St. George Warehouse, Inc.

ST. GEORGE WAREHOUSE 348 NLRB No. 67 1037 St. George Warehouse, Inc. and Merchandise Drivers Local No. 641, International Brotherhood of Teamsters. Case 22–CA–24902 October 30, 2006 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN BATTISTA AND MEMBERS SCHAUMBER AND WALSH On July 28, 2006, Administrative Law Judge Eleanor MacDonald issued the attached supplemental decision. The Respondent filed exceptions and a supporting brief, the General Counsel filed an answering brief, and the Respondent filed a reply brief. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings,1 and conclusions as modified below and to adopt the recommended Order. This compliance proceeding involves a Board Order to restore a bargaining unit that had been reduced by the Respondent’s unilateral transfer of unit work to nonunit employees in violation of Section 8(a)(5) and (1) of the Act. St. George Warehouse, 341 NLRB 904, 909 (2004), enfd. 420 F.3d 294 (3d Cir. 2005). 1. We reject the Respondent’s argument that an alleged loss of majority support among the remaining unit em- ployees makes the Board’s Order to restore the bargain- ing unit inappropriate. We agree with the judge that un- der Master Slack Corp., 271 NLRB 78, 84 (1984), the alleged loss of majority support is tainted by the Respon- dent’s unlawful unilateral transfer of unit work to non- unit employees.2 2. The Respondent also argues that it should not be re- quired to restore the unit, because restoration would re- quire the hiring of additional employees who have not chosen to be represented by the Union, and therefore, the Union will lack majority status in the restored unit. We reject that argument. The new employees will be hired as the result of a court-enforced Board Order to restore the status quo in order to remedy the Respon- dent’s unilateral transfer of unit work. St. George Ware- house, supra. But for the Respondent’s unfair labor prac- tice, there would be no need for the Respondent to hire 1 The case referred to in fn. 3 of the judge’s decision is St. George Warehouse, Case 22–CA–25400. That case is pending before the Board, and the judge properly declined to rely on it. 2 Therefore, it is unnecessary to pass on the judge’s finding that the Respondent’s evidence of employee disaffection would be insufficient even if it were not tainted under Master Slack. We also find it unneces- sary to pass on the judge’s suggestion that the Board’s “changed cir- cumstances” decisions are limited to changes in economic circum- stances. employees to restore the unit. Thus, the Respondent caused the very situation to which it now objects. Under these circumstances, the Respondent cannot rely on the large proportion of new hires relative to existing employ- ees, or on a speculative lack of union support among the new hires, as a defense to complying with the Board’s Order to restore the unit. Cf. Yerger Trucking, 307 NLRB 567 fn. 3 (1992) (respondent could not rely on turnover to deflect a bargaining order pursuant to NLRB v. Gissel Packing Co., 395 U.S. 575 (1969), where the turnover was caused by the very unfair labor practices sought to be remedied: discharge of the bargaining unit and refusal to rehire the prounion employees).3 ORDER The National Labor Relations Board adopts the rec- ommended Order of the administrative law judge and orders that the Respondent, St. George Warehouse, Inc., Kearny, New Jersey, its officers, agents, successors, and assigns, shall take the action set forth in the Order. Julie L. Kaufman Esq., for the General Counsel. John A. Craner, Esq. (Craner, Satkin, Scheer, Schwartz & Ar- nold, PC), of Scotch Plains, New Jersey, for the Respon- dent. SUPPLEMENTAL DECISION STATEMENT OF THE CASE ELEANOR MACDONALD, Administrative Law Judge. On May 12, 2004 the National Labor Relations Board issued an Order requiring the Respondent to rescind the unlawful unilateral transfer of unit work to temporary agency employees and re- store the status quo ante by restoring the unit to where it would have been without the unilateral changes.1 On August 23, 2005 the United States Court of Appeals for the Third Circuit entered a Judgment enforcing the Board’s Order.2 A controversy hav- ing arisen regarding the implementation of the restoration rem- edy, the Regional Director of Region 22 issued a Compliance 3 In rejecting the Respondent’s argument that the Union will lack majority support in the restored unit, Member Walsh also relies on the Board’s well-established presumption that new hires support the union in the same ratio as the employees they replace. See, e.g., NLRB v. Curtin Matheson Scientific, 494 U.S. 775, 779 (1990); Furniture Ren- tors of America v. NLRB, 36 F.3d 1240, 1244 (3d Cir. 1994); Spillman Co., 311 NLRB 95 (1993), enfd. mem. 41 F.3d 1507 (6th Cir. 1994). The Union was certified as the collective-bargaining representative and undisputedly had majority support among the 42 employees in the unit at the time of the election. There is a rebuttable presumption that the Union’s majority status in the unit continued after the certification year ended. Curtin Matheson, supra at 778. Because the evidence of em- ployee disaffection among the existing unit employees is tainted, the Respondent has not rebutted the presumption, and the Union must be considered to have majority support among the existing unit employees. Accordingly, a majority of the new hires will also be presumed to sup- port the Union. The Respondent has offered no evidence to rebut that presumption. 1 341 NLRB 904. 2 St. George Warehouse, Inc. v. NLRB, 420 F.3d 294 (3d Cir. 2005). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1038 Specification and Notice of Hearing on January 31, 2006. The hearing in this compliance case was held on April 27, 2006 at which time Counsel for the General Counsel amended the Compliance Specification. After some testimony and argument the hearing was adjourned and the record was held open to permit Respondent to submit a written offer of proof. On May 18 Respondent submitted a document entitled “Brief” which also contained an offer of proof. The record was closed by Order of May 19, 2006. The Order gave both parties the oppor- tunity to submit a Brief. Counsel for the General Counsel sub- mitted a Brief on June 26, 2006. At the hearing, the Respondent stipulated that the Amended Specification appropriately and accurately sets forth the ratio of directly hired employees to agency hires in conformance with the Board’s Order requiring Respondent to return the unit to the status quo prior to the unlawful change in hiring practices. Thus, pursuant to the stipulation of the parties herein, I find that the correct ratio is 12 direct hires to one (1) agency hire. The only issue in this case arises from Respondent’s conten- tion that it should not have to abide by the Board’s Order as enforced by the Court of Appeals. In order to evaluate this position it is necessary to include a very brief summary of Re- spondent’s litigation history under the National Labor Relations Act. In St. George Warehouse, 331 NLRB 454 (2000), the Board found that Respondent unlawfully discharged two employees because of membership in Local 641, interrogated employees about their Union activities, promised increased benefits if employees did not select the Union, solicited grievances, cre- ated the impression of surveillance, issued written warnings rather than the customary oral warnings and maintained an unlawful no-distribution, no-solicitation clause. The Third Circuit enforced the Board’s decision in a memorandum opin- ion based on “the entire record, including the employer’s dem- onstrated hostility to its employees’ organizing efforts.” St. George Warehouse v. NLRB, 261 F.3d 493 (3d Cir. 2001). In an unpublished decision at 333 NLRB No. 113 (2001) (not reported in Board volumes), the Board ordered Respondent to bargain with the Union after Respondent had refused to rec- ognize and bargain with the Union following its certification on October 27, 2000 as the exclusive collective bargaining repre- sentative of a unit of warehouse employees of Respondent. The bargaining order was enforced by the Circuit Court in St. George Warehouse v. NLRB, No. 01-2215 (3d Cir. August 7, 2001). The election had been held on April 16, 1999. Counsel for the General Counsel stated at the instant hearing that Re- spondent withdrew recognition from the Union in August 2004 and this has led to the filing of a petition for adjudication of civil contempt before the Third Circuit. Respondent’s Brief states that the contempt proceeding is still pending before the Court of Appeals. Negotiations between the company and the Union began in October 2001, following the Circuit Court’s enforcement of the Board’s bargaining order. No collective-bargaining agreement has been reached.3 3 In JD(NY)-02-05 the ALJ found that Respondent had violated the Act by making unilateral changes in working conditions, by assisting in In the instant case at 341 NLRB 904 (2004), the Board found that Respondent unlawfully delayed in providing the Union with information on health insurance premiums and failed to provide the Union with information relating to temporary agency employees who have performed bargaining unit work. The Board found that prior to the election Respondent had used a fluctuating number of temporary agency employees to sup- plement directly hired employees in the bargaining unit. Fol- lowing the election Respondent did not replace unit employees who quit or were fired for cause; instead it used temporary agency employees. As a result the number of unit employees decreased from 42 at the time of the election to 8 at the time of the July 2002 hearing before ALJ Steven Davis. The Board found that Respondent had violated the Act by unilaterally transferring unit work to temporary agency employees without notice to the Union or an opportunity to bargain. The Board did not disturb the ALJ’s findings, made after extensive analy- sis of testimonial and documentary evidence, that some time after the Union won the 1999 election Respondent made a deci- sion to use agency employees rather than directly hired unit employees. The Board ordered the company, inter alia, to re- scind the unlawful unilateral transfer of unit work to temporary agency employees and restore the status quo ante by restoring the unit to where it would have been without the unilateral changes. This Order which has been enforced by the Circuit Court at 420 F.3d 294 is the subject of the present controversy. The Circuit Court’s Opinion rejected all of Respondent’s challenges to the Board’s adoption of the ALJ’s findings of fact and conclusions of law. The Opinion considered in detail all of Respondent’s objections to the remedy requiring restoration of the unit and the court held that In short, St. George’s objections to the status quo remedy are unpersuasive. That remedy addresses the violations St. George committed, and is appropriately tailored to redress the resultant harms. Accordingly, we will not disturb the Board’s remedial order. (footnote omitted) Despite this strong language upholding the Board’s remedial Order, Respondent urges that one footnote in the Circuit Court Opinion permits it to avoid complying with the mandates of the Board and the Third Circuit. In its argument to the Circuit Court the Respondent had objected to the fact that the Union would be given bargaining rights for employees who had not voted for the Union. The Respondent had argued to the Circuit Court, as it argued in the instant compliance hearing, that only a minority of the currently employed direct hires continue to support the union. The court pointed out that there is nothing permanent in a bargaining order and that the employees could file for decertification after the effects of the employer’s unlaw- ful acts have worn off. The court remarked that the record did not support or controvert the contention that even the remaining direct hires no longer supported the Union “and so we intimate the circulation and the filing of a decertification petition, by refusing to bargain in good faith with the Union, and by issuing warnings to and suspending two employees who supported the Union. The ALJ deci- sion has been neither affirmed nor reversed by the Board and I do not rely on it herein. ST. GEORGE WAREHOUSE 1039 no view on the question of whether changed circumstances have undermined the propriety of the Board’s restoration rem- edy.” An accompanying footnote stated, “It is possible that St. George will have an opportunity, at the compliance stage, to present evidence regarding the current state of union support.” The footnote cited Duke University, 315 NLRB 1291 (1995); We Can, Inc., 315 NLRB 170 (1994); and Lear Siegler, Inc., 295 NLRB 857 (1989). Lear Siegler dealt with an order to restore a manufacturing operation that had been moved to another location because the employer did not want to deal with the Union. The Board di- rected that the employer be permitted to introduce evidence at the compliance hearing that the restoration remedy was “unduly burdensome” in view of the economic circumstances of the company. In We Can the employer objected to the reinstate- ment and restoration remedy on the ground that the operation was running at a loss. The Board stated that that the remedy would be implemented unless the employer could show at the compliance stage that its operation was closed or curtailed for legitimate economic business reasons. Similarly, in Duke Uni- versity the Board found that the employer removed work from the bargaining unit and ceased hiring full-time workers. The Board, citing We Can, stated that at the compliance hearing the employer would be permitted to introduce evidence to show that a portion of the remedy was no longer appropriate. This brief summary of the cases cited by the Court of Ap- peals shows that they all dealt with the possibility that a remedy may be unduly burdensome to an employer because of changed economic circumstances. None of these cases permitted reliti- gation of the Board’s findings that the employer had made a change for unlawful reasons. The cases hold that the employer would be required to implement a remedy absent a showing that it would be “unduly burdensome” to the employer to re- store the unit to the status quo ante. The Respondent’s Answer to the Compliance Specification requests that the Board reconsider its order requiring restoration of the unit in light of changed circumstances. The Answer asserts that since the Fall of 2004 it has tried to convince the Regional Director “that the Union does not represent a majority of the employees in the existing bargaining unit . . . and . . . an inference exists that at least a majority of the employees to be hired do not favor the Union thereby overcoming the presump- tion that the Union continues to represent a majority of the hold-over group and the new hires.” The Respondent’s posi- tion herein is that it ought to be permitted to prove that the re- maining directly hired unit employees no longer support the Union. This argument and the purported proof are irrelevant. The Board has never permitted an employer to escape its obligation to comply with a restoration remedy unless the employer could present evidence that the remedy was unduly burdensome be- cause of changed economic circumstances. The record evi- dence upon which Respondent relies is a decertification petition filed on October 17, 2002 by Louis Buono. Thus, the Respon- dent does not allege that the remedy is unduly burdensome to it due to economic factors. Instead, the Respondent alleges that the unit employees no longer support the Union. This allega- tion is made after years during which the Respondent has taken numerous unlawful actions directed at its employees’ support of the Union. As summarized above, the cases show that since 1999 Respondent has discharged and disciplined employees because they belonged to the Union and that it engaged in other conduct that restrained and interfered with its employees’ Un- ion activities. The Third Circuit remarked on Respondent’s “demonstrated hostility to its employees’ organizing efforts.” The Respondent unlawfully refused to recognize and bargain with the Union following the certification issued in 2000 and the Respondent refused to furnish information to the Union once it did begin bargaining. Most significantly, after the 1999 election, the Respondent unlawfully transferred unit work to temporary agency employees pursuant to its decision to use agency employees rather than directly hired unit employees. Respondent’s argument that the employees no longer support the Union is an attempt to profit from the totality of the unlaw- ful conduct in which it has been engaged since 1999. Although Respondent urges that the unfair labor practices to be remedied herein could not reasonably have contributed to the purported employee disaffection from the Union, an analysis of the fac- tors set forth in Master Slack Corp., 271 NLRB 78, 84 (1984), shows that this argument must fail. The unfair labor practices herein began in 1999 and are continuing. The diminution of the unit by the unlawful use of agency employees has never ceased. Respondent does not claim that it has resumed hiring employ- ees directly to perform unit work. Indeed, Respondent asserts the right to continue to replace unit employees with agency hires. The nature of the violation would reasonably have a lasting effect on unit employees. The 8 or fewer remaining unit employees would see that employees represented by the Union were greatly declining in number and that the number of em- ployees not eligible for representation was greatly increasing. Unit employees would see that the employer was determined to avoid dealing with the Union on behalf of its employees and was determined to rid itself of the Union over time by ridding itself of represented employees. This conduct would demon- strate to the employees that it was futile to seek Union repre- sentation. Organizational activities and membership in the Union would fall off accordingly. At the hearing Respondent sought to introduce an additional document purporting to show that the Union no longer repre- sented a majority of the unit. Although I stated on the record my view that the document was irrelevant and that I would not rely on it, I permitted Respondent to introduce this document, a statement by Louis Buono dated August 3, 2004, in order to preserve Respondent’s ability to present its argument in any appeal of my decision. In addition to its irrelevance, the state- ment by a person who ceased employment with Respondent in February 2004, is far from proving what Respondent alleges. Buono alleges that “before I left” three employees “no longer cared for the Union”, but this statement of disaffection does not prove that they did not want the Union to continue representing them. Further, as to at least two of the employees the statement is hearsay. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1040 On the entire record and on the stipulation of the parties, I is- sue the following recommended4 4 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses. ORDER The Respondent, St. George Warehouse, Inc., Kearny, New Jersey, its officers, agents, successors, and assigns, shall restore the unit of warehouse employees by maintaining a ratio of 12 direct hires to 1 (one) agency hire.