Inland Container Corp.

378 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Inland- Container Corporation and . United Paper- workers International Union, AFL-CIO & CLC, Local No. 522. Case 17-CA-10772 7 May 1985 SECOND SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS - HUNTER AND DENNIS On 13 September 1983 the National Labor Rela- tions Board issued a, Decision and Order. in this proceeding.' On 8 February-1985 the Board issued a Supplemental Decision on Reconsideration.2 On 7 March 1985 the United States Court of Appeals for the District of Columbia Circuit issued an order in this proceeding wherein it instructed the Board "forthwith to reopen the record and return the matter to an administrative law judge to-consider"' the additional evidence that the Union sought to introduce. The court also stated that "the" further proceedings should be expedited so that the Board reaches and files with this court its final decision on the merits of the complaint on or before May 7, 1985." On 12 March 1985 the Board issued • an Order remanding this case to Administrative Law Judge Gerald A. Wacknov, who made the initial decision in the .proceeding, for further processing in accord with the court's order.3 On 2 April 1985, after further hearing, the judge issued the attached Supplemental Decision on Remand in this proceeding. The Respondent arid the Charging Party-Union filed exceptions-and sup- porting briefs. Also, the General Counsel filed a brief on the successorship issue which the judge did not reach.. . - The Board has considered the supplemental deci- sion and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings,4 and conclusions on the issues he decided. ' 267 NLRB 1187 (1983) z 273 NLRB 1856 (1985) (Member Dennis dissenting) 274 NLRB 887 (1985). 4 The Respondent has excepted to some of the judge 's credibility find- ings The Board 's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing the findings In so concluding , however, we find it unnecessary to pass on the judge's finding based on the new evidence adduced that the previ- ous credibility resolutions he made regarding the testimony of Union Representatives Gene Aubuchon and Donald Woodall were erroneous In agreeing with the judge that an 8(a)(3) violation has been established in this proceeding, we have not relied on Aubuchon's or Woodall 's testi- mony regarding what they were allegedly told by various Respondent's officials concerning the Respondent's staffing of the Kansas City plant In the section of his decision entitled, "Analysis and Conclusions," sev- enth paragraph, the judge discusses testimony which he indicates was given by David Patterson , the Respondent's hinng and development manager, concerning the hinng criteria for the newly acquired Kansas • We agree with the judge's finding that the Re- spondent violated Section 8(a)(3) and (1) of the Act because its refusal to consider for" hire or to hire the employees of its predecessor,- International Paper,. was discriminatorily motivated.5 For the- reasons set forth below, we further conclude that the Respondent is a successor employer-,and there- fore violated Section 8(a)(5) and (1) of the Act by refusing to'bargain with the Union.6 On 14 August 19817 the Respondent purchased from International Paper a corrugated box manu- facturing plant in Kansas City, Kansas. Since Inter- national Paper planned to continue supplying its customers in" the Kansas City area from other box plants it operated, the Respondent could acquire only its predecessor's plant and equipment. On 28 August International Paper ceased operations and terminated all 60 unit employees. These employees .had been represented- by the Charging Party Union. - . After taking possession of the Kansas' City plant on 2 September, the Respondent transferred `there the plant manager, production manager, and main- tenance " supervisor from other, of its operations. The Respondent hired three of. International Paper's senior foremen to serve as production su- pervisors -in apparently important "positions in the production process. It-also brought in five other su- pervisors from other of its plants. On-1.4 September the Respondent hired Janet Dudley, 'who had been International Paper's former employee relations *su- pervisor, to work in the same capacity for the Re- spondent. Dudley hired four of International Paper's former salaried employees to perform cleri- cal and administrative 'tasks, for the Respondent. Later, in October, Dudley also hired about 20 pro- duction and maintenance employees (but none from City plant The record evidence discloses,' however, that it was the Re- spondent's Equal Employment Opportunity Manager Bill Hewett who testified on these matters as the judge earlier -recounted We find' the judge's reference to Patterson was inadvertent, that it does not affect his credibility resolution regarding Hewett , and that our correction is not sufficient to affect the results of this case • In the section" of the judge's decision entitled "Additional Findings of Fact," par 13, the date "October 12, 1984" should be "October 12, 19811, The Respondent argues that in any event only those 22 of its prede- cessor's former employees who actually submitted employment applica- tions are entitled to reinstatement and backpay It is clear from the record, however, that other former unit employees did not apply for work because they knew the Respondent would not hire them in any event In these circumstances, we do not find that the employees ' failure to perform a futile act terminated their employment tights See Sherwood Trucking, 270 NLRB 445 (1984) We shall modify the judge's remedy to provide backpay and reinstatement for all those individuals whom the Respondent would have hired but for its unlawful discnmintion, See Spencer Foods, 268 NLRB 1483, 1487 (1984) - 6 Although Chairman Dotson has reservations concerning the findings that the Respondent violated Sec 8(a)(5), for institutional reasons, he concurs in the decision of his colleagues ' All dates are in 1981 unless indicated otherwise 275 NLRB No. 60 INLAND CONTAINER CORP the predecessor, International Paper) and, of this number, 16 employees reported for the Respond- ent's orientation program on 9 November. The record further shows that before it actually com- menced box-making operations on 16 November, the Respondent renovated the plant's aging equip- ment, relocated the shipping 'dock, and moved three walls inside-the facility to improve the flow of production materials . It spent about $2.3 million (a substantial percentage of the purchase price) on these renovations. It also considerably reduced the number of employee job classifications. On 18 De- cember the Union made a bargaining demand which the Respondent then rejected on 5 January 1982. The Board's traditional test for determining successorship status is whether there is a substantial continuity in the identity of the employing enter- prise. 8 The Supreme Court affirmed-the Board's test in NLRB v. Burns Security Services, 406 U.S. 272, 279 (1972), and held that a mere change in ownership of the employing business enterprise does not itself absolve the new owner from the ob- ligation to recognize and bargain with the labor or- ganization that represented the former owner's em- ployees. In this case we find that the record evi- dence is sufficient to show "substantial continuity" in the identity of the employing enterprise. Thus, the evidence discloses that the Respondent operates from the same plant, using the same machinery and equipment, albeit updated, and uses the same meth- ods of production as- did International Paper, in producing the . same product. We further find a continuity in the identity of the work force as be- tween the Respondent and International Paper. The judge specifically found, and we agree, that "but for unlawful considerations, the continuity of the predecessor's employee complement would have been maintained."9 We also note that the Re- spondent in fact did hire three important produc- tion supervisors, the employee relations supervisor, and four clerical employees previously employed by its predecessor. Nevertheless, the Respondent claims that it was not a successor employer because of the 2-1/2- month hiatus between the- closing of International Paper and the commencement of its operations. We conclude, however, that this hiatus in operations may have been necessary at least in part because of 8 Premium Foods, 260 NLRB 708 (1982), enfd 709 F 2d 623 (9th Cir 1983), Lincoln Private Police, 189 NLRB 717 (1971) B Infra at 387 We find that absent the Respondent's unlawful actions the Union would have continued to enjoy majority status on any date we might utilize from this record to determine that the Respondent had hired a sufficiently representative complement of employees 379 the Respondent's discriminatory hiring policies. 10 While the Respondent" spent a substantial sum of money on renovations, we -are not satisfied this changed the employing enterprise's identity. No new machinery was introduced and the work done did not alter the machinery's fundamental character but appears to have been long-overdue repair and renovation on equipment that was quite old. Since the Respondent is manufacturing and selling corru- gated boxes in the same geographical area as its predecessor did while operating the Kansas City plant, we further conclude that the evidence the Respondent points .to 'showing that it may be serv- ing different customers within this market also is not dispositive of this issue. In sum, we find that the changes the Respondent made were insufficient to negate the "substantial continuity" of the em- ploying enterprise. Accordingly, we find that the Respondent was a successor employer and violated Section 8(a)(5) of the Act by refusing to bargain with the Union. On the facts here, we also find that the present case is distinguishable from Spencer Foods, supra, where the Board found that the respondent em- ployer was not a legal successor'.12 In that case, unlike here, the prior employer had closed without first consummating a transfer of its operations, and there was a lengthy hiatus in operations of 16 months. Additionally, the new employer there op- erated only two of its predecessor's plants, intro- duced new equipment, eliminated the second work shift, and provided strictly kosher foods in contrast to its predecessor which had a non-kosher line of production. 13 THE REMEDY Having found that the Respondent has engaged in, and is engaging in, unfair labor practices within 10 The supplemental decision of the judge details the Respondent's dif- ficulties in securing an adequate work force because of its discriminatory hiring criteria Absent the use of such criteria, the Respondent may have more quickly secured a work force including the predecessor's employ- ees We are aware that the work force was hired in October and that operations did not begin until November Nonetheless, we are not satis- fied that the hiatus was totally unrelated to the Respondent's application of the discriminatory criteria " We acknowledge that there are certain countervailing factors to our successorship finding (e g , the diminution in unit size, the change in higher management, the change in employee classifications) but we are satisfied, on balance, that the Respondent is a successor employer . 12 In distinguishing Spencer Foods, Member Dennis relies on het sepa- rate opinion in which she found, unlike the situation here, that the re- spondent did not dscrimtnate against the employees of the predecessor because of their union activity 13 In light of our successorship finding here, we refer the issue con- cerning the Board's certification of Over-The-Road and City Transfer Drivers, Helpers, Dockmen and Warehousemen Local Union 41 affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, in Case 17-RC-9583, to the Regional Director for appropriate action consistent with this Second Supplemental Decision and Order 380 DECISIONS OF, NATIONAL LABOR RELATIONS BOARD the meaning of Section 8(a)(3) and (5) of the Act, we shall order that it cease and desist therefrom and take certain affirmative action designed to ef- fectuate the purposes of the Act.14 ' Thus, having found that the Respondent discri- minatorily refused to consider for hire or to hire employees previously employed by International Paper at its Kansas City, Kansas plant, we shall order the Respondent to offer all individuals who would have been hired in and after October 1981 employment in the positions for which they would have been hired -absent the Respondent's unlawful discrimination or, if those positions no longer exist, to substantially equivalent positions, dismissing, if necessary, any and all persons hired to fill such po- sitions. The Respondent shall also place on a pref- erential hiring list all remaining discriminatees who, under nondiscriminatory criteria, would have been hired absent the lack of available jobs. Further- more, we shall order the Respondent to make whole for any losses they may have suffered-all in- dividuals it would have hired absent its unlawful. discrimination against them. Backpay shall be com- puted in accordance with the formula set forth in F. W. Woolworth Co., 90 NLRB 289 (1950), With interest as prescribed in Florida Steel Corp., 231 NLRB 651 (1977). See generally Isis Plumbing Co., 138 NLRB 716 (1962). 'Having found that the Respondent also has un- lawfully refused to bargain collectively, with the Union, we shall order that the Respondent, on re- quest, -recognize and bargain collectively _in good faith concerning rates of pay, wages, r hours, .and other terms and conditions of employment with United Paperworkers International Union, AFL- CIO & CLC, Local No. 522, as the exclusive bar- gaining representative of the employees in-the unit found appropriate and, if an 'understanding is reached, embody such understanding in a signed agreement. CONCLUSIONS OF LAW 1., The Respondent, Inland Container Corpora- tion, is an employer engaged in, commerce within the meaning of Section-2(6) and-(7) of the Act. 2. United Paperworkers International Union, AFL-CIO.. &. CLC,. Local No. 522, is a labor orga- nization within the meaning of Section 2(5) of, the Act. 3. By. discriminatorily ; refusing to consider for hire or to hire, employees previously employed by 'International Paper at its Kansas City, Kansas plant, the Respondent,has engaged in, and is,engag- 14 The Charging Party Union requests that the Board award it ex- penses and attorney's fees incurred in connection with this case This re- quest is denied ing in, unfair labor practices within the meaning of Section 8(a)(3) and (1) of the Act. 4. All full-time and regular part-time employees employed at the Employer's Kansas City, Kansas facility, but excluding office clerical employees, professional employees, guards and supervisors as defined by the Act, constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. 5. At all times material - herein, the Union has Been the exclusive collective-bargaining representa- tive of the employees in the above-described unit. . 6. The Respondent is a legal successor for labor relations purposes to International Paper's oper- ations at the Kansas City, Kansas corrugated box manufacturing plant. 7. By failing and refusing to recognize and bar- gain with the Union as the exclusive collective-bar- gaining representative of the employees in the above-defined unit, the Respondent has engaged and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 8. The aforesaid unfair labor practices are unfair labor practices affecting commerce within. - the meaning of Section 2(6) and (7) of the Act. - ORDER The National Labor Relations Board orders that the Respondent, Inland Container Corporation, Kansas City, Kansas, its officers, agents, successors, and assigns, shall 1. Cease and desist from - (a) Discriminatorily refusing to consider for hire or to hire employees previously employed by Inter- national Paper at its Kansas City, Kansas, plant be- cause of these employees' membership in, represen- tation by, and activities.on behalf of the Union. (b) Failing and refusing to recognize and bargain in good faith with United Paperworkers Interna- tional Union, AFL-CIO & CLC, Local No. 522, as the exclusive representative of its employees in the following appropriate unit:, - All full-time and regular part-time employees employed at the Employer's Kansas City, Kansas facility, but excluding office clerical employees, professional employees, guards and -supervisors as defined by the Act. (c) In any other 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 designed to effectuate the Act. - , (a) Offer to all 'individuals who would have been hired in and after October • 1981 employment in the positions for which they would have been hired INLAND CONTAINER CORP. but for the Respondent's unlawful discrimination or, if those positions no longer exist , to substantial- ly equivalent positions dismissing , if necessary; any and all persons hired to fill such ' positions; and place on a preferential hiring list all remaining indi- viduals who would have been hired but for the lack of available jobs. (b) Make whole, with interest, in the manner set forth in the section above entitled "The Remedy" those individuals the Respondent would have hired but for its unlawful discrimination for any - losses they may have suffered by reason of the Respond- ent's failure to hire them. (c) On request, recognize and bargain collective- ly in good _ faith concerning rates of pay , wages, hours, and other terms and conditions of employ- ment with United Paperworkers International Union, AFL-CIO & CLC, Local No. -522, as the exclusive bargaining representative of the employ- ees in the unit found appropriate and, -if an under- standing is reached, embody such understanding in a signed agreement. (d) Preserve and, on request; make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze - the amount of backpay due under the terms of this Order. - (e) Post at its place of business in Kansas City, Kansas, copies of the attached notice marked "Ap- pendix." 15 Copies of the notice , on forms provided by the Regional Director for Region 17,. after being signed by the Respondent's authorized repre- sentative, shall be posted by the Respondent imme- diately upon receipt and maintained for 60 consec- utive days in conspicuous places including all places where notices to employees are customarily posted . Reasonable steps shall be taken by the Re- spondent to ensure that the notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director in writing within 20 days -from the date of this Order what steps the Respondent-has taken to comply. 15 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- al Labor Relations Board " APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government 381 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. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through representa- tives of their own choice - To act together for other mutual aid or pro- tection To choose not to engage in any of these protected concerted activities: WE WILL NOT discriminatorily refuse to consider for hire or to hire employees previously employed by International Paper at our Kansas City, Kansas plant because of these employees' membership in, representation by, and activities on behalf of the Union. WE WILL NOT refuse to recognize and bargain' in good faith with United Paperworkers International Union, AFL-CIO & CLC, Local 522, as the exclu- sive representative of our employees in the unit de- scribed below. - - WE WILL NOT in any other manner' interfere with, restrain, or coerce our employees in the exer- cise of the rights guaranteed them by Section 7- of the Act. - - ' WE WILL offer to all individuals who would have been hired in and after October 1981 employ- ment in the positions for which they would have been hired but for our unlawful discrimination or, if those positions no longer exist, to substantially equivalent positions, dismissing, if necessary, any and all persons hired to fill such positions; and place on a preferential hiring list all remaining indi- viduals who would have been hired but for the lack of available jobs. . WE WILL make whole 'those individuals who would have been hired but for our unlawful dis- crimination for any losses they' may have suffered by reason of our failure to hire them, plus interest. WE WILL, on request, recognize and bargain col- lectively in good faith concerning 'rates of pay, wages, hours, and other terms and conditions of employment, with United Paperworkers - Interna- tional Union, AFL-CIO & CLC, Local No. 522, as the exclusive bargaining representative of the em- ployees in the appropriate bargaining unit and, if an 382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD understanding is reached, embody such understand ing ' in a signed agreement. The appropriate bar- gaining unit is: All full-time and regular part-time employees employed at the Employer's Kansas City, Kansas facility, but excluding office clerical employees, professional employees, guards and supervisors as defined by, the Act. INLAND CONTAINER CORPORATION SUPPLEMENTAL DECISION ON REMAND GERALD A. WACKNOV, Administrative Law Judge. On February 8, 1985, the Board issued a Supplemental Decision on Reconsideration in the proceeding.' There- after, on March 12, 1985, pursuant to the order of the United States Court of Appeals for the District of Co- lumbia filed on March 7, 1985, the Board issued an Order remanding this case to me for further processing. The court directed the Board "forthwith to reopen the record and return the matter to an administrative law judge to consider both (1) the Dudley statement on re- spondent's preference- for employees with 'a demonstrat- ed willingness to work in a nonunion environment,' and (2) the training manual as it bears on the criterion for se- lecting employees." The court also stated that "the fur- ther proceedings should be expedited so that the Board reaches and files with this court its final decision on the merits of the complaint on or before-May 7, 1985." Thereafter, by Order dated March 20, 1985, following an all-party conference call, a hearing in this matter was scheduled for March 26, 1985, at the Regional Office hearing room in Kansas City, Kansas. The hearing was held as scheduled. The parties were afforded a full opportunity to be heard, to call, examine. and cross-examine witnesses, and to introduce relevant evidence Because of the time con- straints the parties have not been permitted to file briefs, but rather were permitted to present oral argument at the close of the hearing. On the entire record, and based on my observation of the witnesses and consideration of the arguments present- ed, I make the following RESPONSE TO DOCUMENT REQUEST NO. 17 The only documents reflecting defendant's policy of not hiring individuals who have previous corru- gated box experience aside from the order placed with the Kansas Jobs Service, which plaintiffs al- ready have, are a two-page memo by Janet Dudley3 [Exh. 16] and a two-page handwritten memo dated October 12, 1981 [Exh. 17]. The notes are quoted as follows: Met with Jim Griffith, Bill Hewitt and Dave Borman4 and decision was made to interview through Kansas State Job Service and look for ap- plicants with no previous corrugating experience and nonunion background. Following this meeting, Dudley returned to the Kansas City facility and began to implement the afore- mentioned directive. About September 18, 1981, she placed a job order for employees with the Kansas Em- ployment Service 5 and began interviewing on September 25, 1981. The interview process continued until late Oc- tober 1981. Dudley testified that she did not believe that it was proper to exclude prospective employees based on their union background and "probably" told the corpo- rate managers at the September 15 meeting that she thought it was wrong to apply such a restriction Fur- ther, Dudley found it very difficult to comply with the directive, particularly in hiring maintenance employees, inasmuch as any qualified applicants for maintenance po- sitions had gained such experience in union-represented plants. As a result of these considerations Dudley requested that this impediment be withdrawn. Thereupon, accord- ing to Dudley, following a conversation between the Kansas City plant manager and corporate personnel, she was advised that the aforementioned directive mandating the exclusion of employees with union backgrounds was "incorrect." Further, it was clarified to her that "there never was a nonunion barrier." However, Dudley's notes of this change in policy, dated October 5, 1981, state as follows: "After discussion by Dave Harrison and corpo- rate personnel, it was decided to lift the non-union bar- - FINDINGS OF FACT Janet Dudley was employed by the Respondent on September 14, 1981, as employee relations supervisor. She had occupied a similar position with Respondent's predecessor. She was immediately directed to report to Respondent's corporate headquarters in Indianapolis, In- diana, and on the following day, September 15, 1981, met with certain officials of Respondent Dudley 's notes of this meeting, which are included in a two-page memo- randum, were filed with the United States District Court for the District of Kansas in response to the following interrogatory:2 i 273 NLRB 1856 (1985) 2 In conjunction with a lawsuit filed under the Age Discrimination in Employment Act by applicants who were not considered for rehire when Respondent began staffing its Kansas City, Kansas facility (Baker v Inland Container Corp, No 83-2341, D Kansas) the Respondent, in re- sponse to interrogatories in the age discrimination matter, filed with that court an abundance of material, including memoranda, sworn responses to specific interrogatories, and material utilized in training supervisors prior to the commencement of Respondent's operations The aforemen- tioned memorandum by Dudley constitutes one such document Others are more fully described below 3 It should be noted that at the initial hearing Dudley, on cross-exami- nation, was asked, "Is this policy of not employing employees with cor- rugated experience in any written form?" Dudley answered, "No " 4 Griffith is the personnel placement manager, Hewitt is the equal em- ployment opportunity manager, and Borman is the compensation and benefits manager 5 When placing this job order, Dudley understood that the nonunion background criterion was mandatory However, she did not specify this restriction in the job order because she felt "uncomfortable" doing so Dudley testified that she determined the employees' union background or lack thereof upon her knowledge of whether applicants had previously been employed in unionized plants _ INLAND- CONTAINER CORP ner and open interviews with union background which did. help for maintenance applicants." At ; this, time, Dudley had interviewed applicants but had not hired any employees. Thereafter, according to Dudley, she proceeded to hire employees in accordance with three basic criteria, as set forth in the initial decision in this 'proceeding, namely, the preference for a high school graduate, the preference for 2 to 5 years of industrial experience, and the mandatory exclusion of any employees with previous corrugated- box experience. Dudley- also understood, however, in accordance with the instructions she re- ceived in the September, meeting, that the plant was "going to operate in a non-union environment," and ad mitted on cross-examination that -she understood the "lift[ing] of the non-union barrier" was to permit the hiring of applicants with union backgrounds only if it was necessary Dudley further testified as follows 'regarding her un- derstanding of the September 15 meeting: , Q. And even after-you say you probably- told- them you thought- it was wrong, and even after that you come away from the meeting ' understanding' that it was your obligation to do 'this. Is that right? A. I was surprised that they did not want any of the International Paper people employees. ' ' Q. And you understood the non=union back- ground to relate to that? A. Yes. . ' About June 7, 1984, Respondent submitted the follow- ing in the aforementioned age discrimination suit: DEFENDANT'S ANSWERS, RESPONSES OR, OBJECTIONS TO PLANTIFFS' INTERROGATORIES, SECOND REQUEST FOR PRODUCTION AND REQUEST TO ENTER UPON LAND • INTERROGATORY NO. 1 • " State the name and position with or relation to the Defendant of every individual who assisted- or participated in any manner in the preparation of the Answers to these Interrogatories. - • - ANSWER TO INTER R OGA TORY" NO. 1 Janet Dudley - Employee Relations Supervisor • William D. Hewett EEO Manager - .i•, David J. Harrison Vice . President (as to Interrogatory No. 3 only)- INTERROGATOR Y NO. 2 Identify all criteria on which applicants wei-e_ se- lected for hourly positions at Defendant's Kansas, City, Kansas plant and the person(s) who made the decision that such criteria would be used. " - ANSWER TO INTERROGATORY NO. 2 383 Janet Dudley cannot nearly three years later recall every criterion which she applied to hourly applicants' in 1981 . She is certain these criteria would have "included but not been limited to any prior employment record, the attitude shown during interview, employment references, an absence of job-related felonies, no physical disabilities not sus- ceptible to reasonable accommodation. She was ex- pressly directed to prefer but not require comple- tion of high school, a demonstrated willingness to work in a nonunion environment, and two or more years of industrial experience. For both production and maintenance jobs, prior corrugated experience was disqualifying. For maintenance jobs, there were also various skill requirements as set out on "Kansas City Plant Maintenance Classifications" [Exh. 1].6 Dudley testified that she first saw the answer to inter- rogatory No. 2 on September 24, 1984, some 3 months after if was submitted to the district court, when corpo- rate attorneys involved. in the age discrimination suit7 brought it to her and asked her about it. The September 24, 1984 meeting with the attorneys lasted approximately 1-1/2 hours during which time she was shown only the aformentioned interrogatories ,and answers. She admitted having the time to examine the answer "rather thorough- ly„ Dudley, called as a witness by Respondent, testified as Q. Can you-first, look at the -Answer to Inter- rogatory No. 2 and tell me whether or not that cor- rectly states the criteria you used in selecting the hourly work force in the Kansas City plant? A. No. it does not. " - Q. In what -respects is it inacurate? A. I don't understand this demonstrate a willing- ness to work in a non-union environment. I don't know where that came from, I don't know what that means. I had three basic criteria of which I ap- 'plied to all applicants. And those were as I stated prior. Q. Is there anything else in there that- you believe to be inaccurate? A. No. These again, are other employment fac- tors, employment references, those are the things that we might consider in defining one applicant over another for hiring. Q. Ms. Dudley,.look at the first page of General Counsel's Exhibit No. 20, the interrogatory [inter- rogatory No. 1] is state the name or position with or relation to the defendant,` of every individual who 'assisted or participated in any manner in the preparation of the answers to these interrogatories. s Interestingly, it is clear that Dudley did not make the decision that such'cntena should be used Rather, she merely implemented Respond- ent's policy which was made at the corporate level by David Harrison, infra, and others Thus, the answer to the interregatory, indicating that Dudley was solely responsible for establishing such criteria, is erroneous r It should be noted that the several law firms that represent the Re- spondent in the age discrimination suit have not represented the Re- spondent in the instant unfair labor practice proceeding 384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Then in the answer the first name is your. own. Do you see that? A. Yes, I do. Q. Tell the Judge in what way you participated or •assisted in the preparation of the answers to those interrogatories. - ` A'. 3' did" not participate in the answer to those in- terrogatories. I have on occasion spoken with cor- porate lawyers and company officials and have given them information, but have never been specif- ically asked a response to a specific question and I don't know about those answers. Q. Did anyone in the company instruct or direct you to use as a criterion for employment,- a demon- strated willingness to -work in a nonunion environ- ment? " A. No, they did not. Q. Did you ever tell anyone that this was a_crite- rion you used?" A. No. Q. Did you use the criterion? A. No, I did not.8 Bill Hewitt, a licensed' attorney with a substantial background in labor relations, is Respondent's equal em- ployment opportunity manager. Hewitt testified9 that he received the aforementioned interrogatories about May 4, 1984, and signed and verified them on behalf. of Re- spondent on June 1, 1984. During this time he "contact- ed Janet [Dudley] on a few occasions to ask her for doc- uments." Hewitt was in charge, along with local counsel, of preparing the Respondent's defense in the age discrim- ination matter, and had been involved with Dudley for almost 18 months regarding the matter. During this time he had many conversations with her about the method utilized in selecting employees. Hewitt's testimony regarding Respondent's- answer to interrogatory No. 2 is as follows: _ Q. I direct your attention specifically to the answer to interrogatory number two. Are you fa- miliar with that? - A. Yes, I am. Q. Is that answer correct or incorrect? A. It's correct. Q. I direct your attention to the following por- tion of the_ answer: She. was expressly directed to prefer, but 'not require, a demonstrated willingness to work in a non-union environment. Do you re- member that? - - A. Yes, I do. Q. What does that relate to? A. Okay. A demonstrated willingness to work in a non-union- environment means that what Janet 9 It should be noted that although , according to Dudley, she did not consider the "no union background " 'criterion in the hiring process, and purportedly does not even understand it, the Respondent has not to date filed a correction of its answer to interrogatory No 2 with the district court - - 9 Unfortunately, due to the court reporter's negligence in erasing Hew- itt's initial testimony in the remanded proceeding , it was necessary that he be recalled to the stand and examined again The transcript contains his testimony upon reexamination was doing was people who came in who had worked in a union plant for a long period of= time, or people who had not worked in a non-union facil- ity-that could happen when some people hadn't worked that long-she was explaining to' them that this plant was going to start up - on a non-union basis, so that they'd have an opportunity to make a knowing decision about whether' or not they wanted to enter into that type of plant. Hewitt also testified, however, that the phrase is "equal employment" terminology meant to emphasize a prefer- ence, rather than an absolute requirement, for nonunion employees._ Hewitt maintains that he did not draft the phrase but acknowleg-es that he reviewed and verified it. Nor does Hewitt know who expressly directed Dudley to prefer nonunion employees. David Harrison, vice president of employee relations and staff services, testified t ° that prior to the plant start- up he and Warren Gilreath, vice president of operations, established the criteria for the employment.of the hourly work force. Harrison reiterated the three • criteria he had previously enumerated in the initial hearing, and testified that "a demonstrated willingness to work in a non-union environment" was not among the criteria, and that, to his knowledge, such a criterion had never been estab- lished or applied. Harrison testified that he recalled no meeting in Sep- tember or October 1981 during which the subject of hiring employees with a nonunion background was dis- cussed. However, he admitted that it was possible that he attended such a meeting, but due to the fact that he attends many meetings on a variety of subjects he was unable to swear that he either did or did not attend any such meeting."" The following exhibit was also filed with the district court in response to document request No. 17, supra. It is an outline of what was discussed and decided at an October 12, 1984 meeting of several corporate officials, including Harrison, regarding the hiring policy, startup, and training of supervisors at the Kansas City facility: 10/12/81 Gil, dsh, jck, dip, jag, 12 1. Placement-Hourly 1. Slim selection on totally non-union background people. 2. Rates-especially on maint. people Our top rate is $8.50 Advertised for maint. on Wed. 10/7/81 (to go through State service) Have interviewed 4 maint. people. - 10 Harrison's initial testimony in the remanded proceeding was similar- ly erased by the court reporter He was recalled to the stand and the transcript consists of his testimony on reexamination 11 In his initial testimony, which was erased, Harrison testified similar- ly, but also was shown the minutes of a meeting held on October 12, 1984, infra, which did not refresh his recollection that in fact he partici- pated in such a meeting. 12 The record establishes that those in attendance at this meeting were the following corporate officers Warren-Gilreath, David Harrison, Joe Kreitl, David Patterson, and Jim Griffiths The document was apparently prepared by Gnffiths INLAND CONTAINER CORP. Clarification: Don't want box plant exp. but are not systematically precluding people with union background. [Emphasis in original.] Should have mix of age & marital. status to help, non-union stability. Can hire at top rate if appears qualified. Want 2-3 maint. people & 1 storeroom person. Check gov't subsidy program (HIRES, CETA, etc.) II. Non-Union Supervisory Training 16 hrs. in program. Gen. Mgr. & Prod. mgr. should participate Continuing 're-enforcement Team Building Spaced Repitition 2-1/2 days session in each of 2 weeks. A. Develop pre-work materials - B. Visit K.C. week of 10/19 Include: Janet, 4 supervisors, Dean, & Jerry. Hourly Hire 17 people 1st week-total classroom work 2nd week-hands on training Want to start plant 11%9/81-Production David Patterson, training and development manager, testified that immediately prior to the plant startup the supervisors were given 16 hours of training, consisting of, the following four 4-hour segments or modules.13 The training sessions took place on October 20, 28, and 29, 1981, and the extensive material utilized by Patterson, 14' which he specifically and hurriedly assembled and tai- lored for the situation at the Kansas City facility, 15 was designed for a nonunion plant. The materials are volumi, nous and reflect that the ,supervisors were instructed, and tested, in union-related matters, including how to imme- diately identify individual employee characteristics and situations which would suggest that union organization was occurring, how to supervise in such a manner that employees would not desire union representation, and how to combat organizational activity when it occurs. The four above-mentioned modules are as follows: Module I-Union Free Management; Module II-Under- standing Yourself and Others; Module III-Beliefs About People and Motivation; and Module IV-Skills for Ef-' fective Supervision in a Nonunion Environment. Patter- son presented a segment utilizing a slide presentation format, entitled "Union Free Management," with sub- headings as follows: Causes of Employee Dissatisfaction; If Dissatisfaction Continues: Union Organization; How 13 'Apparently, there was an additional 24 hours of training on other matters However, it is unclear when this additional training occurred 14 This material was also furnished in response to interrogatories in the age discrimination suit _ 15 Patterson utilized the services of a private management consulting firm and assisted individuals from that firm in the preparation of the ma- terials The preparation of the material was expedited so that the training sessions could be completed prior to the plant startup 385 Does-a Union Organizer Work; and.How to Recognize Union Organizational Efforts. Analysis and Conclusions = The primary issue in-.this, reopened proceeding is whether the newly discovered evidence, coupled with evidence adduced in the initial proceeding, is sufficient to prove by a preponderance of the record evidence that the Respondent, in fact,'was motivated by unlawful con- siderations in refusing to hire, or even consider for em-' ployment, any.employee of Respondent's predecessor. In my initial decision I found that in order for the General Counsel to prevail it was necessary to prove a discriminatory motive for Respondent's failure to employ former International Paper employees. I further found the record evidence insufficient to prove such a discrimi- natory motive for Respondent's aforementioned hiring practices. The Respondent had presented convincing evi- dence, in my opinion, that antiunion considerations not only played no role in its determination but, moreover, that it was unconcerned regarding even the potential of unionization at its Kansas City, Kansas facility. Thus, the Respondent emphasized its past history of-harmonious relations with the International Union at numerous facili- ties throughout the country, and even appeared receptive to the establishment of such a relationship with the Union herein should it prevail in organizing the new Kansas City employees: As a reading of my initial deci- sion will show, I relied upon these aformentioned consid- erations proffered by Respondent in support of its posi- tion. The additional evidence set forth above mandates a different conclusion. Thus, documentary evidence now shows that the desire to commence the operation of the Kansas City plant on a nonunion basis and to ensure that it would remain nonunion became the overriding consid- eration upon which Respondent's hiring practices were premised. . The record shows, and I find, that in fact Dudley was given four, not three, criteria for the staffing of the new operation. The additional criterion, namely, preference for employees exhibiting a "demonstrated willingness to work in a nonunion environment," is clearly unlawful on its face. See Hutchens Trucking Co., 268 NLRB 509 (1984). Dudley's extensive previous experience during her 19 years with International Paper in the Kansas City area had provided her with the background to imple- merit this unlawful hiring restriction. Indeed, although Dudley believed the various restric- tions to be unlawful, she nevertheless dutifully com- menced to follow her instructions. However, shortly after the interview processbegan, it became apparent that particularly with regard to maintenance employees, qualified applicants with nonunion backgrounds were not readily available. Thereupon, Dudley complained and, in her own words, the "non-union barrier" was lifted. However, Dudley understood this to mean that she was given the authority to lift the restriction only when nec- 386 DECISIONS OF NATIONAL LABOR-RELATIONS BOARD essary. According to her notes of November 9, 1981,1r- denoted as "Orientation Week," there were 16 employ- ees on Respondent's payroll. Seven of these employees had "Union Backgrounds" -and nine were denoted as "Non-Union." Thus, at that point, a month following the so-called lifting of the union barrier, Dudley continued to maintain records evidencing her ongoing consider- ation, in the hiring process, of the - employees' union background: Further, at the hearing in the initial pro- ceeding the Respondent introduced a list of the employ- ees hired from October 19, 1981, until the date of the hearing, October 13, 1982. During this 1-year period, 63 employees had been hired. Of this number, 21 employees were no longer in Respondent's employ. Dudley, at the initial hearing, :identified only 13. of these 63 employees as being formerly employed • in union-represented plants. 17 . Finally, the October 12, 1981 memorandum or minutes" of a high-level corporate meeting regarding the Kansas City plant, attended by Harrison, during. which events of the utmost significance were discussed and resolved, shows, that there indeed was an initial prohibition of em- ployees with -less than a totally nonunion background, and a later clarification of this preexisting ban as follows: "Clarification: Don't want box plant exp. but am not sys- tematically precluding people with union background: Further, to ensure nonunion "stability," Respondent es- tablished a related policy of hiring an employee comple- ment with a "mix of age and marital status," and initiated a 16-hour "Non-Union Supervisory' Training" program. Thus, it is crystal clear that, as embodied in Respond- ent's answer to interrogatory No. 2, there was a fourth criterion utilized in the hiring process, namely, prefer= ence for "a demonstrated willingness to work in a non- union environment," rather than, as had previously been the case, an absolute prohibition of such union-oriented employees. - • - - Dudley's testimony that she did not apply such crite- rion, and her further testimony that she does not under- stand what those particular words mean, is patently absurd. Similarly, Patterson's testimony that he interpret- ed the phrase in question to simply mean that prospec- tive, employees should be advised that they would, be working in a nonunion plant, so -that they could opt to refuse employment, is obviously false. The phrase is. not ambiguous on its face, and Dudley and Patterson, both of whom are articulate, experienced individuals with sub- stantial backgrounds in labor relations- and -who: hold highly responsible positions in a large corporation, are not convincing in' their attempt to deny or misinterpret the very precise language which was prepared either by them or with their direct assistance, and thereafter sworn' to for submission in the district court proceeding. - Harrison's testimony is similarly incredible: It is clear that the discussion and decisions-made at the October 121- 1981 meeting concerning the hiring of employees, train- 16 These notes were ' also incorporated in the aforementioned memo- randum furnished to the district court in response to 'interrogatory No 17 - 17 While Dudley was asked, during the-initial proceeding , to identify "some" employees with union backgrounds , it appears that in fact Dudley specified the names of all such employees ing of supervisors,-and startup of the Kansas City facility were of the utmost significance. It is also not disputed that Harrison attended and participated - in the meeting along 'with other high-level corporate officials. Harri- son's testimony that he does not recollect the meeting, even after being confronted with the very minutes of the meeting - which reflect his attendance, defies credulity. However, the minutes very clearly provide the rationale for Harrison's professed amnesia. Thus, the determina- tions made therein demonstrate, beyond any doubt, Re- spondent's preoccupation with ensuring that the Kansas City plant would commence operations • with an 'employ- ee complement'that was not union oriented, and that im- mediate steps were to be taken, through- intensive super- visory training, to ensure that the plant remain nonunion. There is no way to comprehend the import of these min- utes in any other manner, and Respondent does not even suggest that they do not, in fact, accurately reflect its policies. As a result, the further conclusion is mandated that Harrison's testimony regarding Respondent's hiring practices at the Kansas City plant in'both the initial and reopened proceeding has been false. The Respondent maintains that, even if preference was given to employees with nonunion backgrounds, the gra- vamen of the complaint has a different focus, namely, the refusal to hire employees of the predecessor. Thus, the Respondent argues that, despite 'the new. evidence, it has not been demonstrated, that the mandatory exclusion of employees with previous box-making experience was un- lawfully motivated. As -mentioned previously, the record now . overwhelmingly demonstrates that an overriding concern of the Respondent-was to keep the Kansas City plant nonunion. Further, it is clear, and I find, that both Harrison and Dudley testified falsely in the initial pro- ceeding and, similarly, in,the reopened proceeding re- garding Respondent's hiring practices; and their testimo- ny in the initial proceeding, in significant part because of their apparent veracity` at that time, materially influenced my determination to dismiss the complaint. Given their facility for prevarication, `I certainly do' not credit their further testimony that the mandatory exclusion of em- ployees with previous corrugated box-making experience was not influenced by union considerations, particularly as:the record evidence presented by the" Respondent in the initial proceeding-"in support of its position was not overwhelming, or even entirely rational or consistent. Rather, -I dismissed the complaint because Respondent's professed rationale was "not inherently implausible," and further because there appeared 'to be - insufficient evi- dence -of :an. unlawful motive. Finally, --Dudley's admis- sion in the reopened proceeding that at.the September 15, 1981 meeting ' she understood Respondent's ban on hiring-any employee with a• union background to relate "to the mandatory, exclusion of any former International Paper employees is highly significant. Thus, the two cri- teria did 'not- constitute separate, distinct, and unrelated concepts, but rather were designed to accommodate a common objective, namely, to ensure that the plant would be operated in a union-free environment. Obvious- ly, as the evidence mandates,'this was at least the inoti- INLAND CONTAINER CORP vating, if not the exclusive consideration, on which Re- spondent's conduct was premised. I so find.18 As a result of the new evidence, it appears my earlier specific credibility resolutions were indeed erroneous. The testimony of Gene Aubuchon, International repre- sentative for the Union, must now be examined in a new light. Aubuchon testified, in effect, that Respondent's labor relations manager Howard Acker acknowledged that the only reason Respondent was refusing to hire the predecessor's employees was in order to keep the Union out. This testimony now seems abundantly supported by the record as a whole. Similarly the testimony of Inter- national Representative Donald Woodall, who quoted Respondent's labor relations manager George Applegate as specically advising that the Respondent had no inten- tion of hiring any of the former International Paper em- ployees because the Respondent did not want a union in the plant, makes eminent sense in conjunction with the overwhelming supportive evidence. On the basis of the foregoing, I find that the Respond- ent's failure and refusal to hire or consider for hiring any of the approximately 60 former employees of Interna- tional Paper was motivated by unlawful considerations, as alleged, in violation of Section 8(a)(1) and (3) of the Act NLRB v. Burns Security Services, 406 U.S. 272 (1972); Howard Johnson Co. v. Hotel & Restaurant Em- ployees, 417 U.S. 249 (1974); Marriott Corp., 251 NLRB 1355, 1359 (1980); Wolf Street Supermarkets, 264 NLRB 1124 (1982); Macomb Block & Supply Co., 223 NLRB 1285 (1976); Love's Barbeque Restaurant, 245 NLRB 78 (1979), enfd. in pertinent part 604 F.2d 1094 (9th Cir. 1981). The Board's traditional test for successorship status is "whether there is a continuity in the employing enter- prise." See Canterbury Villa of Waterford, 271 NLRB 144 (1984), and cases cited therein. As a result of my initial determination to dismiss this matter, it appeared unneces- sary to decide the successorship issue. Nor did the Board find it necessary to deal with this issue in its original de- cision. The parties have had no recent opportunity to brief this matter and I do not presently have before me the briefs initially filed in this case. Therefore, because of time constraints, I am unable to make a determination of this issue herein. Suffice it to say that there are a number of salient factors indicating that the Respondent is a suc- cessor employer, including the operation of a similar business at the same location, utilizing the predecessor's supervisors and clerical employees, and most importantly the fact that but for unlawful considerations the continui- ty of the predecessor's employee complement would have been maintained. However, there are countervailing significant factors, such as the relative diminution of the size of the operation, and the fact that not only,did the Respondent not purchase customer lists from Internation- al Paper and commence selling products to the predeces- sor's established customers, but rather the Respondent continued to compete with International Paper in the same market. See Spencer Foods, 268 NLRB 1483 (1984). 18 Wright Line, 251 NLRB 1083, 1089 (1980), enfd 662 F 2d 889 (1st Cir 1981 ), NLRB v Transportation Management Corp, 462 U S 393 (1983) 387 Because of these significant considerations, the parties are hereby directed to advance their respective argu- ments on this issue to the Board. i 9 In its Supplemental Decision on Reconsideration the Board stated that: The present case raises a substantial question wheth- er a key witness may have commited perjury in tes- tifying regarding a material fact. No tribunal can disregard allegations of this kind.5 8 See, e g , Electrical Workers IUE Local 745 (National Electric Coil), 268 NLRB 308 (1983), Northern States Beef 234 NLRB 921 (1978) I have found that the record evidence compels the conclusion that testimony proffered by Respondent's key witnesses, David Harrison, vice president of employee relations and staff services, and Janet Dudley, employee relations supervisor, was knowingly false. But for the persistence and diligence of the Union, coupled with the fortuitous circumstances herein, it is likely that such tes- timony would have perpetuated the erroneous decision heretofore issued, with severe adverse repercussions to the livelihoods of the employees and their families. Fur- ther, such false testimony raises serious issues involving subversion and abuse of the processes of this Agency. See Multimatic Products, 263 NLRB 373 (1982). Based on the foregoing circumstances, I am constrained to recom- mend that the Board refer this matter to the United States Department of Justice for appropriate consider- ation. SUPPLEMENTAL CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within meaning of Section 2(5) of the Act. 3. The Respondent has violated Section 8(a)(1) and (3) of the Act, as alleged THE REMEDY' Having found that 'the Respondent has discriminatorily refused to offer employment to former employees of International Paper, I recommend that their employment status be restored to what it would have been but for the discrimination against them, and that Respondent offer them immediate and full reinstatement and employment without prejudice to their seniority or other rights and privileges they would have enjoyed absent the discrimi- nation against them, discharging if necessary employees hired from other sources, and make them whole for any loss of earnings they may have suffered due to the dis- crimination practiced against them, as prescribed in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest 19 Additionally, a related issue for consideration concerns the subse- quent conditional certification of the Teamsters Union as the current col- lective-bargaining representative of the Kansas City employees, and the disposition of that matter in view of this reopened proceeding 388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD thereon to be computed in the manner prescribed in Flor- ida Steel Corp., 231 NLRB 651 ( 1977).20 [Recommended Order omitted from publication.] 20 See generally Isis Plumbing Co, 138 NLRB 716 (1962)