Nazco, Inc.

NAZCO, INC. Nazco, Inc. and its Agent Junius B. Caldwell, Jr. and Drivers, Chauffeurs and Helpers Local 639 affili- ated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Ameri- ca Nazco, Inc. and its Agents Junius B. Caldwell, Jr., and James Black and Drivers, Chauffeurs and Helpers Local 639 affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Cases 5-CA-7985 and 5- CA-8015 August 29, 1977 DECISION AND ORDER BY MEMBERS JENKINS, MURPHY, AND WAI THER On April 12, 1977, Administrative Law Judge Herzel H. E. Plaine issued the attached Decision in this proceeding. Thereafter, Respondent filed 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 and has decided to affirm the rulings, findings, and conclu- sions of the Administrative Law Judge, to modify his remedy,I and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that the Respondent, Nazco, Inc., and its Agents Junius B. Caldwell, Jr. and James Black, Hyattsville, Maryland, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. I In accordance with our decision in Florida Steel Corporation, 231 NLRB 651 (1977)., we shall apply the current 7-percent rate for periods pror to August 25. 1977. in which the "adjusted pnme interest rate" as used by the Internal Revenue Service in calculating interest on tax payments was at least 7 percent. DECISION HERZEL H. E. PLAINE, Administrative Law Judge: Respondent, an excavator, is charged with violations of Section 8(a)(5), (3), and (1) of the National Labor I The consolidated complaint was issued on July 20, 1976, on a charge filed by the Union in Case 5 CA 7985 on June I, 1976, and amended 231 NLRB No. 112 Relations Act, as amended, for failing since April 2, 1976, to bargain, and to bargain about the effects on employees, with the Charging Party (the Union) regarding the unilateral discontinuance or attempted discontinuance of its trucking operation or the subcontracting or attempted subcontracting thereof, for unilateral changes in working conditions, and for the discharge of its eight truckdrivers allegedly because they were members of the Union. Respondent is further charged with 8(a)( I) and (3) violations for allegedly discriminatorily threatening dis- charge of employees and discharging rehired employee Webb.' Respondent contends that financial difficulties com- pelled it to discontinue the trucking portion of its operations, transfer its trucks to Junius B. Caldwell, who was Respondent's yard superintendent, and discharge the eight truckdrivers. Respondent further contends that the truck operation, after the purported transfer to Caldwell, was his operation as an independent contractor, and was not Respondent's, and that it had no obligation to bargain over the transfer to Caldwell, which it claims was not a sham. Respondent concedes that it had the responsibility to bargain with the Union over the effects on its employees of "liquidating" the trucking portion of its operations, but claims that the Union "implicitly" waived bargaining by failing to respond to an alleged telephone call or calls from Respondent that it had sold or was selling its trucks. The case was heard in Washington, D.C., on August 12 and 13, 1976. Only counsel for the Respondent has filed a brief. Upon the entire record of the case, including my observation of the witnesses and consideration of the brief, I make the following: FINDINGS OF FACT I. JURISDICTION Respondent is a Maryland corporation engaged, as a subcontractor in the building and construction industry, in the excavation and hauling of soil, working out of its Hyattsville, Maryland, yard. In the year preceding issuance of the complaint Respon- dent purchased and received, in interstate commerce, materials and supplies valued in excess of $50,000 from points outside Maryland. As the parties admit, Respondent is an employer within the meaning of Section 2(2), (6), and (7) of the Act. As the parties also admit, the Union is a labor organization within the meaning of Section 2(5) of the Act. II. THE UNFAIR LABOR PRACTICES A. Respondent's Business Operations Respondent was incorporated on May 16, 1973, as Nazarian Construction Co., and later changed its name to Nazco, Inc., on May 12, 1975 (G.C. Exh. 16). Its business is excavating and hauling related to the excavating. charged filed June 4, 1976; and a charge in Case 5-CA-8015 filed on June 14, 1976. 711 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The stockholders are the three Nazarian brothers- Sarkis, Avedis, and Hagop (Jack)-and Eric Carlin. The board of directors comprises Sarkis and Avedis Nazarian, Eric Carlin, and Gregory Haight, who has also been the company lawyer. Respondent's president is Sarkis Nazarian, who, accord- ing to his testimony, became actively and directly involved in management of the Company, starting in the second half of 1975, displacing in that role his brothers Avedis and Hagop and others engaged in supervisory functions. Avedis Nazarian, who is the largest single stockholder, continued on in his role as a mechanic in the shop, and as "final authority" in the shop, said President Sarkis Nazarian. However, this latter assertion appears to be contradicted by the fact that President Nazarian brought in as superintendent of the yard, where Respondent's exca- vating equipment and trucks are kept and from whence they move out, Junius B. Caldwell, a former business associate of the Nazarian brothers and of their multiple construction enterprises.2 Notwithstanding vagueness and attempted evasion by President Nazarian and Chief Executive Officer Carlin concerning the supervisory status of Yard Superintendent Caldwell, it was nevertheless clear from the testimony of the employee and management witnesses (including Naza- rian and Carlin), and from Caldwell himself, that Caldwell was Respondent's yard supervisor, and, specifically, among other things, was in charge of the 8 to 10 truckdrivers, who operated Respondent's dump trucks out of the yard.3 Yard Superintendent Caldwell hired and fired truckdri- vers, assigned them their work, and directed them where to go. In addition to scheduling and dispatching the dump trucks from the yard he would also follow them up from time to time at jobsites. He was also in charge of the several mechanics who worked on and repaired the equipment and trucks at the yard and who sometimes doubled, when needed, as truckdrivers. Caldwell was also responsible for some of the heavy equipment used in excavating (there were 38 pieces of equipment, said Chief Executive Officer Carlin), and for fueling all of the equipment. Occasionally, Caldwell might supervise an operator of such equipment, but more usually the equipment operators were under the direction of the general superintendent (Kaupish and his predecessors) and the jobsite supervisors, in charge of the excavating. On a rough division of authority, as Kaupish put it, Caldwell was in charge of trucks (the hauling operation) and Kaupish was in charge of excavating. Yard Superintendent Caldwell performed other manage- ment functions for Respondent, such as representing Respondent at the grievance procedure under the union contract in the matter of the discharge of employee David Francis, whom Caldwell fired on November 12, 1975 (and later put back to work as a result of an arbitration award). 2 Among these. according to Respondent's current general superinten- dent. Shawn Kaupish, and employee Sinclair Wilhoit, is CSH Contractors. of which Sarkis and Hagop Nazarian and Eric Carlin (who is Respondent's chief executive officer) are the principals. It was testified that CSH was and is a general contractor engaged in construction of government and commercial buildings, and that Respondent does the excavation work for CSH on subcontracts. It was further testified that some years ago, Caldwell had his own company, C and C Trucking and Excavating Co. (now defunct), and worked with and for CSH. I Yard Superintendent Caldwell was killed in an accident while driving Caldwell took his orders directly from President Nazari- an and Nazarian testified that for his services to Respon- dent Caldwell received "consulting fees" of $150 to $200 at a time 4 and unspecified personal loans on which to live. Unquestionably, Yard Superintendent Caldwell was a supervisor and agent for Respondent within the meaning of the Act. Assisting Caldwell as foreman was James Black. Black had been a former employee and associate of Caldwell in Caldwell's former business. Black worked as a mechanic on Respondent's trucks and assisted and filled in for Caldwell in his several supervisory duties. Black hired employees Francis and Poston in 1975 and in 1976 rehired employee Webb (initially hired by Caldwell) after Webb's discharge in the mass discharge of April 2, 1976. Black owned two trucks which he leased to Respondent, but the employees he hired were hired as Respondent's employees on Respondent's payroll, and in his work as a mechanic he worked on Respondent's trucks and equipment. Black's authority as foreman is underscored by the fact that when he hired employee Francis as a truckdriver at the end of September 1975, Avedis Nazarian (who like Black did mechanical work on equipment) expressed the view that Francis needed a road test before being hired. Black replied that Francis did not need a road test and hired him without obtaining permission or approval of anyone. Foreman Black was a supervisor and agent for Respon- dent within the meaning of the Act. As already indicated, Respondent's operational employ- ees were divided into two categories, the one group called operators, who worked at the jobsites operating Respon- dent's excavating and related job equipment, the second group called truckdrivers, who operated Respondent's dump trucks. The operators were members of Local 77 Operating Engineers, according to truckdriver employee Wilhoit, but were not directly involved in the events of this case. The truckdrivers, prior to the mass discharge of them on April 2, 1976, were members of Local 639 Teamsters, the Charging Party Union in this case. The complement of truckdrivers was usually 10, but at the time of the mass discharge numbered 8. Respondent owned at the time, and owns, eight dump trucks, and additionally regularly leased from Foreman Black his two trucks, paying him an hourly rate. In addition, said President Nazarian, since at certain times there might be need for as many as 20 to 25 trucks to do the hauling of dirt and debris, Respondent would telephone other truckers or contractors to provide addi- tional trucks, leasing temporarily from them the needed trucks with drivers. Respondent's work was largely in the greater Washing- ton, D.C., area, that included nearby Maryland and Virginia communities. Some of the contracts that were operative both before and after April 2, 1976, included jobs Respondent's low-boy tractor trailer moving a piece of equipment for Respondent, on May 26, 1976, according to Chief Executive Officer Carlin. Two weeks before his death Caldwell had given the Board an affidavit on May 13, 1976. which Respondent asked to be put in evidence, and which is part of the record, as G.C. Exh. 17. 4 Chief Executive Officer Carlin, whose duties charged him with knowledge of such matters, testified, incredibly, that he was not sure whether Yard Superintendent Caldwell received a weekly check from Respondent. 712 NAZCO, INC. at Boystown Center of Catholic University, at the Naval Medical Center in Bethesda, at Maryland University, at Fort Reno, at High Point High School in Beltsville, and at the Harry Diamond Labratory, according to President Nazarian and employee Webb, who worked on all of these both before and after April 2, 1976. B. The Union Relationship The Union has a multiemployer collective-bargaining contract, sometimes described as an area contract or dump truck contract, with an association of contractors known as the Construction Contractors Council (CCC). Nonmem- bers of the association or independents may become party to the contract. The current contract (G.C. Exh 14) is in effect until April 30, 1978. According to Union President Frank DeBrouse and President Nazarian, Respondent first became party to the Union-CCC contract by Hagop Nazarian signing, on February 7, 1974, the predecessor contract that expired April 30, 1975 (G.C. Exh 6). Respondent continued to be party to the current contract by its (former) General Manager Arthur Pelkey signing the amendments (G.C. Exh. 8) to the predecessor contract on July 21, 1975, and signing a retroactivity letter (G.C. Exh. 7).5 Respondent also signed the union pension fund and health and welfare fund agreements in February 1974, which adherence remained binding without renewal signatures. The union wage rate for the dump truck drivers up till the mass discharge of April 2, 1976, had been $6.85 per hour, according to the employees and the contract (G.C. Exh. 14, p. 24) and thereafter rose on May 1, 1976, to $7.45 per hour. C. The Mass Discharge of the Truckdrivers Without warning or notice, starting after work Friday night, April 2, 1976, on instructions from President Nazarian, Yard Superintendent Caldwell began notifying each of the eight truckdrivers that Respondent was changing hands and that their jobs were ended.6 This was the written testimony of Caldwell corroborated by the testimony of the five of the eight employees who testified. Employee Wilhoit testified that Caldwell called him at home that night, told him that the Company was changing hands, that he and the other truckdrivers no longer had jobs, but that the change did not affect the equipment operators. Employee Samuel got his call from Caldwell the ' At the hearing. President Nazarian, seemed to suggest that Respondent did not become party to the current collective-bargaining contract in 1975 because it did not sign the later printed booklet form contract, G.C. Exh. 16, embodying G.C. Exh. 6 as amended by G.C. Exh 8. Respondent abandoned that suggested argument in its brief. Indeed, Respondent had earlier admitted it was party to the current contract in its answer, filed July 27. 1976, by its lawyer and member of the board of directors. Gregory Haight, in the suit by the Union in Superior Court of the District of Columbia for enforcement of the arbitration award of backpay due employee Francis (see par. 5 of G.C. Exh. 3, admitting par. 5 of G.C. Exh. 2). Moreover, Respondent complied with the wage provisions and other conditions of employment of the current collective-bargaining contract, without complaint or disavowal, and with its payment and reporting obligations under the Union's health and welfare fund and pension fund. untildefault after March 31, 1976. a The eight employees were David Francis, Wallace Frye. Wilson Roosevelt Samuel, Shirley W. Webb, Sinclair G. Wilhoit, Jr.. Jimmie Peterson, Jr., Willie B. Poston, and Carl R. Tandy, Jr. The first five testified. next day, Saturday, April 3, was told the Company was changing hands, and that the new people would not need him because they were bringing their own help. As a result, Samuel came in and picked up his paycheck the same day. Employee Frye reported for work on Monday, April 5, and was told by Caldwell that the Company had been sold and his work was over. He got his paycheck later that day. Employee Webb received his call on Saturday, April 3, from Foreman Black, who told him the Company had folded, that the successor was changing the name, and going nonunion. Employee Francis, who like the others worked Friday, April 2, reported for work on Monday, April 5, and was told by Foreman Black that the Company had been sold, that no trucks were going out, and that there were no jobs for the truckdrivers. 7 In no case were the employees informed as to whom the business had been sold. President Nazarian conceded that he gave no prior notice to the employees, or to the Union, of the termination of the jobs, or of his reasons or the causes, or of any transfer or termination of the trucking operation. Although he claimed to have decided to sell the dump trucks to his Yard Superintendent Caldwell in January 1976, and executed a purported lease purchase agreement dated March 31, 1976, Nazarian said he attempted without success to telephone Union President DeBrouse, in early April 1976, after the employment of the eight truckdrivers had been terminated, 8 and he did not offer the Union an explanation until May 5, 1976, in a letter mailed May 4, 1976 (see C. P. Exh. R-3), which was dated April 13, 1976 (Exh. R-1). Actually, President Nazarian gave several conflicting explanations. In the May 5, 1976, letter explanation to the Union, I month after the mass discharge of the employees, he claimed that Respondent had been losing money and had unsuccessfully sought to sell the entire business, and said that Respondent had "stopped our trucking operation on April 3, 1976, and subsequently have been making temporary arrangements and/or agreements with various people and friends to make use of our trucks to help us make the monthly payments." (Emphasis supplied.) At the hearing 3 months later, President Nazarian claimed that after deciding in January 1976 to sell Respondent's trucks to Yard Superintendent Caldwell, Respondent sold them to Caldwell on March 31, 1976, by contract executed that day (G.C. Exh. 5). In this connec- tion Nazarian testified that Caldwell paid $10,000 down. 7 At the heanring, President Nazanan claimed that on March 25 or 26 in the week ending Friday, April 2. he had authorized the discharge of employee Francis allegedly for not showing up at work on March 24, which was not established, but admitted that neither he. Nazarian, nor anyone else on his behalf had notified Francis that he was discharged. The evidence was that employee Francis was a member of the work force of truckdnvers, who worked through the week ending April 2, and whose employment was terminated as a group immediately thereafter. I President Nazarian did reach one of the union lawyers, Hart (who had handled the arbitration of employee Francis' discharge of November 1975), on the telephone in early April and told him Respondent was shutting down the business and parking its trucks. Hart replied he could not speak for the Union, and that Nazarian should communicate with Union President DeBrouse because Respondent had a duty to bargain with the Union about the effects of any termination. 713 DECISIONS OF NATIONAL LABOR RELATIONS BOARD At the same time, as earlier noted, Nazarian (and Chief Executive Officer Carlin) also testified that Caldwell, who had gone backrupt several years ago, and lost his trucking business, had been living on personal loans from Respon- dent up to his death on May 26, 1976, in addition to the consulting fees Respondent paid for his supervisory services.9 In further contradiction is a third version, President Nazarian's written testimony given in an affidavit to the Board on May 10, 1976.'0 Among other things, Nazarian stated in his affidavit that 2 weeks before discharging Respondent's truckdrivers on April 2, 1976, he, Carlin, and Caldwell made an oral agreement, to be later reduced to writing by Respondent, that Caldwell would take over the trucking aspect of Respondent's business; that in a future meeting of the same three men just prior to April 2, 1976, Caldwell indicated he would like to run all of Respondent; but that on April 2, 1976, Caldwell was informed he could have the trucking operation on a lease-purchase arrange- ment, which he signed some time after April 2. Further, said Nazarian, he decided on lease-purchase rather than purchase because of his prior experience with Caldwell and the need to protect the interest of Respondent. Hence by the terms of the agreement, said Nazarian, he (Nazarian) could cancel the agreement, Caldwell was operating the trucks without owning them, and the trucks remained in Respondent's name until Caldwell contributed cash. And as Nazarian said in his written testimony, in contrast to his testimony at the hearing, Caldwell had paid no money to Respondent; and Caldwell confirmed this in his contempo- raneous written testimony of May 13, 1976 (G.C. Exh. 17), stating that, "To date, I haven't paid Nazco anything yet, because I haven't received my money from the D. C. government"; and further, "I am not solvent." Moreover, the sham nature of Respondent's alleged "sale," or even "lease-purchase" arrangement, with Cald- well, and its claim at the hearing that it retained no interest in the trucks, is underscored in the terms of the agreement itself (G.C. Exh. 5). Though it is labeled a "lease-purchase agreement" and its opening clause suggests that Respon- dent is desirous of leasing its eight dump trucks to Caldwell on a lease-purchase basis, there is not an operative word in the document about sale or transfer of title at any time. In form it is a lease of Respondent's dump trucks on a month- to-month basis for a year (April 3, 1976, to April 2, 1977), for which Caldwell was obligated to pay a security deposit of $10,000 on signing, and $10,000 per month for 12 months, if the lease was not terminated by Respondent before then. There were no limitations on the reasons for termination. Caldwell was given the right to lease the entire fleet of trucks at rates he determined but was obligated to turn over the proceeds of the monthly collections to Respondent so that it could make the monthly payments due on the financing of the trucks. Respondent could terminate the lease for any or no reason on 30 days' notice, or, if Caldwell discontinued operations, on 10 days' notice. 4 Both officers testified that Caldwell had long unfulfilled hopes of collecting on some old claims against the District of Columbia government, amounting to about $200,000, but apparently these were not realized. D. Respondent Continues the Trucking Operation Except for the alleged change in form and dropping of the eight union truckdrivers on April 2, 1976, after an interval of a few days Respondent resumed the use of its trucks on its jobs. Yard Superintendent Caldwell, aided by Foreman Black, hired other drivers on a nonunion basis and wage scale, paying between $5.40 and $5.75 per hour (in comparison with the union scale of $6.85 per hour that increased to $7.45 per hour on May 1, 1976). Of the eight newly hired truckdrivers only one, Shirley Webb, had been among the eight whom Respondent terminated on April 2. On April 8, Webb received a call from Foreman Black to come in and talk. On Friday, April 9, Webb came in and talked to Yard Superintendent Caldwell and Black. Webb testified he was told he could have a job, but it would not be at union scale pay, rather it would be $5.75 per hour. However, Caldwell assured him he would gross more pay than working union, and Webb accepted. Employee Webb testified that he understood he was rehired by and working for Nazco (Respondent), no one told him differently, and except for the pay all of the physical conditions of the hauling operation remained as they had been before April 2. The trucks were housed, and serviced by the same people, at Respondent's Hyattsville yard. The trucks operated out of the yard as heretofore under direction of Yard Superintendent Caldwell, assisted by Foreman Black, who received their calls for trucks at the same yard telephone, as heretofore. Webb worked at the same job as he had worked and Respondent had worked, before April 2. He used the same Nazco truck time tickets, and generally, though not always, drove the same Mack truck (one of two trucks rented by Foreman Black to Respondent) as he had driven before April 2. In this connection, Black testified that Respondent, and not Caldwell individually, continued to rent his two trucks after April 2, and that Respondent, and not Caldwell, paid him the rental for the two trucks. The one different condition that employee Webb noted was that he and the other drivers received their weekly pay in cash, rather than by Respondent's check, but distributed by Caldwell and Black as heretofore. As Webb further testified, when he was discharged a second time, on May 10, 1976, it was Caldwell who fired him and gave him his final pay, under circumstances discussed infra. President Nazarian's testimony reinforced employee Webb's testimony that apart from the replacement of the former drivers with new drivers, the physical setup and handling of the trucking operation, and the jobs worked on, remained as had been the situation before April 2. General Superintendent Kaupish, who was transferred from the post of general superintendent of the Nazarian enterprise CSH Contractors to become Respondent's general superintendent in charge of excavating, testified that Caldwell remained in charge of trucks for Respondent, that those trucks were called and used first by Respondent before calling for auxiliary hauling services of other I' Respondent requested that the affidavit be received in evidence, and it is part of the record as Resp. Exh. 5. 714 NAZCO, INC. companies, and that, in the period April-May 1976 till Caldwell's death, any truck services done by Respondent's trucks for CSH were billed to CSH by Respondent, and not by Caldwell as an individual. Nonetheless, President Nazarian said, in furtherance of maintaining the illusion that Caldwell had become an independent trucking contractor rather than continuing as an employee of Respondent, that Respondent gave Caldwell "first choice" of its business for which he was paid an hourly rental fee per truck. At the same time, Nazarian conceded that he was not aware that the trucks did any other work; and offered no evidence that Nazco paid any truck rental money to Caldwell. Nazarian claimed not to know who provided the money for the drivers' wages, which in this April-May period were being paid in cash, and Caldwell in his written testimony declined to say where the money came from. On Caldwell's death, May 26 1976, said President Nazarian, Respondent resumed "possession" of the trucks, and Respondent has continued the trucking operation. According to Nazarian, no heirs, or anyone else, on behalf of Caldwell has made any claim upon Respondent. E. Other Antiunion Evidence, Second Discharge of Employee Webb Several of the employees testified to the antiunion hostility expressed by Yard Superintendent Caldwell. Employee Wilhoit, who was hired by Caldwell in October 1975, said that shortly after he was hired Caldwell told him, and other drivers present, that he was going to get rid of the Union; and repeated this again, to Wilhoit in March 1976, Caldwell saying he was planning to take over the Company. Employee Frye testified that in March 1976, Caldwell told employee Willie Poston and himself that he was tired of the Union, and that he was going to buy into the Company and go nonunion. In October-November 1975, according to employee Francis, Yard Superintendent Caldwell apparently suc- ceeded in persuading the truckdrivers to work two consecutive Saturdays at straight time pay rather than at overtime pay, as required by the union book contract, but became angered when they refused to work a third Saturday at straight time pay. Caldwell told them, said Francis, they were going by the union book and the Union wasn't worth a damn, that he was going to buy into the Company, that the Union would be eliminated, and he would clean house. A few days later, on November 12, 1975, Caldwell fired employee Francis. As already recount- ed above, Respondent was directed as a result of the arbitration proceeding to reinstate employee Francis, but, as Francis pointed out, Yard Superintendent Caldwell balked and the reinstatement was delayed until the end of February 1976.'1 In connection with the stalling of the reinstatement of employee Francis, Caldwell conceded in " The backpa,. also ordered in the arbitration, was not paid, and the Union brought suit for this on behalf of employee Francis, as previously noted, 12 Foreman Black's claim. that employee Webb was his personal employee. hired by Black to operate one of the two trucks Black rented to Respondent, and was fired by Black, was without substance or support. his written testimony that he told the drivers that no damn union was going to make him hire back David Francis. As set out in section II, D, above, employee Shirley Webb, one of the employees in the mass discharge of April 2, 1976, was recalled on April 9 and went back to work thereafter for Respondent doing the same job he had previously done except for less pay per hour than the union wage and without the payment of union benefits on his behalf. He worked almost a month and apparently became discouraged that the cut-rate pay in comparison with the Union's rate and, as he said, working for 9 hours a day for between 7 to 8 hours' pay, was not living up to Caldwell's promise of greater earnings. Webb and two other employ- ees drew up a letter of complaint about the pay and hours, intended for the Union, dated May 5, 1976, adding that a timeclock should be installed; and thereafter obtained the signatures of the 10 employees (G.C. Exh. 15). Webb had his wife deliver the letter to the Union. Yard Superintendent Caldwell learned about the letter and commented on it angrily to the employees the next day. Webb said several admitted signing. Caldwell then announced that whoever turned the letter into the Union would be fired. On the following day, Friday, May 7, said employee Webb, all of the trucks and drivers went out but him. Yard Superintendent Caldwell told Webb there was no work for his truck and sent him home. Employee Webb reported for work Monday, May 10, 1976. A foreman drove his truck away, said Webb, and Caldwell told Webb he was not needed anymore, that he (Caldwell) was tired of someone else running the Compa- ny. Webb replied that it was a matter of not being paid as they were supposed to be paid. Since Webb had not received his pay on Friday, Caldwell handed him his final pay that Monday morning. 2 F. 8(a)(1), (3), and (5) Findings The record is evident that Respondent has sought, without notice to or consent of the Union, to unilaterally disengage itself from its union contract and the union wage scale and benefit payments for its truckdrivers, under the pretense that Respondent had sold and discontinued its trucking operation or, short of sale, had leased its trucks and subcontracted with the lessee for the hauling needed in Respondent's excavation work. Obviously, there was neither a bona fide sale nor lease, but a pure paper transaction, without monetary or other consideration, hastily put together with Respondent's impecunious yard superintendent as the supposed lessee, in an attempt to disguise as his independent subcontracted operation Respondent's discharge of all of its union truckdrivers on April 2, 1976, replacing them with nonunion drivers, but otherwise continuing the hauling operation after April 2 as it had been done before. Even the pretense of an independent trucking operation was abandoned less than 2 Black said he fired Webb because he was not handling his truck right and had been teanng up the truck for the previous 7 months. This, of course, is incredible, because it was Black who initiated the call to Webb on April 8. 1976. to bring him alone, of the eight discharged employees, back and Black participated with Caldwell in rehiringWebb on April 9. 715 DECISIONS OF NATIONAL LABOR RELATIONS BOARD months later when the yard superintendent, Junius Cald- well, died. By unilaterally attempting to abolish the collective- bargaining unit of truckdrivers and terminating their employment on April 2, 1976, without notice to or consent of the Union, or bargaining with the Union over the supposed decision to subcontract or its effects on the employees, Respondent repudiated its undertakings under the collective-bargaining contract with the Union before the term of the contract had run its course.' 3 Such repudiation was in derogation of Respondent's bargaining obligation under Section 8(d) of the Act, and hence violated Section 8(a)(5) and (1) of the Act. Respondent's alleged financial necessity was not a defense that excused such unilateral repudiation of the contract. C & S Industries, Inc., 158 NLRB 454, 456-458, 460 (1966); Oak Cliff-Golman Baking Co., 202 NLRB 614, 616 (1973), 207 NLRB 1063, 1064 (1973); Nassau County Health Facilities Association, 227 NLRB 1680 (1977). Likewise, Respon- dent's reduction of the contract wage and elimination of contract benefits of employee Webb, who was the one member of the discharged unit recalled by Respondent a week after the April 2 discharge, was a similar midterm repudiation of the undertakings of the contract, in violation of Section 8(a)(5). Moreover, Respondent's mass discharge of the eight union truckdrivers on April 2, 1976, in order to replace them with nonunion truckdrivers, and replacing them with nonunion truckdrivers, was a discriminatory discharge designed to discourage union membership, in violation of Section 8(a)(3) and (1) of the Act. For a similar 8(a)(3) and (5) violation, where the employer subcontracted (though without pretense as here) the truck delivery portion of its business and discharged the truckdrivers to avoid a union obligation, see N.L.R.B. v. American Manufacturing Com- pany of Texas, 351 F.2d 74, 79, 80 (C.A. 5, 1965). Respondent's prior disparagement of the union represen- tation of the employees and threats of discharge of the union employees for adhering to the Union, by Respon- dent's yard superintendent, Caldwell, before the discharges of April 2, were coercive and constituted interference with the employees' Section 7 rights in violation of Section 8(a)(1) of the Act. Lastly, the second discharge of recalled employee Webb, on May 10, 1976, was a violation of Section 8(aX3) and (1) of the Act. Webb was fired by Respondent because he led his fellow employees in making a concerted complaint to the Union concerning Respondent's pay, hours, and computation of time. CONCLUSIONS OF LAW 1. By attempting unilaterally to abolish the collective- bargaining unit of truckdrivers and terminating their employment on April 2, 1976, under pretense of having ':' Respondent's contention that the Union "implicitly" waived its right to notice or to bargain, because it allegedly failed to respond to a telephone call from Respondent's president, Nazarian, is without foundation or substance. The Union disputed receiving the telephone call, but, even if it had received it, the information Nazarian was transmitting (taking any one of his various and conflicting descriptions of Respondent's actions) did not provide the accurate and truthful information on which the Union would subcontracted their work in midterm of the collective- bargaining contract with the Union without notice to or consent of the Union, or bargaining with the Union over the supposed subcontracting or its effects on the employ- ees, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. In addition, by unilaterally reducing the contract wage and eliminating the contract benefits of recalled employee Webb, without notice to or consent of the Union, Respondent has engaged in an unfair labor practice also within the meaning of Section 8(a)(5) and (1) of the Act. 2. By discharging the unit of eight truckdrivers on April 2, 1976, in order to replace them with nonunion truckdri- vers, and by replacing them with nonunion truckdrivers, Respondent has engaged in unfair labor practices within the meaning of Section 8(aX3) and (1) of the Act. 3. By disparaging the union representation of the employees and threatening discharge of the employees because of their adherence to the Union, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(l) of the Act. 4. By discharging recalled employee Webb on May 10, 1976, because he led his fellow employees in making a concerted complaint to the Union about Respondent's pay, hours, and computation of time, Respondent has engaged in an unfair labor practice within the meaning of Section 8(aX3) and (1) of the Act. 5. The unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY It will be recommended that Respondent: (I) Cease and desist from its unfair labor practices. (2) Honor, and give retroactive effect from April 2, 1976, to, the terms and conditions of its collective-bargaining contract, including the payment of wages and benefits as prescribed. (3) Offer immediate and full reinstatement to the eight employees discharged on April 2, 1976, dismissing if necessary persons hired after April 2, 1976, and provide the eight discharged employees with backpay and benefits, from April 2, 1976, making in employee Webb's case an appropriate adjustment for the partial wages he received in the period between his recall and subsequent discharge on May 10, 1976. The backpay is to be computed on a quarterly basis as set forth in F. W. Woolworth Company, 90 NLRB 289 (1950), approved in N.L.R.B. v. Seven-Up Bottling Co., 344 U.S. 344 (1953), with interest at 6 percent per annum as provided in Isis Plumbing & Heating Co., 138 NLRB 716 (1962), approved in Philip Carey Manufacturing Company v. N.LR.B., 331 F.2d 720 (C.A. 6, 1964), cert. denied 379 U.S. 888. (4) Give notice to and bargain with the Union over any subcontracting of the work of employees. have been called to act. Failure to respond to the deceptive call, if the failure occurred, cannot be deemed a waiver of the statutory right, which, in any event, cannot be relinquished by implication or inference or anything less than "clear and unmistakable" language or showing that the waiver occurred. The Timken Roller Bearing Co., v. N.LR.B., 325 F.2d 746, 751 (C.A. 6, 1963), cert. denied 376 U.S. 971 (1964). 716 NAZCO, INC. (5) Post the notices provided for herein and because Respondent violated fundamental employee rights guaran- teed by Section 7 of the Act, and because there appears from the manner of the commission of this conduct an attitude of opposition to the purposes of the Act and a proclivity to commit other unfair labor practices, it will be further recommended that Respondent cease and desist from in any other manner infringing upon the rights guaranteed by Section 7 of the Act. N.LR.B. v. Entwistle Mfg. Co., 120 F.2d 532, 536 (C.A. 4, 1941); P. R. Mallory and Co. v. N.L.R.B., 400 F.2d 956, 959-960 (C.A. 7, 1968), cert. denied 394 U.S. 918; N.L R.B. v. Bama Company, 353 F.2d 323-324 (C.A. 5, 1965). Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, there is hereby issued the following recommended: ORDER 14 The Respondent, Nazco, Inc. and it Agents Junius B. Caldwell, Jr., and James Black, Hyattsville, Maryland, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Attempting unilaterally to abolish the collective- bargaining unit of employees by terminating their employ- ment by pretended subcontract of their work in midterm of the collective-bargaining contract with the Union without notice to or consent of the Union, or engaging in subcontracting of employee work without bargaining with the Union over the decision to subcontract or its effects on the employees. (b) Unilaterally reducing the contract wage or eliminat- ing the contract benefits of an employee during the term of the contract with the Union, without notice to or consent of the Union. (c) Discharging employees who are union members in order to replace them, and replacing them, with nonunion members. (d) Disparaging the union representation of the employ- ees and threatening discharge of the employees because of their adherence to the Union. (e) Discharging employees because of their complaints to the Union about Respondent's pay, hours, and other conditions of employment, or otherwise discouraging employee membership in or sympathy for the Union. (f) In any other manner interfering with, restraining, or coercing employees in the exercise of their rights guaran- teed them in Section 7 of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Offer to the eight employees, David Francis, Wallace Frye, Wilson Roosevelt Samuel, Shirley W. Webb, Sinclair G. Wilhoit, Jr., Jimmie Peterson, Jr., Willie B. Poston, and Carl R. Tandy, Jr., immediate and full reinstatement to their former positions, dismissing if necessary persons hired after April 2, 1976, or, if the former positions no longer exist, to substantially equivalent positions, without preju- dice to their seniority or other rights and privileges. (b) Make said eight employees whole, in the manner set forth in the section of this Decision entitled "The Remedy," for any loss of earnings and benefits incurred by each as a result of his discharge on April 2, 1976. (c) Honor, and give retroactive effect from April 2, 1976, to, the terms and conditions of the collective-bargaining contract with the Union, including the payment of wages and benefits as prescribed. (d) Give notice to the Union and bargain with it over any decision to subcontract the work of employees or its effects on the employees. (e) Preserve and, upon request, make available to the Board and its agents, for examination or copying, all payroll, social security, time, personnel, and other records necessary to ascertain the backpay and benefits due under the terms of this Order. (f) Post in the office and yard at Hyattsville, Maryland, copies of the attached notice marked "Appendix." 5 Immediately upon receipt of said notice, on forms provided by the Regional Director for Region 5, Respondent shall cause the copies to be signed by one of its authorized representatives and posted, the posted copies to be maintained for a period of 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily pcsted. Reasonable steps shall be taken by Repsondent to insure that said notices are not altered, defaced, or covered by any other material. (g) Mail copies of the foregoing signed notices to each of the eight employees named in paragraph 2(a), above. (h) Notify the Regional Director for Region 5, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. 14 In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board. the findings. conclusions. and recommended Order herein shall, as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 'S 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 The National Labor Relations Board having found, after a hearing, that we violated the National Labor Relations Act, as amended, has ordered us to post this notice: WE WILL NOT attempt unilaterally to abolish the collective-bargaining unit of employees by terminating their employment by pretended subcontract of their work in midterm of the collective-bargaining contract with the Union without notice to or consent of the Union, or engage in subcontracting of employee work without bargaining with the Union over the decision to subcontract or its effects on the employees. WE WILL NOT unilaterally reduce the contract wage or eliminate the contract benefits of an employee during the term of the contract with the Union, without notice to or consent of the Union. 717 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL NOT discharge employees who are union members in order to replace them with nonunion members and WE WILL NOT replace union member employees with nonunion members. WE WILL NOT disparage the union representation of our employees. WE WILL NOT threaten employees with discharge because of their adherence to the Union. WE WILL NOT discharge employees because of their complaints to the Union about our pay, hours, and other conditions of employment, and WE WILL NOT otherwise discourage employee membership in or sympathy for the Union. WE WILL NOT in any other manner, interfere with, restrain, or coerce our employees in the exercise of their rights to belong to or be active for a labor union or to engage in concerted activities, or to refrain therefrom. Because the Board found that we unlawfully dis- charged employees David Francis, Wallace Frye, Wilson Roosevelt Samuel, Shirley W. Webb, Sinclair G. Wilhoit, Jr., Jimmie Peterson, Jr., Willie B. Poston, and Carl Tandy, Jr., WE WILL offer each his former or like position, dismissing if necessary persons hired after April 2, 1976, and WE WILL give each backpay and benefits with interest from the time of discharge, April 2, 1976. WE WILL honor, and give retroactive effect from April 2, 1976, to, the terms and conditions of our collective-bargaining contract with the Union, includ- ing the payment of wages and benefits as prescribed. WE WILL give notice to the Union and bargain with it over any decision to subcontract the work of employees or its effects on the employees. NAzco, INC. 718