Desoto, Inc.

788 DECISIONS OF NATIONAL LABOR RELATIONS BOARD DeSoto, Inc. and Teamsters Union Local 115 a/w International Brotherhood of Teamsters,,Chauf- feurs, Warehousemen and Helpers of America. Case 4-CA-12828 28 February 1986 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS DENNIS AND JOHANSEN On 23 June 1983 Administrative Law Judge Norman Zankel issued the attached decision. The Respondent, the Charging Party, and the General Counsel filed exceptions and supporting briefs. The Respondent and the General Counsel also filed an- swering briefs.' 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, fmdings,2 and conclusions only to the extent consistent with this Decision and Order. We agree with the judge's dismissal of the 8(a)(5), (3), and (1) allegations concerning the Re- spondent's closure of its Pennsauken, New Jersey facility.3 We disagree, however, with his finding that the Respondent violated Section 8(a)(5) by failing to bargain with the Union about the effects of the closing. As found by the judge, the Respondent informed the Union of the closing on 4 February 1982. The Union requested, and the Respondent agreed, to bargain about the effects of the closure. The parties ' The Respondent filed a motion to reopen the record to receive evi- dence of its transfer of all rights , title, and interest in its former Pennsau- ken plant In view of our dismissal of the complaint, we find it unneces- sary to rule on the motion. 2 The Charging Party and the General Counsel have excepted to some of the judge's credibility findings. 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 discussing employee Magorry's testimony concerning an August 1981 conversation with Personnel Manager Lepore in sec. III,B ,(l) of his decision, the judge attributes to Lepore the comment that if there were to be a strike the Union should conduct it in good weather. The record shows that Magorry testified that he made the "good weather" statement. In sec III,C,(1) of his decision, the judge refers to the Union 's analysis that the Company could increase its savings by $466,000 by closing the Columbus plant rather than the Pennsauken facility The judge failed to mention that this figure was premised on the reduction of the Pennsauken production and maintenance employees' wages and benefits to the level received by the employees at the Orlando plant 3 In finding it inappropriate to defer to the grievance arbitration award in this case, we note the judge's observation that the issues presented to the Board, involving both the production and maintenance and the office clerical and laboratory technician units, are broader than those in the ar- bitral proceeding. In addition, no party in this proceeding seeks deferral See Olin Corp., 268 NLRB 573 (1984) met on 16 February and the Union made several proposals regarding the effects of the closure. The parties discussed numerous subjects at the meeting. The parties met again on 26 February. The Re- spondent made several proposals and the Union made counterproposals. The Respondent made a final offer, covering 10 subjects. The Union reject- ed the offer. At that point the Respondent's attor- ney stated that,the meeting was over, whereupon he was physically confronted by the Union's secre- tary-treasurer Morris. Following the arbitrator's award the Respondent advised the Union of its willingness to negotiate over the decision to close and the effects. The par- ties met on three occasions in September 1982. The Respondent took the position that it would not resume operations at the plant. The Union declined to discuss production and maintenance unit matters in light of the arbitrator's award. Instead, the Union sought to continue the contract negotiations for the clerical and technician unit. In January 1983 the Respondent again offered to bargain about the decision and effects of the clo- sure. The parties met in February and March and discussed the decision to close. The Union request- ed information related to the decision to close. Contrary to the judge, we find that the Respond- ent satisfied its obligation to bargain about the ef- fects of the Pennsauken closure. The Respondent complied with the Union's request to meet in Feb- ruary 1982 and bargain about numerous effects-re- lated 'subjects. The Respondent remained willing to discuss the closure, and subsequent negotiations took place. The Union, however, chose to discuss the decision to close, not the effects, and requested information pertaining to the decision. We find that the record does not support the judge's findings that the Respondent's proposal to keep the plant closed and its failure to provide all the information it promised the Union prevented effects bargaining. Rather, we find that the Respondent adequately en- gaged in and remained willing to conduct effects bargaining. To the extent more extensive effects bargaining did not occur, it was attributable to the Union's lack of interest in pursuing such bargain- ing. Unlike our dissenting colleague, we find that the Respondent's closing of the Pennsauken plant and transfer of the work to other facilities did not modify any provision in the parties' collective-bar- gaining agreement . Under Milwaukee Spring Divi- sion, 268 NLRB 601 (1984), affd. 765 F.2d 175 (D.C. Cir. 1985), the Board may find a violation of Section 8(d) when a company decision modifies a specific contractual term dealing with a mandatory subject of bargaining. The Charging Party asserts 278 NLRB No. 114 DESOTO, INC. that article XXV of the contract precludes the Re- spondent's action here. The Respondent contends that the closing and transfer of work are consistent with article XXVI of the contract. Those articles are as follows: Article XXV-Plant Location The Company shall not move its plant from its present location beyond the radius of twenty- five (25) miles without the written consent of the Union, but the Union shall not withhold its consent for arbitrary or capricious reasons. Article XXVI-Subcontracting The Employer will not subcontract or transfer out work which results bn a layoff of its em- ployees, except that this limitation on subcon- tracting, or transferring out shall not be appli- cable to the allocation of products among the various plants of the Company for business reasons. An arbitrator concluded that the Pennsauken closing violated the contract. The arbitrator found that article XXV, not article XXVI, applied to the Respondent's action. The Third Circuit upheld the arbitrator's finding. Teamsters Local 115 v. DeSoto, Inc., 725 F.2d 931 (1984). The, court observed that the arbitrator's interpretation of the two clauses, to some extent, appeared to be a dubious one. Never- theless, the court found that the clauses were at least open to interpretation, and the Company did not establish that the arbitrator's interpretation was irrational or did not draw-its essence from the par- ties' agreement. 725 F.2d at 935. We have not been asked to defer to the arbitra- tor's award. Having reviewed the contract, we find no term that restricts the Respondent's right to close the Pennsauken plant and transfer the work to other company facilities. Article XXV limits the Respondent's right to move the Pennsauken plant from its present location. The evidence, shows, however,,that the Respondent decided to close the Pennsauken facility because of excess production capacity in its overall operation.4 Thus, the Re- spondent did not move the Pennsauken plant to an- other location. Rather, it decided to eliminate the plant from its production complement. The very fact that prompted the closing-excess production capacity at the Respondent's 10 plants-also count- ed for the reallocation of Pennsauken's work to other existing facilities. By eliminating the Pennsau- ken plant, the Respondent relieved its excess capac- ity problem and made, its overall operation more efficient and economical. We therefore find that the Respondent's closing of the Pennsauken plant 789 and transfer of'the work to other facilities did not constitute a."move" within the meaning of article XXV. The only other contract provision that re- lates to the Respondent's decision is article XXVI. That clause, by authorizing the Company to trans- fer out work in order to allocate products among the various plants for business reasons; is consistent with the Respondent's action. -Having considered the nature of the Respondent's action and the spe- cific language of the contract, we find that the Re- spondent did not modify any term of the contract by closing the Pennsauken plant and transferring the work to its other facilities. We further find that the Respondent was not ob- ligated under Section 8(a)(5) to bargain about the decision to close Pennsauken and transfer the work elsewhere. We agree with the judge's fording that contractual labor costs were not an operative factor in the Respondent's decision. Thus, under Otis Elevator Co., 269 NLRB 891 (1984), the Re- spondent's decision was not amenable to bargain- ing. Based on the foregoing, we shall dismiss the complaint in its entirety. ORDER The complaint is dismissed. MEMBER DENNIS, dissenting. I disssent from the majority's failure to find that the Respondent violated the Act by abrogating its explicit contractual pledge to preserve unit work. The majority's decision is contrary to the Act's purpose of "stabiliz[ing] agreed upon conditions during the term of a [collective-bargaining agree- ment]." Boeing Co. v. NLRB, 581 F.2d 793, 798 (9th Cir. 1978) (emphasis in original). Since 1970 the Union has represented the Re- spondent's Pennsauken, New Jersey plant produc- tion and maintenance employees. The parties' most recent collective-bargaining agreement, effective 16 January 1980 to 15 January 1983, contains the fol- lowing work preservation clause:' The Company shall not move its plant from its present location beyond the radius of twenty- five (25) miles without the written consent of the Union, but the Union shall not withhold its consent for arbitrary and capricious reasons. In February 1982 the Respondent announced that it was closing the Pensauken plant and trans- ferring the facility's work to other plants. In March the Union filed a grievance alleging that the clos- ing violated the above-quoted article XXV. In 4 The Respondent had 10, production facilities nationwide at the time. 1 The parties' previous contracts contained the same clause. 790 DECISIONS OF NATIONAL LABOR RELATIONS BOARD August an arbitrator found the grievance meritori- ous, stating that article XXV "prohibits the elimi- nation of the entire work force by a move,. .. that might make transfer infeasible." In November a district court enforced the arbitrator's conclusion, and in July 1984 the Third Circuit held that the ar- bitrator properly found the closing violated article XXV. Teamsters Local 115 v. DeSoto, Inc., 725 F.2d 931 (1984). An employer may not modify terms and condi- tions of employment contained in a contract with- out obtaining the union's consent before imple- menting the change. Milwaukee Spring Division, 268 NLRB 601 (1984), affd. 765 F.2d 175 (D.C. Cir. 1985). Thus, if the parties' contract contains a spe- cific term prohibiting the Respondent's transferring the Pennsauken work, the Company may not do so during the contracts's duration without the Union's consent. The parties' work preservation clause is a specif- ic term contained in the contract that the Respond- ent modified without the Union's consent when the Company closed the Pennsauken plant and trans- ferred the facility's work elsewhere.2 The arbitra- tor's decision and the court opinions so construe the contract language, and I see no reason for con- cluding otherwise.3 Consequently, the Respondent's midterm modifi- cation of the contract violated Sections 8(a)(5) and 8(d) of the Act.4 I would order the Respondent to reopen the Pennsauken facility, reinstating produc- tion, maintenance, clerical, and technical employees the Respondent laid off as a result of the plant clos- ing and work transfer.5 DECISION STATEMENT OF THE CASE NORMAN ZANKEL, Administrative Law Judge. This case was tried before me on April 4-8, 13-15, and 25, 1983, at Philadelphia, Pennsylvania. The cause came before me on a complaint and notice of hearing issued by the Regional Director for Region 4 of the National Labor Relations Board on March 4, 1983. In substance, the complaint alleges that the Em- ployer violated Section 8(a)(1), (3), and (5) of the Act by discriminatorily laying off the employees in two appro- priate bargaining units consisting of production and maintenance and clerical and laboratory technicians then employed at its Pennsauken, New Jersey facility; by transferring all production work from the facility; and by closing that facility, all on February`4, 1982,2 and with- out first having given the Union, as the exclusive collec- tive-bargaining representative of the employees in both bargaining units, a chance to negotiate and bargain about the decision and the effects of the work transfer, layoffs, and closing. The Employer filed a timely answer which admitted certain matters but denied the substantive allegations and that it had committed- any unfair labor practice. All parties appeared at the trial. Each was represented by counsel and afforded full opportunity to be heard, to introduce and meet material evidence, to examine and cross-examine witnesses,2 to present oral argument, and to file briefs. Counsel for all parties submitted posttrial briefs, the contents of which have been carefully consid- ered. s On consideration of the entire record, the briefs, and my observation of the witnesses and their demeanor, I make the following FINDINGS AND CONCLUSIONS 2 Of course, an employer does not violate the Act by unilaterally changing a contract term dealing with a permissive bargaining subject. Allied Chemical & Alkali Workers Local 1 v. Pittsburgh Glass, 404 U S. 157 (1971). A work preservation clause, however, is a mandatory bargaining subject See my concurring opinion in Otis Elevator Co., 269 NLRB 891, 899 fn 16 (1984). a As no party raises the deferral issue , I do not defer to the arbitrator's award. Nevertheless, recognizing arbitrators' expertise in construing con- tarcts, I regard the arbitrator's decision as a helpful tool in interpreting art. XXV 4 I find it unnecessary to address the General Counsel's additional theories. 5 The Respondent filed a motion to reopen the record, alleging that in December 1984 it sold the Pennsauken plant I would deny the motion, but permit the Respondent to show at the compliance stage of this pro- ceedmg that the above remedy would be unduly burdensome. Marvin L. Weinberg, Esq., for the General Counsel. Barry Bevacqua, Esq., and Jerald R. Cureton, Esq. (Pechner, Dorfman, Wolffe Rounick & Cabot), of Phila- delphia, Pennsylvania, for the Employer. Richard Markowitz, Esq., and William T. Josem, Esq. (Markowitz & Richman), of Philadelphia, Pennsylvania, and Norton Brainard, Esq., of Philadelphia, Pennsylva- nia, for the Union. 1. JURISDICTION - Jurisdiction- is uncontested. The Employer is, and at all material times has been, a Delaware corporation. Until February 4, 1982, the Employer was engaged in the manufacture of paint and household detergent at a facili- ty located at 8600 River Road, Pennsauken, New Jersey. During calendar year 1981 , the Employer -purchased and received goods and materials valued in excess of $50,000 directly from points outside New Jersey. Based on the foregoing, and the Employer's admission, I find it is, and at all material times has been,, an employ- er engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. The answer admits, the record reflects, and I find the Union is, and at all material times has been, a labor' orga- nization within the meaning of Section 2(5) of the Act. 1 All dates hereinafter are in 1982 unless otherwise stated. 2 The Employer's motion to sequester witnesses was granted. Each party was permitted one representative to be present throughout the pro- ceedmgs at the counsel table. S The General Counsel's unopposed motion, dated May 27, 1983, to correct transcript is granted. DESOTO, INC. 791 H. THE ISSUES A. Whether the closing of the Pennsauken operations and subsequent reallocation of work formerly performed at that location was motivated by unlawful consider- ations in violation of Section 8(a)(3) of the Act within the purview of Textile Workers v. Darlington Co., 380 U.S. 263 (1965). B. Whether the Employer unlawfully refused to bar- gain over the decision to close its Pennsauken operations in violation of Section 8(a)(5) of the Act. C. Whether the Employer unlawfully refused to bar- gain over the effects of closing the Pennsauken facility in violation of Section 8(a)(5) of the Act. D. Whether the closing and attendant reallocation of work to other facilities constitutes an unlawful midterm modification of the production and maintenance collec- tive-bargaining agreement, within the purview of Los An- geles Marine Hardware Co., 235 NLRB 720 (1978), enfd. 602 F.2d 1302 (9th Cir. 1979) (LA Marine). E. Whether an order to restore the status quo ante by requiring the Employer to resume the Pennsauken oper- ations is appropriate. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background 1. The Employer's business and relevant hierarchy The Employer, the seventh largest manufacturer of consumer paint in the United States, maintains its corpo- rate headquarters in Des Plaines, Illinois. When the al- leged unfair labor practices occurred, the Employer op- erated three production groups. 'Those groups were des- ignated as chemical, specialty products, and furniture. (The furniture group was sold subsequent to the critical incidents.) There are two divisions, chemical coatings and chemi- cal products, within the chemical group. Ten production facilities existed in various locations at the time of the al- leged unfair labor practices. They were located in Penn- sauken, New Jersey, Chicago Heights, Illinois, Elgin, Il- linois, Greensboro, North Carolina, Columbus, Ohio, Or- lando, Florida, Garland, Texas, Berkely, California, Orange, California, and Westland, Michigan. The chemi- cal coatings division produces industrial coatings and consumer paint marketed for the do-it-yourself paint pur- chaser. The Employer's do-it-yourself paint is manufac- tured by the Employer for two customers, Sears, Roe- buck & Company and American Hardware Company. Sears, which owns 31 percent of the Employer's -common stock, purchases approximately 75 percent of the Employer's paint production. The Employer is under contract with Sears. That contract provides Sears must purchase 90 percent of its paint requirements from the Employer as long as the Employer's price to Sears is lower than any other supplier's price to Sears for a prod- uct of similar quality.4 At Pennsauken, the Employer 4 Unrefined evidence reflects that, in 1978, Sears purchased 1 million gallons of paint from another manufacturer because the Employer could not meet its competitor's price manufactured both do-it-yourself paint (for the chemical coatings division) and also detergent (for the chemical products division).5 Two other plants, one located at Joliet, Illinois, and the other at Orange, California, functioned as part of the chemical products division. The relevant corporate hierarchy located at the Em- ployer's headquarters are: R. E. Missar, president and chairman of the board; W. L. Lamey Jr., vice president, finance; J. Barreiro, vice president, personnel and indus- trial relations; R. J. Anderson, vice president and group president, chemical division; J. E. Curran, director, in- dustrial relations; W. L. Anderson, vice president, chemi- cals group and general manager, chemical coatings divi- sion; and D. A. Bergren, vice president, chemicals group and general manager, chemical products division. Relevant members of the Pennsauken facility are: I. P. Schwerd, plant manager; F. Lepore, personnel manager; and J. Adams, assistant warehouse superintendent.6 2. Relevant collective-bargaining history at Pennsauken The Union has been the collective-bargaining repre- sentative for the approximately 60 employees in the Pennsauken production and maintenance unit since 1970. The employer and the Union had negotiated a collective- bargaining agreement in 1970 following a strike. There have been no other strikes at the Pennsauken facility since that time. Successive collective-bargaining agree- ments were negotiated in 1977 and 1980. The latter agreement expired, by its terms, on January 15, 1983. The parties arbitrated only one grievance between 1970 and 1980. The Employer's personnel manager and the Union's chief steward agreed that throughout this time the parties' relationship was amiable. The Employer maintains collective-bargaining relation- ships with unions representing employees at other of its facilities. Specifically, production employees at the Joliet plant are represented by the Paperworkers Union; the Joliet maintenance employees are represented by the Ma- chinists Union; the Auto Workers represents the produc- tion and maintenance employees at the Westland facility; the production and maintenance employees at Berkely are represented by the Painters Union; the Royal Chatta- nooga Division, specialty products group employees, are represented by a Teamsters local; and a skeleton force of 5 The Union submitted a motion, dated June 2, 1983, to reopen the record to adduce evidence, asserted as newly discovered, regarding the announcement of the opening of a new plant within its chemical products division The General Counsel joined m the motion On June 6, 1983, I ordered the Employer to show cause why the motion should not be granted. All parties responded to the show cause order On June 16, 1983, I denied the motion because it appeared the evidence to be intro- duced is irrelevant in that it is the chemical coatings division which is the gravamen of the instant complaint (see also fn 34, infra), presentation of the evidence would comprise a "fishing" expedition; and reopening would entail an unnecessary delay in issuance of this decision which is guided by a U S district court injunction 6 It was stipulated that at all material times up until February 4, 1982 (the date Pennsauken closed), Adams occupied this position, that he was laid off on February 4 and was recalled to his former position about Feb- ruary 16 in which he worked until May 14; and that during the times Adams worked he was a supervisor within the meaning of the Act 792 DECISIONS OF NATIONAL LABOR RELATIONS BOARD maintenance employees at the former furniture facility at Fort Smith, Arkansas, are represented by the Furniture Workers Union. There are office clericals and laboratory technicians employed at each of the Employer's nine facilities (ex- cluding Pennsauken) of its chemical coatings division. None of those employees are represented by any labor organization, nor have they ever been so represented. During the spring of 1981, the 18 office clericals and lab- oratory technicians at Pennsauken requested the Union to represent them for collective-bargaining purposes. On May 11, 1981, the Union requested recognition on behalf of these employees. The Employer declined recognition. The Union filed a representation petition (Case 4-RC- 14720). A Board-conducted consent election was held on July 9, the employees voted for union representation. The Union was certified as the bargaining representative of Pennsauken's office clericals and laboratory techni- cians on July 17. Negotiations ensued.? There are two noteworthy contractual provisions re- garding the Pennsauken production and maintenance unit. They are articles XXV and XXVI. Each of these clauses has been in existence, without language change, since the 1970 collective-bargaining, agreement. Article XXV deals with plant relocation. It provides "the Com- pany shall not move its plant from its present location beyond a radius of twenty five (25) miles, without the written consent of the Union, but the Union shall not withhold its consent for arbitrary and capricous rea- sons." Article XXVI deals with subcontracting and transfer out of bargaining unit work. It provides "the Employer will not subcontract or transfer out work which results in a layoff of its employees, except that this limitation on subcontracting or transferring out shall not be applicable to business peaks or valleys or to the allocation of products among the various plants of the Company for business rea- sons." (Emphasis added.) The Employer's defense to the instant allegations is, in part, premised on its claim that it was contractually priv- ileged to close the Pennsauken facility and reallocate its work, The Employer contends the italicized exception in article XXVI establishes its right to reallocate its work from Pennsauken to other facilities. On March 4, 1982, the Union filed a grievance in which it complained the Pennsauken closing and work transfer violated article XXV. That grievance was arbi- trated. On August 16, 1982, the arbitrator issued his deci- sion. He found, consistent with the Union's position, that the Employer indeed had violated the collective-bargain- ing agreement. The award ordered that Pennsuaken be reopened and the effected employees be made whole. The Employer moved the U.S. district court to vacate the award. On November 10, 1982, the district court vacated that portion of the arbitrator's award which required resump- tion of operations. The case was remanded to the arbitra- tor for amendment of his award consistent with the court's judgment. On November 24 and 30, 1982, respec- 7 The substance of the office and laboratory bargaining will be dis- cussed below tively, the arbitrator issued a conforming determination and opinion on remand. The revised award excluded an order to reopen. The revised award was confirmed by the district court on December 6, 1982. The Employer has declined to comply and, instead, appealed to the Third Circut Court of Appeals. That appeal is currently pending. The appeal challenges the propriety of the arbi- tration award in its entirety. In the instant case, the Union asserts that "arbitrator has determined that the Company's actions in closing Pennsauken and allocating its production elsewhere con- stituted a violation or unlawful modification of . . . Arti- cle (XXV)." In essence, the Union argues that the arbi- trator's conclusions provide me with one of the predi- cates for finding the Pennsauken closing constitutes such a midterm modification as is contemplated by LA Marine. The Employer contends the Board is not bound by any finding or conclusion of the arbitrator. The Employ- er claims the arbitrator exceeded his authority when he "balanced" the parties' bargaining positions and that he also incorrectly found the Employer's conduct breached the collective-bargaining agreement. During the hearing, counsel for the General Counsel declared, in effect, it was not his position that the Board is bound by the arbitrator's award. I need not resolve these contentions of the parties. The circuit court properly has the propriety of the arbitra- tor's award before it. I am mindful of the Supreme Court's observation that national labor law policy encourages the arbitration process as set forth in the so-called Steelworkers Trilogy (Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960); Steelworkers v. Gulf Navigation Co., 363 U.S. 574 (1960); and Steelworkers v. Enterprise Corp., 363 U.S. 593 (1960)). That observation was enunciated when the Court stated that the "grievance machinery under a collective-bar- gaining agreement is at the very heart of the system of industrial self-government. . . . The processing machin- ery is actually a vehicle by which meaning and content are given to the collective-bargaining agreement." (Steel- workers v. Warrior & Gulf Navigation Co., 363 U.S. 574 at 578(1960).) I subscribe to that philosophy. However, it is equally clear that the Board's expertise in labor-management relations is accorded deference. Thus, in Carey v. Westinghouse Electric Corp., 375 U.S. 261, 272 (1964), the Supreme Court noted "should the Board disagree with the arbiter . . . the Board's ruling would, of course, take precedence." The case at bar con- tains elements which both tend to support and reject the principle that the Board should be bound by the arbitra- tor's award. In support, it is clear the arbitrator deter- mined the contractual issue. Conduct assertedly in dero- gation of contractual commitments is eminently suited to the arbitral process. On the other hand, the arbitrator had absoutely no issue before him which relates to the clericals and technicians unit. No contract existed for him to interpret. The rights of those employees are pre- sented for resolution for the first time only in the present forum, as alleged unfair labor practices. DESOTO, INC. Moreover, although the rights of the production and maintenance employees were encompassed in the arbitra- tion within the framework of alleged contract violation, they are also presented to the Board as alleged unfair labor practices and are based, in part, on evidence of al- leged unlawful motivation as a violation of their rights under Section 7 of the Act. Issues of unlawful motivation generally are reserved for Board determination (General American Transoportation Corp., 228 NLRB 808 (1977)). Also, deference to the arbitrator's award would deprive the Board of its statutory obligation to fashion a com- plete remedy. That is, the arbitrator's award necessarily is limited in scope to the length of the parties' collective- bargaining agreement. As noted, that contract expired in January 1983. If the Board were to find a violation, the remedy would be broader. It would extend beyond the contract's life. From the above, it is clear that the Board must pro- ceed to hear and determine the unfair labor practice issues, ab initio, because the arbitrator undeniably did not have those matters presented to him and his written opinions evince no indication that he considered those issues. See Suburban Motor Fi eight, 247 NLRB 146 (1980). In Schaefer v. NLRB., 697 F.2d 558 (1983), the Third Circuit Court of Appeals noted, With apparent ap- proval, that where Section 7 rights are concerned and are not presented and considered in arbitration proceed- ings, the Board correctly entertains the unfair labor prac- tice claims before it. Accordingly, the balance of this decision will deal with the issues framed by the pleadings. To deviate from this task, in the total circumstances herein, is deemed an abrogation of statutory mandate. Indeed, resolution of the unfair labor practice issues may well prove to aid in the ultimate disposition of all the issues presented by the scenario of events. See NLRB v. Acme Industrial Co., 385 U.S. 432, 437 (1967). 3. Economic backdrop The critical events must be vnewe4 in the context of the relevant economic conditions in the industry and, in particular, regarding the Employer. It is a necessary in- gredient' of the assessment of the Employer's economic defense. Paul Anderson (not a relative of the Employer's vice president R. J. Anderson or of its group vice president, W. L. Anderson), himself president of an independent consulting firm in the paint industry, testified regarding the economic climate within that industry. He testified without substantive contradiction. The essence of his tes- timony follows. In 1962-1963, DuPont Corporation entered the paint market with a product called Lucite. To stimulate demand for its product, Dupont, encouraged its sales at approximately one-half of the normally expected retail price. At that time, Sears controlled about 11 percent of the national retail business. In order to survive, all paint companies were required to cut their prices. Sears changed its merchandising philosophy to increase its share of the do-it-yourself market. By 1977, Sears con- trolled 25 percent of the exterior, and 26 percent of the interior paint market. However, in 1977, the cost of raw 793 materials had increased more than in the combined previ- ous 10 years. This situation created an erosion of profits. Anderson testified that the combination of price pressure from raw materials and increased resistance by retail dealers to consumer price rises resulted in a drop in paint industry profits from 4.9 percent to approximately 2.9 percent. Thus, from about 1977, the paint industry was charac- terized as a no-growth industry, and the do-it-yourself paint market was "very competitive." After 1979, there was a decrease in units of paint sold. This was attributed to heavy inflation, high rises in raw materials costs, the fact the nation was moving into recession, intense com- petition among manufacturers, and a reduction in the number of surfaces requiring paint. Concurrently, retail dealers maintained a so-called magic price of $9.99 per gallon of top quality paint. A retail charge of $10.99 per gallon brings a precipitous drop in sales volume. The instant Employer, according to Anderson, "pro- vided Sears with the highest quality paint at the lowest possible price so that Sears can continue to increase their market share in the paint industry." The do-it-yourself paint market did not realize the full effect of the national economic recession until the second 6 months of 1981. 4. History of this, case February 4, 1982: The Employer announced its deci- sions to close Pennsauken. All employees at that facility were laid off. However, approximately 21 employees were recalled on February 16 and worked until on or about April 28 to wind down operations. March 4, 1982: The Union filed its grievance discussed above. March 31, 1982: the Union filed an injunction action in the U.S. district court to prohibit the Employer from re- moving raw materials and finished products from the Pennsauken facility and otherwise disposing of its per- sonal and real property from that plant. The injunction petition also requested, pending arbitration, reinstatement of all 'Pennsauken employees and resumption of the Pennsauken operations. March 22, 1982: A district court, hearing was conduct- ed on the injunction petition. March 31, 1982: District Court Judge Brotman issued a decree which directed the parties to arbitrate and, pending that proceeding, enjoined the Employer from re- moving or selling machinery, equipment, and real estate, except raw materials and finished products. The court declined to order reinstatement, of employees and re- sumption of Pennsaken operations. April 9, 1982: The instant unfair labor practice charge was filed. May 14, 1982: The arbitration hearing was conducted on the Union's March 4 grievance. May 26, 1982: The Regional Director for Region 4 of the Board issued a letter administratively deferring fur- ther processing of the instant charge, pending the out- come of the arbitration. August 16, 1982: The arbitrator issued his initial opin- ion and award, as described above. (The remaining chro- 794 DECISIONS OF NATIONAL LABOR RELATIONS BOARD nology relative to the arbitration is also described above.) September 10, 1982: The Regional Director wrote the parties. He advised them that because the unfair labor practice issues were not litigated or addressed in the ar- bitration award, further deferral of action on the instant charge was unwarranted. The parties were thus informed that the investigation of the instant charge was being re- newed. March 4, 1983: The instant complaint was issued. March 7, 1983: The Regional Director petitioned the U.S. district court for an injunction against the Employer selling, transferring, or otherwise disposing of the Penn- sauken plant or any equipment, machinery, or supplies located at that facility and to maintain such facility, equipment, and machinery in good working order, pend- ing the disposition of the instant proceedings. April 5, 1983: The Regional Director and the Employ- er entered into a consent injunction which by its terms expires on July 31, 1983, with certain provisos relative to possible extensions.8 B. The Instant Dispute 1. Clerical and laboratory campaign-credibility resolutions As previously stated, the unfair labor practice allega- tions involved in this case have their genesis in the 1981 effort of the 18 clericals and technicians to select the Union as their collective-bargaining representative. Specifically, the union president, Joe Yoeman, met with the Employer's Pennsauken personnel manager, Frank Lepore, on May 11. Yoeman orally requested the Employer grant recognition to the Union as collective- bargaining agent of the clerical and technician's unit. The request was denied. At Lepore's request, Yoeman presented the employees' authorization cards to Lepore for examination. Lepore copied the names of employees who had signed the cards and Yoeman left. The parties later sent letters confirming the request and denial. Lepore promptly reported the Union's request to John Curran, the corporate director of personnel relaitons. Curran, who had been scheduled to be in Columbus, flew to Pennsauken instead. On May 13, Curran met with all of Pennsauken's supervisors. On the same day, Curran also conducted another meeting with the supervi- sors, managers, and exempt salaried employees of Penn- sauken's office and laboratory unit. Curran apprised them of the Union's recognition request and the Employer's rejection. He discussed how they should conduct them- selves during the organizational campaign. He advised the attendees of prohibitions on employer conduct. He told them the Act proscribed threats, interrogation, promises, and surveillance. He gave examples of these subjects. Curran said the Employer would campaign against unionization. He cautioned that supervisors should do 8 In the consent decree the parties agreed to expedite the processing to the instant case to final disposition In that regard, it is noted that none of the parties requested any extension of time in which to file their posthear- ing briefs The briefs were received, as originally scheduled, on May 31, 1983 nothing to violate the law. He warned supervisors not to question employees. He said no supervisor should play favorites or discriminate against anyone. However, he encouraged supervisors to convey their personal feelings and that the Employer's view was that unionization of the clericals and technicians was unnecessary. Also, on May 13, Curran testified he received a tele- phone call from Union Secretary-Treasurer John Morris. According to Curran,9 Morris said the Union literally was forced to make the recognition demand because the clericals and technicians had threatened to seek out a dif- ferent union, after the Union had earlier turned them away several times. Curran testified Morris claimed the clericals and the technicians were concerned about infla- tion and job security. Finally, on May 13, Plant Manager Schwerd briefly addressed all salaried employees, including the clericals and technicians. He read a prepared statement. He said that "the Company does not believe further unionization of employe[e]s at this facility is either in the employe[e]s best interest or in the Company's best interest... . Within the framework of the law, the Company fully in- tends to resist this . . . and to prevent any such further unionization. As plant manager I would make this addi- tional, personal, note. That given an opportunity, free objectively, that each of you will also conclude that fur- ther unionization here ' at Pennsauken is not necessary, and not wanted by salaried employe[e]s." Curran returned to corporate headquarters. Lepore traveled there. The two of them met with Industrial Re- lations Vice President Barreiro, Chemical Coatings Vice President W. Anderson, Director of Manufacturing R. J. McQueen, and Labor Relations Attorney H. M. Berman. They discussed the Employer's campaign strategy. Curran was to be in charge of the campaign. Curran said it was unlikely the Employer's would succeed. The offi- cials agreed Curran speak to the unit employees. Curran credibly testified there was no discussion concerning the possibility of closing the Pennsuaken operations. The General Counsel produced the Union's chief stew- ard T. Magorry who, in part, testified that on May 11 or 12 he spoke with Lepore. According to Magorry, Lepore asked him if he knew anything about the union drive. Magorry testified he answered he knew nothing about it. Magorry claimed Lepore said he "heard" the Union may have 16 cards and that it would be "a bad day" for everyone if the Union won an election. Ma- gorry also testified Lepore asked who started the Union and he responded he had no idea. Lepore presented a more comprehensive version of that conversation. While Magorry created an impression he had been called to Lepore's office for the interroga- tion, Lepore testified, without contradiction, 10 he and Magorry spoke one to three times daily to head off prob- lems before they became grievances. Lepore acknowl- edged he and Magorry discussed the clerical and techni- cian's organizing effort. Lepore testified Magorry said the production and maintenance employees' did not want 9 Morris did not appear as a witness 10 Magorry was not called as a rebuttal witness, although the General Counsel presented other rebuttal testimony. DESOTO, INC. 795 the Union to represent the clericals and technicians during their initial representational effort in 1970 and that the fact the clericals and technicians had crossed the picket line in 1970 created bad feelings among the pro- duction and maintenance employees. Lepore unequivocally denied it was he who made the "bad day" remark. Lepore attributed that comment to Magorry. Thus, Lepore testified it was actually Ma- gorry, not Lepore, who commented, "We've made a lot of progress since then [the time the Union gained recog- nition and a contract for the production and maintenance employees.] If they [the clericals and technicians], it's going to be a bad day for all of us." The General Counsel asserts the "bad day" comment which he attributes to Lepore reflects the Employer's antiunion hostility and should be considered an element of unlawful motivation. Resolution of this issue involves determining the relative credibility, of Lepore and Ma- gorry. My credibility resolutions regarding these individuals, as with the additional credibility resolutions required hereafter, are based on my observation of witness de- meanor, the weight of the respective evidence, estab- lished or admitted facts, inherent probabilities and infer- ences which may be reasonably made from the record as a whole. Northridge Knitting Mills, 223 NLRB 230 (1976); V & W Casting, 231 NLRB 912 (1977); Gold Standard Enterprises, 234 NLRB 618 (1978). Credibility resolutions and further recitation of facts do not involve discussion of every bit of evidence or every argument of counsel. Nonetheless, I have consid- ered all such matters. Omitted material is considered ir- relevant or superfluous. To the extent that testimony or other evidence not mentioned might appear to contradict the findings of fact or credibility resolutions, such evi- dence has not been overlooked. Instead, it has been re- jected as incredible or of little probative value. Walkers, 159 NLRB 1,159, 1161 (1966). I credit Lepore's denial of the "bad day" "remark. In general, Lepore was candid, forthright, direct, compre- hensive, and sure during all of his testimony. Magorry was less precise and exhibited a tendency to cast his tes- timony in a light most favorable to the General Counsel and the Union. In the latter regard, I have noted McGorry's emphasis on the point that he'had been called to Lepore's office to discuss the organizational campaign. Lepore's full description of the conversation is logical. It is more likely that Magorry would have alluded to dis- cord created by a group of employees who did not honor the Union's picket line now becoming affiliated in that same labor organization, than Lepore making the "bad day" remark in the context of what even Magorry declared was an harmonious labor-management relation- ship between them and between the Employer and Union. Moreover, there was no effort to have Magorry (on rebutal) refute Lepore's version of their conversa- tion. ]Finally, I note the conversation took place either on the same day recognition was requested or on the fol- lowing day. ' Magorry was unsure. If it occurred on the latter date, it is not probable that Lepore would have questioned Magorry, as Magorry claimed. It is unrefuted that Lepore saw the authorization cards and copied the names of employees who signed them. In this context and, given the good relationship which existed between him and Magorry, it is difficult to believe Lepore would have said he "heard" 16 cards had been signed. That re- lationship is more likely to have exuded greater frankness from Lepore. On the foregoing, I conclude Lepore did not make the "bad day" comment asserted by the General Counsel. Therefore, I find no evidence of unlawful motivation contained in this conversation between Lepore and Ma- gorry. I- now return to the sequence of events. On May 20, Curran visited the Pennsauken facility. He conducted two meetings. The first meeting was with all clerical and technicians' supervisors as well as nonsupervisors, exempt and nonexempt salaried personnel . He advised them of the recognition demand and the Employer's re- sponse. He told them the next probable step is the filing of a representation petition, to be followed by a hearing. He said the -Employer did not feel a union was needed among the clericals and technicians because, as salaried personnel, they already were covered by the same poli- cies and general benefit plans and programs applicable to other salaried employees within the Company. Curran commented that if the Union came in, those benefits would become subject to negotiations. He -asserted the Employer would negotiate 'in good faith but that it would have to make a conscious departure from the tra- ditional handling of the various benefits. Each would have to be justified. Nothing would be guaranteed or automatic regarding wages, pension, and other benefits. Curran said he believed the problem is one of comrtiuni- cation. He speculated that the Employer may not have done a good job listening in the past. He asserted the Company is a good employer, and has competitive pro- grams. Curran advised the employees that signing a card does not commit them to voting for the Union, that they are, entitled to a secret-ballot election, and that they could vote their own conscience. At the end of the meet- ing, he asked for questions. Curran's second meeting on May 20 was with a group of laboratory employees. He repeated his remarks made earlier that'day to the office personnel. There was some discussion concerning job security. It centered around the Employer's reallocation of work of its industrial products in 1977. At that earlier time, the Employer had reallocated industrial paint production from Pennsauken to Garland, Chicago Heights, and Columbus. It also reas- signed its Sears ''stores for distribution of consumer paint from Pennsauken to Columbus and Greensboro. Then, the' Employer asserted the right to reallocate in article XXVI' of the production and maintenance agreement. As a result, a total of 43 employees were laid off. The' Em- ployer and the Union engaged in effects bargaining with respect to the layoffs.l i 'r The Employer urges the Union's actions in 1977 , are evidence that the Union waived its right to challenge the February 4, 1982 reallocation of the Pennsauken work. I consider this waiver argument part of the issues now pending before the Third Circuit Court of Appeals . There- fore, I shall not address this contention of the Employer any further. 796 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On May 28 and 29, 1981 , Curran and Lepore (togeth- er) met with small groups of clericals and technicians. Two such sessions were held on May 28 . The first in- cluded employees B. Petre, D. Eaves, J. Cooper, and E. Tirendi.12 Curran told them the Employer believed their unionization was unnecessary. He said he was there to explain the Employer's position and to answer any ques- tions they had. He then told these employees the same things he told the personnel to whom he spoke on May 20. The second session on May 28 was with unit employ- ees T. Anderson, D. Smith, D. Keys, M. Cheng, and B. Pickard. 113 Curran credibly testified he made the same general comments as during the first session on that date. T. Anderson and Keys said they were concerned with job security, noting that morale diminished when the in- dustrial paints reallocation of 1977 resulted in lost jobs. Curran responded by saying, in effect, he did not under- stand how a collective-bargaining agreement could ame- liorate their concerns because the 1977 layoffs involved both salaried and hourly employees, and that the latter were part of the contractual bargaining unit of produc- tion and maintenance employees. Three meetings between Curran, Lepore, and the cler- icals and technicians were held on May 29 . Employees R. Wilson and P. Olszewski attended the first session. What Curran said is disputed. Curran testified he made the same opening remarks as he made to the employees on May 28. He reminded them that salaries and benefits would be subject to negotiation. According to Curran, Olszewski raised the issue of plant closing . Curran testi- fied Olszewski said she got an impression the plant would close if the Union got in and asked if this were true. Curran said it was not. He explained plants are closed for economic reasons and that the Employer had closed both union and nonunion plants. Curran un- equivocally denied that he said the Employer intended to close, that the organizing effort threatened the Company in any way, that he offered to correct grievances or problems, and that he raised the issue of plant closings. Olszewski testified, but was not questioned about this session by the General Counsel or the Union. During cross-examination, the Employer's counsel asked whether she attended. Olszweski acknowledged she had been present. No party asked Olszewski to describe what oc- curred at this meeting. Wilson testified that Curran said he was there to "find out what our grievances were and why we thought we needed a union." (Emphasis added.) The General Counsel asserts the Employer's unlawful motivation is shown by Curran 's having unlawfully solic- ited grievances and improperly interrogated Olszewski and Wilson. I find Curran's version more reliable than Wilson's. Wilson's direct testimony was presented in con- clusionary terms. She was less precise than Curran. She admitted, during cross-examination , Curran may not have used the word "grievances." In other respects to be noted below, Wilson was more generalized and apparent- ly confused as to what occurred and how many meetings 12 None of these employees appeared as a witness. 13 None of these employees was called as a witness she attended with Curran . Wilson admitted her recall of events was poor. In contrast, Curran was direct, sure, precise, comprehensive, and candid in rendering his ac- count of this meeting.14 Wilson's testimony must also be viewed in the context of the total absence of similar testimony from Olszewski. The General Counsel carefully adduced corroborative testimony from all other employee witnesses produced by him who were present together during the various al- leged incidents. I view the failure to have Olszewski confirm Wilson's account of this session a factor, though not dispositive, to be properly considered in evaluating the respective credibility of the participants in this meet- ing. There was no effort to challenge Curran's testimony that Olszewski, not Curran, raised the issue of possible plant closure or his denials that the - Union's organizing effort was a threat to the Employer. In all of the above circumstances I conclude there is no credible evidence to support the General Counsel's contention that during the conference attended by Ols- zewski (and which Wilson thinks she attended), Curran expressed unlawful motivation.15 Curran's and Lepore's second meeting on May 29 was with unit employees C. Fox and B. Watts. Fox and Watts both testified that near the meetings end, Curran said the Employer would close the Pennsau- ken plant before it would let the employees go union. Though Watts claimed he "told [other employees] what the meeting was about," he did not specifically testify that the alleged threat to close was relayed to them. In- stead, Watts expressly testified that he and Fox did not discuss the alleged threat with each other at any time. Watts, alone, during direct examination also testified that Curran "wanted to know why we wanted a union" and that "he [Curran] could do things to correct" the bases of employee dissatisfaction. Curran unequivocally denied asking Fox and Watts why they wanted a union, threatening to close, and of- fering to correct grievances. Curran testified he knew Fox was a leading union organizer and had signed a card. Curran testified he made the same general com- ments to Fox and Watts as he did in earlier meetings with other employees. Fox and Watts, according to Curran, talked about their personal problems. Fox accused the Employer of lying to him. Fox said he had been placed in the labora- tory temporarily and that he would be returned to a 14 I found Curran generally a credible witness The elements enumer- ated which lead to his conclusion will not be repeated below when dis- cussing other testimony against which his must be assessed I have also taken into account the contents of his personal notes and have accorded them some, but not dispositive, weight in my credibility resolutions Those notes substantially support his oral testimony 15 Wilson testified she was present at a second meeting which was also attended by employees Harris and Morrow, to be described below. The Harris-Morrow meeting was on June 5. Neither of them placed Wilson with them Yet, the substance of Wilson's testimony is similar to the de- scription of Morrow and Harris. The confused situation is exacerbated by the failure to have Olszewski relate anything said when (and if) she and Wilson were together 0lszewski apparently was not with Wilson. Ols- zewski's testimony (described below) only refers to a meeting between her and Lepore alone. There is simply too much confusion surrounding Wilson's testimony to make her a reliable witness compared to Curran. DESOTO, INC. former supervisory job in the production and mainte- nance unit. Also, Fox noted that when the industrial paint was reallocated in 1977, senior people lost their jobs and, according to Curran, Fox said that is why he expected the clericals and technicians to elect the Union. According to Curran, Watts commented that the Em- ployer was going downhill, and that in a rush to become productive the office and laboratory employees had been neglected and the price the Employer must pay was their unionization. Watts also complained that a change in plant managers decreased employee morale. Also, Watts said he had no great love for a union, but that his pay had fallen behind and he had been moved to the lab- oratory from the production area and watched the pro- duction employees make more money than he did. I find it improbable that Fox and Watts would not have spoken to one another about the alleged threat had it actually been made. There are other deficiencies in their testimony. The descriptions of the threat vary. Watts claimed Curran referred to the closing as neces- sary to prevent a "precedent," while Fox said Curran re- ferred to the closing as a means to prevent the employ- ees from "going union." Also, Fox did not at all mention the alleged interrogation and promises to correct griev- ances which Watts attributed to Curran. Both Fox and Watts attempted to explain these variations by indicating that the attendees had 'engaged in separate, simultaneous conversations. If this were true, then it is difficult to un- derstand how both of them were able to hear Curran's threat. In this context, I consider their, efforts to explain the selective character of their testimony a self-contra- diction. Fox impressed me as seeking to, shade his testimony in a light most favorable to the General Counsel' s cause. He acknowledged he looked for hidden microphones upon entering the conference room, he was a prinicpal union protagonist on behalf of the clericals and techni- cians organizing drive, and he was smarting from the Employer's failure to return him to a supervisory posi- tion in production after an illness. Normally, I would not discredit an alleged discriminatee simply because of his self-interest in the outcome of litigation. As to Fox, I am persuaded that his interests went beyond customary prej- udices. They were more deeply rooted and apparently bent to aid his cause. As to Watts, my, analysis of his cross-examination re- flects responses which conform to a good portion of Curran's own account of the meeting. On balance, I fmd Curran's more direct, comprehen- sive, and forthright testimony more reliable than Fox's and Watts'. Accordingly, I fmd the preponderance of credible testimony does not provide probative evidence of unlawful motivation during Curran's meeting whith Fox and Watts. The third meeting on May 29 among Curran and Lepore; and employees was with J. McLaughlin, B. Tom- linson, and K. Fisher. None of these employees testi- fied. t 6 Curran credibly testified that during this meeting 16 In assessing Curran's credibility, I have considered that there is no assertion Curran and Lepore made any statements tending to show un- lawful motivation to any of the employees with whom they met during 797 he made the same general comments as in earlier meet- ings with employees and that there was no discussion concerning plant closing, solicitation, or resolution of grievances and no statement that the organizing effort was a threat to the Employer. Curran again met with certain employees on June 5. Lepore again was with him. They spoke with employees V. Morrow and L. J. Harris. Both of these employees testified they met twice with Curran. During the first meeting, Harris claimed Wilson and Plant Manager Schwerd were also present. Morrow, however, omitted Wilson and Schwerd from her descrip- tion of the attendees at the first session. According to Harris, Curran analogized the organizing effort to the then recent baseball strike. Harris claimed Curran said the 18 employees organizing were taken by the Employer as being a strike threat. Morrow testified the baseball discussion occurred at the second, not the first, session. Moreover, Morrow expressly claimed she did not recall Curran using the word "threat." Morrow asserted, "from what I got out of his conversation was that the 18 employees at Pennsauken was a threat to the rest of the Company." As to the second meeting, Harris identified those present as including Morrow, Curran, and Lepore. Morrow, on the other hand, , testified Schwerd and Wilson also were present. Harris testified that Curran said the 18 clericals and technicians were a threat and if the employees had problems, they could talk to manage- ment about them. - Curran recalled meeting with Morrow and Harris on June 5. He claimed he made the same opening comments as to all other employees. Curran testified that Morrow and Harris complained they were not paid enough wages; Morrow said the Company discriminated against women in job opportunities and that the pension was not good. Harris agreed. Morrow complained about supervi- sors doing unit work. Curran testified he only listened to the complaints. He unequivocally denied saying that the Employer viewed the organizing as a threat, that he used' the word "threat," that the Employer was concerned with the impact of this organizing, that he was there to solicit or correct grievances, and that there was any discussion concerning closing. The testimony' of Harris and Morrow is patently con- fusing. What is clear is that there is a diversion between them as to whether Curran claimed the organizing effort was viewed as a threat. (This comment if made is urged by the General Counsel as evidence of unlawful motiva- tion.) Morrow's total failure to recall that Curran used the word "threat" casts serious doubt that it was said. Indeed, Morrow's cross-examination reflects the concept of a threat was derived 'purely from her own conjecture. Additionally, Morrow admitted she had not reported the threat to Union Attorney Brainard who interviewed her their campaign, but who this decision indicates did not testify. There is some, but not dispositive, evidence to negate the General Counsel's con- tention (made in the brief) that the Employer, through Curran, engaged in a "systematic" effort to make antiunion threats and statements to the unit employees 798 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and prepared her pretrial affidavit. In view of Curran's denial that he used the word and my overall impression of his credibility, I find he did not make the remark at- tributed to him by Harris. Curran testified that he also met with unit employees R. Lagerman and D. Smith in June.17 Curran testified that he opened the session with the same general com- ments regarding organizing as with other employees. He unequivocally denied saying the Employer was threat- ened by the organizing, threatening to close, asking for grievances, and asking why either of them wanted a union. Lepore separately is asserted to have made a statement indicating the Employer's 'unlawful motivation. Thus, Olszewski testified that she and Lepore spoke about the Union a week or two before the July 9 election. Ols- zewski testified that she went to Lepore to discuss the rumors she heard that the plant could close and possibly move to Florida. Olszewski first testified Lepore told her the ' plant could close and the - Company could take care of her if she did not sign an authorization card "or if I voted for the Company or against the Union. It's been a long time." (Emphasis added.) Then, still during direct examination, Olszewski testified, "I asked if something like this [closing and moving] could happen and he [Lepore] said it could." According to Olszewski, she and Lepore then discussed her position as sole support of her household. She first stated - it was she who raised the issue of her as a sole support, but later in her direct ex- amination and after being visibly prodded by counsel for the General Counsel changed her testimony to state it was Lepore, 'not she, who raised that subject. Olszewski further testified Lepore reminded her she had only one "paycheck." Finally, Olszewski testified Lepore said she would be protested if she voted for the Company. Lepore acknowledged he had a private conversation with Olszewski. He testified she claimed she heard an "awful lot of rumors" about the plant closing if the Union won. Lepore testified he responded, "that's not going to happen. Desoto won't close if 18 people become unionized. We already had some 80 people in the Union." According to Lepore, Olszewski then com- plained to him about unfair treatment by her supervisor. Lepore unequivocally denied saying anything regarding what would happen if the employees voted for the Union. Lepore did not recall using the word "paycheck" during this conversation. Earlier in this decision, I have found Olszewski's testi- mony to be confusing and, by her own admission, admit- tedly based on a vague recollection and more a narrative of her personal impressions,of what was said than a re- flection of the words used. Olszew'ski's testimony about the Lepore incident, when viewed in the context of the General Counsel's prodding to have her state it was Lepore, not she, who raised the subject of plant closing during their private meeting, is self-contradictory. More- over, the italicized portion of her testimony quoted 17 Lagerman testified on the issue of "chilling effect" of the closing. That matter will be discussed below: He was not questioned regarding his meeting with Curran. D. Smith did not testify. above is tantamount to an acknowledgment of the impre- cision of her testimony due to the passage of time. In contrast to this, I have already commented on my view of Lepore as a witness. Those observations are in stark contrast to the responses and demeanor of Ols- zewski. As between them, I credit Lepore's denial that he threatened to close the plant during his conversation with Olszewski. This conclusion is logical. As will be shown below, the decision to close was not made until 6 months after this conversation, was made in the Employ- er's headquarters city, and Lepore was not a party to it. In view of this, and the careful instructions to avoid threatening remarks conveyed to him in May, coupled with the amicable relationship Lepore personally en- joyed with union representatives, it is reasonable to con- clude his conversation with Olszewski occurred in the manner described by him. Thus, I find no probative evi- dence of unlawful motivation flows from Lepore's con- versation with Olszewski. Other motivational evidence was offered by the Gen- eral Counsel through V. Morrow and L. J. Harris. They implicated then Assistant Warehouse Superintendent J. Adams and Plant Manager Schwerd. A regular part of Adams' job was to make daily visits to the data processing room where Morrow and 'Harris worked. Morrow, using generalizations, testified that after the Union requested recognition Adams was "always talking' about the same thing," to wit, "that it wasn't necessary to go union and it was better ways to solve our problems, and the possibility of the plant clos- ing if we did go union, and . . . [Harris] . . . said why would they want to close our place when we're doing so well, and . . . [Adams] . . . said Greensboro, North Carolina could handle our work load." Morrow further testified that on election day she heard Adams "talking about the same thing, not going union, and the possibility of plant closing, and that he had seen it happen at a place where he had worked, and the people were crying and holding on to their machin- ery as they were dragging it out." According to Morrow, Schwerd entered the room during Adams' al- leged comments and Schwerd smiled, nodded in agree- ment, but said nothing. Harris, in abbreviated form, merely testified Adams, frequently asked her, "why did we have to sign up for a union." And said the employees did not need a union, because they could always talk to management. As to the election day incident, Harris testified Adams said the employees did not need a union, the plant could possbily close, the work could be -done in Greensboro, and that he had worked in a plant where "people were hanging onto the machinery when it closed." Harris then testified Adams said nothing else. However, after consid- erable leading, counsel for the General Counsel elicited Harris' testimony that Adams also said the employees at the plant which closed were "crying."18 Harris also testified that after the employees signed au- thorization cards, Schwerd, who formerly had been friendly, never spoke to the employees. 18 This leading apparently was designed to corroborate Morrow. DESOTO, INC. During cross-examination, Morrow recanted some- what, admitting she was not sure Adams mentioned Greensboro during the election clay conversation, but she believed Adams twice mentioned Greensboro at some time. During her cross-examination, Harris acknowledged she had been friendly with Adams. Harris' pretrial affida- vit contains the alleged closure comment, but omits any reference to Greensboro. Nonetheless, Harris remained steadfast in her recollection that Adams had suggested the employees' work could be done in Greensboro. Harris was self-contradictory and confusing. During her direct testimony, Harris claimed Adams stopped convers- ing after the authorization cards were signed. Next, during cross-examination, Harris insisted that Adams mentioned Greensboro on many occasions during the same period of time. Adams was no longer employed by the Respondent Employer when he testified. He had been laid off as a result of the Pennsauken closing . He agreed he and Harris had been friendly and often engaged in conversa- tion while he was waiting in the data processing room to pick up his work. Adams candidly acknowledged that their relationship had cooled during the campaign. Gen- erally, Adams testified, Harris would make derogatory remarks about the Employer and he would take the Em- ployer's side. He agreed that he frequently opined unions "are not productive. They don't provide jobs. Companies provide jobs." Adams gave a rather comprehensive account of his election day discussion, although he admitted to recalling only "some of it." Thus, he claimed Harris and Morrow were unusually jubilant that day. According to Adams, it was Harris who opened the conversation, saying "today, is the day," Adams said, "I hope you considered what you're about to do." When Harris answered she did, Adams claimed he said , "[U]nions don't provide jobs. Companies provide jobs. If the Company decides to-or if the Company closes the plant„ what are you going to do?" Adams testified Morrow answered, "We'll just have to find another job." Adams claimed he commented that Harris and Morrow have good jobs because he had to interrupt them from reading their novels to get them to complete the work he was there to retrieve. Adams testified that Schwerd was not part of the conversation and he (Adams) did not know whether Schwerd was present. Adams unequivocally denied he ever told Harris the Pennsauken work could be done in Greensboro or that the plant would close if the Union won the election. As to the alleged conversations other than on election day, Adams testified he and Harris discussed the organiz- ing effort more than once. According to Adams, each such conversation was initiated by Harris. Adams con- ceded he spoke of his experience with unions at other plants. According to Adams, he told Harris the salaried employees of another employer of his had a union elec- tion and they voted it down. Also, he claimed he told Harris that at yet another employer where he had worked, the company asked the union which represented the employees for concessions during collective bargain- ing. When the union would not accede, the employees 799 blocked the gates, trying to keep trucks from taking the equipment. Adams reflected that unions can be "very rigid, too rigid without considering." Finally relevant is Adams' testimony that he had asked Harris, " [W]hy do you feel you need a union when you have a good job?" Generally, I found Adams to be a relaxed, articulate, forthright, careful, and deliberate witness. He testified he was present when Curran presented the "do's" and "don'ts" of campaigning . Adams' demeanor persuades me it is not likely he would have violated his instruc- tions. He freely admitted relating his prior experiences with unions and asking why Harris thought she needed a union. In isolation, the latter question arguably comprises unlawful interrogation . 19 The context of friendly conver- sation, initiated by Harris, in the total circumstances herein, in my view, dispels the requisite tendency to coerce. The complete testimony of those involved in these alleged incidents leads me to conclude that the conversations were perceived by all participants as person to person, rather than supervisor to employee. In this connection, it is noted Adams exercised no supervi- sory responsibilities over Harris and Morrow. Additionally, I credit Adams' denial he said anything about Greensboro . The record reveals Adams first learned of the closing on February 4, 1982, together with all rank-and-file personnel. It is improbable that he would have made such a blatant reference in all the in- stant circumstances. I fmd Harris and Morrow prone to exaggeration and self-contradiction. Their testimony, when superimposed upon one another, reveals inconsistencies and exaggera- tions which diminish their testimonial reliability. In agreement whith the General Counsel, I find Adams' admitted statements are expressions of antipathy toward unions. They can be readily discerned as such. Nonetheless, that conclusion must be balanced against the setting and circumstances which I find exist here. In the context in which the statements were made, they do not bear a coercive tenor. They occurred during friendly conversation initiated by one of the unit employees. Adams was a low-level supervisor who clearly had no role whatsoever in studying or making the decision to close. Those tasks were conducted by higher manage- ment officials, apd several months after the alleged im- proper statements were made . Finally, Adams remarks were made in a context otherwise void of evidence that the Employer engaged in any other conduct which was coercive. In the foregoing posture, I fmd Adams' statements are not sufficiently probative to support counsel for the Gen- eral Counsel's contention that he demonstrated the Em- ployer's unlawful motivation during his discussions with Harris and Morrow.20 19 There is no 8(a)(1) allegation regarding any statement alleged to in- dicate unlawful motivation. 20 The General Counsel argues Adams' credibility is in doubt because he acknowledged, during cross-examination, that when asked by a former employee if he would testify on behalf of the Union, Adams asked how it could benefit him In view of Adams' layoff and the plant having been closed over a year at the time of the hearing, I find Adams' response equally susceptible to the conclusion it was an expression of futility as it Continued 800 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The General Counsel argues that Schwerd's nodding in agreement with Adams' alleged threatening comments regarding what occurred at the movement of equipment at the closed location of Adams' former employer evinces the instant Employer's unlawful motivation. I disagree. Though Adams was not sure whether Schwerd was present during the election day conversation, the record shows he could have been there if Adams had been facing away from the door. Nonetheless, Schwerd credi- bly testified he was in his office during the time the Adams' conversation occurred. It is not certain Adams spoke of the closing on election day. Even assuming Schwerd had been present, and nodded, when Adams talked about the closing, that action is ambiguous. Even Morrow testified Schwerd said nothing. In these circum- stances, I reject the General Counsel's argument that Schwerd's alleged nodding is coercive or that it serves to demonstrate that a scheme to close the plant in Febru- ary 1982 was already in progress as early as July 1981 and the Employer's high management officials, such as Schwerd, knew of such a plan at that earlier time. Alleged evidence of unlawful motivation persists after the election. Magorry testified in abbreviated fashion that in August 1981 Lepore told him that "this thing will be a lot worse than a strike," after commenting to Magorry that if there would be a strike, the Union should conduct it in good weather. Lepore admitted talking to Magorry sometime after the election. According to Lepore, he and Magorry "had a running joke" between them. This involved Magorry quipping if "you guys can't agree on a contract, if you're going to have a strike, let's have it in the summer time so I can go to the shore, or I could play, or I'd go on vacation." According to Lepore he re- torted in a joking fashion, "[Olkay, I'll try and accom- modate you." Lepore denied saying this could be a lot worse than a strike. On the basis of my earlier resolution of the relative credibility between Lepore and Magorry, I accept and credit Lepore's more comprehensive account of the al- leged discussion. I find his version plausible, especially given the relationship which existed between them, and the absence of credible evidence showing Lepore had any notion, in August, that the plant would be closed. Yet another incident, in December 1981, is asserted by the General Counsel to demonstrate unlawful motivation. This alleged incident was provided by production em- ployee M. Masny, a packing machine operator. Masny testified that he and Schwerd spoke on the production floor. According to Masny, Schwerd said production was going well; that he requested corporate headquarters to provide a new packing machine which provided in- creased production capacity; and that he (Schwerd) was after more business, but the "cockroaches upstairs are causing me" trouble.21 is to the conclusion that he was soliciting some inducement for his testi- mony This is particularly manifest from the description of the timecard and unemployment line incident to be described below. 21 The clericals and technicians worked "upstairs," as did manage- ment Schwerd recalled having a discussion with Masny re- garding acquisition of a new packing machine. However, Schwerd unequivocally denied he referred to anyone as a cockroach. The General Counsel argues the reference to cock- roaches, if made, "underscores the Employer's deep re- sentment towards the newly organized bargaining unit who were at the time still engaged in" contract negotia- tions; and also claims that headquarters personnel "al- ready was implementing its plans to discontinue-Pennsau- ken production, and that Schwerd knew of those plans" contrary to his assertion that he first learned of them in January 1982. During cross-examination, Masny was self-contradicto- ry. Then, he testified, as appears in his pretrial affidavit, he assumed Schwerd meant he had contacted headquar- ters for the new machine. This was contrary to Masny's direct, testimony that Schwerd expressly mentioned it was the headquarters office to which he made his re- quest. In these circumstances,, it is difficult to ascribe the meaning desired by the General Counsel to Schwerd's remarks. If it was not headquarters about which Schwerd was talking, the basis for an inference of unlaw- ful intent vanishes. Masny's self-contradiction makes it questionable whether Schwerd involved the corporate headquarters in his conversation. Moreover, I find it unnecessary to decide whether Schwerd referred to anyone as a cockroach. If he did so, the application of the term is ambigous. Assuming it was meant to apply to the clericals and- technicians, a fact which is uncertain because Masny testified Schwerd did not define the word, then it might mean that whoever was responsible for authorizing new equipment was then consumed in the ongoing negotiating process and it was the latter company officials to which the term applied. Also, as will be discussed below, certain of the Employ- er's officials were then involved in the preparation and consideration of the cost analysis studies which the Em- ployer submits was the basis of the Pennsauken closing. In such a milleu, I am unwilling to ascribe the sinister meaning requested by the General Counsel to the "cock- roach" comment if it had been made., Accordingly, I find probative evidence of unlawful motivation derived from the Schwerd-Masny conversation. The date of Pennsauken's closing gives rise to another assertion by the General Counsel that the Employer, this time through Adams, revealed its unlawful antiunion mo- tivation. Adams was standing near the timeclock as the employees were punching out after the closing and lay- offs that day. Production employees R. Kowatz and M. Browna testified that as they 'walked by the timeclock, Adams said, "I hope the .12 m-r f-rs starve to death." (Twelve clericals and technicians voted for union repre- sentation.) Adams did not remember making that remark. Instead, Adams recalled he was extremely upset at the time and told production employees J. Carpenetta and T. Nien- ault, in the shipping office that they "can thank the 12 people up front for" them not having a job. Adams fur- ther credibly testified that no one had told him the union election caused the closure and layoffs. DESOTO, INC. 801 Carpenetta testified that, on February 4, Adams, in effect, said it was those who voted for the Union who closed the plant. The General Counsel apparently does not refer to this testimony in support for his claims Adams' comments reflect unlawful motivation. Considering the state of confusion, dismay, and discon- tent which pervaded the atmosphere on the closing date, it is reasonable that memories (such as Adams') might be obscured. Assuming, however, the said what Browna and Kowatz ascribed to him, I reject the General Counsel's contention that that remark constitutes evidence of the Employer's unlawful motivation . I have already found no credible or probative evidence exists to show Adams had prior knowlege of the closing. In the total context of this event, I accept Adams' explanation he was simply giving vent to the emotionally charged climate which then existed. I conclude the circumstances make it rea- sonable to conclude, as I do, that if Adams made the al- leged statement, it was merely an expression of personal frustration. The final shred of evidence asserted by the General Counsel to show the Employer' s unlawful motivation was presented by production employee F. Zabawa and Nienault who testified they met Adams on an unemploy- ment line on February 9, 1982. (Carpenetta also was present, but did not testify as to what occurred on Feb- ruary 9. Employee Schiffler also was present.) Zabawa and Nienault testified they heard Adams say he was there because of the 12 employees who voted for the Union and that because there was a large group of clericals and technicians in the Employer's Illinois re- search facility neither Sears nor the instant Employer would put up for that group of employees having a union. During cross-examination Nienault said he thought Adams was "just laying off steam," and that he told Adams he (Nienault) thought the layoffs were caused by a combination of factors, including economic conditions. Zabawa during cross-examination said Adams ap- peared bitter and that he (Zabawa) had only a vague recollection. of what was said. Adams testified that when he met the employees on February 9,' it was they who blamed Schwerd for the closure. Retorting, Adams candidly admitted he said they could "thank those 12 a-- h-s no front for our standing in this unemployment office." Adams claimed this was his own opinion22 and that he had only been officially told the closing was for economic reasons. Only 5 days had elapsed between the closing and the unemployment line incident. It is not likely the emotional distress generated by the closing had yet dissipated. Thus, on the basis I have concluded the timeclock inci- dent of February 4, if it occurred as described by the employee witnesses, contained no probative evidence of 22 The parties' stipulation that Adams was in layoff status and not a supervisor on February 9 appears to have been intended by the Employ- er to provide the basis for arguing any remarks made on that date cannot be imputed to the Employer. At the hearing, I reserved ruling on the Employer's motion to strike Nienault's testimony because Adams was not a supervisor after the layoff In view of my disposition of the substantive issue concerning Adams' postlayoff statements , a ruling on this motion is moot unlawful motivation, I make the same conclusion as to the Adams' comments on February 9. On all the foregoing, I find there is no credible and probative evidence to demonstrate either that the Em- ployer habored unlawful motivation or that it engaged in a systematic program to defeat the employees ' Section 7 rights. 2. Postcertification negotiations On July 29, after having been certified as the collec- tive-bargaining of the clericals and technicians, the Union sent the Employer a written request for certain fi- nancial information as a prelude to negotiations . This re- quest was customary. Submission of the information was delayed because the Employer 's officials were engaged in other pressing labor relations matters. Curran took charge and the information was forwarded to the Union. (It was during this delay that the Magorry-Le`pore con- versation about a strike being called in good weather oc- curred.) On October 1, the parties met jointly for negotiations. The Union presented its so-called master form contract. The Union said it wanted a contract for the clericals and technicians which tracked the terms of the production and maintenance contract . The Employer resisted, claim- ing it did not want a wall-to-wall unit . The Union con- tended that would not be the case; that there would indeed be separate agreements . The Union presented no economic proposals that day. It wanted to negotiate lan- guage first. The Employer asked for a complete propos- al. The Employer claimed it was concerned about the impact of these negotiations upon its other clericals and technicians who were yet unorganized. The Union ac- cused the Employer's officials of evidencing a negative change in attitude toward the clericals and technicians. The Employer contended those complaints had no sub- stance. The parties met again on October 20, November 11 and 12, and' December 10. On October 20, the Employer indicated it would agree to the language of the produc- tion and maintenance contract, except as to five clauses which included seniority, stewards, supervisors perform- ing ' bargaining unit work, subcontracting, and mainte- nance of standards. The Union requested two changes which were unacceptable to the Employer. During November 11, the parties further discussed the language changes in the disputed areas. On November 12, the Employer made a written proposal. On December 10, the Union rejected the Employer's November 12 proposal because the union negotiators be- lieved it contained more changes than in the five disput- ed areas. The meeting ended without agreement . (At this time, the alleged Masny-Schwerd conversation took place.) The mediator who attended the December 10 session attempted to schedule another session for January 4, 1982, but Curran was unavailable . The next bargaining session was then scheduled for February 10. That session was not held because the closing of Pennsauken inter- vened. 802 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Concurrent with the negotiations just described, the Employer was engaged in certain economic studies, which it claims was the sole basis for making the deci- sion to close. 3. The Employer's economic studies The immediate studies conducted in 1981 by the Em- ployer were a part of a series of studies it makes on a recurring basis. To fully comprehend the events which are asserted as the basis for the closing, it is necessary to describe the nature and breadth of the Employer's pro- duction capacity studies. The Employer maintained a perpetual plan on capital expenditures. The plan contains projections for 5 years. It is kept current by evaluation studies which are made at approximately 3-year intervals. The interim evalua- tions result in revisions to the 5-year plan, as circum- stances require. For purposes of this decision, the 5-year plan will be considered synonymous with a strategic plan. Short-range studies are also made. Their results normally necessitate changes to the strategic plan. The short-range studies will be referred to as tactical stud- ies.23 In 1976, the Employer projected Sears' market share of the consumer paint market would grow twice as fast as the overall do-it-yourself paint market. Also, it ex- pected a 10-percent growth rate in the Southeastern United States for Sears paint. Late that year, the Em- ployer decided to construct a new plant in Orlando. This was done to alleviate the potential shortfall in paint man- ufacturing and warehousing capacity. It was not until early 1979 that the Orlando plant became operational. Concurrently, the Employer instituted technological improvements in its existing paint plants. Those improve- ments resulted in production of an additional 3 to 4 mil- lion gallons of paint per year between 1978 and 1981. The Employer's most recent strategic plan covers the period 1979 through 1983. That plan is dated June 28, 1978. Among the anticipated projects, the plan made an assumption that if growth continued as expected, the Employer would need to establish a new plant in New England which "should be in production by 1982." Es- tablishment of that plant was considered in order to retain the Employer's self-determined level of 20-percent excess production capacity to secure the Employer against future growth and unexpected catastrophic events in its existing plants. Because of the conditions de- scribed immediately below, the Employer did not imple- ment the New England expansion plan. The Employer's optimistic forecasts contained in stud- ies made in 1976, 1977, and 1978 became visibly errone- ous in 1979. In 1977, the Employer produced its highest gallonage volume in its history. That volume decreased 8 percent in 1978. In 1979, the volume further decreased .6 percent from 1978. By 1979, the Employer's actual pro- duction totaled 32.1 million gallons of paint. Its strategic plan had anticipated 1979 production would reach 39 million gallons. Thus, there was a shortfall of 7 million gallons. At that point, W. Anderson instituted a cost-control program. The program was designated as plan C. That plan resulted in cost reductions of $2.1 million. Another cost reduction program was undertaken in 1980. That was designated plan Z. Concurrently, the volume of gallons sold continued their decline. Thus, the 1980 volume was 28.4 million gallons, while the Employ- er's projection for that year anticipated 40 million gal- lons would have been sold. The decrease from 1979 to 1980 was 11.5 percent. On July 9, 1981, the Employer's president, R. Missar, issued instructions "to submit lean budgets" for 1982 op- erations. He promulgated guidelines which were distrib- uted to each plant manager. During the time the production of numbers of gallons and sales declined, the cost of raw materials required the Employer to negotiate its largest single price increase in 1979. This negotiation raised its average selling price 18.9 percent effective in 1980. Approximately 16 percent of the 18.9-percent increase was attributed to increases in raw material costs. In order to maintain the $9.99 "magic price" described above in section III,A(3), the Employer absorbed the difference in costs, except for raw material increases. Merchandise Director S. Mountsier testified without contradiction that Sears continued its pricing pressure on the Employer by requesting 1981 prices even lower than those of 1979. In 1981, that price reduction pressure continued. It re- sulted in the Employer making price concessions of $3 million to Sears for 1982 prices. Because the cost control programs (plans C and Z) ef- fectively reduced costs to a minimum, the Employer searched for other means of coping with the pricing pressures. Plant budgets for 1982 were returned to plant managers. Those managers were asked to recompute them to effect even greater cost savings. The resubmis- sions totaled $1 million in savings for consumer paint op- erations. R. Anderson testified the Employer was "in se- rious trouble . . . as far as profitability was concerned." Further, he testified he believed the Employer had excess capacity.24 W. Anderson conducted his study in late November and early December 1981. He reported his results to R. Anderson in mid-December. The study concluded that closing the Pennsauken facility would result in $5 million per year cost savings. The results were ordered reviewed by the division controller and manufacturing director. The study's accuracy was confirmed. A report to that effect was made to R. Anderson in early January 1982. Concurrent with the cost capacity study conducted by W. Anderson, the Employer's vice president, D. Ber- gren, was asked to, and did, engage in an impact study of the chemical products division. In early January 1982, Bergren reported that elimination of Pennsauken and 22 The term "strategic" and "tactical" studies are adopted from testi- mony of the Union's expert witness Professor E Krendel He testified that, within the industrial commercial community, strategic planning has a "time horizon" of roughly 3 to 5 years, and tactical planning involves short-range planning with "a time horizon of about a year." 24 The term "excess capacity" refers to the ability of the paint produc- tion facilities to generate more gallons of paint than could be sold As previously indicated, the Employer found it desirable to maintain a normal excess capacity level of 20 percent to cover contingencies DESOTO, INC. 803 consolidating operations at Joliet would, save approxi- mately $850,000 annually. In mid-January 1982, R. Anderson met with Missar. They reviewed the conclusions of W. Anderson's and Bergren's studies. They agreed Pennsauken should be closed. They arranged to meet with key officers of the Employer to discuss all implications of a decision to close that facility. Shortly thereafter, Missar and R. An- derson met with Vice President of Finance Lamely, Vice President Barriero, and W. Anderson. They decided to close Pennsauken if, according to R. Anderson, the Em- ployer "could legally do so." A legal opinion was sought. On January 15, 1982, Attorney Berman met with Missar, Barriero, and R. and W. Anderson. They asked for his opinion. Berman reviewed the proposal and they discussed the labor relations ramifications. Berman told them it appeared the situation was governed by First Na- tional because the closing appeared to him to be a basic determination with respect to scope and direction of the enterprise. W. Anderson then met with the plant managers affect- ed by the decision to close Pennsauken. He provided them with copies of his study. He asked the managers to review the study and report their views of its feasibility. The managers responded they could absorb the volume of production which would be reallocated to their plants. Also, they reported the savings estimated in W. Ander- son study were understated. They claimed the Employer could save approximately $330,1000 more than Anderson's study had anticipated.25 The Employer did not inform the Union it had under- taken any of the studies and analyses mentioned above, nor that closing of Pennsauken was under consideration. On January 22, 1982,, Berman met with Curran, W. Anderson, and some other employer officers. They re- viewed all the studies and reports then discussed how to notify the Union of the decision to close. On-January 25, Berman and Curran met. They decided to arrange a meeting with the Union. Berman called Union Secretary-Treasurer Morris, told him he wanted to meet with Morris and only one other person about a "very important" matter. Berman did not disclose the subject. Morris asked for the mediator to attend. Berman reluctantly agreed. They tentatively arranged to meet on February 1. Berman called the mediator. The meeting was ultimately scheduled for February 4, because Morris was unavailable on February 1. 4. The closing and subsequent bargaining On February 4, 1982, the parties met. Curran and Berman represented the Employer. The Union was rep- resented by Morris, Recording Secretary J. Smith, J. Sheehan, and clericals and, technicians negotiating team members R. Wilson and C. Fox. The mediator was present. Berman began by reading a prepared statement. The statement announced Pennsauken was being "permanent- ly" closed, all Pennsauken, employees would be terminat- ed, and all Pennsauken work would be allocated to other of the Employer's plants. Specifically. the statement ad- vised the Employer would "transfer the production of paint to our plants in Orlando, Greensboro, Columbus and Chicago Heights. Detergent production will be transferred back to our plant in Joliet." Berman indicated the closing would occur that day. - Morris said he wanted the production and maintenance stewards present because this matter involved the entire employee complement. The meeting was briefly ad- journed, and resumed when Union President Yoeman, Lepore, and the production and maintenance stewards arrived. Berman continued to read from the prepared statement. He paraphrased the concluding portion. Eco- nomic reasons were ascribed to the closing. The Union was advised a cleanup crew would be recalled. Morris asked to negotiate over such things as vacations, pension withdrawal liability, severance pay, insurance, and trans- fers. Around 2:50 p.m. on February 4, Schwerd read an an- nouncement to all employees telling them the plant was closing. His statement directed the employees to clean their lockers and go home. On February 16, the parties met. The Union was ad- vised 22 employees would be recalled to wind down the operation. The Union made certain proposals regarding the effects of the closure. It proposed severance pay, in- surance continuation, benefits for early retirees, vacation, transfers, and other matters. Concerning pensions, the Union provided a letter which estimated the Employer's withdrawal liability under the pension, plan. On February 26, the parties met again. Each presented several offers and counteroffers regarding effects of the closing. The Employer presented a final offer. The Union caucussed, returned, and rejected that offer. As noted above, the Union grieved the closing in March and the arbitration hearing was conducted in May.26 On August 31, after receiving the arbitrator's initial award, the Employer informed the Union it was willing to negotiate over the decision to close, and over its ef- fects. On September 9, the Union responded it was avail- able to negotiate. On September 10, the Employer proposed, as to the decision, that Pennsauken remained closed. By letter dated September 14, the Union responded there was nothing to discuss concerning the production and mainte- nance unit, in view of the arbitrator's award. However, the Union said it was prepared to continue negotiations for a clerical and technician collective-bargaining agree- ment. On September 15 the parties met again. The Employer again proposed to close the Pennsauken facility and keep it closed. The Union responded it would not negotiate the closing. But would negotiate for a contract covering the clericals and technicians. On September 20, the parties again met Each party remained adamant in its respective positions. 21 This report, in effect, meant even greater cost savings to the Em- 26 The scenario of events of the arbitration and district court mvolve- ployer than expected when the decision to close was made ment appears above. - 804 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On January 5, 1983, the Employer wrote the Union. It claimed readiness to negotiate all outstanding issues. On January 10, Union Attorney Markowitz responded. His letter expressed confusion as to what the Employer was willing to negotiate. On January 11, the Employer advised it was willing to negotiate both the decision and effects of closing. On February 22, the parties met. Once again, the Em- ployer proposed to keep the plant closed. The Union asked what concessions or agreements were necessary to induce the Employer to reopen the Pennsauken plant. The Employer reviewed the asserted economic reasons for the closing. On February 28, the Union wrote the Employer re- questing financial data pertaining to Orlando, Greens- boro, and Columbus plants. This was asserted necessary to permit the Union to analyze cost factors. On March 3, the parties met. Some of the information requested by the Union was provided. The remainder was promised. No other meetings were held. No witness could state whether the Employer delivered the balance of the infor- mation. C. Analysis 1. The economic defense As noted, the Employer contends the Pennsauken plant was closed solely for economic reasons, unrelated to labor costs. The General Counsel argues the 1981 cost and capac- ity studies were a subterfuge to disguise its discriminato- ry motivation. He does not seriously challenge the statis- tical accuracy of the studies. Instead, the General Coun- sel interposes a series of other financial and statistical data and events which, it is claimed, provide the basis for inferring the economic defense is pretextual. The Union joins in the attack mounted by the General Counsel. In addition, the Union (in support of its LA Marine theory) argues the substantial economic evidence in the record clearly shows there is no substance to the Employer's protestations that labor costs were not an op- erative factor in the decision to close Pennsauken. (a) The General Counsel, in effect, contends the Em- ployer's studies were concocted to provide a defense to this action. The thrust of this position is that the Em- ployer's undeniably sound financial status belies depend- ence and emphasis on cost savings. Clearly, the Employer's sales, in the chemical coatings division, increased from $262 million in 1981 to $278 mil- lion in 1982. Missar, in the Employer's 1981 annual report had declared consumer paint sales to be resistent to recession. The record shows the Employer sold Sears over 99 percent of the latter employer's paint require- ments and that Sears is the Employer's largest single stockholder. The General Counsel argues that these fac- tors cast doubt on the Employer' s assertion that the stud- ies were genuinely undertaken in response to pricing pressures and that the Employer "really is not in danger of losing its Sears account." I disagree. P. Anderson, the Employer's expert witness, credibly testified that the advent of such things as aluminum siding contributed to the competitive nature of the con- sumer paint market and was a basis of his observation it was a "no-growth" industry. The excessively high increase in raw materials cost and the "magic sales" price of $9.99 could only serve to contribute to the feeling of insecurity of any producer. P. Anderson's testimony showed the Employer's reputation for producing paint of the highest quality. To maintain that stature at a saleable market price, in the surrounding circumstances, surely is a matter of grave concern for any employer. In this context, Missar's opinion that the consumer paint market is recession proof is neither reli- able nor probative. Moreover, Missar's statement is cited out of context. Missar actually wrote "consumer paint sales tend to be recession resistant." (Emphasis added.) He also wrote that "the depth and duration of the current recession are uncertain. DeSoto is hopeful that its 1982 sales and earn- ings will surpass those of 1981." As noted above, his hopes were fulfilled. That occurred, of course, in the framework of the Pennsauken closing. The totality of cicumstances persuades me that the studies were a natural consequence of the Employer's ef- forts -to_ fulfill Missar's expectations. Reduction of costs and retention of market position are ingredients of profit- ability. Even Professor Krendel characterized the Em- ployer as a prudent economic forecaster. Thus, I fmd the 1981 studies show the Employer's consistent and histori- cal efforts to maintain and enhance its market position. Finally, there is little substance to an assertion that Sears' stockholding in the instant Employer safeguarded the latter's position. That argument ignores the evidence that in 1978 Sears bought I million gallons of paint from a different producer, not DeSoto. The contractual ar- rangement between the Employer and Sears permits such an event. The 1978 incident shows the Employer lived with a very real threat it could lose Sears' business. Eco- nomic reality dictates an imperative that Sears, and indeed any other 'retailer, do business with manufacturers who would sell its merchandise at a saleable price. In this posture, I find little probative value in the Employ- er's overall successful profit picture. The increased prof- its between 1981-1982 virtually are irrelevant. - (b) The General Counsel, in effect, contends there is no evidence that the Employer possessed a known need that it had been operating with excess production capac- ity when it began the 1981 studies. The documentary evidence shows that the Employer's production for Sears during 1980-1982 increased from 28.4 million gallons to 33.5 million gallons. I have reported above that W. An- derson felt that the Employer's production capacity had increased to excessive amounts. He attributed this to the acquisition of more efficient equipment and installation of new production system. I concede that when the 1918 studies began, the Em- ployer had no hard statistics showing precisely to what extent is production capacity had increased. Indeed, it was not until the plant managers reviewed the initial re- sults of the study that the Employer had full knowledge of the extent of its increased production capacity. These factors, however, neither support an argument the stud- DESOTO, INC. 805 ies were contrived for illegitimate. purpose or that W. Anderson's credibility is diminished. No employer witness claimed the Employer knew the extent of its excess capacity. That was precisely one function of the study. The plant managers simply con- firmed W. Anderson's conclusion, made in his initial report of the study, that their excess capacity was such that their plants could absorb the gallonage produced at Pennsauken.27 The fact that more efficient operations generated in- creased gallonage does not necessarily mean, as is im- plied by the General Counsel's position, that the 20-per- cent level of desirable excess capacity remained constant. Whether that was true was an object of the studies.28 The record as a whole demonstrates the Employer's continuing program of cost analysis. In the context of the severe pricing pressure of the immediate 2 preceding years, and the cost reductions already effected, it is plau- sible and logical that the 1981 study would have been di- rected to determining the extent of excess production ca- pacity as well as cost factors. Accordingly, I find the fact that the Employer's full knowledge of its capacity was unknown to it before the study was completed has no adverse impact on its economic defense. (c) The General Counsel, in effect, claims the 1981 studies were illusory because they ignored and failed to consider the Employer's profitability. 29 I agree all the evidence, especially documentary, fo- cuses on cost reduction and savings. The oral testimony shows managerial discussion revolved around those sub- jects. There is no evidence of discussions regarding the Employer's profits. Thus, the General Counsel is literally correct. Nonetheless, I conclude there was no need to explicitly address profitability. Consideration of cost reduction and expense savings are not conducted in a vacuum. Realistically, profits are the goal of manufacturing operations in American indus- trial life. Deliberations involving minimizing operating costs and expenses inherently have maintenance and en- hancement of profits as their objective. Excesses in oper- ational expenses unquestionably diminish profits. Thus, if a study shows, as did the 1981 study, that a condition of excess production capacity was present, then profits would diminish. I find no merit to the argument profit- ability was not, considered. In this regard, the General Counsel notes that the con- clusions as to how much could be saved by closing Pennsauken were reviewed for accuracy only in connec- tion with that facility. No effort was made to engage in similar reviews as to the other plants encompassed by the study. Thus, the General Counsel's position implies that the Pennsauken closing was predetermined. On this 27 In this connection, the record shows that after Pennsauken closed no additional production and maintenance employees were hired at any of the plants to which the work was allocated. Only two color house em- ployees (clerical and technican unit), and two nonunit employees (an ac- countant and warehouse superintendent) were added 25 Though R Anderson testified, "We recognized we had excess ca- pacity," I decline to use that comment to hold there is an inconsistency in the Employer's defense because his comment relates a conclusion reached after he had seen the results of the study 29 As stated above, R. Anderson asserted he perceived the Employer's "profitability" picture placed it in "serious trouble " issue, W. Anderson credibly explained that the additional studies were not warranted because the percentage of sav- ings shown for each of the other locations vis-a-vis Penn- sauken would have remained unaltered-only the dollar amounts saved would have changed to show higher sav- ings at each plant. Also, the Genreal Counsel claims Professor Krendel's testimony reflects DeSoto's cavalier and cursory ap- proach to the 1981 studies. Specifically, Krendel testified he would not have relied on the 1981 tactical study as the basis for a decision to close Pennsauken, especially in view of the Employer's "sophisticated" strategic plan- ning. Krendel testified the following factors are normally among those considered in deciding on a plant closing and reallocation of its work: market share, demography, transportation and communication networks, availability of labor force, applicability of governmental regulations, and technological expertise of available labor. During cross-examination by the Union, W. Anderson testified (in an unsolicited manner and before Krendel testified) that demography was an element of input to his study. Then, during surrebuttal, W. Anderson credibly testified each of the factors mentioned by Krendel in fact served as input to the study. Examples of how each was considered were provided.80 (d) The General Counsel, in effect, also argues that the 1981 study is perfunctory and, hence, unreliable for the purpose claimed by the Employer. In this regard, Curran testified the original decision (made in January 1982) was to transfer Pennsauken's paint production to Orlando, Greensboro, Columbus, and Chicago Heights. That is what Berman announced to the union representatives on February 4. However, Curran acknowledged that is not what happened. Actually, all of Pennsauken's production went to Greensboro and Columbus; some production from Columbus went to Chicago Heights; and some pro- duction went from Greensboro to Orlando. W. Ander- son's testimony at the arbitration hearing reflects that the changes just described resulted from postclosing discus- sions among employer officials. The General Counsel as- serts this "last minute change in a decision of such great importance" tends to negate the Employer's defense, I do not agree. As noted above, Krendel on whom the General Coun- sel relies for other matters, praised the quality of the Em- ployer's strategic plans. I find the Employer's postclosing alteration in plans nothing more than a logistical matter. It is irrelevant to the accuracy and the reasons for the study. It is not a separate decision to close. This is espe- cially true when viewed in light that no new production employees were added the closure. In the absence of evi- dence that the original planned reallocation would have resulted in displacement of Pennsauken's employees in favor of new employees, I am unwilling and unable to concur with the General Counsel on this point. 30 The General Counsel argues this testimony is self-serving and lends credence to Krendel I note, however, testimony provided by each liti- gant is necessarily self-serving That alone is no basis for discrediting a witness. The fact this surrebuttal also corroborates Krendel serves to en- hance the credibility of both W. Anderson and Krendel, each of whom this decision shows I do credit. 806 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Union's separate attacks on the defense are now considered. It argues that "numbers can mean whatever you want them to mean." Assuming -the truth of the quoted statement, I am faced with the dilemma of choos- ing between the extensive statistical analyses presented by both the Union and the Employer. This posture liter- ally requires I substitute my judgment for that of man- agement. Clearly, this is inappropriate. Having rejected such a concept, I find much of the Union's admittedly careful and attentive analysis and ar- gument subjugated to a determination as to whether the Employer's statistics are accurate and to whether the 1981 study was undertaken with discriminatory motives. As to the first, the Union's brief concedes,"all of the fig- ures are accurate," referring to both the Employer's and its statistics. The second issue is disposed of (1) by the credited evidence which shows the 1981 study was part of a well-established historical program of combined stra- tegic and tactical planning, and (2) by my findings that there is no credible evidence the study was initiated by antiunion considerations. Certain elements, not previously discussed, are note- worthy. Thus, the Union argues such a "momentous de- cision" was made in the absence of supporting written memoranda. The Union urges this is inconsistent with the Employer's otherwise meticulous planning over the years which had been memorialized in written docu- ments. I conclude the record does indeed contain suffi- cient written backup evidence of the kind the Union sug- gests should be expected. That material consists of the various intercompany memos in connection with the cost-reduction efforts, and the studies of Mountsier and W. Anderson. The Union's analysis concludes that "closing of the Columbus plant would result in savings of some $466,000 more than would result from closing Pennsauken." I concede the Union's computations do bear out that con- tention. However, that kind of analysis alone does not warrant discrediting the Employer's economic defense. By this argument, the Union paradoxically disregards the- other factors cited by its own witness Krendel. Also, to rely on such a factor in the context of the admitted dubi- ous nature of bare statistics is to engage in an analysis which is without reliable foundation. This case should not be viewed in abstraction. Finally, I find the balance of the Union's arguments amount to a succession of situations which produce only suspicious circumstances. Such circumstances do not rise to the level of probative evidence which would render the defense nugatory. On all the foregoing, I find the preponderance of cred- ible evidence leads to the conclusion that the Employer did have economic justification for closing the Pennsau- ken facility. 2. The Darlington case In Darlington (380 U.S. 263 (1965)), the Supreme Court declared employers possess an- unfettered right to entirely go out of business even if that action is motivat- ed by antiunion considerations. The Court, however, de- clared that right does not apply to situations which in- volve a partial closing. The Court held a partial closing is discriminatory when two elements are present. Those elements are (1) a purpose on the Employer's part to chill unionism in any of-its remaining plants which are part of its business; and (2) the employer must reasonably have foreseen that the partial closing would have such a chilling effect. (380 U.S. at 275.) Direct evidence of a chilling effect is rarely available. To ascertain whether such an effect is present, the Board may rely on "fair inferences arising from the totality of the evidence considered in the light of the then-existing circumstances." (See the Board's decision on remand from the Supreme Court, Darlington Mfg. Co., 165 NLRB 1074, 1083 (1967). See also Milo Express, 212 NLRB 313, 314 (1974).) It is not enough that it may be deduced the "closing necessarily had an adverse impact upon unionization." (380 U.S. at 276, emphasis added) among employees in other parts of the employer's business. However, as long as there are facts present on which to base a fair infer- ence that a partial closing was motivated by an intention to chill unionism, no "affirmative evidence of an actual `chilling effect' on remaining employees" is required. (George Lithograph Co., 204 NLRB 431 (1973)). The Board and Third Circuit Court of Appeals both lay the burden of proof of a prima facie case of discrimi- natory conduct on the General Counsel. Wright Line, 251 NLRB 1083 (1980); 'Behring International v. NLRB, 657 F.2d 83 (3d Cir. 1982)).31 The General Counsel's theory of violation proceeds from the assumption the record contains both direct and indirect evidence- of unlawful motivation and chilling effect; and that such evidence reflects the Employer's as- sertion that Pennsauken was closed for economic reasons is a disguise to mask its unlawful conduct. I find the record as a whole does not contain sufficient evidence of a prima facie Darlington case. First, my dis- position of the motivational evidence, contained in sec- tion III-B(1) effectively eliminates the incidents there dis- cussed as probative,direct evidence of the requisite moti- vational element of the prima facie case. Two additional employee witnesses were produced by the General Counsel to, provide indirect evidence from which I am presumably able to make an inference that the Employer's conduct had a chilling effect. It is appar- ent that the General Counsel contends the closing chilled the potential of unionization among clericals and techni- cians at the Employer's other facilities. Witnesses N. Belcher and R. Lagerman were in the clericals and technicians unit. They are both color house service technicians. Their duties required them to be in telephone contact with their counterparts in the Greens- boro, Columbus, and Chicago Heights plants. They regu- larly, had telephone conversations two or three times each month during the preelection period and through the negotiations for the clericals and technicians collec- tive-bargaining contract until the closing. 31 Though both cited involved so-called dual-motive situations, I find their lesson regarding burdens of proving puma facie cases applies herein The disagreement between the forums as to whether the burden shifts on such proof is not relevant here because I agree with General Counsel that the instant case presents a pretext question. DESOTO, INC. 807 Both of these employees testified, without contradic- tion, that they spoke frequently of the Union to their counterparts. Each described the substance of those con- versations in detail. Belcher, in salient part, testified that the counterparts "were more or less trying to find out what was going on in our plant. They knew we had signed a union card .. . and they were inquiring, looking for information" with respect to the Union. Belcher repeated, saying "they [his conuterparts in Greensboro and Columbus] wanted to know what was going on at that particular time. They knew we had signed cards for the Union. They were looking for information, I guess." Belcher was then asked to describe what he talked about regarding the Union. Belcher replied, "Just the progressing of it which wasn't really much . It was that we had signed the cards. The election was on. We had won the election, and they were just wondering what was going on. Really, the only thing that I could tell them at that time was that we were waiting for the Com- pany and the Union to get together in a meeting." Lagerman named two employees to whom he spoke about the Union at Greensboro and three employees at Columbus. He first testified he "mentioned to them that cards had been signed for the purpose of joining a union." Then, Lagerman was asked whether the Greens- boro and Columbus employees "said anything back" to him. He responded, "Just general comments are far as- well, keep us informed and so forth." Lagerman was then asked to describe his conversa- tions about the Union after the election. He answered, "[A]fter business was transacted I would keep them posted on the progress of the negotiations that were then underway." Lagerman appeared as a rebuttal witness, but testified regarding other subjects. He was not again asked any questions about conversations regarding the Union with employees at other plants. I find no testimony sprang forth from Lagerman or Belcher to reflect either of them told anyone of any of the incidents proffered by the General Counsel as direct evidence of unlawful motivation. In these circumstances, I conclude there is no record evidence of a nexus be- tween any of those alleged incidents and the advent of the Union, the election campaign, the subsequent negoti- ations, or the closing. Their testimony may fairly be characterized as containing innocuous generalities. These cannot form the basis for the inferences required to pro- vide the prima facie element of chilling effect. The General Counsel asserts another basis he claims demonstrative of unlawful motivation, to wit: that Penn- sauken was the only unionized plant within the Employ- er's "eastern" facilities made part of the cost analysis and capacity, study and the employees who worked there were the highest paid among .the plants involved in the study. The Employer's records show the average hourly rate for, production and maintenance employees during the times relevant herein (including cost of Scanlon plan bo- nuses) were: $10.51 at Pennsauken; $9.21 at Greensboro; $9.94 at Columbus; and $6.83 at Orlando. In addition, the annual cost of fringe benefits per pro- duction and maintenance employee (including contribu- tions to union benefit funds) at Pennsauken was $7556.99. At Greensboro, the annual fringe benefit cost per em- ployee was $4691 .68, at Columbus $525.01 , and at Orlan- do $3872.93. Thus, the General Counsel correctly ob- serves the Employer's operational cost for wages and fringes at Pennsauken was considerably higher than the other plants studied. These statistics, viewed in isolation, arguably militate in favor of making the adverse inference requested by the General Counsel. However, in the entire setting herein, especially the uncontroverted evidence that the Employer's operation is not labor intensive and that direct labor cost comprise less than 2 percent of its oper- ating budget, I am persuaded such inference is not war- ranted. Even the addition of indirect labor cost (comput- ed by deducting the 66 percent of total product costs at- tributable to cost of raw materials) shows the total labor costs is not more than one-third of total operating costs. Though this percentage of the Employer's costs is not in- significant, it cannot be said with certainty that it is suffi- ciently substantial to infer unlawful motivation. Finally, the General Counsel has enumerated an im- pressive array of other factors which he claims justify the basis for making an inference of unlawful motivation. Those elements consist of such things as Curran's precip- itous change of plans so he could fly to Pennsauken im- mediately after the demand for recognition, the Employ- er's admitted failure to inform the Union that the reason for the requested meeting in January 1982 was to advise the Union of the decision to close, and the speed (ap- proximately 3 weeks) in which the 1981 study was con- ducted. I consider all such elements as arousing susp- cious circumstances which, in a different context, might give rise to the requested inference . The instant record as a whole, in my view, does not warrant elevating them beyond what they are-suspicions. I cannot not find a violation on such a basis . Kings Terrace Nursing Home, 229 NLRB 1180 (1977); Foodway, 235 NLRB 415, 416 (1978). - On all the foregoing, I find the preponderance of cred- ible and probative evidence ' does not demonstrate the ex- istence of a prima facie Darlington, or any other, type of unlawful discrimination within the meaning of the Act, because the record lacks the requisite elements of unlaw- ful motivation and chilling effects of the Pennsauken closing. Accordingly, I shall recommend the dismissal of such allegations. 3. The LA Marine theory Only the Union propounds the LA Marine theory. During the trial, I granted the General Counsel's motion to amend the complaint to place that theory in issue. The General Counsel later moved to withdraw that amend- ment, claiming "it's the General Counsel's position that it [sic] cannot make out an L.A. Marie [sic]" case. The Union, nonetheless, pursues this theory. It claims the Employer's closure of Pennsauken, which occurred just under a year before the most recent production and maintenance collective-bargaining agreement was due to 808 DECISIONS OF NATIONAL LABOR RELATIONS BOARD expire, is tantamount to an unlawful midterm modifica- tion within the intendmant of Section 8(d) of the Act. As evidence, the Union asserts the arbitrator's decision de- termined that issue, and I am bound by it. I have already rejected the latter notion . Thus, I shall resolve the sub- stantive question. - Relocations are violative of Section 8(a)(5) and (3) and Section 8(d) of the Act when during the term of a col- lective-bargaining agreement an employer relocates work covered by the agreement without the union's consent in order to avoid the labor costs32 contained in the collec- tive-bargaining agreement.33 Herein, the Employer has asserted the closing was mo- tivated by purely economic considerations apart from the terms of the collective-bargaining agreement. I have found that the closing was not motivated by unlawful considerations. The question whether the contractual labor costs formed a part of its economic considerations remains. The Union strongly suggests it is inescapable that the Employer's reliance on economic reasons does not en- compass the costs of contract -implementation. The Union points to the Employer's records which show that the projected net savings resulting from the Pennsauken shutdown was $3 ,472,200, exluding savings from closing the small detergent operation at that facility , 34 while the net savings projected from closing Columbus was $3,245,600. Then the differences in fringe benefits costs at Penn- sauken and Columbus are factored into the analysis of relative savings, the net savings is almost the same for both locations . The net savings differences at Greensboro present even greater disparities. Thus, the Union argues it is apparent that the difference in savings is indeed at- tributable to the labor costs of the Union's production and maintenance contract. The Union's argument is superficially appealing. How- ever, it must be examined in light of the totality of evi- dence present in this case. For example, as previously reported, W. Anderson tes- tified that the Employer's paint operations are not labor- intensive and that direct labor costs are less than 2 per- cent of product costs. Also, he credibly testified that he did not consider wage rates in compiling his study. He as- serted that his study did not separately involve ascertain- ing the impact of the union contract , and that pension costs were not considered , nor were they computed, as a factor in his analysis of the projected savings which would result from the closing . I cannot fmd any evi- dence which effectively refutes his testimony. It is rea- sonable to conclude from that testimony that the Em- ployer had not seriously been concerned with the impact of its costs under the union contract when making the decision to close. This is not to say the union contract had been entirely disregarded . Legal advice was request- 32 DeSoto's costs are set forth in the immediately preceding section of this decision. 33 Los Angeles Marine Hardware Co., supra, Milwaukee Spring Division, 265 NLRB 206 (1982). 34 The Union acknowledges the detergent savings is irrelevant because the record reflects that operation could have been -eliminated without closing the entire plant. ed and obtained concerning the overall impact of the de- cision to close on the collective-bargaining agreement. However, there is no evidence that the discussions with Attorney Berman involved cost factors. They were, in- stead, directed to the Employer's general bargaining obli- gations. I have also considered the evidence, previously de- scribed, which reflects the harmonious relationship be- tween the parties and the fact that continuation of Penn- sauken operations and successful culmination of the cleri- cals and technician's collective-bargaining negotiations would add only 18 empoyees to the Employer's probable increased costs flowing from such a collective-bargaining agreement. Finally, I have included the undeniable evi- dence that the Employer was faced with actionable excess production capacity and the absence of discrimi- natory motivation. When the Union's statistical analysis is balanced against the factors present in the Employer's behalf, I am persuaded that the contractual costs are not so substan- tial and impressive as to warrant the conclusion the Em- ployer was in any way seeking to obtain economic relief from the terms of the union contract. In the total context herein, the savings to the Employ- er derived from abrogation of its contract does not loom as an operative factor in the decision to close. There is absolutely no evidence, as existed in LA Marine and Mil- waukee Spring, of an express claim of such intent. To the contrary, the instant record contains a multitude of ex- press denials. Throughout these proceedings the Employer has as- serted that no degree of labor costs concessions at Penn- sauken could have changed its decision to close that fa- cility. The Employer has saved approximately $5 million per year after Pennsauken closed. The labor cost at Pennsauken was $2.7 million. At the February 16, 1982 bargaining session, the Employer told the Union the con- cessions it needed would have to at least equal the differ- ence between the amount saved and the then-current contractual labor costs. When the Employer agreed to bargain over the decision to close, it proposed keeping the plant closed and remained adamant in that position. McQueen testified that, based on the actual savings real- ized from the Pennsauken closing, combined with the fact the Employer does "not need the" production ca- pacity of that facility, it would close again at the earliest opportunity, even if ordered to resume its operations. In this context, it is difficult to perceive how it can be said that the contractual labor costs were an operative, factor in the decision to close. On all the foregoing, I fmd no merit to the Union's LA Marine theory. 4. The refusals to bargain The General Counsel analogizes the Pennsauken clos- ing (which he concedes involved a reallocation of work) to a partial closing, because it is clear the Employer's business continued without interruption after the closing and the closing did not involve any alteration of the Em- ployer's product line or production. The General Coun- sel contends that the Employer's failure ' to give the DESOTO, INC. 809 Union prior notice of the deliberations regarding closing and of the decision to close constitutes an unlawful refus- al to bargain in violation of Section 8(a)(5). Midland-Ross Corp., 239 NLRB 323, 329-330 (1978), enfd. 617 F.2d 977 (3d Cir. 1980). Also, the General Counsel asserts an unlawful refusal to bargain occurred by the Employer's failure to bargain in good faith over the effects of the closing. In essence, the theory of this violation is predicated on the conten- tion that the insufficient notice of the closing effectively precludes a finding of the Employer's good faith because the Employer's conduct removed any opportunity for the parties to engage in bargaining which might have been meaningful. Instead, the General Counsel argues that the Employer's total conduct, before and after the closing, foreclosed such meaningful bargaining. See Na- tional Car Rental System, 252 NLRB 159, 162 (1980), enfd. 672 F.2d 1182, 1189 (3d Cir. 1982). The Employers contends (1) the Union waived its right to be consulted by agreeing to article XXVI of the pro- duction and mai tenance contract, and (2) it was privi- leged to effectuate the closing without prior notice under First National Which, the Employer claims, established the principle that no advance notice is required of a deci- sion to terminate a part of an employer's business when that decision is based solely on the employer' s economic profitability. Relying on the genuineness of its motives and accuracy of its analyses, the Employer claims its ac- tions are lawful as within the framework of decisions the First National h lding recognized as being not amenable to'resolution through collective bargaining. The Employ- er cites Swift &'Co., 264 NLRB 240 (1982), and claims its similarities make', it applicable herein. In Swift, the Board left stand an adniinistrative law judge's recommendation to dismiss the complaint which alledged Swift failed to bargain in good Faith by closing a plant without giving a union which represented the employees advance notice'35 To resolve the refusal-to-bargain allegations, I first note that plant relocation decisions are presumptively mandatory bargaining subjects. Production Molded Plas- tics, 227 NLRB 176 (1977), enfd. 604 F.2d 451 (6th Cir. 1979); , Weltronic ! Co., 173 NLRB ' 235 (1968), enfd. 419 F.2d 1120 (6th Cir. 1969), cert. denied 398 U.S. 938 (1970). T h i s rule i s n t affected by the First National decision. The Supreme court expressly left open the issue of whether an employer has a duty to bargain about man- agement decisions (other than whether to close part of the business for economic reasons) that may have an impact on the employment of unit employees (452 U.S. at 686 fn. 22). The Court declared a balancing test to as- certain whether, and to what extent, an employer' s entre- preneurial decision involves labor costs or other factors that would be amenable to resolution through the collec- tive-bargaining process. That test requires a determina- tion of whether the benefits of collective-bargaining out- 35 'Though I concede there are numerous similarities in Swift, I find it distinguishable. There, unlike here, there was no reallocation of the weigh the burden placed on the conduct of the employ- er's business (452 U.S. at 679). I have already concluded DeSoto's decision to close Pennsauken was due to the existence of excess produc- tion capacity. I view that decision as a purely entrepre- neurial decision by the Employer to close part of its business solely for economic reasons. The differences be- tween the savings realized from the closing and the costs of continuing the operation (contained above in the dis- cussion of the LA Marine theory) show that it is improb- able the Union could have proposed anything which would have caused the Employer to retreat from its de- cision. In such circumstances, I conclude the Employer was under no statutory obligation to bargain over the de- cision to close the Pennsauken facility. Cf. Brooks-Scan- lon, Inc., 246 NLRB 476 (1979), pet. for rev. denied 654 F.2d 730 (9th Cir. 1981).36 Similarly, I find it was not unlawful to fail to give the Union a chance to bargain over that part of its decision which involved reallocation of the Pennsauken work. There are circumstances in which such an obligation exists. See Otis Elevator Co., 255 NLRB 235 (1981). Otis, however, involved not only a relocation of unit work but also a transfer of certain unit employees. In the case at bar, no employees were transferred or considered for transfer. Moreover, as earlier noted, no additional pro- duction and maintenance employees were hired to per- form the unit work formerly of Pennsauken. This factor makes Otis Elevator significantly distinct from the instant case. Fibreboard Corp. v. NLRB, 379 U.S. 203 (1964), and its progeny, reflect this distinction. Though those cases involve subcontracting of unit work, they also present situations where a new cadre of employees performed the work removed from the unit employees by the sub- contracting. Herein, the Pennsauken work was absorbed by the available theretofore unused production capacity of the Employer's plants to which the Pennsauken work was reallocated. Otis Elevator contains 'another distinguishing character- istic. Specifically, in Otis the relocation was of only a segment of a plant's operation (255 NLRB at 247). Herein, DeSoto completely closed the Pennsauken oper- ation. The fact no new employees were hired tends to show two things. First, that the decision to close was in fact attributable to excess production capacity and, second, that it may be viewed purely as designed to ameliorate the Employer's conduct of its business. The latter is in the nature of an entrepreneurial decision which, in these circumstances, is not readily amenable to the collective- bargaining process and in which the Union need not share. There simply existed no terms and conditions of employment over which the Union could negotiate. Assuming, arguendo, Fibreboard principles are appo- site, the particular facts of each case to which those prin- ciples apply must be carefully scrutinized. The distinc- tion between simple subcontracting and termination of a business enterprise is not easily discernable. The issue re- closed facility's work Thus, the closing amounted to a going out of bust- 36 In view of this finding, it is unnecessary to decide whether art, ness - XXVI of the contract was a waiver of the Union's right to bargain 810 DECISIONS OF NATIONAL LABOR RELATIONS BOARD quires determination whether an employer' s action in- volves an aspect of the employer-employee relationship that is amenable to resolution through bargaining with the union or is one that represents a significant change in operations or lies at the core of entrepreneurial control. Such a determination must take into account a variety of factors. They are ( 1) the nature of the business before and after the action is taken, (2) the extent of capital ex- penditures, (3) the basis for the action, and (4) the ability of the union to engage in meaningful bargaining in view of the employer's situation and objectives. (Bob's Big Boy Family Restaurants, 264 NLRB 1369 (1982).) In the instant case, the Pennsauken closing did not change the Employer's business, nor has it been shown or contended the closing involved any substantial capital restructuring or investment . These factors support a con- clusion that the Fibreboard, not First National principles should govern the disposition of the issues. However, when the third and fourth criteria are con- sidered, the case assumes a different tenor . Herein, the Employer's economic defense is meritorious . Its objec- tive was to reduce its excess production capacity. The ultimate goal was maintenance and enhancement of prof- its. The Employer had to, and did, make business judg- ments `as to how best it could accomplish that end. In making those judgments the elements of demography, transportation networks, market share, and applicable governmental regulations were evaluated. These matters clearly are out of the Union's control. In the entire con- text, it is difficult to perceive how the Union could have provided effective input during the bargaining process. I find this a close issue . On all the foregoing relevant discussion, wherever contained in this decision , I am per- suaded that the balance swings in favor of the conclusion that the preponderance of evidence does not warrant dis- posing of the refusal-to-bargain allegations as a Fibre- board case. Accordingly, I fmd that no notice was re- quired concerning the decision to close Pennsauken or to rellocate the work to other facilities. I have considered the possibility that article XXV of the production and maintenance contract provides the basis for holding the Employer derogated from its 8(d) bargaining obligation by unilaterally straying from the terms of that contractual provision during the term , of the collective-bargaining agreement. See, e.g., Boeing Co., 230 NLRB 696 (1977), enf. denied 581 F.2d 793 (9th Cir. 1978); University of Chicago, 210 NLRB 190 (1974), enf. denied 514 F.2d 942 (7th Cir. 1975). As'earlier reported, article XXV limits plant relocation to a radius of 25 miles, without the "written consent of the Union, but the Union shall not withold its consent for arbitrary and capricious reasons." Clearly, this lan- guage establishes a right to consultation in the Union. In view of the pending appeal to the Third Circuit of the arbitration proceedings, and also in view of the con- clusion that the closure decision is not amenable to the collective-bargaining process, I find it unnecessary to decide whether a Boeing or University of Chicago ration- ale could be applied herein. On all the foregoing, I find no merit to the allegation that the Employer violated Section 8(a)(5) by its failure to afford the Union an opportunity to bargain over the decision to close or the reallocation of work. Whether the Employer provided an opportunity for meaningful bargaining over the effects of the closing is a factual question (672 F.2d at 1189-1190). A concommi- tant of meaningful bargaining is the good faith of the parties so that the negotiations are not rendered futile or impossible. In all, the parties met on six occasions after the clos- ing, between February 16, 1982, and March 3 , 1983.37 In addition, several letters were exchanged between their counsel. Proposals were exchanged regarding the effects of the closing on the affected employees. Discussion ensued. The postclosing negotiations until January 11, 1983, can be fairly characterized as threshold bargaining. There was considerable parrying between the parties and their counsel. The early meetings immediately after the closing re- flect considerable discussion over effects- The Employer made a "final" offer on February 26, 1982, which the Union rejected. That was only the second meeting. I find no impasse in effects bargaining existed at that time. Indeed, on January 11, 1983, the Employer's coun- sel, in response to the Union counsel's request for clarifi- cation of the bargaining status, clearly advised the Union of the Employer's intention to continue bargaining over both the effects of closing and the decision to close. Thereafter, the parties met only twice. The first such meeting basically addressed the decision to close, the parties having discussed what , and whether, concessions could promote a reopening of Pennsauken. There is little, if anything, that occurred during that session which could be ascribed as effects bargaining . The second of such meetings (and the final meeting of the parties before the instant trial) contains no indicia of effects bargaining. Instead, some of the information requested by the Union relating to the decision to close was supplied. At the end of the final negotiating session , the Em- ployer had not yet provided all the information the Union requested. It remains unclear whether balance of the information has been provided. If it had been provid- ed, it is reasonable to presume the Employer would have adduced that fact at the trial. Although it is not evident what precise use the Union will make of all the information requested , it is possible that its receipt, and further discussion between the par- ties, will enable it to formulate new proposals on effects. In any event, the state of negotiations clearly reveals the parties had not seriously addressed the issue of effects anytime after the Employer's January 1983 declaration of continued readiness to discuss that issue. Not long before that declaration , the Employer's pro- posal to keep the plant closed effectively diverted the parties from effects bargaining . This factor, and the ab- sence of evidence the Employer had provided all the in- formation it promised the Union' 311 forestalled effects 37 The details of what occurred during these sessions appears above in sec III(b)(4) 98 No contention was made that the information was not necessary and relevant to the Union's fulfillment of its bargaining responsibilities DESOTO, INC. 811 bargaining and lead me to conclude the Employer has not fulfilled its obligation to bargain over the effects of the decision to close. Soule Glass & Glazing Co., 246 NLRB 802 (1979). Accordingly, I find that the Employer violated Sec- tion 8(a)(5) of the Act by failing to bargain in good faith over the effects of the closing, and shall recommend an appropriate remedy. On the basis of the foregoing- findings of fact, and the entire record, I make the following CONCLUSIONS OF LAW 1. The Employer is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of the Act. 3. The following employees of Respondent constitute appropriate units for purposes of collective bargaining within the meaning of Section 9(b) of the Act: (a) All production and maintenance employees in- cluding shipping and receiving employees employed at Respondent's Pennsauken, New Jersey facility; but excluding all office clerical employees, laborato- ry employees, professional -employees, guards, and supervisors as defined in the Act. (b) All office clerical and laboratory technicians employed at Respondent's Pennsauken, New Jersey, facility; but excluding all confidential secretaries, professional employees, guards and supervisors as defined in the Act. 4. By failing to bargain in good faith with the Union over the effects of the February 4, 1982 closing of its Pennsauken facility, the Employer violated Section 8(a)(5) and (1) of the Act. 5. The aforesaid unfair labor practice affects commerce within the meaning of Section 2(6) and (7) of the Act. 6. The Employer did not commit any of the other unfair labor practices alleged in the complaint. THE REMEDY Having found the Employer violated Section 8(a)(1) and (5) of the Act, I shall recommend it cease and desist from engaging in such conduct in the future and affirma- tively take such action as will dissipate the effects of its unfair labor practices. To remedy the Employer's failure to engage in good-faith effects bargaining, the Order shall require' the Employer to resume bargaining over the effects of the February 4, 1982 Pennsauken closing on bargaining unit employees affected by it, and to con- duct such bargaining in good faith. As noted, one of the issues presented was whether a status quo ante remedy requiring the Employer to resume its Pennsauken operations is appropriate and nec- essary. Such a remedy is a customary component of a Board order in situations where an employer has en- gaged in discriminatory conduct. Lion Uniform, 247 NLRB 992, 994 (1980); R & H Masonry Supply, 238 NLRB 1044 fn. 3 (1978), and cases cited therein. See also Sunflower Novelty Bags, 225 NLRB 1331 (1976). I have found the Employer engaged in no conduct dis- criminatory within the meaning of Section 8(a)(3) of the Act. In Production Molded Plastics, 227 NLRB 776, 778 (1977), the Board commented, "The Board . . . is reluc- tant to order the resumption of operations, especially where, as here, the closing is for nondiscriminatory rea- sons." In the absence of credible and probative evidence of discriminatory intent, and the other factors recited above, I conclude there is no factual or legal basis to order the Employer to resume its Pennsauken operations. Also see Marriott Corp., supra. It is not argued, nor was evidence presented to prove, that the Employer's conduct found unlawful herein is an extension of a proclivity to violate the Act or is egre- gious. Thus, on the instant record, I conclude a broad proscriptive order is unnecessary. See 'Hickmott Foods, 242•NLRB 1357 (1979). Accordingly, the Employer shall be ordered to cease and desist from in any like or related manner interfering with, restraining, or coercing employ- ees in the exercise of their Section 7 rights. ,Inasmuch as the Pennsauken facility presently is closed and none of the employees represented by the Union and affected by the unfair labor practice found herein is em- ployed there, I conclude ta, effectively convey the mes- sage contained in the notice which the Employer shall be ordered to sign, provisions should be made to assure all such employes become aware to their rights, and these proceedings. Thus, the Order shall require the Employer to mail a copy of the notice to each such employee. Amshu Associates, 218 NLRB 831, 836-837 (1975). [Recommended Order omitted from publication.]