The Cross Co.

392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Cross Company and United Employees of the Cross Company, Covington Assembly Plant. Case 9-CA-20456 27 February 1985 DECISION AND ORDER shall take the action set forth in the Order as modi- fied. 1. Delete paragraph 2(a) and reletter the subse- quent paragraphs. 2. Substitute the attached notice for that of the administrative law judge. BY CHAIRMAN DOTSON AND MEMBERS HUNTER AND DENNIS On 25 September 1984 Administrative Law Judge Peter E. Donnelly issued the attached deci- sion. The Respondent filed exceptions and a sup- porting brief. The Board has considered the decision and the record in light of the exceptions and brief and has decided to affirm the judge's rulings, findings, I and conclusions and to adopt the recommended Order as modified. 2 ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified below and orders that the Re- spondent, The Cross Company, Covington, Ken- tucky, its officers, agents, successors, and assigns, i In sec III,A, par 5, of his decision , the judge inadvertently misstated certain facts The judge incorrectly stated that the Respondent failed to reply to Union Attorney Eby's letter of 26 August 1983 requesting bar- gaining On 31 August the Respondent sent a reply letter to Eby Con- trary to the judge, Eby did not repeat his bargaining request in another letter 31 August Finally, the judge stated incorrectly that the Respond- ent told union representatives at an 18 September meeting that the plant had been given away, instead , the Union first learned in a local newspa- per article on 24 September that the Respondent had donated the Cov- ington plant to the city 2 We agree that the Respondent failed to bargain in good faith over the effects of the decision to close the plant The j udge, however, in ad- dition to recommending that the Respondent be required to bargain over the effects of the plant closure, recommended a limited backpay remedy, citing Transmanne Navigation Corp, 170 NLRB 389 (1968) In Transmar- me, the Board imposed a limited backpay requirement to assure meaning- ful bargaining and to make whole employees for losses suffered as a result of an employer's failure to bargain over the effects of its decision to shut down its operations Unlike the situation in Transmarine, all em- ployees had been laid off for 11 months when the Respondent closed the plant and donated it to the city of Covington At the time of the closure and the subsequent requests to bargain in October and November, the Union was already devoid of economic strength Accordingly, we shall delete the limited backpay requirement of Transmarine from the remedy section of the judge' s decision, shall delete par 2(a) of the recommended Order, and shall issue a new notice to employees See National Terminal Baking Corp, 190 NLRB 465, 467 (1971) ("Respondent's failure to bar- gain about effects did not occur at a time the plant was still open") Member Dennis agrees with her colleagues that the Respondent failed to bargain over the effects of its decision to close the Covington plant In agreement with the judge, however, she would impose a Transmarine limited backpay requirement In discussions with the Union, the Respond- ent maintained that the plant was not permanently closed During the dis- cussions and without notice to the Union, the Respondent donated the plant to the city of Covington After the conveyance, the Union contin- ued to request bargaining about the effects of the plant closure, but the Respondent insisted the facility was not permanently closed The Re- spondent's refusal to engage in effects bargaining, together with the unan- nounced conveyance of the plant , effectively precluded the Union from engaging in timely, meaningful bargaining Under these circumstances, Member Dennis believes a limited backpay requirement is appropriate 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 has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT fail and refuse to bargain collec- tively with the United Employees of the Cross Company, Covington Assembly Plant, regarding the effects of the permanent cessation of operations of our Covington, Kentucky facility on our em- ployees, including, but not limited to the subjects of severance pay, pensions, medical insurance, and relocation of employees. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed by the Act. WE WILL, on request, bargain with United Em- ployees of The Cross Company, Covington Assem- bly Plant, regarding the effects of the permanent cessation of operations at our Covington, Kentucky facility on our employees, including, but not limit- ed to the subjects of severance pay, pensions, medi- cal insurance, and relocation of employees. THE CROSS COMPANY DECISION STATEMENT OF THE CASE PETER E. DONNELLY, Administrative Law Judge. The complaint herein was issued on January 20, 1984, based on a charge filed by United Employees of the Cross Company, Covington Assembly Plant (the Union) on December 13, 1983. The Cross Company (the Respond- ent)' filed a timely answer and a hearing was held on March 9, 1984, before me in Cincinnati, Ohio. The com- plaint alleges that the Respondent refused to negotiate with the Union regarding the effects of the permanent cessation of the Respondent's operations in violation of Section 8(a)(5) and ( 1) of the Act. The Respondent denies that a permanent cessation of its operations has occurred. Briefs were timely filed by the General Coun- sel and the Respondent and have been duly considered. I The Respondent's name appears as amended at the hearing 274 NLRB No. 65 CROSS CO 393 FINDINGS OF FACT 1. THE EMPLOYER The Respondent is a Michigan corporation engaged in the manufacture, assembly, and nonretail sale and distri- bution of machine tools and related products, having, at all times relevant herein, an office and place of business in Covington, Kentucky During the calendar year ending December 31, 1982, the Respondent in the course and conduct of its operations sold and shipped from its Covington plant products, goods, and materials valued in excess of $50,000 directly to points outside the State of Kentucky. The complaint alleges, the Respondent admits, and I find that the Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II THE UNION The complaint alleges, the Respondent admits, and I find that the Union is a labor organization within the meaning of Section 2(5) of the Act III. THE ALLEGED UNFAIR LABOR PRACTICE A. Facts In July 1982, because of an economic downturn, the Respondent began a series of layoffs of the work force of its Covington, Kentucky facility. By October 1, 1982, the entire work force had been laid off. The layoffs occurred while the latest of a series of collective-bargaining agree- ments was in force. That agreement expired on Septem- ber 30, 1983 No assembly, subassembly, or manufactur- ing operation has taken place at the plant since October 1, 1982 In July 1983, respresentatives of the Union and the Re- spondent met to begin negotiations for a contract to take effect on the expiration of the then current contract. The Union was represented by Earl Murphy (past union president), Russell Coyle (union president), Raymond Baker (grievance officer), Ken Perez (financial secre- tary), and an alternate. The Respondent was represented by John Clark (employee relations manager), Gary Ste- phens (domestic operations manager), and Richard Gwynn (assistant to Clark) 2 At the first meeting on July 8, 1983,3 Clark informed the Union that the financial outlook for the idle Coving- ton facility was poor, that the Respondent was consider- ing closing the plant, and that the Respondent would consider any suggestions or proposals made by the Union In a meeting held July 14, Murphy gave the Re- spondent a letter containing the Union's proposals which were then discussed. At the conclusion of that meeting, Clark and Stephens said they would return to the Re- spondent's headquarters and recommend that the Cov- ington plant be closed On July 19, the union representatives wrote to Clark asking for a response to the proposals of July 14 and re- questing bargaining regarding the effects of the plant 2 The only witnesses who testified were Murphy and Clark closing More meetings were held on July 28 and 29. At those meetings, the union representatives were told that the Covington plant would be disposed of and that a former superintendent of assembly would handle a small facility in Florence, Kentucky, approximately 10 miles from Covington ' Stephens said that when business im- proved the Respondent would rent or maybe even build a plant. When the union representatives asked what the Company was going to do with the old building, the re- sponse was that the Respondent would sell, rent, or tear down the building On August 26, the Union's attorney, Gary Moore Eby, wrote to Clark asking Respondent's intention and re- questing bargaining about the effects of the plant closing. No response was made and, on August 31, Eby repeated his requests in another letter. On September 18, a meet- ing was held at which Clark told the union representa- tives that the Covington plant had been given away and that negotiations were at a stalemate Several days later, a story appeared in the local news- paper that the Respondent had donated the plant to the city of Covington. At that time, the union representa- tives became convinced that the Respondent had in fact closed the plant. Still hoping that Respondent would reopen in another location, the union representatives had Eby write to Clark to accept the latest contract offer with the condition that 50 percent of the employees would be back to work by January 1, 1984. Clark reject- ed that proposal at a meeting on September 30, saying that the Company could not guarantee people would be back to work by January 1. The contract expired mid- night that night Eby then sent a series of letters to Clark asking about bargaining over the effects of the plant closure Clark fi- nally responded in a letter dated November 11, 1983, in which he once again denied that the Respondent was in a plant closing situation.5 B. Discussion It is undisputed that the Union has requested and the Respondent has declined to bargain over the effects of the closing of the Covington facility. The sole issue for consideration in this case is whether or not there has been a permanent cessation of those operations. The Re- spondent has consistently maintained throughout the course of its discussions with the Union and in this pro- ceeding that it has not permanently closed. Consistency, however, is the only virtue of its position To permit the Respondent to prevail on this issue would be, in effect, to superimpose the completely subjective representations of the Respondent over reality. In this case, the Re- spondent no longer owns the production facility at Cov- ington, having made a gift of that facility to the the city of Covington. Nor does it appear that the Respondent has any plans to reopen the operation in Covington or anywhere else in that vicinity While the Respondent re- 4 The Company used the facility in Florence for service order process- ing (a clerical function) No manufacturing, production, or maintenance operations have ever taken place in the Florence facility 5 Clark testified at the hearing, however, that the Respondent had no I All dates hereinafter will refer to 1983 unless otherwise indicated "definite plans" to resume operations in the Covington area 394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD cites that it may at some unspecified future time decide to open some manner of production facility in the area, this is pure speculation. The facts in this case, set out more fully above, despite the Respondent's protestations, make it clear beyond cavil that the Respondent has per- manently closed the Covington production facility.6 I therefore find that the Respondent has violated Sec- tion 8(a)(5) and (1) of the Act by refusing to negotiate with the Union regarding the effects on unit employees of its closure of the Covington plant. Columbia City Freight Lines, 271 NLRB 12 (1984). IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in connection with the Respond- ent's operations described in section I, above, have a close and intimate relationship to trade, traffic, and com- merce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY In order to ensure meaningful bargaining, the order to bargain over the effects of the Respondent's plant clo- sure shall be accompanied by a limited backpay require- ment such as that ordered by the Board in Transmarine Navigation Corp., 170 NLRB 389, 390 (1968). Such a re- quirement is "designed both to make whole the employ- ees for losses suffered as a result of the violation and to recreate in some practicable manner a situation in which the parties' bargaining position is not entirely devoid of economic consequences for the Respondent." Thus, the Respondent shall be required to pay the former bargain- ing unit employees of the Covington plant backpay at the rate of their normal wages when last in the Respond- ent's employ from 5 days after the date of this Order until the occurrence of the earliest of the following con- ditions: (1) the date that the Respondent bargains to agreement with the Union over the effects of the deci- sion to close the Covington plant; (2) a bona fide impasse in bargaining; (3) the failure of the Union to request bar- gaining within 5 days of this Order or to commence ne- gotiations within 5 days of the Respondent's notice of its desire to bargain with the Union; or (4) the failure of the Union to bargain in good faith. In no event shall the sum paid to any of these employees exceed the amount that they would have earned as wages from October 1, 1982, the date that the Covington plant permanently closed,' until the time that they secure equivalent employment elsewhere, or the date on which the Respondent shall have offered to bargain, whichever occurs sooner; pro- vided, however, that in no event shall this sum be less than these employees would have earned for a 2-week period at the rate of their normal wages when last in the Respondent's employ Columbia City Freight Lines, supra at fn. 1. Because the usual remedy , of notice posting is inappro- priate in a case such as this, since the Respondent has ceased operations, the Respondent will be required in- stead to mail a copy of the attached notice to each laid- off bargaining unit employee. CONCLUSIONS OF LAW 1. The Cross Company is an employer within the meaning of Section 2(2), (6), and (7) of the Act. 2. United Employees of the Cross Company, Coving- ton Assembly Plant is a labor organization within the meaning of Section 2(5) of the Act. 3. At all times material herein the following described unit has been an appropriate unit for the purposes of col- lective bargaining within the meaning of Section 9(b) of the Act, such unit being specified in the unit description of the collective-bargaining agreement between the Re- spondent and Union effective October 1, 1980, through September 30, 1983. 4. At all times material herein the Union has been and is now the exclusive representative of the employees in the above-described bargaining unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. The Respondent violated Section 8(a)(5) of the Act by refusing to bargain with the Union regarding the ef- fects of the permanent cessation of operations at its Cov- ington, Kentucky facility on its employees, including, but not limited to, the subjects of severance pay, pensions, medical insurance, and relocation of employees. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed" ORDER The Respondent, The Cross Company, Covington, Kentucky, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Failing and refusing to bargain collectively with United Employees of the Cross Company, Covington Assembly Plant regarding the effects of the permanent cessation of operations at its Covington, Kentucky facili- ty on its employees, including, but not limited to, the subjects of severance pay, pensions, medical insurance and relocation of employees. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Pay to the former bargaining unit employees of the Covington plant backpay at the rate of their normal 6 Maintaining a single nonbargaining unit employee in a clerical-type 8 If no exceptions are filed as provided by Sec 102 46 of the Board's function in Florence, Kentucky, does not compel a different result Rules and Regulations, the findings, conclusions, and recommended ' That date is October 1, 1982, the date that the last employee was laid Order shall, as provided in Sec 102 48 of the Rules, be adopted by the off and production was permanently ceased It is immaterial that the fa - Board and all objections to them shall be deemed waived for all pur- cility was not donated to the city of Covington until sometime later poses CROSS CO 395 wages when last in the Respondent's employ from 5 days after the date of this Order until the occurrence of the earliest of the following conditions: (1) the date that the Respondent bargains to an agreement with the Union over the effects of the decision to close the Covington plant; (2) a bona fide impasse in bargaining; (3) the fail- ure of the Union to request bargaining within 5 days of this Order or to commence negotiations within 5 days of the Respondent's notice of its desire to bargain with the Union; or (4) the failure of the Union to bargain in good faith. In no event shall the sum paid to any of these em- ployees exceed the amount that they would have earned as wages from October 1, 1982, the date that the Coving- ton plant permanently closed, until the time that they secure equivalent employment elsewhere, or the date on which the Respondent shall have offered to bargain, whichever occurs sooner; provided, however, that in no event shall this sum be less than these employees would have earned for a 2-week period at the rate of their normal wages when last in the Respondent's employ. (b) On request, bargain with United Employees of the Cross Company, Covington Assembly Plant regarding the effects of the permanent cessation of operations at its Covington, Kentucky facility on its employees, includ- ing, but not limited to, the subjects of severance pay, pensions, medical insurance, and relocation of employees. (c) Preserve and, on request, make available to the Board or its agents for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (d) Mail an exact copy of the attached notice marked "Appendix"9 to United Employees of the Cross Compa- ny, Covington Assembly Plant and to all former bargain- ing unit employees of the Covington, Kentucky facility. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. 9 If 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 Na- tional Labor Relations Board " shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the Nation- a] Labor Relations Board "