O. L. Willis, Inc.

O. L. WILLIS, INC. ' 203 O. L. Willis, Inc. and Teamsters Local 315, Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case 32-CA-7372 23 January 1986 DECISION AND ORDER BY MEMBERS JOHANSEN, BABSON, AND STEPHENS On 7 November 1985 Administrative Law Judge William L. Schmidt issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel filed cross-excep- tions and a supporting 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, cross-exceptions and briefs and has decided to affirm the judge's rul- ings, 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, O. L. Willis, Inc., Martinez, California, its officers, agents, suc- cessors, and assigns, shall take the action set forth in the Order. i The General Counsel excepts to the judge's recommended Order to the extent that it does not include a visitatorial clause authorizing the Board, for compliance purposes, to obtain discovery from the Respond- ent under the Federal Rules of Civil Procedure under the supervision of the United States court of appeals enforcing this Order In denying the General Counsel's request for this remedy, we do not rely on the judge's discussion in fn 9 of his decision. We, however, find that under the cir- cumstances of this case it is unnecessary to include such a clause. David Dominguez, Esq., for the General Counsel. Robert Cassel, Esq. (Cassel & Araham), -of San Francisco, California, for the Respondent. DECISION STATEMENT OF THE CASE WILLIAM L. SCHMIDT, Adminstrative Law Judge. On 13 July 19851 Teamsters Local 315 (the Union) charged that O. L. Willis, Inc. (Respondent) violated Section 8(a)(1) and (5) of the National Labor Relations Act by refusing to bargain concerning the effects on its repre- sented employees resulting from Respondent's closing of its Martinez, California facility. On 19 August the Gener- al Counsel of the National Labor Relations Board (NLRB or the Board) issued a complaint pursuant to i Unless shown otherwise, all dates refer to the 1985 calendar year. Section 10(c) of the Act alleging Respondent violated the Act essentially as charged. The complaint, as amend- ed, prays for the entry of a remedial order in accord with the Board's decision in Transmarine Navigation Corp., 170 NLRB 389 (1968), and a special remedial pro- vision requiring Respondent to submit to discovery in the manner provided by the Federal Rules of Civil Pro- cedure for the purpose of determining or securing com- pliance with the remedial order sought.' As Respondent does not dispute the material allegations of the 'com- plaint, it filed no answer. However, Respondent vigor- ously disputes the legal authority of the Board to order a Transmarine remedy. I heard this matter on 15 October at Oakland, Califor- nia. Having carefully considered the hearing record and the posthearing briefs filed by the General Counsel and Respondent, I have concluded on the basis of the follow- ing that Respondent violated the Act, as alleged, and that the Transmarine remedy is appropriate but the dis- covery remedy is not. FINDINGS OF FACT 1. THE ALLEGED UNFAIR LABOR PRACTICE A. The Undisputed Complaint Allegations Respondent intentionally chose not to file an answer to the General Counsel's complaint. Accordingly, I deem the following allegations of the complaint to be true:2 1. The unfair labor practice charge was filed by the Union on 12 July and a copy thereof was served on Re- spondent by certified mail about 15 July. 2. At all times material, Respondent, a California cor- poration with an office and place of business in Martinez, California, has been engaged in the operation of an intra- state trucking and terminal facility delivering general merchandise for other business entities. During the 12 months preceding the issuance of the complaint, Re- spondent, in the course and conduct of its' business oper- ations, purchased and received goods valued in excess of $50,000 from sellers located within the State of Califor- nia, which sellers or suppliers had received such goods in substantially the same form directly from outside the State of California. 3. Respondent is now, and has been at all times materi- al, an employer engaged in commerce within,the mean- ing of Section 2(2), (6), and (7) -of the Act. 4. The Union is now, and has been at all times materi- al, a labor organization within the meaning of Section 2(5) of the Act. 5. At all times material, O. L. Willis Jr. occupied the position of Respondent's president and is now, and has been at all times material, a supervisor of Respondent within the meaning of Section 2(11) of the Act and an agent of Respondent within the meaning of Section 2(13) of the Act. 2 Sec. 102 20 of the NLRB's Rules and Regulations provides that if no answer is filed, the complaint allegations "shall be deemed to be admitted to be true and shall be so found by the Board, unless good cause to the contrary is shown " 27 8 NLRB No. 29 204 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 6. The following described employees of Respondent constitute a unit appropriate for the purposes of collec- tive bargaining within the meaning of Section 9(b) of the Act: All full-time and regular part-time drivers, and driver-helpers employed by Respondent at its Mar- tinez, California facility; excluding all other employ- ees, office clerical employees, managerial employ- ees, guards, and supervisors, as defined in the Act. 7. Since about 1958 , and at all times material, the Union has been the designated exclusive collective-bar- gaining representative of the employees in the unit, and since that date the Union has been recognized as such representative by Respondent . Such recognition has been embodied in successive written collective-bargaining agreements; the most recent of which (the Agreement) was effective by its terms for the period 1 April 1979 to 31 March 1982. 8. At all times since 1958 , the Union, by virtue of Sec- tion 9(a) of the Act, has been, and is, the exclusive repre- sentative of the employees in the unit, for the purpose of collective bargaining with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment. 9. About 1 June, Respondent ceased operations from its Martinez, California terminal. 10. Respondent engaged in the acts and conduct de- scribed above in paragraph 9 without prior notice to the Union and without having afforded the Union an oppor- tunity to negotiate and bargain as the exclusive repre- sentative of Respondent's employees in the unit with re- spect to the effects of such acts and conduct. 11. From about 1 June to 30 July, Respondent failed and refused to negotiate with the Union concerning the effects of Respondent's decision to cease operations at its Martinez, California terminal. 12. The subject matter set forth in paragraph 11 relates to the wages, hours, and other terms and conditions of employment of the employees in the unit and is a manda- tory subject for the purpose of collective bargaining. 13. By the acts and conduct described above in para- graphs 9, 10, and 11, and by each of those acts, Respond- ent has failed and refused, and is failing and refusing, to bargain collectively and in good faith with the represent- ative of its employees, and Respondent thereby has been engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(1) and (5) and Section 2(6) and (7) of the Act. B. Other Evidence Insofar as is known, Respondent's former Martinez fa- cility was its only terminal. Since closing that terminal, Respondent has liquidated its assets , with the exception of some cash in its corporate bank account which is being maintained pending the outcome of this proceed- ing. O. L. Willis, Respondent's president, is now engaged in business as the sole proprietor of a trucking brokerage firm. Charles Brown and Ed Lemmons, the remaining unit employees on Respondent's payroll when it ceased oper- ation, were informed by Willis of Respondent's intention to close a couple of months before it occurred. In the final calendar quarter of Respondent's operation, Brown was employed more or less on a regular full-time basis. After Respondent ceased active operation, Brown re- mained employed until the payroll period ending 14 June to prepare Respondent's rolling stock for a 7 June public auction and to clean up around the Martinez facility. At the 7 June auction, Brown purchased a truck and set of trailers and has since entered his own business as an independent trucking contractor. Willis estimates that Brown has earned from $1500 to $2000 per week through his brokerage operation and asserted that Brown has contracted to haul for others. Considering their present business relationship , it is fair to assume that Willis' statements about Brown 's earnings refers to gross income without regard for Brown's business expenses which would be of no concern to Willis. Whether Brown's business is profitable or not is not known.3 Willis characterized Lemmons' employment in the final quarter as part time. However, other evidence shows that a dispute erupted during this period which led Lemmons to file a grievance with the Union alleging that Respondent used drivers with less seniority to per- form work when Lemmons was available. Although Willis maintained that Lemmons' grievance lacked merit, he settled the grievance by making a cash payment to Lemmons by a check dated 17 July. Respondent's pay- roll reflects that Lemmons was last employed by Re- spondent during the payroll period ending 18 May. In addition, Willis was notified in the final month of operation that Lemmons had filed a permanent disability claim with the Respondent's workers'' compensation car- rier. Willis, who had no direct notice of Lemmons' dis- ability, cooperated in furnishing information to the insur- er's investigator and physician but did not know the final outcome of the claim. No evidence was adduced from any other source concerning Lemmons' claim or its out- come, if any.4 C. Contentions and Conclusions That Respondent violated Section 8(a)(1) and (5) of the Act by failing to notify the Union of its intention to close and thereby deprived the Union of the opportunity to bargain concerning the effects of the closing on em- ployees is undisputed and I so find. Interstate Tool Co., 177 NLRB 686 (1969), and the cases cited therein.5 S Brown was not called as a witness nor was his presence at the hear- ing called to my attention 4 Lemmons' presence at the hearing was made known by the General Counsel's request to consult with him before stipulating to his earnings for the March-May period However, neither party called Lemmons as a witness. The General Counsel maintained that the entire inquiry concern- ing the postclosing events lack relevance to any issue involved. 5 Par 9 of the complaint alleges only the Respondent ceased operation about 1 June. Pars 10, 11, and 12 of the complaint allege, in essence, that Respondent failed to bargain with the Union concerning the effects on employees flowing from its cessation of operations. Par. 13 of the com- plaint alleges that Respondent violated Sec. 8(a)(1) and (5) of the Act by the conduct described in "paragraphs 9, 10, and 11, and by each of said acts " To the extent that the General Counsel alleges that Respondent violated the Act solely by closing its Martinez facility, it is unwarranted. Textile Workers v. Darlington Co, 380 U.S. 263 (1965). 0 L. WILLIS, INC. 205 To remedy that violation, the General Counsel seeks a limited backpay order as provided in Transmarine Navi- gation Corp., supra, and its progeny, the usual remedy in cases of this nature. Respondent disputes the need for a Transmarine remedy here. It argues that Brown suffered no "deleterious effects whatsoever" from the closing be- cause of his income as an "independent hauler." As for Lemmons, Respondent argues that "no evidence was of- fered by the Counsel for the General Counsel that .. . Mr. Lemmons had failed to obtain a permanent disability rating by the time of the hearing or thereafter." In the Respondent's view, the "most common form" of benefits to be derived from effects bargaining in these situations is severance compensation which would have been inap- propriate for either Brown (who, in Respondent's view, benefitted by the closing) or Lemmons (who, in Re- spondent's view, must be presumed to be physically un- qualified for further employment). For these reasons Re- spondent claims that a Transmarine remedy "is inappro- priate and unlawful" as' "there exists no statutory author- ity for the Board to impose a penalty and, in the absence of any showing of injury to the employees affected ... no monetary penalty is appropriate." The factual and legal basis for the Respondent's remedy argument are unsupportable. Respondent has not shown that Brown has "benefitted" by his postclosing business as an independent hauler. Rather, it has shown only that his gross income from that business has exceed- ed his gross wages as its employee. Where Brown stands economically after he pays his present business -expenses is anybody's guess on the basis of this record. And as for Lemmons, Respondent erroneously equates his mere claim of some unspecified permanent disability with a proven incapacity to work at all. Thus, even assuming some legal basis for Respondent's argument, the record here would not justify denying the limited backpay ef- fects bargaining remedy sought. Respondent's claim that the Board lacks statutory au- thority to impose a Transmarine remedy because it is pu- nitive also lacks merit. As explained in that case, the object of such a remedy is twofold. First, the remedy does seek to make employees whole for their losses to limited degree. Secondly, and more importantly, Trans- marine and other similar 8(a)(5) remedies are designed to restore at least some economic inducement for an em- ployer to bargain as the law requires. This approach has been recognized as a lawful exercise of the Board's au- thority under Section 10(c) of the Act to devise appro- priate remedial action. NLRB v. Master Slack, unofficial- ly reported at 120 LRRM 2514, 2519 (6th Cir. 1985). At- tempts to label such 'remedies as unlawfully punitive has been rejected by both the courts and the Board. See, e.g., Yorke v. NLRB, 709 F.2d 1138, 1145 (7th Cir.' 1983); Royal Plating Co., 148 NLRB 545, 548 (1964). And, as the General Counsel correctly notes, the Board has im- posed a Transmarine remedy even in the face of evidence that displaced employees earned more in their new em- ployment. Walter Pape, Inc., 205 NLRB 719 (1973). No special circumstances were shown to justify refusing such a remedy especially where, as here, it is specifically sought by the General Counsel. As I am bound by the Board's precedent until it is overruled by the Supreme Court, the requested Transmarine remedy will be im- posed. Lenz Co., 153 NLRB 1399 (1965). II. THE EFFECT OF THE UNFAIR LABOR PRACTICE UPON COMMERCE Respondent's unlawful activities, described in section I, occurring in connection with its operations at the rele- vant times, have a close, intimate, and substantial rela- tionship to trade, traffic, and commerce among the sev- eral States and tend to lead to labor disputes burdening and obstructing the free flow of commerce. CONCLUSIONS OF LAW 1. Respondent, at the material times, was an employer within the meaning of Section 2(11) of the Act engaged in commerce or an industry affecting commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By failing to notify the Union it intended to close its Martinez, California facility and thereby provide the Union with an opportunity to bargain concerning the ef- fects of that closing on employees represented by the Union, Respondent engaged in an unfair labor practice within the meaning of Section 8(a)(1) and (5) of the Act. 4. The unfair labor practice specified above affects commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent engaged in the unfair labor practice specified above, I recommend an order which provides that Respondent cease an desist there- from and take certain affirmative action described below which is designed to effectuate the purposes of the Act. Because Respondent failed to bargain about the effects of the closing of its Martinez facility, the unit employees were deprived of an opportunity to bargain through their collective-bargaining representative at a time when Re- spondent was still in need of thier services and a measure of bargaining power existed . Now, no meaningful bar- gaining can be assured without restoring some economic strength to the Union at the bargaining table. To do this, the order here requires Respondent to bargain with the Union concerning the effects on unit employees from the closing of the Martinez facility. As noted above, the bar- gaining order is accompanied' with a limited backpay re- quirement designed to make, employees whole for any losses and to recreate a situation in which the Union's bargaining position is not" entirely devoid of economic consequences for Respondent. This is done by requiring Respondent to pay backpay to its employees in the manner required in Transmarine, supra. Thus, Respond- ent shall pay employees backpay at the rate of their normal wages when last in Respondent's employ from 5 days -after the date of this decision until the occurrence of the earliest of the following conditions: (1) the date Respondent bargains to agreement with the Union on those subjects pertaining to the effects of the closing on its employees; (2) a bona fide impasse in bargaining; (3) the Union's failure to request bargaining within 5 days of 206 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent's notice of its desire to bargain with the Union; or (4) the Union's subsequent failure to bargain in good faith; but in no event shall the sum paid to any of the unit employees exceed the amount the employee would have earned as wages from the date of the closing to the time the employee secured equivalent employ- ment, or the date on which Respondent offered to bar- gain, 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 Respondent's employ. Backpay shall be based on earnings which the terminated employees would normally have received during the ap- plicable period, less any net interim earnings, and shall be computed on a quarterly basis in the manner set forth in F. W. Woolworth Co., 90 NLRB 289 (1950), together with interest as provided in Isis Plumbing Co., 138 NLRB 716 (1962); and Olympic Medical Corp.,, 250 NLRB 146 (1980). To the extent that Lemmons received any workers' compensation benefits, their interim earn- ings nature shall be determined in accord with Canova Moving & Storage, 261 NLRB 639 (1982).6 Finally, Re- spondent shall be required to mail a copy of the attached notice to the Union and to the last known addresses of its former employees in order to advise them of the out- come of this proceeding. On these findings of fact and conclusions of law and on the entire record, I issue the following? ORDER The Respondent, O. L. Willis, Inc., Martinez, Califor- nia, its officers, agents, successors, and assigns, shall 6 During a prehearmg conference concerning this case , the General Counsel took the position that interim earnings should not be deducted from the gross backpay computed under the Transmanne remedy. At that time it apparently was the -General Counsel's view that the limited back- pay remedy is for the purpose of restoring some economic strength to a union's bargaining position and, as such , was for a fundamentally differ- ent purpose than a backpay remedy in discrimination cases . Apparently, the General Counsel felt that an interim earnings deduction would dilute the economic strength the remedy seeks to restore The General Counsel noted that Transmarine and some of its progeny make no mention of an interim earnings deduction. See, e g , Tucson Yellow Cab, 275 NLRB 170 (1985); National Car Rental, 252 NLRB 159 (1980); Walter Pape, supra; and Transmarine, supra. On the other hand, certain Transmarine remedy cases do provide for interim earnings deductions See, e g., Jade Handbag, 269 NLRB 259 (1984); Modern Angel, Inc, 258 NLRB 1216 (1981), Hill- crest Furniture, 253 NLRB 72 (1980); and Uncle John's Pancake House, 232 NLRB 438 (1977). The General Counsel's postheanng brief does not address this matter I have included an interim earnings offset m accord with the latter cases to avoid any confusion at the compliance stage. In my judgment, it would be an error to construe the Board's silence in the former cases as an indication that the Board did not intend the usual in- terim earnings deduction. The circumstances in this case make it highly unlikely that the Union's economic leverage would be diluted in any manner by deducting employee net interim earnings from the gross back- pay due in accord with the usual Board practice. Thus, Brown is en- gaged in a highly competitive business in which operational expenses often consume a large portion of the gross income and Lenunons' status appears very uncertain. As Respondent has ceased operating entirely, its only method to minimize its liability exposure is to promptly engage in good-faith effects bargaining with the Union 7 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. 1. Cease and desist from (a) Refusing to bargain collectively with Teamsters Local 315, Internaitonal Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, concerning the effects of closing its Martinez , California facility on employees in the following appropriate unit: All full-time and regular part-time drivers, and driver-helpers employed by O. L. Willis, Inc. at its Martinez, California facility; excluding all other em- ployees, office clerical employees , managerial em- ployees, guards, and supervisors , as defined in the Act. (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 designed to ef- fectuate the policies of the Act. (a) On request, bargain with Teamsters Local 315 con- cerning the effects on employees in the above unit result- ing from closing its Martinez, California facility, and reduce to writing any agreement reached as a result of such bargaining., (b) Reimburse employees in the manner set forth in the remedy section of this decision. (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 a copy of the attached notice marked "Ap- pendix" to Teamsters Local 315 and to all employees who were employed at its Martinez, California facility after the decision was made to close that facility." Copies of the notice, on forms provided by the Regional Director for Region 32, shall, be signed by Respondent's representative and shall be mailed to Teamsters Local 315 and to the last known address of each unit employee. (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 8 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- 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." 9 The General Counsel's complaint requests a visitatorial clause in the recommended Order permitting the use of discovery under the Federal Rules of Civil Procedure to investigate any compliance questions. The General Counsel's brief contains protracted argument on behalf of such a clause; Respondent's brief did not address the question Entirely aside from the lack of Board precedent for such an order, the General Coun- sel's brief is unconvincing The General Counsel eschews the use of the investigatory subpoena authorized in Sea 11 of the Act on the ground that it would be too time consuming but does not explain how discovery would cause less delay. The two cases cited by the General Counsel de- monstrative of delay in subpoena proceedings (NLRB v. Martins Ferry Hospital Assn., 654 F.2d 455 (6th Cir 1981), and NLRB v. Dutch Boy, Inc., 606 F.2d 929 (10th Cir 1979)) did not involve the use of subpoenas in aid of compliance with Board or court orders and, thus, are not at all reflective of a judicial attitude toward the problem the General Counsel addresses. A review of Table 21 in the Board's Annual Reports strongly Continued O. L. WILLIS, INC. 207 suggests either a historical underutilization of the Board's investigatory subpoena power or significant voluntary compliance with its use. My own personal experience, after nearly a quarter of a century with the Board, convinces me that it is the former and not the latter. Regardless, Table 21 indicates that there has been only a minimal opportunity to de- velop supporting legal precedent for the use of the statutory subpoena power which would have a salutary effect on many aspects of the Board's statutory mission, as well as compliance. Moreover, the General Counsel's request for this novel procedural departure involves a matter which is better suited to an exhaustive review which could be achieved if the Board exercised its rulemaking power under the Administrative Pro- cectures Act, especially in view of the Board's historical refusal to permit discovery in its complaint proceedings . For these reasons, the General Counsel's request for a visitatorial clause in the recommended Order is denied. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Teamsters Local 315 concerning the effects on you re- sulting from closing our Martinez, California facility. The employees represented by Local 315 are: All full-time and regular part-time drivers, and driver-helpers employed by O. L. Willis, Inc. at its Martinez, California facility; excluding all other em- ployees, office clerical employees, managerial em- ployees, guards, and supervisors, as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act. WE WILL, on request, bargain with Teamsters Local 315 concerning the effects on you resulting from closing our Martinez facility and reduce to writing any agree- ment reached as a result of such bargaining. WE WILL reimburse you in the manner provided in the remedy section of the decision in this case. 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. O. L. WILLIS, INC.