufman spoke about the upcoming election and said "that if the Union comes in, we could lose freedom such as magazines on the job and getting your coffee and everything at break, only if our work was done and done right," adding that those freedoms "would be out the door if the Union come in." On a number of occasions between March 7 and 14, Plant Manager Mclnvale held meetings with the group teams, at each discussing the importance of the Open Management System. Admittedly he told the employees that the open system was "extremely important," that employment at the Sharon plant "had been extremely stable, that people had not been laid off even though production levels did not necessarily justify keeping all employees on the payroll at all times," and that Respon- dent was "very desirous of continuing our work on the open system, and that we didn't want to lose it through any device." Mclnvale denied that at any of the meetings he said that if the Union won the election the open management would be gone; to the contrary, so he testified, he was asked that question by employees and responded by stating "that I had worked in an environment where . . . the Union existed in an open system environ- ment for several years and to my viewpoint, whether or not the open system ceased to exist would depend on the parties." Mclnvale stated that Respondent urged employ- ees to attend union meetings in order to ascertain all the facts, but denied that he ever asked any employee to report back to him concerning what happened at a union meeting, although "employees at times would volunteer what happened" but that he "never asked an employee to tell me what happened." During the course of the election campaign Mclnvale had distributed to management team members some eight position papers for their use during the campaign. On March 17, Mclnvale spoke to all employees, who were required to attend that meeting and were paid therefor. He read a speech he had prepared in conjunction with Clegg. In it, he stated that the open system "puts a premium on people working together to solve problems. Involving a third party will make this process more time- consuming, will make systems more inflexible and some- thing that's really significant - will leave you out." He also referred to the fact that under the prevailing system employees "have considerable freedom" to schedule their own rest periods as well as other privileges, and said that if they had "a third party arrangement, then those privileges may not be the plant's prerogative to grant." He referred to the fact that during the campaign Respondent had placed much information before the employees and inquired whether the Union had "just made unproven statements" and said that its "main tactic seems to lie in making you believe that the Company is against you - that we would lie and cheat you." He said that he did not understand "how some complete stranger can come in and convince you to risk losing the system that is the reason for Frito- Lay operating this plant" and inquired what led the employees to accept that risk which, according to him, involved strikes, layoffs, and other disadvantages. He referred to the importance of the open system and said that the Union would "stifle direct problem solving between us," and that, in effect, "some outsider will be telling you and I what we can do and what we can't. Do you really think that the idea of a business agent is compatible with the open system? I sure don't! I think that anyone who believes that we can keep the open system and have some Union in the plant is just dreaming. I don't think that you've thought it through if you really buy that." As we have seen, the Union lost the election held on March 18 and 19 by vote of 22 to 17. Thereafter, it filed objections to the election and the charges in the instant case, which in due course were consolidated by the 763 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Regional Director for purposes of hearing. In its objec- tions, filed March 24, the Union alleged that Respondent's unlawful course of conduct, in substance paralleling the allegations contained in the charge and the complaint, destroyed the union majority status. McInvale left for vacation on April 18 and, shortly before his departure, he had a telephone conversation with one of his superiors, Ed Walsh, from Dallas headquarters, in which Walsh asked about McInvale's vacation itinerary and where the latter could be reached. The following Monday, April 21, so Mclnvale testified, Walsh called him and "informed me that all avenues of increased demand had been explored and found lacking and the decision had been made by Mr. Kickham to close the plant." In addition, Walsh told McInvale that immediately upon his return from vacation he should prepare "an action plan for an orderly closure and termination of the Company's business in the Sharon facility." McInvale returned from vacation on April 28 and then met with his management staff. Steps were taken to immediately terminate all inbound orders for raw materi- als, parts, and supplies and formulate a plan as to how long it would take to close the Sharon plant in an orderly manner. McInvale transmitted these data to headquarters in Dallas. On that date he advised only the plant engineer and the administrative manager of these determinations and later on the team leaders were informed. The hourly employees were advised of the decision to close the plant on May 14, according to Mclnvale.5 Some days later, Hunter and Team Leader Kettlehut had a conversation in the plant concerning the shutdown. According to Hunter, he said that it was a shame that the plant was being closed, to which Kettlehut replied he agreed and that "that's what it is to try to get a union in a non-union shop." About June 1, the Sharon plant stopped all Muncho pellet production operations; however, it continued to be used as a sales and distribution center, but none of the employees previously employed in production operations were thereafter employed in the sales or distribution operations. Respondent did not notify the Union of its decision to close the plant and no discussions were held with it regarding the decision to stop production or transfer the production to the Dallas plant. Moreover, Respondent had no discussions with the Union concerning the effects on employees of the closing of the Sharon plant or the transfer of production to the unorganized Dallas plant. C. The Alleged Refijsal To Bargain and Discrimination 1. Unit and majority There is no dispute that the following constitutes an appropriate unit for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All formulation employees, processing employees, packaging employees, maintenance employees, support employees, shipping and receiving employees and plant I In his brief" counsel for the Cieneral Counsel states that Respondent "notified the employvees by letter" on May 14 "which was posted on the bulletin board that the plant was going to shut down." Ile cites Resp. Fxh. 25 as being the letter. However, Resp Fxh 25 is a letter dated March 17 clerical employees employed at the Employer's West Middlesex, Pennsylvania, location; excluding all office clerical employees, salesmen, drivers and professional employees, guards and supervisors as defined in the Act. As set forth above, the results of the election on March 18 and 19 reveal that, of approximately 40 eligible voters, the Union received 17 votes while 22 votes were cast against it. Between February 2 and 6, as related above, it appears that 21 of the production and maintenance employees had signed union authorization cards and the Union, on February 7, demanded that Respondent recognize it as the collective-bargaining representative for the employees in the foregoing unit. Respondent refused this request and, during the course of the hearing, took the position that the Union did not represent a majority. In his brief, counsel for Respondent asserts that the total of "28 purported authorization cards" which the Union had as of February 20, were defective for several reasons. First, it is claimed that "all cards allegedly authenticated by witnesses Scalish and Sandor should not be admitted into evidence because the testimony of the witnesses was contradictory . . . as well as that of employee Feltovich, that the testimony of neither witness was credible and certainly could not be accepted as a basis for authenticating authorization cards." Without citing references to the transcript, counsel for Respondent states that (a) Scalish testified that Sandor signed his card at the Depot Restaurant in Sharon, while Sandor stated he signed at the New Villa Restaurant in Ferrell, Pennsylvania; (b) Scalish testified that on February 3, employees Bedell, Sandor, and Feltovich signed cards at the Depot Restaurant, whereas Sandor stated he did not sign at the Depot but that the only person who did sign on that day was Bedell; and (c) Scalish testified that Feltovich, Sandor, Bedell, Collenette, and he were at the Depot Restaurant on February 3, but states that Sandor testified that only Bedell, Scalish, and himself were there. In addition, counsel for Respondent objected to the admis- sion of any cards which Hunter undertook to authenticate, on the ground that Hunter's "entire testimony is incredi- ble." It becomes necessary, therefore, to examine carefully the record evidence relating to the authorization cards and their authenticity. Scalish, the business representative for the Union and international vice president, as has been previously related, was active in the organizational campaign. He related that the first meeting with employees was held on February 2, at a restaurant, which he did not identify, in Sharon and that the employees in attendance at that meeting were Hunter, Svarny, Daniel Sump, and Collenette. On that occasion he obtained signatures on four authorization cards from these employees and, during the course of the hearing, testified that the cards were signed in his presence by the individuals whose names appear thereon. When counsel for the General Counsel moved that these cards be received in evidence, counsel for Respondent had no objection. The next meeting was on February 3, again at a Sharon from Vice President Clegg to employees in which he pledged "that no employees of the Sharon plant will be disciplined in any way because of his union or non-union beliefs or actions. The only reason for disciplinary action is ifan employee violates an established work rule." 764 FRITO-LAY, INC. restaurant not identified. According to Scalish, employees Sandor, Collenette, Feltovich, and Bedell were present. Scalish testified that employees Sandor, Bedell, and Feltovich signed authorization cards at that meeting and Scalish testified that he was present when these cards were signed bearing the date of February 3. At the close of the hearing day on November 12, counsel for Respondent objected to the receipt in evidence of the authorization cards and I stated on the record that I would withhold my ruling until the following morning and, with the agreement of counsel, I was permitted to take them for the evening in order to examine them. The following morning I returned the authorization cards to counsel for the General Counsel, I stated that the cards that I had examined were all time- stamped by the Board and that the signatures appeared to be genuine and authentic, and I expressed the view that the cards were authentic. Counsel for Respondent thereupon stated that he objected to any cards not authenticated by the individual whose name appeared on the card to the effect that he in fact signed the card. In addition, he objected to any cards purportedly identified by Scalish because, in his view, there was "substantial reason to doubt the credibility of that witness with respect to the issue of authenticating cards." On substantially the same basis, counsel objected to the admission into evidence of any cards purportedly authenticated by Sandor, Hunter, and Collenette. I told counsel for Respondent at this point that he was free to produce evidence reflecting upon the credibility of the foregoing persons concerning their testimony with respect to the authorization cards and I received the cards at that point but stated that my receipt of them into evidence in no way precluded counsel for Respondent from producing evidence of the sort he had indicated and that my then decision to receive the cards was not irrevocable. Sandor testified that he signed an authorization card on February 3, at the New Villa Restaurant in Ferrell and that he personally solicited the signatures on authorization cards of employees Feltovich, Fall, Klingensmith, James Knox, Pearl Askerneese. and Bedell. He related that Feltovich signed his card on February 3, at the New Villa Restaurant as did employee Fall. Sandor also testified that another meeting of the Union was conducted on the same date at the Depot Restaurant, which he attended. At that meeting, according to Sandor, Bedell and Scalish were present and Bedell signed his authorization card. Sandor also testified that he obtained a signed card from employee James Knox on Feburary 5, in the locker room at the plant. He further related that Askerneese signed her card at the Depot Restaurant on February 5. In addition, he testified that Klingensmith signed his card on February 6, in the plant. Upon all the evidence, I conclude that the authorization cards proffered by counsel for the General Counsel are authentic and that they establish that, as of February 7, the Union did in fact represent a majority of the employees in the appropriate unit. 2. The refusal There is no dispute, as has been related previously, that Respondent refused to recognize the Union on February 7, when it demanded recognition and collective bargaining. Nor is there any dispute that Respondent initiated and implemented a wage increase without notifying the Union thereof or offering to discuss that matter with it; nor is there any controversy concerning the fact, as more fully developed in the succeeding section of this decision, that Respondent closed the Sharon facility without discussing that matter or the effects of the closing on employees with the Union. 3. The closing of the Sharon plant Plant Manager Mclnvale, on May 14, informed the hourly employees at the Sharon facility that Respondent would shut down that plant on approximately June I; the plant did in fact cease operations on or about that date, and by that time all of the production employees had been terminated. Thereafter, Respondent transferred its unit work to the Dallas plant, which, as has been related, was unorganized. Shortly before the Sharon plant was closed the Dallas facility was operating less than two of its three production lines on the manufacture of Muncho pellets. According to Wheless, Respondent's director of industrial engineering, the closing of the Sharon plant involved some increase in production at the Dallas plant, and he also testified that if the Dallas plant did not increase production Respondent could not have met its overall demand for Munchos. There is no dispute that after the Sharon plant was closed the Dallas plant ran all three of its production lines in producing Muncho pellets and that, while the Sharon facility had only one production line and that before it closed the Dallas facility was operating less than two of its lines on Muncho pellet production, it is evident that Respondent increased the production of the Dallas plant to a full three lines when it transferred the work done at Sharon to Dallas. It is the position of counsel for the General Counsel, as set forth in his brief, that the economic defense put forward by Respondent is pretextual and that the true motive for the closing of the Sharon plant was the advent of the Union. He asserts that the sales forecasts relating to the nationwide demand for Munchos, in particular during the first quarter of 1975, are not borne out by the evidence. Indeed, counsel for the General Counsel states that the advent of the Union "so threatened its [Respondent's] innovative Open Management System that it caused Respondent, without any economic justification, to aban- don the system, the plant and its employees"; he notes that the institution of this system was "the most important factor in the existence of the Sharon plant" and was the facility's "primary mission," as Mclnvale testified, and that Respondent had expended some $200,000 in designing it. It becomes necessary, therefore, to examine closely Respon- dent's contention that economic reasons accounted for the closing of the Sharon plant. Mclnvale testified that the cost of opening the Sharon facility involved an investment of between $3.5 and $4 million. In connection with the establishment of wage rates for employees at the Sharon plant, two members of the employee relations department from Dallas, in February or March 1974, came to Sharon and stayed there for several 765 DECISIONS OF NATIONAL LABOR RELATIONS BOARD days, making a survey of community wage scales. Accord- ing to McInvale, it was ascertained that the great majority of the work force in the area worked under the basic steel contract, which was coming up for negotiations during the summer of 1974 and, so he related, Respondent endeav- ored to project what effect that would have on the wage rates for Respondent's Sharon employees. Counsel for Respondent contends that the decision to close the Sharon facility "was mandated by economic conditions" and that the decision "on whether to continue to operate a facility at a loss, when those losses could be substantially reduced by closing the plant, was a funda- mental decision as to the direction of the Company's corporate operations." In consequence, he argues that there was no duty to bargain with the Union with respect to the decision to close the Sharon plant even if Respon- dent had been under a general duty to bargain with the Union. On the other hand, counsel for the General Counsel contends that the "prospect of unionization" opened the eyes of the Sharon plant employees to the defects of the Open Management System and that Respondent "realized that because of its numerous unfair labor practices prior to the election and the Union's pending Objections to the Election, that the probability existed that through the Board's processes the Sharon plant would eventually become unionized." As a result of this, he contends, Respondent shifted its standard for evaluating the opera- tion of the Sharon facility "from one based on establishing a successful Open Management System to one based strictly on economic considerations." D. Discussion and Concluding Findings In my view, a threshhold issue to be resolved is the credibility of Hunter. As previously noted, counsel for Respondent, in his brief, makes a rather detailed attack on the veracity of Hunter. Counsel for the General Counsel, in his reply brief, makes a painstaking analysis of this issue. In consequence, I have found it necessary to go through the record as carefully as possible and analyze the contentions made by able counsel on both sides of the question. At the outset, I must observe that my impression of Hunter as he testified was favorable. It seemed to me that he responded to questions, whether on direct or cross- examination, in a direct and forthright manner. Upon a review of his testimony, particularly in the light of the attack made upon it by counsel for Respondent, I am led to conclude that a number of incidents that he testified, from his recollection, occurred in March, in fact had occurred in February. Thus, counsel for the General Counsel notes that "Hunter's faculty for recall of dates may have been faulty and that the unlawful activities in fact occurred during the second or third week of February 1975." While realizing that dates may be crucial, counsel for the General Counsel submits that the fact that Respondent engaged in unlawful activity "is more crucial," and thus suggests that the appropriate conclusion to draw is that unlawful activity of Respondent did in fact occur and that the recollection of Hunter with respect to dates was faulty. In support, counsel for the General Counsel cites certain pages of the transcript where Hunter testified that the unlawful activity occurred on either a Thursday or a Friday while he was working in the shipping and receiving department under the supervision of Team Leader Sineath. As pointed out by counsel for the General Counsel, an examination of relevant exhibits shows that from the week ending February I to the week ending February 15, Hunter was employed in the shipping and receiving department under Sineath's supervision and that, in addition, they show that the work schedule of Hunter consisted of 8-hour shifts from 8 a.m. to 4:30 p.m., Monday through Friday. Moreover, he also points out that Hunter's timecard for the week ending February 22 shows that from Monday through Thursday he was still employed in the shipping and receiving department and that, on February 22, a Saturday, he was transferred to the production department under the supervision of Team Leader Pitts and that he worked in that department on an early week shift. In view of these facts, counsel for the General Counsel suggests, while acknowledging that Hunter had a faulty recall about dates, that the record evidence supports his testimony concerning the occurrence of Respondent's actions viola- tive of the Act, and that there is therefore no solid basis for discrediting his testimony. As I have said, Hunter impressed me favorably. Upon a careful review of his testimony, the objective facts, and the relevant exhibits, I credit his testimony. Counsel for the General Counsel asserts that Respondent engaged in an intensive campaign to thwart the desires of employees concerning union representation and, in sup- port, refers to eight separate instances of interrogation, threats of reprisals if the employees selected the Union, threats of plant closure, warnings that strikes would occur if they selected the Union, statements that it would be futile for them to select the Union, creating the impression of surveillance of employee union activity, threatening them with discharge and/or layoff if they chose the Union, suggesting that they select another labor organization as their representative, threatening them with loss of wages and the implementation of more onerous working condi- tions if they chose the Union, and granting and implement- ing a wage increase to all employees on February 21. Team Leader Riley denied that he had a conversation with employee Collenette, on February 4, in the presence of Team Leader Kettlehut, concerning his knowledge of the Union. Indeed, Riley testified that he was not "even aware that there was a union in the plant"; however, he admitted conversing with Collenette about the Union and its benefits. In view of the active solicitation of union authorization cards at the plant and in the parking lot on February 3 and 4, it seems rather odd that Riley was unaware of any union activity until the Union demanded recognition on February 7. Team Leader Kettlehut denied that he had a conversation with Collenette concerning the Union on February 4 or 5. However, he acknowledged that he and Riley would walk through the plant frequently and that on one occasion Collenette stopped him and asked what the issues in the union campaign were; he testified that he replied that the issues were benefits, wages, and the 12-hour day working schedule. Kettlehut also related that on one occasion Collenette said that if the employees did not get what they wanted through bargaining they could go 766 FRITO-LAY, INC. on strike. With respect to the alleged questioning of employees Fall and Sandor, Riley admitted that he did have conversations with both employees during the relevant period and that he told them that if the Union did come in "everything would be bargained for and if the open management system was bargained out, that the plant could be evaluated on an economic basis." He also testified that he gave his opinion concerning the Open Management System and inquired "what a union could give that the open management wasn't or could not." The testimony of employee Klingensmith is that Team Leader Riley, shortly before the election, told him that if the Union came in the employees would run the risk of losing wages because, by law, Respondent was only required to pay the minimum wage; Riley added that he did not see why the employees needed the Union to speak on their behalf with Respondent. Sineath, a team leader, recalled that he had a meeting with employee Gordon when she returned to work in February after having been off due to illness. As has been related above, he inquired what reasons the employees had for desiring a union and she replied that in her view it was a matter of job security. So far as appears, he did not deny questioning Gordon on that occasion. It also appears that, while Team Leader Sineath denied that he told Hunter to return to Sharon Steel, he did have a conversation with Hunter, sometime in September or October, as he and Hunter were engaged in a discussion of benefits, in which he told Hunter that if he did not like the benefits at Respondent's plant, he could go back to Sharon Steel. Counsel for the General Counsel contends that these undenied acts of interrogation were violative of Section 8(a)(l) of the Act. Team Leader Pitts admittedly had a conversation with employee Cooke about the middle of March but denied that he had questioned Cooke about the Union. However, in an affidavit submitted to the Board during the course of its investigation, he stated that he had heard that some of the employees desired a union and he wondered what problems had caused them to do so and that he was "particularly anxious to find out if there was something wrong with me or with the system." In his brief, counsel for Respondent contends that Respondent at all times acted within the bounds of the law and did not commit "serious and substantial violations" of Section 8(a)(1) of the Act, as alleged. He asserts that, with respect to testimony concerning threats of plant closure, allegedly contained in the March 17 speech of Clegg, a considerable amount of the former employees' testimony concerning this meeting "is unclear" and that a review of Clegg's testimony, particularly inasmuch as he spoke from notes from which he did not deviate, "reveals that nothing objectionable was contained" in that speech. Concerning the meetings with teams of employees that Clegg conduct- ed early in March, counsel asserts that the testimony of witnesses produced by the government "is confused and conflicting, whereas Clegg's is clear and definite." Counsel for Respondent suggests that the version given by Clegg should be credited inasmuch as there is no question that he used written material in making his comments concerning plant closure and, furthermore, that "it seems incredible that a man with Clegg's experience and expertise in NLRB elections would so blatantly transgress well-known and established election guidelines as some of the wilder testimony by General Counsel's witnesses would have one believe." Concerning the remarks made by Plant Manager Mclnvale at the March 17 meeting, Respondent's counsel states that it is not "even clear whether any of the testimony of the General Counsel's witnesses even suggests that what McInvale is alleged to have said violates the Act"; but, in any case, he points out that it is uncontradict- ed that McInvale read verbatim from a text during that meeting and that he did not say that a union victory in the election would represent a failure in the Open Management System. Counsel for the General Counsel also contends that Respondent threatened employees that strikes would be inevitable if they selected the Union as their collective- bargaining representative and, in this connection, refers to team meetings conducted by Clegg on March 3 and 4, in which Clegg assertedly told employees that the Union had been responsible for threats, violence, and vandalism in prior years and stated, according to employee Sandor, that Respondent had no reason to believe that such was not possible in Sharon; in making his remarks, Clegg allegedly referred to Scalish as "Frank Scallywag." Moreover, as Hunter testified, Clegg stated that if a union did come in and undertook to negotiate, the plant would be shut down and negotiations could last from 30 to 90 days and, during that period, the employees would not be able to receive unemployment compensation because they would not be in the status of laid-off employees and, "the only thing we could get was food stamps." About March 7, Team Leaders Riley and Kettlehut spoke with Collenette at the latter's work station, during the course of which they showed him some newspaper articles relating to strikes, and stated that if the Union did come in and if in negotiations with officials of Respondent "could not come to some agreement on contract terms, there would be a long strike" with the possibility of children starving. Both Riley and Kettlehut admitted talking to Collenette about strikes; Kettlehut denied he used the term "long" strikes. Counsel for the General Counsel contends that the foregoing statements, considered in light of other conduct engaged in by Respondent, "represent unlawful threats that strikes would be inevitable as a result of unionization." He further argues that Respondent, in its efforts to defeat the Union, "engaged in a counter campaign replete with unfair labor practices and that the threats of strikes should be viewed as part of Respondent's violative patterned course of conduct." On another aspect, counsel for the Government contends that Respondent warned employees that it would be futile for some to select a union as their collective-bargaining representative. In this respect he refers to conversations that Team Leader Riley had with employee Sandor from early March until near the election, to the effect that a union was not needed at the Sharon plant and that more could be accomplished by means of other proposals. Riley told his team early in March that in the Sharon plant unions were unnecessary, a remark that Riley did not deny. During the meetings he conducted on March 3 and 4, 767 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Clegg told employees that "the only value of a union was that it called for dances" and that the Union could offer them nothing but strikes and taking their money. During the course of their speeches prior to the election, Mclnvale and Clegg spoke about the futility of unioniza- tion. According to the text of Mclnvale's prepared speech, he told the employees that the "only thing that matters to them is your dues. Whether you work or not, or how often means nothing to them." In addition, he asked employees why they would be willing to risk everything they then enjoyed for an organization that took the position that any matter in controversy was negotiable. In this respect, he stated that this would be "like betting your grocery money on a long shot at the race track. It may be thrilling, but it sure isn't likely to be profitable." To summarize, I am persuaded that Respondent did in fact violate Section 8(a)(1) of the Act substantially in the respects alleged in the General Counsel's complaint, and that it also violated Section 8(a)(3) and (5) of the Act in closing the Sharon plant and terminating all unit employ- ees. More specifically, on a number of occasions supervi- sors questioned various employees between February 4 and March 17, the day before the Board election, as has been previously related. Moreover, Respondent threatened employees with reprisals if they selected the Union as their collective-bargaining representative, as evidenced by Mclnvale's statement to Hunter that if he heard any further rumors to the effect that Hunter was attempting to start a union, he would be in trouble. Late in February Team Leaders Kettlehut and Riley told Collenette that he should think twice about choosing a union since the benefits that the employees then received were good; early in March, Riley told Sandor that if the Union came into the plant, that circumstance would represent a failure of the open system and, in that event, Respondent would have to reevaluate the plant solely on economic grounds. Clegg made substantially the same statement on a number of occasions at employee meetings on March 3 and 4. It is the contention of counsel for the General Counsel that Respondent undertook to implement the Open Management System at Sharon with the realization that during the initial phases of its existence the Sharon plant would operate at a loss. In the light of this, he argues that it is totally unwarranted for Respondent to rely on this anticipated poor economic position as a reason for threatening to cease production at the Sharon facility. He argues that Respondent's threat to discontinue the Open Management System, with resultant loss in wages, benefits and jobs, "was due solely to the employees' union activities." Counsel also refers to the remark made by McInvale to Hunter, during the first week in March, to the effect that Hunter had been previously warned about trying to start a union and that, when Hunter told McInvale that he could not be fired for obtaining employee addresses for a union meeting to hear arguments for and against forming a union, Mclnvale stated, as Hunter testified, "you'd be surprised at what I can do." On the same day Supervisor Kettlehut told Hunter that he had heard about Hunter being reprimanded and suggested that Hunter keep his mouth shut "about trying to get a union down here because they're out to get you." These incidents, according to counsel for the General Counsel, constitute threats of reprisals and, accordingly, were violative of Section 8(a)(1) of the Act. Counsel also refers to threats that the plant would be closed if the Union were selected by the employees as their representative, and in this connection points to statements made by Supervisor Riley to employee Sandor, statements made by Supervisors Riley and Kettlehut in mid-March to Collenette, conversations Riley had with employees Fall and Sandor during March concerning a cotton mill in Texas, Clegg's statements during the team meetings on March 3 and 4 to the effect that if the Union came in that circumstance would represent a failure of the O.D. System and that, if the employees rejected the O.D. System, Respondent could close the Sharon plant and continue to produce Munchos at the Dallas plant where production costs were less; he also refers to the remarks made by Mclnvale to Supervisor Riley's team on or about March 14, to the same effect as the comments made by Clegg on March 3 and 4 and, finally, the substantially similar remarks allegedly made by Mclnvale and Clegg during their presentations on March 17. It is the position of counsel for Respondent that the determination to close the Sharon plant was motivated solely by economic considerations and that counsel for the General Counsel has failed to prove either that Respondent closed the Sharon plant in order to chill unionism in its other plants or that the closing of the Sharon facility would have that effect, citing Darlington Manufacturing Co., et al., 380 U.S. 263 (1965). He argues that the decision to open the Sharon facility was made "solely because the Compa- ny's internal data forecasted a critical shortage in the manufacturing capacity to make Muncho pellets." How- ever, he states new data that came to hand before the plant actually began production indicated that the Sharon facility might not be required in Respondent's operation; however, he suggests that the opening of the plant "proceeded as planned because of the enormous financial expenditures already made by the Company in connection with modifying the plant and employing management for it." He claims that from the time the plant opened Respondent's engineering experts "were dubious about its necessity and apprehensive about the effect of that facility upon the Company's other plants." Mark Wheless, Respondent's director for industrial engineering, testified in some detail concerning the consid- erations that led to the closing of the Sharon facility. Under date of January 15, Steve Johnson, an industrial engineer, wrote a memorandum to Dave Stanley, who was in the facility engineering group of the engineering department, stating that in connection with their telephone conversa- tion of the preceding day he would need certain informa- tion "to complete a study of shutdown economics of the Sharon Company, Pennsylvania pellet plant," and pro- ceeded to list the data needed. Under date of January 23, Johnson wrote to Jim O'Neal, a director of distribution for Respondent. In that memorandum, Johnson stated that in evaluating "the most recent poundage forecasts of total pellet requirement, and alternative operating economics, the 'mothball' of the Sharon, Pennsylvania pellet plant is desirable," pointing out that the net potential savings from 768 FRITO-LAY, INC. closing the Sharon facility during the first year "is approximately $258,000, with subsequent savings about $280,000 per year." He also stated that the most recent Muncho and Bakonip forecasts "show no increases in pounds from 1975 to 1979" and that this static forecast "implies that abandonment or selling of the operation is feasible"; however, he recommended that Respondent "hold the Sharon operation in the mothball state" and gave reasons for that, namely that the forecast was "very close to the current operational capacity" of the Dallas plant, unforecasted sales changes "could force us to re-open Sharon," and there were sales routes "currently operating out of the Sharon facility." However, he stated that a reevaluation concerning the selling opportunity of Sharon should be "pursued if any of the following conditions developed, namely, if sales of Munchos or Bakonips did not increase, the utilization of new technology at the Dallas plant were feasible and resulted in poundage increases, and if new or alternative uses for the Sharon facility could not be envisioned." Under date of February 11, Wheless wrote to Kickham, Respondent's senior vice president of manufacturing, stating that, as they had discussed that day, "a decision was made to keep the Sharon. Pennsylvania facility open for the near future," noting that while the "five-year sales forecast specifies no growth" for Munchos, Respondent was "experiencing a 6% poundage increase over 1974 through Week 1, Period 2 of 1975" and, if this rate of growth continued, "Sharon will be needed to accommodate it." In a memorandum to Kickham dated March 27, Wheless again reviewed pellet production facilities and stated that, without "significant new volume, closing Sharon can be justified" and that, if "this new volume cannot be achieved, total contribution can be maximized by closing Sharon" and limiting volume to the capacity of the Dallas plant. Under date of March 31, Frank Peck, the senior vice president for sales and marketing, wrote to Kickham confirming their conversation of March 17, stating that the "best outlook at present for the following on an annualized basis" was that the dollar volume of regular Munchos would be, in thousands of dollars, 28.5, for Bakon snacks, 5.7, and zero for a possible new product. Under date of April 11, E. F. Walsh, who functioned as an employee relations adviser to the manufacturing department, wrote to Kickham enclosing "all the pertinent data regarding the economics for closing down Sharon," stating that the "key factor" was the fact that all Muncho pellet production could be handled by the Dallas plant. He also enclosed a plan for placement of Sharon management personnel, and noted that since all hourly employees were hired at the same time the preceding year they would "all receive the same severance arrangements" and, because "of their time with the Company no Sharon employee has any vested retirement benefits." Wheless testified that the April I 1 document was in response to Kickham's request made sometime between March 27 and April 10, to develop a plan to close the Sharon facility, and that, at the time he made his recommendation to close the Sharon facility, he was not aware that a union had sought or was seeking recognition. Kickham testified that he decided to close the Sharon facility in April. Asked whether the effort at unionizing the facility was a factor in reaching that decision, Kickham replied, "No, it couldn't be, other than the fact that they elected for Frito-Lay, but the plant had to be closed on an economic basis, I had no choice, I couldn't stop it, I had to do it." Upon a careful review of the record, I am persuaded that Respondent, before the Union's organizational efforts were well underway, came to the tentative conclusion that the Sharon facility should be closed. Factors leading me to this view include: (a) the detailed evaluations made by the concerned officials of Respondent beginning early in the year; (b) the unanticipated decline in Respondent's sales forecast of demand for Munchos; and (c) the resultant losses being incurred and anticipated to be incurred at the Sharon facility, in contrast to the lower cost of production at the Dallas plant and the fact that the latter facility had ample production capacity. Inasmuch as the unfair labor practice findings made above, in substantial part, relate to the conduct of Respondent in connection with the March 18 and 19 election, it follows that the objections filed with respect thereto are sustained. In his brief, counsel for the General Counsel requests that I recommend that the election be set aside. Of course, it is clear that the election was a nullity, but it seems to me that it would be superfluous for me to recommend that it be set aside, particularly in view of the findings and recommendations I have made. 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. Frito-Lay, Inc., is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Laundry, Dry Cleaning and Dye House Workers' International Union, Local No. 1, is a labor organization within the meaning of Section 2(5) of the Act. 2. By questioning employees about their union sympa- thies and activities, threatening them with reprisals and more onerous working conditions if they selected the Union as their representative, and stating that if the Union came into the Sharon plant that facility would have to be evaluated solely on economic grounds, without regard to continuing to operate it in part as a demonstration project for the Open Management System, Respondent violated Section 8(a)(1) of the Act. 3. By granting unit employees a wage increase on February 21, 1975, effective February 23, without bargain- ing on this matter with the Union, Respondent violated Section 8(a)(3) and (1) of the Act. 4. By closing the Sharon plant and terminating all unit employees on or about June 1, 1975, without bargaining with the Union concerning the closing and its effects on said employees, Respondent violated Section 8(a)(3), (5), and (I) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. 769 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 111. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth, 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 com- merce and the free flow of commerce. IV. THE REMEDY Inasmuch as I have found that Respondent has engaged in unfair labor practices, I shall recommend that it cease and desist therefrom and take appropriate affirmative action designed to effectuate the policies of the Act. As set forth above, I have found that Respondent in various respects violated Section 8(aXl) of the Act by questioning employees about their union sympathies or activities, threatening them with reprisals and more onerous working conditions if they selected the Union as their representative, and stating that in the event the Union came into the plant Respondent would have to reevaluate its Sharon operations solely on economic grounds, without regard to continuing to operate the facility in part as a demonstration project for the Open Management System. In view of these violations, it will be recommended that Respondent cease and desist therefrom and take appropri- ate affirmative action designed to effectuate the policies of the Act. The findings I have made to the effect that Respondent violated Section 8(a)(3) and (5) of the Act by closing the Sharon plant and terminating the unit employees present some problems with respect to the appropriate remedy. In his brief, counsel for the General Counsel asserts that the Board has "invariably issued bargaining orders whenever unlawful discharges [footnote omitted] occur in a small unit and are coupled with extensive 8(a)(1) violations such as threats, interrogations, and/or promises made by management officials to a significant segment of unit employees...." In his view, the present case is "custom- tailored to the application" of the Supreme Court's decision in Gissel Packing Co., Inc., et. aL, 395 U.S. 575 (1969). He contends that, in view of the fact that Respondent has closed the Sharon production operations, and thus terminated all production employees, "a bargain- ing order alone would be meaningless." Therefore, counsel for the General Counsel urges that in addition to an order to bargain, an order be issued "requiring Respondent to reopen the West Middlesex, Pennsylvania facility, and offer reemployment to the terminated employees...." In this connection, he points out that Respondent still owns the Sharon facility, has continued to utilize a portion of it as a sales and distribution center, and that the production equipment is still at the facility in a "mothball" status. Moreover, he refers to the fact that a majority of the former unit employees still reside in the Sharon area. Thus, in his view, the "only expense Respondent would incur in reopening the production facility would be shipment of raw materials to Sharon and the transfer of the previous or another management team," and that in view of the serious nature of Respondent's unfair labor practices and the Board's policy of attempting to restore the status quo ante, it is essential that an order be issued requiring Respondent to reopen the facility and offer reemployment to the former employees. On the other hand, the facts concerning the economic position of Respondent, in particular anticipated produc- tion requirements for Munchos and the production facilities and their utilization at the Dallas plant, present difficulties. It has already been established that the Dallas plant was operating at less than capacity and producing the product at less cost, whereas the Sharon plant had been operating at a loss. No suggestion has been made that these conditions have changed in any significant respect. The question presented, therefore, is whether Respondent should be ordered to resume operations at Sharon or whether, considering all the circumstances, some other remedy should be devised. The Board has addressed itself to problems quite comparable to those that I conceive to be present here. While the facts cited by the Government in support of its request that Respondent be ordered to reopen the Sharon plant are not subject to serious dispute, it is still true, so far as appears, that the Respondent's Dallas plant, even after absorbing the production of the Sharon plant, had ample capacity to fulfill all present and anticipated orders and, in addition, produced the product at less cost per pound than did the Sharon plant. The net result of the proposed remedy advanced by counsel for the General Counsel would be that the Dallas plant would continue to operate at less than capacity while the Sharon plant would continue to operate at a loss. While the Board customarily adheres to its remedial principle that violators of Section 8(a)(3) of the Act be ordered to restore the status quo ante, it is not so doctrinaire that it will rigidly insist upon restoration of the status quo ante where practical considerations indicate otherwise. Thus, in Thompson Transport Company, Inc., 165 NLRB 746, 747 (1967), where the respondent there closed a terminal without notifying the union or bargaining con- cerning that decision and its effects on employees was held to be a violation of Section 8(a)(5) and (1) of the Act, the Board noted that an order requiring that respondent to restore the status quo ante "would require Respondent to recreate the situation existing prior to the closedown of the Phillipsburg terminal by reopening the discontinued terminal. However, we believe that our remedy should also be tempered by practical considerations, which, if applied to the present situation, dictate against restoration of the Phillipsburg terminal as being impractical and nonessential to the formulation of a meaningful remedy, since the terminal has been closed for a considerable period of time and the trucks and other equipment have been shipped some distance away. Also we have found that Respon- dent's decision to close the Phillipsburg terminal was motivated solely by economic considerations." According- ly, the Board stated that it would not require reestablish- ment but, instead, ordered that Respondent "establish a preferential hiring list of all employees in the appropriate unit following the system of seniority, if any, customarily applied to the conduct of Respondent's business, and, if operations are ever resumed at Phillipsburg or anywhere in the Phillipsburg area, at that time offer reinstatement to those employees" and bargain with the representative of 770 FRITO-LAY, INC. the employees upon request. In addition, the Board noted that if the respondent in that case had adhered to its bargaining obligation the employees there involved would not have been terminated without the protection of collective bargaining and they might not have been terminated at all. The Board noted that this was particular- ly true since the respondent there owned the property and "could have remained on the premises for as long as it desired beyond the closing date, and further there is nothing in the instant record to suggest that Respondent permanently abandoned the Phillipsburg operation, or that Respondent would not resume operations there if it would acquire adequate hauling contracts." The Board continued by stating that "it is both reasonable and necessary to require that 'the employees whose statutory rights were invaded by reason of Respondent's unlawful unilateral action, and who may have suffered losses in consequence thereof, be reimbursed for such losses until such time as Respondent remedies its violation by doing what it should have done in the first place.' " Thus the Board ordered the respondent in that case to make the discharged employees whole and that the "liability for such backpay shall cease on July 12, 1966, the date on which Respondent fulfilled its duty to bargain as to the effects of its decision to suspend operations from the Phillipsburg facility." (Id. at 747-748.) In Ozark Trailers, Incorporated, etc., 161 NLRB 561, 571 (1966), the Board noted that "the unfair labor practice was the unilateral closedown of the Ozark plant without giving the Union notice or opportunity to discuss the decision to close down and matters that would affect the employees involved." The Board noted that the "nature of the violations would justify directing the Respondents to restore the situation existing prior to the closedown of the Ozark operation by reestablishing the discontinued opera- tion." However, it found that "this appears impractical as the plant has been shut down for a considerable period of time and the machinery has been shipped some distance away." Further, the Board noted that that employer's decision to close down the Ozark operation "was prompted s The record shows that Respondent has plants at Williamsport, Pennsylvania, Allen Park. Michigan. and Beloit, Wisconsin. These are "fry" solely by pressing economic necessity." It ordered that employer to make whole the employees for any loss of pay they suffered as a result of the employer's unlawful refusal to bargain "from the time they made the decision to close the plant at the end of January 1964, to the date the Ozark plant was closed on March 1, 1964...." (p 571-572). In Trey Packing, Inc., 172 NLRB 291, 292 (1968), the Board, in ordering the restoration of the status quo ante to redress violations of Section 8(a)(3) and (5), noted that the respondent there had not offered "any evidence which would tend to show that a resumption of truck delivery operations. . . would cause any considerable change in its business or subject Respondent to undue financial hard- ship." In the light of the foregoing precedents, and considering the particular situation present here, I am of the view that Respondent should be ordered to pay the unit employees backpay, in accordance with the customary formulas, from January 15, 1975, the date on which I am convinced Respondent had reached a reasonably firm determination to close the Sharon plant, to June 1, 1975, when it did in fact close the plant and terminate the unit employees. In addition, inasmuch as Respondent still owns the Sharon property and utilizes it to some extent in its sales and distribution operations, and, moreover, still has the production equipment there in a "mothball" state, it should be ordered to establish a preferential list of the unit employees, following such seniority principles as it had observed in the past, for reemployment in the event that it should reopen the Sharon plant. Moreover, in view of the fact that Respondent has facilities in various other areas of the mainland, including locations not too far distant from Sharon, I think it equitable to order Respondent to extend to the Sharon unit employees the opportunity to transfer to or obtain employment in facilities cperated by Respondent in the northeastern area of the United States. 6 I shall so recommend. [Recommended Order omitted from publication.] plants. where the pellet is sliced into chips. fried. bagged, and distributed to Respondent's retail customers. 771