Presidents Island Steel And Wire, Inc.

30 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Presidents Island Steel and Wire , Inc. and Highway and Local Motor Freight Employees, Local Union No. 667, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case 26-CA-10263 31 October 1985 DECISION AND ORDER By MEMBERS DENNIS, JOHANSEN, AND BABSON On 28 March 1984 Administrative Law Judge Philip P. McLeod issued the attached decision. The Respondent filed exceptions and a supporting brief, to which the General Counsel filed an answering brief. The National Labor Relations Board has delegat- ed 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, and conclusions and to adopt the recommended Order. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Presidents Island Steel and Wire, Inc., Memphis, Tennessee, its officers, agents, successors, and assigns, shall take the action set forth in the Order. ' The General Counsel filed a motion to strike extra-record material included in the Respondent's brief regarding the number of employees currently employed by the Respondent We find that this information was not presented as evidence at the hearing and, therefore, is not part of the record in this proceeding See Sec 102 45(b) of the Board's Rules and Regulations Accordingly, we grant the General Counsel's motion to strike See Weldtnont Corp, 275 NLRB 1432 fn 1 (1985), Today's Man, 263 NLRB 332, 333 (1982) John Goree, Esq., for the General Counsel. Donald R. Wellford, Esq. (Boone, Wellford, Clark, Langschmidt & Apperson), of Memphis, Tennessee, for the Respondent. Duria Jones, Jr., Esq., of Memphis, Tennessee, for the Union. DECISION STATEMENT OF THE CASE PHILIP P. MCLEOD, Administrative Law Judge. This case was heard by me on October 24, 1983, in Memphis, Tennessee . It originated from a charge filed on June 15, 1983, by Highway and Local Motor Freight Employees, Local Union No. 667, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union) against Presidents Island Steel and 277 NLRB No. 5 Wire, Inc. (Respondent). On July 22, 1983, a complaint and notice of hearing was issued alleging, inter alia, that Respondent violated Section 8(a)(1) and (5) of the Na- tional Labor Relations Act (the Act), by failing and re- fusing to recognize and bargain with the Union as the ex- clusive collective-bargaining representative of its em- ployees. In its answer to the complaint, Respondent ad- mitted certain allegations, including the filing and serv- ing of the charge, its status as an employer within the meaning of the Act, the status of the Union as a labor organization within the meaning of the Act, and that the following employees constitute a unit appropriate for the purpose of collective-bargaining within the meaning of Section 9(b) of the Act: All production and maintenance employees em- ployed by the Respondent at its Memphis, Tennes- see, location; excluding all office clerical employees, guards, watchmen and supervisors as defined in the Act. Respondent denied having any obligation to bargain with the Union as the exclusive collective-bargaining repre- sentative of its employees and denied having engaged in any conduct which could constitute an unfair labor prac- tice within the meaning of the Act. At the trial herein, all parties were represented and were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence. Following the close of the trial, the General Counsel filed a timely brief which has been duly considered.' On the entire record in this case and from my observa- tion of the witnesses, I make the following FINDINGS OF FACT 1. JURISDICTION Presidents Island Steel and Wire, Inc. is a corporation with an office and place of business in Memphis, Tennes- see, where it is engaged in manufacturing wire and steel products. Respondent admits that about June 1, 1983, it pur- chased the assets of Piper Industries, Inc., Wire Division, including the plant and equipment, and since that date it has been engaged in the same business operation, at the same location, selling the same product to substantially the same customers, and has as a majority of its employ- ees individuals who were previously employees of Piper Industries, Inc. Based on a projection of its operations since about June 1, 1983, at which time Respondent commenced its operations, Respondent, in the course and conduct of its operations, will annually sell and ship from its Memphis, ' At the close of the trial, I set November 28, 1983, as the day when briefs were to be received by me if any party desired to file a posthearing brief Respondent filed a brief dated November 28 , which was received in the Board's Atlanta, Georgia branch office of the Division of Judges on November 29, 1983 No good cause having been shown by Respond- ent for its failure to file a timely brief, I shall not specifically address ar- guments advanced therein in my decision I have, however, considered Respondent's argument advanced at the trial and I shall give it appropri- ate consideration PRESIDENTS ISLAND STEEL 31 Tennessee facility products , goods, and materials valued in excess of $50,000 directly to points outside the State of Tennessee. Similarly , Respondent will annually pur- chase and receive at its Memphis, Tennessee facility products, goods, and materials valued in excess of $50,000 directly from points outside the State of Tennes- see. Respondent is and has been at all times material an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. LABOR ORGANIZATION Highway and Local Motor Freight Employees, Local Union 667, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES The sole issue in this case is whether Respondent has continued the employing entity and is a successor of Piper Industries, Inc. with the concomitant obligation, as such, to recognize and bargain with the Union which was the certified exclusive collective -bargaining repre- sentative of employees of Piper Industries, Inc., in the appropriate bargaining unit described above. The facts in this case are uncontested . Piper Industries, Inc., Wire Division (Piper), manufactured wire which was sold to customers to be used in making products such as barbecue grills , refrigerator racks, nails, bed- springs, and upholstered furniture springs. On December 14, 1981, the Union was certified as the exclusive collective-bargaining representative of Piper's employees in the unit described above. On August 2, 1982, Piper and the Union entered into a collective-bar- gaining agreement covering employees in the certified bargaining unit. This agreement was effective by its terms from July 12, 1982, until July 11, 1983. Jack L. Long served as general manager of Piper's wire division since October 1977. At a later date, Long assumed management responsibilities over Piper's steel division as well. Long signed the collective-bargaining agreement with the Union on behalf of Piper. Long, who had no ownership interest in Piper, was in- terested in expanding its wire division , but Piper did not want to make further investment in such expansion. As a result, Long began steps to acquire a wire manufacturing company in Greenville, Mississippi, which he had previ- ously managed . At the same time, Long advised Piper of his negotiations to buy this company . Piper responded by offering to sell Long its own wire division . In May 1983, Presidents Island Steel and Wire, Inc. was formed, and it immediately entered into a contract with Piper to pur- chase the land, building, and equipment of Piper's wire division. The sale was to be closed on June 1 , 1983. Re- spondent is owned in equal shares by Long and Robert C. Wilcox, the latter of whom had no prior relationship with Piper. A complicated financial package was ar- ranged for the purchase and expansion of Piper 's wire di- vision, each portion of which was contingent on the suc- cessful completion of other portions of the package. Re- spondent was unable to complete one portion of the fi- nancial package in time to close the sale and conclude the other financing arrangements on the June 1 closing date. Nevertheless, Respondent assumed actual control and commenced operations on that date by use of alter- native short-term financial arrangements . The sale later closed on July 29, 1983. There was no significant hiatus between the closing of Piper's operations and the commencement of Respond- ent's operations on June 1. Approximately May 26, em- ployees of Piper were notified their employment was being terminated effective May 31. Piper employees were contacted on the job and given an opportunity to fill out applications for Respondent prior to the closing of Piper. The plant was closed on May 30 and 31 in order for Piper to take a physical inventory in connec- tion with the sale to Respondent . David Lunsford, who was employed by Piper as plant superintendent, was hired by Respondent in the same capacity . On June 1, 1983, Lunsford conducted brief interviews with former production and maintenance employees of Piper. On June 1 and 2 Respondent hired 22 of Piper 's 26 bargain- ing unit employees. In summary, it may be said that Respondent entered into a contract to purchase and took over the operation of Piper on June 1 , 1983. Respondent began operations with 22 production and maintenance employees, all of whom had been employees of Piper . Long, Piper's gen- eral manager, became a 50-percent owner and president of Respondent. Lunsford continued as plant superintend- ent with Respondent as he had with Piper. The com- plaint alleges, and Respondent admits, that since June 1, Respondent has engaged in the same business operation at the same location, selling the same product to substan- tially the same customers, and has as a majority of its employees individuals who were previously employees of Piper. As I indicated above, Long had plans from the time he incorporated Respondent to expand to some degree the amount of business which Piper had done. At the time Respondent commenced operations on June 1, it ac- quired five wire-drawing machines from Piper. From the outset, Respondent planned to purchase two additional wire-drawing machines and an Annealer furnace. Be- cause of the problems in arranging financing for the pur- chase of Piper, purchase orders for the acquisition of this equipment were delayed until July 29, when the sale/purchase between Piper and Respondent was for- mally closed. By the time of the trial herein, Respondent had taken delivery of the two additional wire-drawing machines. Respondent currently employs 30 production and maintenance employees . The Annealer is in the proc- ess of being fabricated and will not be in operation before April or May 1984. When asked on cross-exami- nation if the Annealer would change the kind of product that Respondent produces, Long replied that it would. Long later admitted, however, that "it would still be wire, but it will be just another application we can supply to a different industry ...." Long testified that he planned to use the same unit employees to operate the new equipment, and that the forklift driver will be able 32 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to operate the Annealer. At most, Respondent will have to hire one additional person per shift to run the new equipment. Long estimated that the maximum anticipated work force would be 35 employees. By letter dated June 7, 1983, the Union requested Re- spondent to recognize that it was the successor to Piper for purposes of collective bargaining and to bargain with it on behalf of unit employees . Respondent did not re- spond to the letter or otherwise indicate a willingness to recognize and bargain with the Union as the exclusive collective-bargaining representative of employees in the unit described above. Long testified that the reason he did not respond to the Union's request for bargaining was that he "did not feel that they represented the majority of the employees out there anymore." When questioned regarding his basis for doubting the Union 's majority status, Long respond- ed, "there was about just 50 percent of them that was in the bargaining unit at any time really, for Piper. And there was about 50 percent of them that we hired when we came over and also from the comments made by indi- viduals that was part of the bargaining unit." Long admits that these were the sole reasons why he refused to recognize and bargain with the Union. Though in his initial reply, Long refers to only 50 per- cent of Piper employees being "in the bargaining unit," it is clear from Long's other testimony and the record as a whole that Long is actually referring to the fact that only about 50 percent of Piper employees in the bargain- ing unit were dues-paying members of the Union. When questioned about the comments made by individuals to which Long refers, Long could recall only one conver- sation with a unit employee, Sylvester McBee, and an occasion when Plant Superintendent Lunsford informed him that two individuals had said to Lunsford they were glad they did not have a union . Long admitted, howev- er, that neither his conversation with McBee nor his con- versation with Lunsford took place prior to his refusing to bargain with the Union. Both the conversation with McBee and the conversation with Lunsford occurred July 1983. According to Long, in the conversation with McBee, McBee stated, "We're no longer represented by the Union." Long responded, "Yeah." McBee replied, "Good." Lunsford testified he could recall only two unit employees, Jerome Rigney and Joe Anderson , coming to him and asking him if they were still represented by the Union. In both cases, Lunsford replied, "No." Anderson responded : good-that he needed the extra money. When asked what the basis was for his telling employees they were no longer represented by the Union , Lunsford testified, "only that you know, that it was a new compa- ny as far as I was concerned." Analysis and Conclusions Respondent purchased the assets of Piper, including the plant and equipment, and since June 1 , 1983, Re- spondent has been engaged in the same business oper- ation, at the same location, selling the same product to substantially the same customers, and has as a majority of its employees individuals who were previously em- ployees of Piper. Though Respondent has purchased and plans to purchase certain additional equipment in order to expand its volume of business, there has been no sub- stantial change in the nature of the employing enterprise between Respondent and Piper. The two wire-drawing machines purchased by Respondent are exactly the same type of equipment which Respondent acquired from Piper. Though Long first asserted that the Annealer, which is still in the process of being fabricated, would change the kind of product Respondent manufactures, Long later admitted that in fact it would not , that "it would still be wire, but it will be just another application we can ' supply to a different industry . . . ." Further, Respondent plans to use current bargaining unit employ- ees, in particular the forklift driver, to operate the An- nealer. There was no significant hiatus between the termina- tion of Piper's operation and the commencement of Re- spondent's. While they were still employees of Piper, people in the bargaining unit were invited to fill out ap- plications for employment with Respondent. Production ceased for only 2 days while Piper inventoried its prod- uct and materials in preparation for the sale to Respond- ent. Long, who had been Piper's general manager and is now Respondent's president, and Lunsford, plant manag- er for both Piper and Respondent, continued to control and run the day-to-day operations of Respondent. At the time Respondent commenced operations , its entire 22- person production and maintenance work force were former employees of Piper. Even now that Respondent has increased its work force to 30 employees , at least two-thirds of them, a vast majority remain former Piper employees. Even if Respondent should in fact increase its work force to the maximum anticipated level of 35 em- ployees, a clear majority of them will have been former Piper employees. In view of these facts, and the record as a whole, I find that Respondent is clearly a successor employer of Piper Industries Inc., Wire Division. NLRB v. Burns Se- curity Service, 406 U.S. 272 (1972). Respondent admits that it received the Union 's letter of June 7 requesting Respondent to recognize and bar- gain with it as the exclusive collective -bargaining repre- sentative of its employees. Long testified that the sole reason he did not respond to the Union's request was that he doubted the Union's majority status. According to Long, his basis for doubting the Union's majority status was that the dues-checkoff list at Piper showed that only about 50 percent of the employees were on dues checkoff and that Long received some comments from three or four employees indicating they no longer wished to be represented for purposes of collective bar- gaining by the Union. When questioned, however, Long could recall only one conversation with a unit employee and the conversation with Lunsford in which Lunsford told Long that two employees had told Lunsford they were glad the Union no longer represented them. It is significant, however, that in the conversations Lunsford had with employees, the statements by employees that they were glad not to be represented by the Union came only after Lunsford told them they were no longer rep- resented. Even more significant, however, is the fact PRESIDENTS ISLAND STEEL Long admits that his conversation with employee McBee as well as his conversation with Lunsford did not occur until July 1983, several months after Respondent chose to ignore the Union's request for bargaining. From the record as a whole it is clear that Long's and Lunsford's conversations with employees played no part in Re- spondent's refusal to recognize and bargain with the Union. Instead, the real reason, and the only reason, Re- spondent in any way doubted the Union's lack of majori- ty support was because Long knew as general manager of Piper that only about 50 percent of employees in the bargaining unit at Piper were on union dues' checkoff. Respondent's position, however, contains a major flaw in that it equates support for the Union with dues checkoff and membership. It simply does not follow in States which have enacted "right to work" laws that only members of the Union prefer representation than it does in other States which permit "union security clauses" that everyone who is a member of a union desires repre- sentation. It is well established that Respondent may not use the number of employees who are union members nor the number of employees on dues checkoff to dem- onstrate a purported lack of majority support by employ- ees for the Union. Stratford Visiting Nurses Assn., 264 NLRB 1026 (1982); Odd Fellows Rebekah Homes, 233 NLRB 143 (1977). Accordingly, I find that Respondent's refusal to recognize and bargain with the Union as the exclusive collective-bargaining representative of its em- ployees in the appropriate unit described above violated Section 8(a)(1) and (5) of the Act. CONCLUSIONS OF LAW 1. The Respondent, Presidents Island Steel and Wire, Inc., is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Highway and Local Motor Freight Employees, Local Union No. 667, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent purchased the assets of Piper Industries, Inc., Wire Division, including the plant and equipment, and since June 1, 1983, has engaged in the same business operation, at the same location, selling the same product to substantially the same customers, and has as a majori- ty of its employees individuals who were previously em- ployees of Piper; and Respondent has thereby continued the employing entity and is a successor of Piper. 4. The following employees of Respondent constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All production and maintenance employees em- ployed by Presidents Island Steel and Wire, Inc., at its Memphis, Tennessee location; excluding all office clerical employees, guards, watchmen, and supervisors as defined in the Act. 5. By letter dated June 7, 1983, the Union requested Respondent to recognize it as the exclusive collective- bargaining representative of Respondent's employees in the unit described above and to bargain collectively with 33 it 'with respect to their rates of pay, wages, hours of em- ployment, and other other terms and conditions of em- ployment. 6. Since June 7, 1983, Respondent has failed and re- fused to recognize, and is failing an refusing to recognize and bargain with the Union as the exclusive collective- bargaining representative of employees in the appropriate unit described above; and Respondent thereby violated and is violating Section 8(a)(1) and (5) of the Act. - 7. The unfair labor practices which Respondent has been found to have engaged in, as described above, have a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing com- merce and the free flow of commerce within the mean- ing of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices in violation of Section 8(a)(1) and (5) of the Act, I shall recommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed2 ORDER The Respondent, Presidents Island Steel and Wire, Inc., Memphis, Tennessee, its officers, agents, successors, and assigns, shall 1. Cease desist from (a) Failing and refusing to recognize and bargain with the Union as the exclusive collective-bargaining repre- sentative of employees in the appropriate unit described above. (b) In any other like or related mariner interfering with, restraining, or coercing employees in the exercise of rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Bargain, on request, with Highway and Local Motor Freight Employees, Local Union No. 667, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America as the exclusive collective-bargaining representative of Respondent's em= ployees in the unit described above with respect to their rates of pay, wages, hours of employment, and other terms and conditions of employment, and, if an agree- ment is reached embody such agreement in a signed con- tract. (b) Post at its Memphis, Tennessee facility copies of the attached notice marked "Appendix."," Copies of the 3 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 3 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 Nation- Continued 34 DECISIONS OF NATIONAL LABOR RELATIONS BOARD notice, on forms provided by the Regional Director for Region 26, after being signed by the Respondent's au- thorized representative, shall be posted by the Respond- ent immediately upon receipt and maintained for 60 con- secutive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has or- dered us to post and abide by this notice. WE WILL NOT fail and refuse to recognize and bargain with Highway and Local Motor Freight Employees, Local Union No. 667, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America as the exclusive collective-bargaining represent- ative of employees in the following appropriate unit: All production and maintenance employees em- ployed by the employer at its Memphis, Tennessee, facility; excluding all office clerical employees, watchmen, guards and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of rights guaranteed them in Section 7 of the Act. WE WILL recognize and bargain, upon request, with the Union as the exclusive collective-bargaining repre- sentative of our employees in the unit described above with respect to their rates of pay, wages, hours of em- ployment, and other terms and conditions of employ- ment, and, if an agreement is reached, embody such agreement in a signed contract. PRESIDENTS ISLAND STEEL AND WIRE, INC.