Daniel Construction Co.

DANIEL CONSTRUCTION CO. Daniel Construction Company, a Division of Daniel International and Local Union No. 4 and its branches International Union of Operating Engi- neers. Case 1-CA-11567 April 19, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND MURPHY On November 23, 1976, Administrative Law Judge James L. Rose issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions and a supporting brief, and a brief in answer to cross- exceptions. The General Counsel filed a brief and cross-exceptions. 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 briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that the Respondent, Daniel Construc- tion Company, a Division of Daniel International, Greenville, South Carolina, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. DECISION STATEMENT OF THE CASE JAMES L. ROSE, Administrative Law Judge: This matter was heard before me on September 23, 1976, at Augusta, Maine. The complaint alleged, in general terms, that the Respondent unilaterally subcontracted bargaining unit work in violation of Section 8(a)(1) and (5) of the National Labor Relations Act, as amended (29 U.S.C. § 151, et seq.). At the close of the hearing the General Counsel amended the complaint to allege that under the same facts the Respondent also violated Section 8(a)(3). Upon the record as a whole, including my observation of the witnesses, briefs, and arguments of counsel, I hereby make the following: 229 NLRB No. 24 FINDINGS OF FACT 1. BUSINESS OF THE RESPONDENT The Respondent is a Delaware corporation engaged as the general contractor in the building and construction industry with its principal offices in Greenville, South Carolina. It is the general contractor on a $200 million project in Maine where the events in this matter took place. In the course of its business, the Respondent performs work outside the State of South Carolina in excess of $50,000 annually. The Respondent admits to be, and I find is, an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Local Union No. 4 and its branches, International Operating Engineers, is admitted by Respondent to be, and I find is, a labor organization within the meaning of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Factual Background On the project involved here, the Respondent had approximately 53 primary subcontractors and an indeter- minate number of secondary and tertiary subcontractors. It appears from the testimony that most of the employees for the Respondent and the subcontractors are represented by one or more labor organizations and, indeed, the Respon- dent as well as the Union here are signatories to a "project agreement." The Union has several branches, each of which is responsible for employees performing particular types of work within the general jurisdiction of the operating engineers including equipment operation and the like. The branch involved in this matter deals with the field engineers (surveyors). In the fall of 1974, not long after the project commenced, the Union began organizing the Respondent's field engineers, which at that time numbered approximately II1. While the union business agents knew that the Respon- dent had subcontractors doing the same type of construc- tion surveying work as the Respondent's employees, they nevertheless determined only to organize the Respondent's employees. Business Manager Walter Ryan said that their plan was to organize only the Respondent's employees, then negotiate a contract with a subcontractor clause whereby the Respondent would agree that any subcontrac- tor's employees doing surveying would be bound by the terms of the agreement. In short, Ryan testified that it was the Union's tactic to organize only the Respondent's employees and, then upon successful negotiation of a contract, other employees doing surveying work would, in effect, be automatically organized. Following a short organizational campaign, an election was conducted among the Respondent's field engineers, with the majority voting for the Union. On December 31, 1974, the Union was certified by the Board as the exclusive 93 DECISIONS OF NATIONAL LABOR RELATIONS BOARD collective-bargaining representative of the unit of field engineer employees.' In the spring of 1975, Ryan and William O'Keefe, the union business representative in charge of the field engineers branch, met with company representatives for the purpose of negotiating a collective-bargaining agree- ment. They had two sessions and generally agreed to all noneconomic items including what the Union conceived to be a stronger subcontracting clause than the one in its standard construction agreement. However, toward the end of the second bargaining session the Company proposed an economic package which was unacceptable to the Union. There have been no further bargaining sessions. Rather than continue negotiating, the Union determined to take the position that the project agreement covered field engineers. The basic reason the Union chose this course rather than take economic action to force its contract demands was that the project agreement con- tained a clause prohibiting picket lines or the honoring of the picket lines. Thus, the Union determined that it could be more effective by arguing that the project agreement covered these employees. The Company rejected this contention and the matter went to arbitration, with the arbitrator ultimately deciding that the field engineers were not in fact covered under the project agreement. Thus the matter now stands. As noted above, even before the Union had begun organizing Respondent's field engineers, subcontractors of the Respondent were in fact performing this type of work and have continued to do so. Specifically, since February 1975, SLF, Inc., has done surveying work as a subcontrac- tor, and before that was a secondary subcontractor. The contract between SLF, Inc., and the Respondent, of May 12, 1975, has been modified on nine occasions through August 11, 1976. At the time of the election the Respondent employed nine field engineers, exclusive of party chiefs who the Respondent contended were supervisors but who neverthe- less were included in the unit. This number was gradually reduced during the early part of 1975, such that by March 11, 1975, only three were left,2 plus Don Queen, the party chief. The three field engineers were terminated on March 19, 1976. Queen testified that beginning in January 1976 he noticed that his crew was making more mistakes than is normal, which he said he documented in his field notebook. Finally, he recommended to George Crump, the Respondent's site manager, that these employees be discharged. This was done following discussion with James LaCoste, the Respondent's personnel and labor relations manager. The three employees in question, however, were not advised that they were discharged. Rather, they were told that they were being laid off as a result of a "reduction in force." The Respondent did not advise, much less bargain with, the Union about the termination of the bargaining unit. I The unit is: All field engineers employed by the Employer at the Scott Paper Company's Somerset Project in Hinckley, Maine, including rod men, transit men and party chiefs, but excluding all other employees, office Also on March 19, the Respondent made a requisition for a modification of its contract with SLF, Inc., the essence of which was that' SLF, Inc., was to furnish an additional three-man crew. B. Contentions of the Parties The General Counsel contends that by subcontracting unit work to SLF, Inc., without negotiating with the Union the Respondent thereby violated Section 8(aX5) of the Act under the authority of Fibreboard Paper Products Corp. v. N.LR.B., 379 U.S. 203 (1964). The Respondent, on the other hand, contends that Fibreboard is not applicable to the building and construc- tion industry (Tellepsen Petro-Chem Constructors, 190 NLRB 433 (1971)), that the subcontracting occurred more than 6 months preceding the filing of the charge, thus finding a violation is barred by Section 10(b), and in any event the parties did negotiate about subcontracting generally. The General Counsel also alleges that these facts make out a violation of Section 8(aX3). The Respondent argues that the three were discharged for cause. C. Findings and Conclusions The Violation of Section 8(a)(5) There is no question but that some, if not much, of the surveying work on the project could have been performed by the members of the bargaining unit but was in fact done by employees of subcontractors. Such was the case even prior to the organizational campaign. Further, there is no question but that the Company began subcontracting unit work to SLF, Inc., in February 1975. And on March 12, 1975, the Respondent entered into a subcontract with SLF, Inc., which was subsequently modified nine times through August 11, 1976. Inasmuch as the initial subcontracting to SLF, Inc., occurred well beyond 6 months prior to the filing of the charge herein, pursuant to the provisions of Section 10(b) of the Act such cannot be found a violation of Section 8(a)(5) nor can it be used as evidence of a violation. The fact of subcontracting generally and of unit work to SLF, Inc., specifically is the status quo in this case. Nevertheless, the facts are that in mid-March 1976 there was a fundamental change by the Respondent from the status quo with regard to how the surveying work would be performed and by whom. Site Manager George Crump had the direct responsibili- ty for the field engineers at the time herein material. He testified that he had been advised by Queen that the field engineers were making a number of errors thus he determined, according to his testimony, to put in a "reduction in force." He testified that he laid off the entire crew because it was difficult to determine who specifically was making the mistakes and in any event: clerical employees, professional employees, guards and supervisors as defined in the Act. 2 James MacDowell and Gerry A. Garland were employed throughout this period. Albert A. Fuller was employed from July 1974 to November 20, 1974, and was rehired on January 20, 1975. 94 DANIEL CONSTRUCTION CO. [W]e put a reduction on the force - a reduction in forces on this thing because that's what we were doing. We were culling our forces and I chose the individuals that was doing the poorest workmenship or we were getting the worse workmenship out him, those were the ones that we terminated. James MacDowell testified that on March 18 Queen told him that the crew was going to be laid off the next day. On March 19, the Respondent requisitioned a modifica- tion to the SLF, Inc., contract whereby in addition to the two survey crews of four men each, SLF, Inc., would provide one survey crew of three men. Thus the evidence, including the testimony of the Respondent's site manager, is that there was a management decision to lay off the remainder of the bargaining unit and simultaneously to have SLF, Inc., provide an additional three-man crew. A summary of the Respondent's records concerning the number of survey crews SLF, Inc., had on the project during 1975 and 1976 establishes that the additional crew was in fact provided. On March 19, therefore, unit work was still available. The Respondent took the work from the bargaining unit employees and gave it to employees of a subcontractor without even telling the Union, much less negotiating with it. Even though there had been a prior history of subcon- tracting unit work to SLF, Inc., these acts, the elimination of the bargaining unit jobs while simultaneously providing that bargaining work be done by subcontractor, are matters which the Respondent was obligated to bargain with the Union about. Having failed to do so, the Respondent thereby violated Section 8(a)(5) of the Act. Fibreboard Paper Products, Corp. v. N.L R. B., supra. The Respondent argues that the Fibreboard doctrine does not apply because it is inapplicable to the construction industry, citing Tellepsen Petro-Chem Constructors, supra. The facts of Tellepsen are substantially distinguishable from the instant case, including the fact that here bargaining unit employees were put out of work. Further, I find nothing in the Board's decision in Tellepsen which would suggest that Fibreboard is not generally applicable to the construction industry. Accordingly, I conclude that in changing the method by which unit work was to be performed - eliminating the bargaining unit and having that work performed by employees of a subcontractor - without negotiating with the Union the Respondent breached its bargaining obliga- tions. While the appropriateness of the unit is disputed, I find that the Union is the certified bargaining representative in the bargaining unit described above and was so on March 19, 1976. The unit issue was litigated in Case l-RC-13478. By its action in eliminating the bargaining unit, an order will be recommended whereby the Respondent will not only offer reinstatement to the bargaining unit employees but the certification year of the Union for those employees will be extended I year. 3 The Respondent's posthearing motion to substitute for G.C. Exh. 12 portions of the fieldbook now identified as Resp. Exh. I is granted. The Violations of Section 8(a)(3) During the course of the hearing, the Respondent contended that in addition to not having an obligation to bargain about subcontracting, it terminated the three bargaining unit employees for cause. It is claimed their work performance was inferior and that irrespective of the characterization that they were "laid off" as a result of a "reduction in force," they were discharged for cause. At the hearing, I allowed the General Counsel to amend the complaint to allege that these facts constitute a violation of Section 8(aX3) of the Act. Essentially the Respondent rested its discharge-for-cause contention on the testimony of Don Queen, who stated that beginning about January 1976 he noticed that they were having a number of problems with the work being performed by the surveying crew. He testified that he wrote these incidents in his fieldbook, portions of which were received into evidence.3 Queen's testimony was general and vague. That the crew was making inordinate mistakes is not even supported by his fieldbook notes. Further, his demeanor was not impressive. On the other hand, the testimony of the three individuals in question was relatively straightforward. These individuals were experienced surveyors, all of whom had worked for the Respondent in excess of a year without any adverse comment concerning their work performance. Additionally, the Respondent seems to have changed positions; first, that the three employees were laid off due to a reduction in force, and, second, that they were discharged for cause. All these factors lead me to the conclusion that the alleged cause for their termination was pretextuous. Aside from its obligation to bargain with the Union concerning this matter, the Respondent had the right to discharge these three employees for any reason or no reason at all, except for engaging in union or protected concerted activity. But, if the asserted reason is not reasonable, then that fact is evidence that the true motive lies elsewhere. "If he [the trier of fact] finds that the stated motive for a discharge is false, he certainly can infer that there is another motive." Shattuck Denn Mining Corpora- tion (Iron King Branch) v. N.LR.B., 362 F.2d 466, 470 (C.A. 9, 1966). Finding that the alleged reason for the discharges was false, I infer that the true motive for terminating these three employees on March 19 was because they were members of the bargaining unit and were represented by a union which the Respondent was obligated to bargain with. I conclude that the Respondent's motive was to eliminate the entire bargaining unit and thus the necessity for negotiating further with the Union. Again, the allegations by the Respondent that there was cause to discharge these three specific individuals is just too unpersuasive in this factual context to believe. Accordingly, I conclude that the Respondent by terminating Fuller, Garland, and Mac- Dowell on March 19, 1976, violated Section 8(aX3) of the Act. Town and Country Manufacturing Company, Inc., and 95 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Town & Country Sales Company, Inc., 136 NLRB 1022 (1962). CONCLUSIONS OF LAW 1. Respondent is, and at all times material herein has been, an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Local Union No. 4 and its branches, International Union of Operating Engineers, is, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act. 3. The unit appropriate for purposes of collective bargaining is: All field engineers employed by the Employer at the Scott Paper Company's Somerset Project in Hinckley, Maine, including rod men, transit men and party chiefs, but excluding all other employees, office clerical employees, professional employees, guards and supervi- sors as defined in the Act. 4. The Union is, and at all times material has been, the exclusive representative of employees in the unit described above. 5. By terminating employees James A. MacDowell, Gerry A. Garland, and Albert A. Fuller on March 19, 1976, and arranging to have their work done by a subcontractor, without bargaining with the Union, the Respondent violated Section 8(a)(5) of the Act. 6. By discharging employees James A. MacDowell, Gerry A. Garland, and Albert A. Fuller in order to dissipate the bargaining unit, the Respondent violated Section 8(a)(3) of the Act. THE REMEDY Having found the Respondent has committed certain unfair labor practices, it will be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. The Respondent will be ordered to offer James A. MacDowell, Gerry A. Garland, and Albert A. Fuller immediate and full rein- statement to their former positions of employment or, if those positions no longer exist, to substantially equivalent jobs without prejudice to their seniority or other rights or privileges, and to make them whole for any loss of wages or other benefits they may have suffered as a result of the discrimination against them in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB 289 (1950), and Isis Plumbing & Heating Co., 138 NLRB 716 (1962). Whether the Respondent's offer of reinstate- ment to these three employees was a substantial offer which would toll the backpay period was not fully litigated in this matter and will be left to the complaince stage of this proceeding. 4 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. The Respondent will also be ordered to bargain with the Union as the exclusive representative of employees in the above-defined unit, with the initial period of certification beginning on the date the Respondent commences bargain- ing in good faith with the Union. Howmet Corporation, 197 NLRB 471 (1972). Upon the foregoing findings of fact, conclusions of law, the entire record in this case, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER 4 The Respondent, Daniel Construction Company, a Division of Daniel International, Greenville, South Caroli- na, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain with Local Union No. 4 and its branches, International Union of Operating Engineers, as the exclusive representative of its employees in the above- described bargaining unit concerning mandatory subjects of bargaining. (b) Discharging or otherwise discriminating against employees because of their interest in or activity on behalf of the above-named or any other labor organization. (c) In any other manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Offer reinstatement to James A. MacDowell, Gerry A. Garland, and Albert A. Fuller and make them whole for any losses in accordance with the provisions in "The Remedy" section above. (b) Upon request, recognize and bargain with Local Union No. 4 and its branches, International Union of Operating Engineers, whose initial certification shall commence when the Respondent begins bargaining in good faith. (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 documents necessary and relevant to analyze and compute the amount of backpay due under this Order. (d) Post at its facility at the Daniel Construction Company, a Division of Daniel International, copies of the attached notice marked "Appendix." 5 Copies of said notice, on forms provided by the Regional Director for Region 1, after being duly signed by the Respondent's authorized representative, shall be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, includ- ing all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Company to insure that said notices are not altered, defaced, or covered by any other material. 5 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 96 DANIEL CONSTRUCTION CO. (e) Notify said Regional Director, in writing, within 20 days from the date of this Order, what steps the Respon- dent has taken to comply herewith. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing in which all parties were represented by attorneys and afforded the opportunity to present evidence in support of its respective position, it has been found that we have violated the National Labor Relations Act in certain respects and we have been ordered to post this notice and carry out its terms. WE WILL offer immediate reinstatement to James A. MacDowell, Albert A. Fuller, and Gerry A. Garland to their former jobs or, if such jobs no longer exist, to substantially similar positions of employment, and WE WILL make them whole for any loss of wages or benefits suffered by them as a result of the discrimination against them with interest at 6 percent per annum. WE WILL NOT refuse to bargain about mandatory subjects with Local Union No. 4 and its branches, International Union of Operating Engineers. WE WILL recognize and bargain with Local Union No. 4 and its branches, International Union of Operating Engineers as the exclusive representative of our field engineers. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of rights guaranteed them by Section 7 of the National Labor Relations Board. WE WILL NOT discharge or otherwise discriminate against employees because of their interest in or activity on behalf of any labor organization. DANIEL CoNsTRUC'nON COMPANY, A DIVISION OF DANIEL INTEINATIONAL 97