Metropolitan Teletronics Corp.

METROPOLITAN TELETRONICS 957 Metropolitan Teletronics Corp. and Bedding, Cur- tain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL- CIO Metropolitan Teletronics Corp. and Bedding, Cur- tain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL- CIO and Production Workers Union, Local 148 a/w International Union of Allied Novelties & Production Workers, AFL-CIO Production Workers Union, Local 148 a/w Interna- tional Union of Allied Novelties & Production Workers, AFL-CIO and Bedding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL-CIO and Metropolitan Teletronics Corp . Cases 2-CA- 19571, 2-CA-19657, and 2-CB-9912 19 May 1986 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS DENNIS AND STEPHENS On 15 June 1984 Administrative Law Judge Raymond P. Green issued the attached decision. The General Counsel (joined by the Charging Party) filed exceptions and a supporting brief, the Charging Party filed additional exceptions, and Re- spondents Metropolitan Teletronics Corporation (the Company) and Production Workers Union, Local 148 a/w International Union of Allied Nov- elties & Production Workers, AFL-CIO (Local 148) filed the posthearing briefs submitted to the judge. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings,' and conclusions only to the extent consistent with this Decision and Order. The judge found that the Company had no statu- tory obligation to bargain with Charging Party Local 140 over its decision to close its New York City operations and relocate in Jersey City, New Jersey, and fulfilled its obligation to bargain about decision's effects. The judge further found that the Company was required to recognize Local 148 as the bargaining representative of employees at the Jersey City facility, and therefore the Company and Local 148 did not violate the Act by entering into an agreement covering employees at the Jersey City facility. We find that the Company violated Section 8(a)(5) by failing to bargain over the effects of the relocation decision . We affirm the judge 's dismissal of the remainder of the complaints' allegations. 1. THE FACTS Until April 1983 the Company reconditioned used telephones at plants in New York City and Union City, New Jersey, for resale. The Company owned the New York City quarters and rented the Union City space. Local 140 represented the New York City production and maintenance employees, and Local 148 represented the Union City produc- tion and maintenance employees. The Company suffered serious economic difficul- ties in 1982 and early 1983. In May 1982 it ob- tained a large loan at an interest rate of 18-1/2 per- cent from Atlantic Bank of New York by mortgag- ing its New York City building . After the Compa- ny failed to make payments on the loan, Atlantic Bank commenced foreclosure proceedings against the property in late October. In mid-November the Company began negotiations for the purchase of a facility in Jersey City, New Jersey, that had more space than the Union City and New York City plants combined. Representatives of the New Jersey Economic Development Authority (EDA) participated in the negotiations , and held out the prospect of major financial assistance in the form of tax-exempt bonds2 if the Company opened a new plant in Jersey City and created jobs for New Jersey residents. By no later than early March 1983 the Company knew it could not avoid foreclosure on its New York building. On 30 March the Com- pany signed the final contract for the purchase of the Jersey City facility.3 The seller was to finance the balance of the purchase price after down pay- ment at an interest rate significantly lower than the Company's Atlantic Bank loan rate. Within a week the Company sold its New York facility. The sale enabled the Company to pay off the Atlantic Bank loan, make a down payment on the Jersey City property, and cover moving expenses.4 On or ' The General Counsel has excepted to some of the judge's credibility findings. The Board's established policy is not to overrule an administra- tive 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 re- versing the findings. Contrary to the judge's decision, there was no allegation that the Com- pany violated Sec 8(d) of the Act. ' The judge incorrectly referred to EDA 's potential assistance as a loan s The judge inadvertently placed the final contract signing and closing in 1982. 4 In April the Company applied to EDA for $975,000 in tax-exempt bonds that the Company could sell which would allow it to renovate and equip the new facility for expanded production and new product lines, and create 200 new jobs . The Company was unable to sell any of the bonds, however, and the planned expansion had not taken place as of the October 1983 hearing date. 279 NLRB No. 134 958 DECISIONS OF NATIONAL LABOR RELATIONS BOARD about 4 April the Company began moving employ- ees and equipment from the Union City facility to the Jersey City plant. In January 1983 Local 140 notified the Company of its desire to negotiate a new contract to replace the collective-bargaining agreement due to expire 19 March 1983. The parties exchanged proposals and met on 23 March and 4 April. On 5 April the Company rejected Local 140's contract proposals, and on 6 April Local 140 commenced a strike at the New York facility. About 10 April the Compa- ny began moving the New York facility's goods and equipment to the Jersey City plant. The Com- pany had not informed Local 140 of the decision to close and relocate.5 On 11 April Local 140's counsel, Vicki Eren- stein, wrote to the Company's representative, Robert Ferris, inquiring about the New York oper- ations. On 13 April Ferris replied, offering to bar- gain about the effects of the relocation. Erenstein and Ferris traded letters in the latter half of April, each expressing his or her client's willingness to meet and bargain over the effects of the Company's decision to close the New York City operations and relocate to Jersey City, but differing over Local 140's continued status as bargaining repre- sentative for the Company's employees at the relo- cated plant. Company and Local 140 representa- tives did not meet until 4 May.6 Local 148 represented about 29 production and maintenance employees at Union City at the end of March 1983. By 10 April the Company had trans- ferred substantially all the Union City employees to Jersey City, and had begun hiring new employees at the new plant. Normal production commenced by 22 April, at which time 28 former Union City employees, 14 new hires, and 2 former New York City employees,7 a total of 44, were working at the Jersey City plant. The next week the Jersey City employee complement consisted of 26 former Union City employees, 13 new hires, and 2 former New York City employees, a total of 41.6 On 25 April the Company recognized Local 148 as the collective-bargaining representative for the Jersey City employees and extended the terms and condi- tions of the Union City contract to the new loca- tion.9 5 The Company's repeated references between 1980 and 1983 to finan- cial plight and the possibility of closing the New York City plant did not amount to notice of the Company's relocation plans 6 The record does not support the General Counsel 's assertion that the delay in meeting was due to the Company's stalling 7 The Company transferred 2 New York City production employees to Jersey City but terminated the other 24 New York City employees s Based on a misinterpretation of the Company's payroll records, the judge erred in dating the Company's work force fluctuations 9 Between April 1983 and the hearing date in October 1983, the Jersey City work force gradually expanded to about 68 employees At the 4 May meeting 1 ° between Company and Local 140 representatives the Company offered to employ the former New York City employees at the new plant on the condition that they work under Local 148's contract. Local 140 demanded that the Company recognize Local 140 as the bar- gaining representative for the production and main- tenance employees at the new plant, offer the former New York City employees jobs at Jersey City, and provide for the employees' travel ex- penses to the new plant . On 13 May Ferris sent a letter to Erenstein offering severance pay or em- ployment at Jersey City under Local 148's contract in return for Local 140 withdrawing the NLRB charge it filed in Case 2--CA--19571 on 12 April. Ferris wrote to Erenstein again on 20 May, indicat- ing that he had not received a reply to the Compa- ny's 13 May offer. Erenstein replied on 24 May, communicating the Union's rejection of the offer, but making no counteroffer. Thereafter, bargaining ceased. II. ALLEGED 8 (A) (5) VIOLATIONS The judge found the Company was under no statutory obligation to bargain over its decision to close its New York City operations and relocate to Jersey City. We agree. The Company's decision to move to Jersey City was motivated by the foreclo- sure action on the New York City building, the new facility's lower mortgage interest rate and more spacious quarters, and the prospect of EDA assistance through the issuance of tax-exempt de- velopment bonds. The Company's decision did not turn on labor costs at its New York City plant and therefore was not a mandatory bargaining subject. See Otis Elevator Co., 269 NLRB 891 (1984). 11 The judge also found that the Company bar- gained in bad faith before the plant closed by con- cealing during negotiations with Local 140 the de- cision to close the New York facility and relocate the business, but the judge found that the Company satisfied its effects bargaining obligation when, after closing, it offered on 13 April to bargain about the decision's effects and subsequently ex- changed proposals with Local 140. We disagree with the judge's conclusion that the Company ful- filled the effects bargaining obligation. 10 The judge incorrectly found the meeting occurred 12 May 11 Member Dennis agrees based on her analysis set forth in her sepa- rate opinion in Otis The factors underlying the decision were wholly outside the Union's control Local 140 was in no "position to lend assist- ance or offer concessions that reasonably could [have] affect[ed] . the employer's decision " Otis Elevator, 269 NLRB at 897. Member Stephens, in finding that the Company had no duty to bargain over the closure and relocation of its New York City operations, notes that the result would be the same under any of the views expressed in Otis Elevator METROPOLITAN TELETRONICS The Company was obligated to bargain "in a meaningful manner and at a meaningful time" with Local 140 over the effects on employees of the de- cision to close and relocate. First National Mainte- nance Corp. v. NLRB, 452 U.S. 666, 681-682 (1981). An element of "meaningful" bargaining is "timely notice to the union" of the decision. Penn- tech Papers, Inc. v. NLRB, 706 F.2d 18, 26 (1st Cir. 1983). By concealing its decision from Local 140 until after it began to vacate the New York City facility, the Company failed to provide timely notice, thus denying the Union an opportunity to bargain at a time when the Union retained at least a measure of bargaining power. Penntech Papers, 263 NLRB 264, 275 (1982), enfd. 706 F.2d 18 (1st Cir. 1983). The Company's belated offer to bargain with Local 140 (after its unfair labor practices de- prived the Union of bargaining power) was no sub- stitute for timely notice of its decision and good- faith bargaining before closing. Thompson Transport Co., 184 NLRB 38 (1970).1 2 We conclude that the Company failed to bargain in good faith about the effects of the decision to close and relocate the New York City operations by failing to notify the Union of the decision in a timely manner. 13 Our dissenting colleague asserts that we are ap- plying a per se rule that an employer commits an effects bargaining violation if it fails to give pre- closure notice to the union of the plant closure de- cision. The rule regarding timely notice is not a per se rule. An employer can avoid 8(a)(5) liability by demonstrating that emergency circumstances justi- fied late notice to the union. Raskin Packing Co., 246 NLRB 78 (1979); M & M Transportation Co., 239 NLRB 73, 75 (1978). 14 Here the Company knew by early March 1983 that it would close the New York City plant, but offered no explanation for concealing its plans from Local 140 until after closure. What apparently prompts our dissenting col- league to label our analysis a per se rule is that, ac- Accord P J Hamill Transfer Go, 277 NLRB 462, 463 (1985) 18 Because we find the Company violated Sec. 8(a)(5) by its conduct before closing the New York operations, we find it unnecessary to pass on the General Counsel's allegation that the Company engaged in unlaw- ful conditional bargaining after closing 14 Courts also have indicated their understanding that , absent special justification, pre-implementation notice is required to satisfy the obliga- tion to bargain over effects. See, for example, Yorke v. NLRB, 709 F.2d 1138, 1143-1144 (7th Cir. 1983) (trustee in bankruptcy excused from giving pre-closure notice where "emergency situation" precluded ad- vance notice); Florsheim Shoe Store Co. v. NLRB, 565 F 2d 1240, 1246 (2d Ctr 1977) (effects bargaining obligation encompasses bargaining with rep- resentative over "time and manner of implementing the decision") (em- phasis added), NLRB v. Transmarine Navigation Corp, 380 F.2d 933, 939- 940 (9th Cir 1967) (employer did not satisfy obligation to give reasonable notice when it initially withheld information concerning decision to ter- minate operations and finally notified union through letter dated 3 days before scheduled termination) 959 cording to him, we find an 8(a)(5) violation with- out a showing that Local 140 had a "meaningful chance of extracting substantial concessions" from the Company before closure. Our colleague would find that Local 140 lost nothing by having to bar- gain after closure because before then the Compa- ny was suffering economic difficulties and the em- ployees Local 140 represented were low skilled and low paid. We find questionable any rule that makes a col- lective-bargaining representative's rights to pre-clo- sure notice and effects bargaining turn on the rela- tive skill and wage levels of the employees it repre- sents. But even assuming that, contrary to our un- derstanding, there were support for our colleague's position that an employer has no obligation to give pre-implementation notice unless there is a showing of actual prejudice to the employees' bargaining position, we would not agree that the record sup- ports our colleague's application of the rule. It is not clear to us that bargaining over concessions in- volving "substantial" cost to the employer is the only form of bargaining the Board protects under Section 8(a)(5). For example, in this case Local 140's priorities were reemployment for the New York City employees and representational rights for itself at the new plant, interests Local 140 might have been able to protect by securing a promise in pre-closure bargaining that the Compa- ny would hire New York City employees at the new plant if the Company had positions for them.' 5 Such a promise would have cost the Com- pany nothing. Our 8(a)(5) fording is not based, however, on speculation about the results of pre-closure bargain- ing had it taken place. Rather, we find that Local 140 suffered a disadvantage to its bargaining posi- tion by being denied an opportunity to bargain at a time when it still represented employees upon whom the Company relied for services. Moreover, we observe that if the Company believed there was 's Instead, the Company delayed until mid-April before it offered to bargain over effects, and did not submit its employment offer to the New York City employees until after the representational issue at the new plant had been foreclosed, and the New York City employees could gain reemployment only at the price of losing representation by their own representative Contrary to the dissent, taking note that another possible outcome was foreclosed by the Company's late notice is not inconsistent with our finding that the Company's recognition of Local 148 at the Jersey City plant did not violate the Act As explained below, infra, fn 19, there is no evidence of union animus in the Company's relocation and hiring actions, nor can we be sure, had there been timely notice and bar- gaining, whether the New York employees would have been hired at Jersey City in sufficient numbers in April , along with Union City em- ployees and new hires, that when normal operations commenced there would have been reason to question Local 148's majority status as the collective-bargaining representative of the combined work force Thus, we cannot disturb the recognitional consequences of the hiring that actu- ally took place 960 DECISIONS OF NATIONAL LABOR RELATIONS BOARD no advantage to be gained by concealing its plans from the Union, presumably it would not have done so. We cannot excuse the Company's bad- faith tactics by after-the-fact conjecture that the conduct reaped no significant gains. III. THE COMPANY'S ALLEGED UNLAWFUL RECOGNITION OF LOCAL 148 AS THE JERSEY CITY EMPLOYEE REPRESENTATIVE We agree with the judge's determination that the Company did not violate the Act by recognizing Local 148 as the employee representative at the Jersey City facility. By 25 April, the recognition date, the Jersey City plant had commenced normal production. The Respondent's work force of ap- proximately 40 to 45 production and maintenance workers, who were performing jobs and functions that were substantially the same as those at the two former plants, constituted a substantial representa- tive complement of employees.) 6 As at least 26 of the 40 to 45 workers were employees Local 148 had represented at Union City, the Company was bound under Section 8(aX5) of the Act to recog- nize Local 148 as the Jersey City employee repre- sentative. Lammert Industries, 229 NLRB 895, 934- 935 (1977), enfd. 578 F.2d 1223 (7th Cir. 1978); Fairlawn Care Center, 233 NLRB 1025, 1026 (1977).17 The General Counsel, citing Hudson Berlind Corp., 203 NLRB 421 (1973), enfd. 494 F.2d 1200 (2d Cir. 1974),18 argues that the Company violated the Act by unilaterally choosing between Local 148's and Local 140's conflicting representational claims at the new plant. We do not fmd Hudson Berlind controlling. When an employer merges two separately represented work forces the employer may not choose between the competing representa- tional claims, unless one of the merged groups con- stitutes such a large proportion of the combined work force that there is no reason to question the continued majority status of that group's bargain- ing representative. Boston Gas Co., 235 NLRB 1354, 1355 (1978); Martin Marietta Refractories Co., 270 NLRB 821, 822 (1984). We believe that be- cause the Union City transferees constituted at least 63 percent and the New York transferees no more 16 The Company's expectation of expansion, contingent on EDA's as- sistance, was too uncertain under all the circumstances to affect the de- termination that a substantial representative complement had been hired. 17 Because the former Union City employees constituted a clear major- ity of the Jersey City plant's employee complement, we find it unneces- sary to rely on Westwood Import Co, 251 NLRB 1213 (1980), enfd. 681 F.2d 664 (9th Cir 1982) is In Hudson Berlmd, after the employer merged two warehouses whose forces had been separately represented by different unions, the em- ployee complement at the merged facility consisted of a significant number from both union-represented groups The Board held that the employer violated Sec 8(ax2) of the Act by recognizing one of the unions as the employee representative at the merged facility, than 5 percent of the merged work force on the recognition date, there was no reason to question Local 148's majority status.19 AMENDED CONCLUSIONS OF LAW 1. Substitute the following for Conclusion of Law 3. "3. By failing to notify in a timely manner Bed- ding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL- CIO of the decision to close its New York City fa- cility in April 1983 and relocate its business in Jersey City, New Jersey, Respondent Metropolitan Teletronics Corp. failed to bargain in good faith about the effects on employees of the decision and thereby violated Section 8(a)(5) and (1) of the Act." 2. Add the following as Conclusion of Law 4. "4. Respondent Metropolitan Teletronics Corp. has not otherwise violated the Act, and Respond- ent Production Workers Union, Local 148 a/w International Union of Allied Novelties & Produc- tion Workers, AFL-CIO has not violated the Act." THE REMEDY Having found that Respondent Metropolitan Te- letronics Corp. has engaged in unfair labor prac- tices within the meaning of Section 8(a)(5) and (1) of the Act, we shall order that it cease and desist therefrom, and take certain affirmative action de- signed to effectuate the policies of the Act. As a result of the Company's unlawful failure to bargain in good faith with the Union about the ef- fects of its decision to close its New York City plant and relocate its business in Jersey City, New Jersey, the terminated employees have been denied an opportunity to bargain through their collective- bargaining representative at a time when the Com- pany might still have been in need of their services and a measure of balanced bargaining power exist- ed. Meaningful bargaining cannot be assured until some measure of economic strength is restored to Local 140. A bargaining order alone, therefore, cannot serve as an adequate remedy for the unfair labor practices committed. 19 The General Counsel argues that the judge erred when he failed to find that, had the Company engaged in effects bargaining in a timely manner, it is possible that the outcome would have been the transfer of a significantly greater number of New York employees to Jersey City We find, however, no evidence that union animus motivated the Company's relocation and conduct toward Local 140 and the New York City em- ployees. Nor do we find that the Company's conduct was "inherently de- structive" of employee rights Absent such findings, we will not attempt to infer the outcome of good-faith bargaining between the Company and Local 140 had it occurred at the proper time and thus will not speculate how many New York employees would have secured jobs at the new plant. METROPOLITAN TELETRONICS 961 Accordingly, we deem it necessary, in order to effectuate the purposes of the Act, to require the Company to bargain with Local 140 concerning the effects of the shutdown and relocation on its employees, and shall accompany our order with a limited backpay requirement designed both to make whole the employees for losses suffered as a result of the violations and to recreate in some practica- ble manner a situation in which the parties' bar- gaining position is not entirely devoid of economic consequences for the Company. We shall do so in this case by requiring that the Company pay back- pay to its terminated New York City employees in a manner similar to that required in Transmarine Navigation Corp., 170 NLRB 389 (1968). Thus, the Company shall pay its terminated New York City employees backpay at the rate of their normal wages when last in the Company's employ from 5 days after the date of this Decision and Order until occurrence of the earliest of the following condi- tions: (1) the date the Company bargains to agree- ment with Local 140 on those subjects pertaining to the effects of the plant shutdown on its employ- ees; (2) a bona fide impasse in bargaining ; (3) Local 140's failure to request bargaining within 5 days of the date of this Decision and Order, or to com- mence negotiations within 5 days of the Company's notice of its desire to bargain with Local 140; (4) Local 140's subsequent failure to bargain in good faith; but in no event shall the sum paid to any of these employees exceed the amount they would have earned as wages from 5 April 1983, the final day of operations at the Company's New York fa- cility,20 to the time they secured equivalent em- ployment elsewhere, or the date on which the Company shall have offered to bargain in good faith, whichever occurs sooner; provided, however, that in no event shall this sum be less than these employees would have earned for a 2-week period at the rate of their normal wages when last in the Company's employ. Backpay shall be based on earnings which the terminated employees would normally have received during the applicable period, less any net interim earnings, and shall be computed in accordance with F. W. Woolworth Co., 90 NLRB 289 (1950), with interest as prescribed in Florida Steel Corp., 231 NLRB 651 (1977). 80 Because of Local 140's strike, the precise date the Company closed the facility is unclear. Absent the Company's unfair labor practices, how- ever, the strike might not have taken place Therefore , in limiting the maximum backpay award , we do not begin the period of presumed em- ployee earnings with the date of shutdown or employee terminations, but rather with the final day of operations before Local 140 commenced its strike, which was also the day the Company signed the contract for the sale of the New York facility Cf Transmanne, supra Further , the strike is not to be considered in determining what employees would have earned in that period ORDER The National Labor Relations Board orders that the Respondent, Metropolitan Teletronics Corp., Jersey City, New Jersey, its officers, agents, suc- cessors, and assigns, shall 1. Cease and desist from (a) Failing to bargain in good faith with Bed- ding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL- CIO concerning the effects on employees of its de- cision to close its New York City facility and relo- cate its business in Jersey City, New Jersey. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) On request, bargain collectively in good faith with Bedding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL-CIO with respect to the effects on employees of its decision to close its New York City facility and relocate its business in Jersey City, New Jersey, and, if an understanding is reached, embody the understanding in a signed agreement. (b) Pay the former New York City employees terminated by the Respondent when it closed the New York City facility in April 1983 their normal wages for the period set forth in the remedy sec- tion of this Decision and Order. (c) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (d) Post at its facility copies of the attached notice marked "Appendix."21 Copies of the notice, on forms provided by the Regional Director for Region 2, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon receipt and main- tained for 60 consecutive days in conspicuous places including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. A copy of the notice, signed in the 21 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board " shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 962 DECISIONS OF NATIONAL LABOR RELATIONS BOARD same manner, shall be immediately mailed to Bed- ding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL- CIO and to the last known address of each person formerly employed at the Respondent's former New York City facility at the time of its closing. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. CHAIRMAN DOTSON, dissenting in part. Contrary to my colleagues, I agree with the judge that the Respondent satisfied its bargaining obligation regarding the effects of its decision to close its New York City facility. As the judge found, the Respondent did offer on 13 April 1983 to engage in effects bargaining with Local 140 and in fact presented a proposal to Local 140 on 4 May 1983. The Respondent reiterated its proposal to Local 140 by letter dated 13 May 1983 and 1 week later sent another letter to Local 140 indicating that it had received no reply to its 13 May offer. Local 140 subsequently rejected the offer, but did not make a counteroffer or request any further bar- gaining. Regardless of whether the Respondent delayed notifying Local 140 of its decision to close the New York City facility, the fact remains that the Respondent attempted to engage in effects bargain- ing with Local 140, but Local 140 refused. There is no reason to assume, as my colleagues appear to do, that any different result would have occurred if effects bargaining had commenced at any earlier date. As my colleagues admit, there was no evi- dence that union animus motivated either the Re- spondent's relocation decision or its actions regard- ing Local 140 and the New York City employees. The cases cited by the majority are factually in- apposite. In Penntech Papers, Inc., 263 NLRB 264 (1982), enfd. 706 F.2d 18 (1st Cir. 1983), the em- ployer failed to bargain in good faith with the union over effects of its decision to close a facility after it gave the union notice of the closing by re- fusing to send a responsible official with sufficient bargaining authority to the negotiations and by rep- resenting to the union that the facility was not per- 3nently closed. In Thompson Transport Co., 184 N:,RB 38 (1970), the employer refused the union's initial request to engage in effects bargaining and did not agree to bargain until 5 weeks after the union had been notified of the plant closing. In the present case, however, the Employer offered to bargain over the effects of the closing of the New York facility within days of the closing of the facil- ity and thereafter remained willing to bargain in good faith with the Union. Both Penntech and Thomspon Transport involve late notice to the union. Both, however, contain, in addition, much other evidence tending to demon- strate bad faith on the part of the respective em- ployers. Here, the majority bases its holding solely on the concept that the union was due "an oppor- tunity to bargain at a time when [it] retained at least a measure of bargaining power." Such oppor- tunity, according to the majority, can only occur prior to the closure of the old operation. Presum- ably it equates this rule to the "meaningful time" of First National Maintenance Corp. v. NLRB, 452 U.S. 666, 681-682 (1981). I leave to one side the question of whether these formulations are equiva- lent because it need not be answered. The real question is whether the failure to give pre-closure notice to the Union by itself presents a per se viola- tion of Section 8(a)(5). I conclude that it does not because I can see no way in which pre-closure notice, under these facts, would have affected the Union's ability to extract concessions. As found by the administrative law judge, almost all the New York employees were "relatively un- skilled." Their average wage rates "were only slightly above the Federal minimum wage." Sever- al times during the life of the labor agreement, and most recently in March 1983, the Respondent's president, Kay, had told the Union that the Re- spondent was in poor financial straits and might have to discontinue its New York operation.' The evidence shows that the Company's eco- nomic situation was abysmal in 1982 and, even more significant, in 1983 . Some of the Respondent's customers had failed to pay for delivered goods. The Respondent, consequently, was unable to meet its obligations. Among these were loan payments on the amount of $3668.34 per month to the Atlan- tic Bank of New York and rental payments for 1983 at its Union City facilities . On several occa- sions the Respondent's payroll checks were dishon- ored. The Respondent was unable to make pay- ments to Local 140's welfare fund under the collec- tive-bargaining contract. It was in arrears on New York, New Jersey, and Federal taxes. In late October 1982 the Atlantic Bank served the Respondent with a summons and complaint whereby it sought to foreclose the mortgage on the Respondent's New York facilities. Besides its then- current tax arrearages, the Respondent owed money to many of its suppliers. These facts make the majority opinion's discus- sion of comparative "bargaining power" an exer- ' The majority finds, and I agree, that these comments lacked the spec- ificity of detail to constitute notice McGregor Printing Corp, 163 NLRB 938 (1967). METROPOLITAN TELETRONICS cise in abstraction rather than an empirical compar- ison. Whatever the Union's abstract "bargaining power" prior to the closure-presumably based on its power to withhold the services of its members- that "bargaining power" must be measured oper- ationally by the possible concessions it could ex- tract. I do not believe anyone familiar with the conduct of business would say that local 140, with these members, had any meaningful chance of ex- tracting substantial concessions from the Respond- ent prior to the new Jersey move. That those chances may also have been poor following the New Jersey move cannot render the Respondent's pre-move position a violation of Section 8(a)(5). Penntech Papers, cited by the majority, recognizes this possibility, for the court stated, "A concomi- tant element of `meaningful' bargaining is timely notice to the union . . . so that good faith bargain- ing does not become futile or impossible." Penntech Papers v. NLRB, 706 F.2d 18, 24 (1st Cir. 1983). (Emphasis added.) If no real loss of bargaining power is shown, the mere timing of the notice be- comes an irrelevancy and cannot, by itself, create a violation of Section 8(a)(5). When the per se theory of violation espoused by the majority is put to one side, the record demon- strates a high degree of bona fides on the part of this Respondent. In early April 1983, two events occurred which alleviated the Respondent's finan- cial situation: (1) the Respondent entered into an agreement with the New Jersey Economic Devel- opment Authority whereby it could gain additional capital by the sale of $975,000 in bonds; and (2) the Respondent sold its New York location for $350,000. This fresh infusion of capital with pros- pects for future augmentation gave the Respondent needed maneuvering room and, significantly for its dealings with Local 140, the possibility of meaning- ful proposals. The Respondent transferred its operations to New Jersey on 10 April, within a few days of these events. Upon inquiry, the Respondent wrote the Union on 13 April stating its readiness to bargain "concerning the effect of this move on our current New York employees."2 On 4 May, at a meeting of the parties, the Respondent offered to employ the New York employees at the new Jersey City facility. The Union countered with a proposal that the Respondent should pay these employees' travel expenses and, in addition, recognize Local 140 as the bargaining representative at the new location.3 The Y The Respondent did not formally discharge its New York employees during the transfer Those employees were on strike at that time a This issue clearly represents Local 140's chief concern both in these negotiations and the subsequently filed charges The grant of recognition to Local 148 is what made the Respondent's offers unacceptable "because they did not cure its unfair labor practices " 963 following day, the Respondent made a written offer whereby it proposed to give $300 severance pay or an offer of employment at Jersey City under the terms of the Local 148 contract.4 The Respondent proposed that any NLRB charges hith- erto filed against it should be withdrawn. Receiv- ing no answer, the Respondent wrote again to Local 140 on 20 May. Finally, on 24 May, Local 140 replied that the Respondent's 4 and 13 May offers were ."unacceptable" because they "[did] not cure its unfair labor practices." Local 140 made no additional counterproposals or further attempt to bargain with the Respondent. As the administrative law judge properly found, these exchanges reflect- ed the Respondent's good faith in dealing with the effects of the transfer on its employees.5 When the Respondent was in a financial position to do so, it attempted to deal meaningfully with Local 140's questions over the effects of the transfer. Local 140, unfortunately, proved to have purely institu- tional concerns on its mind. I have not, as the majority intimates, meant to confine Local 140's interest to concessions "involv- ing 'substantial' cost" to the Respondent nor do I propose, as the majority explicitly states, a different rule for "low-skilled and low-paid" employees. The question here revolves not around the costs to the Respondent or the wage and skill levels of the em- ployees but whether Local 140's bargaining power was lessened or destroyed by the Respondent's ac- tions in this case. Evaluating that question requires a look at all the surrounding facts and circum- stances including the Respondent's economic situa- tion, the composition of the work force, and, most particularly, the Respondent's postclosure conduct. I characterize the majority's approach as "per se" because it ignores every fact in the case with the exception of the timing of the notice to Local 140. That approach is no less per se because the Re- spondent might have demonstrated (which it did not) some emergency which, in the majority's view, would have excused notice. The majority, while rejecting the possibility that they have erected a per se rule, proceeds to specu- late on what Local 140 could have obtained with pre-closure bargaining. One of those items is em- ployment for its members at the new location, a concession actually offered by the Respondent. The other benefit is representation rights for Local 4 The terms of this contract were substantially similar to those of the Local 140 contract. 5 I note that the Respondent's $300 severance pay offer, for instance, is comparable in amount to the 2 weeks' minimum backpay award the ma- jonty would grant as part of its Transmanne remedy The Respondent's offer was thus comparable to what the majority believes is minimally re- quired to restore the Union's "bargaining power " 964 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 140 at the new location. The majority found no violation in the Respondent's having recognized another labor organization (Local 148) at the new location, but in this context they speculate that such recognition resulted from the lack of proper effects bargaining with Local 140. Leaving aside the fact that Local 148's Union City employees outnumbered Local 140's New York contingent, I believe these propositions to be inconsistent. The majority, finally, comments that there is "no precedent" for a contrary position. Such lack of precedent can be attributed only to the uncommon factual situation of this case. Yet it is exactly such cases that call for precise and detailed analysis in- stead of the application of general rules derived from factually inapposite precedent . Such analysis is the foundation of the expertise in industrial dis- putes generally attributed to this Agency by the Federal courts. Under these circumstances, I agree with the judge that the Respondent did not violate Section 8(aX5) of the Act. Accordingly, I would dismiss this complaint allegation. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively threough representa- tives of their own choice To act together for other mutual aid or pro- tection To choose not to engage in any of these protected concerted activities. WE WILL NOT fail to bargain in good faith with Bedding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL-CIO concerning the effects on employees of our decision to close our New York City facility and relocate our business in Jersey City, New Jersey. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL, on request, bargain collectively in good faith with Bedding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL-CIO with respect to the effects on employees of our decision to close our New York City facility and relocate our busi- ness in Jersey City, New Jersey, and, if an under- standing is reached, embody the understanding in a signed agreement. WE WILL pay the former New York City em- ployees we terminated when we closed our new York City facility in April 1983 their normal wages for a period specified by the National Labor Rela- tions Board, plus interest. METROPOLITAN TELETRONICS CORP. Carole Sobin, Esq. and Marisel Ayabarrero, Esq., for the General Counsel. Robert Ferris, Esq., of New York, New York, on behalf of Metropolitan Teletronic Corp. Lloyd Somer, Esq., of New York, New York, for Local 148. Vicki Erenstein, Esq. (Sipser, Weinstock Harper, Dorn & Leibowitz), of New York, New York, for Local 140. DECISION STATEMENT OF THE CASE RAYMOND P. GREEN, Administrative Law Judge. These consolidated cases were heard by me in New York, New York, on October 12, 13, and 14, 1983. The charge in Case 2-CA-19571 was filed on April 12, 1983, the charge in Case 2-CA-19657 was filed on May 19, 1983, and the charge in Case 2-CB-9912 was filed on May 1983. The complaint in Case 2-CA-19571 was issued on May 27, 1983, and a consolidated complaint was issued in Cases 2-CA-19657 and 2-CB-9912 on June 29, 1983. On July 6, 1983, an order consolidating all three cases was issued. The allegations of the complaints are as follows: (1) That the Company relocated certain of its oper- ations from New York City to Jersey City, New Jersey, without bargaining about the decision or its effects, with Bedding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL-CIO (Local 140). In this respect, the General Counsel alleges that the Company violated Section 8(axl) and (5) and Section 8(d) of the Act. (2) That on the relocation to Jersey City, the Compa- ny unlawfully recognized and entered into a collective- bargaining agreement, containing a union-security clause, with the Production Workers Union, Local 148 a/w International Union of Allied Novelties and Production Workers. In this regard, the General Counsel contends that such recognition was granted at a time when there did not exist a representative complement of employees and therefore the Company violated Section 8(axl), (2), and (3) of the Act. (The 8(aX3) allegation is based on the fact that the contract between the Company and Local 148 contains a union-security clause.) METROPOLITAN TELETRONICS (3) That Local 148 violated Section 8(bx1XA) and (2) of the Act by accepting recognition and by entering into the aforesaid contract. The positions of the Company and Local 148 are as follows: (1) The Company contends that due to economic con- siderations, namely, financial losses and the commence- ment of an action to foreclose the mortgage on its New York building (owned by the Company), it had no realis- tic choice but to vacate that building and relocate. The Company asserts that its decision to relocate was not re- lated to labor costs under its contract with Local 140 and that, given the circumstances, it would have been futile to bargain about that decision. Thus, although there is no real dispute that the Company did not offer to bargain about its decision to relocate, it asserts that, given the particular circumstances of this case, it did not violate Section 8(axl) and (5) of the Act. (2) The Company asserts that economic circumstances caused it to vacate its New York City facility and that it was not motivated by discriminatory reasons. It therefore contends that it did not violate Section 8(aX3) of the Act. (3) The Company contends that it did, in fact, offer to bargain with Local 140 concerning the effects of the re- location. It asserts that such bargaining was thwarted by Local 140's insistence that the Company not only offer jobs at the new location, but that it recognize Local 140 as the representative at the new location. In this regard, the Company asserts (as noted below) that the Jersey City facility was a new operation which resulted from the relocation not only of the New York facility, but also from the relocation of its other plant previously located in Union City, New Jersey, which had a labor agreement with Local 148. As a majority of the new facility's em- ployees were transferees from Union City, it is argued that the Company could not legally agree to Local 140's condition that it be recognized at the new location, and that if it had acceded to that condition it would have been in violation of Section 8(aX2) of the Act. (4) The Company and Local 148 contend that as the new facility was populated by employees, a majority of whom were transferred from the Company's plant in Union City, the collective-bargaining agreement extant at Union City automatically extended to the Jersey City fa- cility. Also, they dispute the General Counsel's assertion that at the time the contract was applied to Jersey City, that plant did not employ a representative complement of employees. Thus, although it is acknowledged that company representatives, at various times, publicly ex- pressed the intention of employing about 200 employees, they argue that these statements should be construed as wishful thinking and nothing more . It therefore is con- tended that during the period subsequent to the move (and until the date of the hearing), the Company em- ployed a maximum work force of about 68 employees and that when Local 148's contract was applied to this new facility, the plant was fully operational. Because a majority of the Jersey City work force were formerly members of Local 148, and only two were transferees from New York City, it is contended that the extension 965 of the Union City contract to the Jersey City work force was legal. Based on the entire record in this proceeding , includ- ing my observation of the demeanor of the witnesses, and on consideration of the briefs filed, I make the fol- lowing FINDINGS OF FACT 1. JURISDICTION The Company Is a New York corporation which is en- gaged in the business of refurbishing old telephones for resale. During the calendar year 1982 the Company, at its New York City facility, sold and shipped goods valued in excess of $50,000 directly to firms located out- side the State of New York. It therefore is concluded that the Company is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATIONS INVOLVED It was agreed by the parties and I find that Local 140 and Local 148 are labor organizations within the mean- ing of Section 2(5) of the Act. III. THE OPERATIVE FACTS Prior to April 1983, the Company had two plants for its business operations, one located at 18th street in New York City and the other located in Union City, New Jersey. Both facilities employed production employees who did the work of refurbishing old telephones for resale. Essentially the work done at each plant was the same and almost all the employees were relatively un- skilled. The building containing the New York plant was owned by the Company, but was subject to an outstand- ing mortgage held by Atlantic Bank of New York. The production employees at the New York City plant were represented by Local 140. The most recent collec- tive-bargaining agreement between Local 140 and the Company ran from June 20, 1980, to March 19, 1983. The production employees at Union City were represent- ed by Local 148 and its contract ran from August 26, 1981, to August 24, 1984. In March 1983, and prior to the relocation of both plants to Jersey City, the New York City plant employed about 26 production employ- ees. A review of the two collective-bargaining agree- ments indicates to me that the monetary terms of each were roughly comparable although it could be said that the agreement with Local 140 was marginally better. In both cases the average wage rates were only slightly above the Federal minimum wage. During the life of the labor agreement covering the New York City operation, there were several occasions when Company President Alpay Kavountzis (Al Kay), told Union President Enio Carrion that the Company was in poor financial straits and that he might have to discontinue operations in New York . The last of these occasions occurred in March 1983, but the evidence does not reveal that Al Kay was specific in detailing his trou- bles or that he informed Carrion of any intended course of action. 966 DECISIONS OF NATIONAL LABOR RELATIONS BOARD There is, however, no doubt about the Company's economic situation in 1982 and 1983 which can only be described as being poor to abysmal . In fact, the record shows that a couple of the firms which were customers of the Respondent failed to pay for goods received and that the Respondent, in turn, was unable to pay certain of its own obligations. In May 1982, the Company ob- tained a large loan from the Atlantic Bank of New York using its New York City building as collateral. In this re- spect, the loan called for repayments in the amount of $3668.34 per month, which payments the Company largely failed to make. Also, in 1983, the Company failed to pay the rent for the facilities it occupied in Union City and there were a few occasions when payroll checks bounced . Also, the Company was not making payments to Local 140's welfare fund, as required by the contract, and it was in arrears for state and Federal taxes. In September 1982, Al Kay purchased a building for a purchase price of about $70,000 in West New York, New Jersey, with the intention of relocating his Union City operation. Al Kay paid about $20,000 and the mortgage on this building was held by the seller. For better or worse, the Company did not utilize the West New York building and its initial payments were lost. On October 25, 1982, the Respondent was served with a summons and complaint by the Atlantic Bank which sought to foreclose the mortgage on the New York City building. The evidence shows that at about the same time, the Respondent owed back taxes to New York State, New Jersey, and the Federal Government, in addi- tion to owing sums of money to many of its suppliers and to Local 140's welfare fund. About November 15, 1982, the Respondent was con- tacted by Morton Ruderman of the Archie Schwartz Company, a broker of industrial property, who negotiat- ed with Al Kay over the purchase of property in Jersey City. The first draft of a contract of sale of the Jersey City property was written in December. However, the final contract was not executed until March 30, 1982, and the closing on the property occurred on May 25, 1982. Participating in the negotiations over the purchase of the Jersey City property were representatives of New Jersey's Economic Development Authority who appar- ently were seeking to find and aid companies willing to locate in some of the lower income areas of New Jersey and to hire the hardcore unemployed. In early April 1983, Al Kay applied to the New Jersey Economic De- velopment Authority for a $975,000 loan in order to help him purchase, renovate, and equip the Jersey City facili- ty. The loan application stated that the Company planned to create 200 permanent new jobs. According to Al Kay, about April 1983, a person, Paula Kramer, appeared who expressed an interest in buying the New York City building. He stated that after a short negotiation Kramer agreed by contract dated April 5, 1983, to buy the building for $350,000, which would then enable him to repay the loan to the Atlantic Bank, to pay off other outstanding debts, and to enable him to pay for the property in Jersey City. While the Company engaged in negotiations over the purchase and sale of property described above, Local 140 on January 12, 1983 , sent a notice to the Company indicating its desire to negotiate for a new contract. Be- cause the Company did not respond to this notice, the Union sent a second notice on January 21, 1983 . On Feb- ruary 18, 1983, the Company, through its attorney, Ferris, sent a letter to the Union indicating that it was willing to commence negotiations on March 7. However, when the union representatives went to Ferris' office on March 7, he was unavailable , and the Union left a copy of their contract demands with his secretary. According to Ferris, the Union was given a copy of the Company's demands on the same date. On March 8 Carrion and Ferris set up a meeting for March 23 and that meeting was held. According to Car- rion, Ferris presented the Company 's demands at that meeting. Carrion states that when he reviewed the Com- pany's demands, he told Ferris that the Union would not agree to "give backs" as set forth in the Company's pro- posals. He also testified that Ferris, at this meeting, asked that the contract be extended without modification for 1 year. He stated that when he rejected this proposal, Ferris proposed that the contract be extended for 3 months. By letter dated March 23, Ferris wrote to Carri- on, as follows: I refer to our conversation of today concerning the exchange of demands for the aforementioned labor contract between Local 140 and Metropolitan. At the present time, Metropolitan is under in- credible financial pressures and in finding it an almost impossible task to even meet the daily busi- ness expense requirements. As a result, Mr. Kay has been forced to cut back substantially on new orders since he is not in a position to even purchase the materials. In view of the above, and in an effort to cooper- ate with Local 140, we respectfully propose that the current agreement be extended in toto through June 19, 1983, at which time we can review the situation and decide the next bargaining step, hopefully to review the proposals submitted by both sides. If this suggestion meets with the approval of your constituents, please confirm same in writing to me and we will prepare the appropriate stipulation. Following the meeting of March 23, the Union held a meeting with the Company's New York employees on March 28. At this meeting the Company's proposal to extend the contract for 3 months was rejected . Carrion then called Ferris and set up another meeting for April 4. On April 4 a meeting was held at Ferris' office. Ac- cording to Carrion, at one point in the meeting, he showed Ferris an article from a New Jersey newspaper dated April 1, relating to the Company's purchase of the Jersey City facility and asked Ferris what he knew about it. Carrion asserts that Ferris said that he knew nothing about it. Ferris admitted that by April 4, he was fully aware of the fact that the Company was purchasing the Jersey City building and was transferring its operations from Union City. He concedes that he did not discuss METROPOLITAN TELETRONICS 967 the Jersey City move with Carrion at the April 4, 1983 negotiating session or at any previous time. On April 5 Carrion called Ferris on the phone , and the latter said that the Company would not accept the final union contract proposals . Accordingly, on April 6, the Uion commenced a strike at the New York City facility. About April 10, the union's representatives saw that trucks began arriving at the New York City facility and were being unloaded at the Jersey City facility . There is, in fact, no dispute that during this time the Company began to vacate the New York City plant and to move its goods and equipment to Jersey City. On April 11, 1983, the Union's attorney, Vicki Eren- stein, sent a letter to Ferris which stated: Our client, Enio Carrion, President of Bedding, Curtain & Drapery Workers Union, Local 140, United Furniture Workers of America has received information that your client, Metropolitan Tele- tronic Corp. has purchased a new facility in New Jersey, resulting in a wide variety of rumors con- cerning your intention of continuing your oper- ations in New York. Under the National Labor Relations Act, you are obliged to advise the union of any projected change in your operations insofar as it may affect your em- ployees. Will you therefore advise the undersigned in writing of the following: (1) Whether you are planning to terminate your operations at your New York location. If you do plan any such termination, please advise us of the approximate contemplated termination date. (2) Whether you are planning to move your New York operations to some other location. If so, where, and the approximate date of such planned move. (3) Whether you are planning to change the nature of your New York operations. If so, the nature of such change and the contemplated date of such change. (4) Whether you are planning to sell or otherwise assign your New York operations, whether you are soliciting offers for sale, lease, or other disposition of your New York premises or operations, or whether you have already sold or leased the same. (5) Whether you are planning to phase out your New York operations and/or employees. If so, will you advise us of such plans insofar as they affect your employees, including your best estimate of the rate of such phasing out, including projected date and number of employees. We would appreciate your earliest possible re- sponse. On April 13 Ferris responded as follows: Referring to the above client and your letter to me dated April 11, 1983 , the move of my client to New Jersey was long known by Local 140. In any event, we are prepared to bargain with Local 140 concerning the effect of this move on our current New York employees. Please contact me upon receipt to discuss a mutually acceptable date and time. About April 18 the Union set up a picket line at the Jersey City facility, which the Company attempted to enjoin in a New Jersey court. As part of its moving papers, certain affidavits were filed which asserted, inter alia, that the Company intended to employ a total of about 200 people and that they were in the process of interviewing, hiring, and training new people. On April 19 Erenstein sent another letter to Ferris which stated: We are in receipt of your letter of April 13, 1983, in which you offered to bargain with Local 140 concerning the effects of Metropolitan's removal of its operations from New York . We have learned from newspaper articles that the Company is relo- cating its bargaining unit operations to Jersey City. Under those circumstances, you are advised that Local 140 remains as the collective bargaining rep- resentative of your production and maintenance em- ployees. We are prepared to meet with you at any time on Friday, April 22 or Saturday, April 23, 1983 to dis- cuss with you and your client all matters arising out of the transfer of operations. By letter, dated April 20, Ferris responded as follows: Article 1 of the Collective Bargaining Agreement by and between Local 140 and Metropolitan clearly states that Local 140 represents only those employ- ees "employed by the employer at its 134 West 18th Street, New York, New York location." It is my understanding that the New Jersey em- ployees of Metropolitan are represented by the Pro- duction Workers Union Local 148. In the event that local 140 wishes to discuss the contents of my letter to you dated April 13, 1983, please advise me accordingly. On April 25 the Company and Local 148 executed both a supplemental agreement and a full collective-bar- gaining agreement covering the production employees at the Jersey City facility. In essence, these contracts merely extended the terms and conditions of the existing contract already in effect at Union City to the new loca- tion at Jersey City. On May 12 a meeting was held between Local 140 and Ferris. At this meeting the Company offered to employ at the Jersey City facility, the employees from New York. Erenstein, in response, demanded that in addition to such job offers, the Company should pay their travel expenses and that Local 140 be recognized as bargaining representative. On May 13 Ferris wrote to Erenstein as follows: Confirming our conversation of yesterday, my client is prepared to offer the employees, on its pay- roll as of the day prior to the strike, the following: A. Severance pay of $300.00 or 968 DECISIONS OF NATIONAL LABOR RELATIONS BOARD B. An offer of employment in Jersey City, pur- suant to all of the terms and conditions of the current Local 148 agreement and C. Withdrawal of all charges against Metropol- itan before the NLRB, cessation of all litigation (if any), and a representation that no future charges will be made against Metropolitan If the above is acceptable , please so indicate in writing so that we can begin to implement same. I hope that we can resolve our differences and fi- nalize this matter. On May 20 Ferris again wrote to Erenstein, indicating that he had not received a reply to the Company's offer of May 13. On May 24 Erenstein did reply in writing as follows: The Company's offer of settlement contained in your letter of May 13, 1983 does not cure its unfair labor practices, and is therefore unacceptable to our client. Subsequent to the exchange of letters on May 13, 20, and 24, no further meetings or communications were had between the Company and Local 140. With respect to the Company's complement of em- ployees, the payroll records indicate that during the week ending March 31, 1983, the Company employed, on an hourly basis, approximately 20 production workers at its Union City plant and 26 production employees at its New York City facility. The Company executed its contract to buy the Jersey City property on March 30, 1983. By April 6 the New York City plant was no longer functioning as a result of a strike, and about April 10 the Company began to vacate the New York City plant and move its goods and equipment to Jersey City. Also during this period , the Company began transferring its Union City employees to the Jersey City plant. The pay- roll records do not indicate how many employees worked in Jersey City and how many were employed in Union City at any given point. However, the Company's president testified that his entire Union City operation had been transferred to Jersey City, with the exception of two employees. By April 22, 1983, production had commenced at the new location and no one remained at the Union City facility as of April 27, 1983. The payroll records show that by the week ending April 22, 1983, the Company employed about 35 hourly paid production workers. Five of the 35 on payroll had been hired by the Company during the first 2 weeks in April, 2 had been transferred from the New York City facility, and the re- maining 28 had come from the Union City facility. Be- tween April 22 and 29, the Company hired 9 more new employees thereby increasing its production staff to a total of 44 employees . On the date this case was heard in October 1983, the Company's work force had expanded to a total of about 68 production workers , the maximum of number of workers employed by the Company at its Jersey City facility. IV. ANALYSIS The present case essentially involves a situation in which the Company, after the expiration of its agreement with Local 140 and during the midterm of its contract with Local 148, relocated and consolidated its two oper- ations in one newly purchased facility in Jersey City without notifying the Charging Party Local 140 of, or bargaining over, its relocation decision . Although the vast majority of the Union City employees continued working for the Company at the Jersey City facility, only two employees from the New York City plant transferred to the new location, and the Company con- tinued to recognize Local 148 as the bargaining agent of its employees at Jersey City. The motivating factors behind the relocation decision were economic, inasmuch as a foreclosure action had been initiated against the Company's New York City facility and the Company an- ticipated that it would receive a loan from the State of New Jersey in return for its promise that it would employ more residents of the State. Thus, it cannot be said that the Company manifested any animus toward Local 140 in its decision to relocate. Nevertheless, ques- tions remain whether the Company transgressed provi- sions of the Act by failing to notify Local 140 of, and to bargain over, the relocation decision and its effects and whether both the Company and Local 148 violated the Act by entering into a collective-bargaining agreement on relocation to Jersey City. The record indicates that both before and during the negotiations with Local 140 over a new contract to cover its New York City employees, the Company did not reveal its plan to buy the Jersey City facility and close its New York City and Union City operations. As early as November 1982, the Company began negotiating the purchase of the Jersey City property and a draft of a purchase agreement was drawn up the following month. In January 1983, Local 140 notified the Company of its desire to begin negotiating a new contract as its current contract was due to expire in March 1983. The Company failed to apprise the Union that a relocation to Jersey City was being contemplated at that time. Moreover, during collective-bargaining sessions in March and April 1983, and while New York City employees remained on strike after an impasse was reached , company negotiators who were fully aware of the Company's activities, failed to disclose to Local 140 representatives that the Jersey City facility had been purchased, and that the Company was planning to sell its New York City plant and relo- cate its operations. Thus, Local 140's striking workers were taken by complete surprise when equipment from the New York City plant began being loaded on trucks bound for Jersey City. Various Board decisions have held that a company en- gages in bad-faith bargaining by concealing from the Union during negotiations its previously made decision to substantially alter its operations. Avila Group, 218 NLRB 633 (1975); Garment Workers, 182 NLRB 958 (1971), enfd. 463 F.2d 907 (D.C. Cir. 1972); McGregor Printing Corp., 163 NLRB 938 (1967). As evidence of its claimed good faith, Respondent points to the fact that on several occasions it advised Local 140 that it might be METROPOLITAN TELETRONICS necessary to close the New York operation. In this re- spect the present case is similar to McGregor Printing Corp., in which, in finding that the employer had violat- ed Section 8(a)(5) by failing to notify the Union of its de- cision to permanently close its plant during a strike, the Board remarked, "although Respondent had in every bargaining session, stated that it might become necessary to close the plant if an acceptable agreement were not reached . . this did not amount to notice, and was rightfully construed by the [Union] as merely a 'bargain- ing tactic"' 163 NLRB at 938. Similarly, Respondent's statements in the instant case that it might have to shut down its New York City plant did not constitute suffi- cient notice. Consequently, Respondent's failure to notify Local 140, during negotiations, of its relocation decision clearly reflected bad-faith bargaining on its part. Although Respondent negotiated in bad faith by failing to notify the Union of its relocation decision, it is never- theless necessary to determine whether Respondent's re- fusal to bargain with the Union over the decision , itself, amounted to a violation of the Act. The Supreme Court in First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981), held that an em- ployer has no obligation to bargain about its decision to terminate a part of its business provided that the decision was not discriminatorily motivated. The Court did not, however, purport to overrule earlier Board and court holdings concerning relocation decisions ' and stated at footnote 22, "In this opinion we of course intimate no view as to other types of managerial decisions, such as plant relocation, sales, other types of subcontracting, au- tomation, etc., which are to be considered on their par- ticular facts." In First National Maintenance the Supreme Court dis- tinguished between three categories of managerial deci- sions in relation to the bargaining obligations imposed by Section 8(a)(5) of the Act. In the first category of deci- sions, "such as choice of advertising and promotion, product type and design, and financing arrangements," the Court opined that these types of decisions did not re- quire bargaining as they "have only an indirect and at- tenuated impact on the employment relationship." In the second category, including order of succession of layoffs and recall, production quotas, and work rules, the Court concluded that decisions of this nature are "almost exclu- sively 'an aspect of the relationship' between employer and employee." Thus, concerning category two types of decisions, it is reasonable to conclude that the Court would invariably require decision bargaining absent union waiver. The Court also set forth a third category of decisions which, while involving "a change in the scope and direc- tion of the enterprise," also are of "central and pressing concern to the Union and its member employees." Con- cerning category three type decisions, the Supreme Court in First National Maintenance, stated that the obli- gation to bargain will depend largely on whether "the ' See, e g , Park-Ohio Industries, 257 NLRB 413 (1981), enfd 752 F 2d 624 (6th Cir 1983), Garment Workers v. NLRB, 463 F 2d 907 (D C Cyr 1972), Weltromc Go, 173 NLRB 235 ( 1968), enfd 419 F 2d 1120 (6th Cu 1969), cert denied 398 U S . 938 (1970). 969 subject proposed for discussion is amenable to resolution through the bargaining process." The Court further stated that bargaining over management decisions "that have a substantial impact on the continued availability of employment should be required only if the benefit for labor management relations and the collective bargaining process outweighs the burden placed on the conduct of the business." In essence, therefore, the Court in First National Main- tenance prescribed a balancing test for cases involving category three types of managerial decisions. It did not state, however, that such decisions only would be subject to bargaining if they are motivated solely by labor cost considerations. Although a managerial decision which is taken for the purpose of reducing labor costs would pre- sumptively be amenable to the bargaining process be- cause the Union would be in a position to make direct concessions in this area, this does not necessarily mean that the bargaining process cannot be used to resolve de- cisions motivated by other considerations. For example, even when managerial decisions to subcontract, relocate, etc., are made for reasons completely divorced from labor cost considerations, it is conceivable that manage- ment may change its mind if a union were to make con- cessions not only on wage rates, but also with respect to work rules, productivity programs, etc. (In short, a union may make an offer which a Company cannot refuse.) For instance, in a case recently tried before me (Liquid Carbonic Corp., 257 NLRB 686 (1983)), the Company as- serted that its decision to subcontract out certain driving work was motivated by cost considerations separate and apart from labor costs. Yet, at the same time, company representatives conceded that they nevertheless would have preferred to retain control over the work and would have done so had the Union made contract con- cessions. The Board's recent case of Otis Elevator Co., 269 NLRB 891 (1984), does not assist me regarding the ab- stract question whether a company must bargain about its decision to relocate. Thus, although all the Board members agreed, on the facts of that case, that decision bargaining was not required, there was no majority opin- ion about the rationale. According to Board Members Dotson and Hunter, the critical factor is whether the de- cision to relocate turned on a "change in the nature or direction of the business, or turns on labor costs." They opined that the question of whether a bargaining obliga- tion exists is not dependent on the decision 's "effect on employees nor a union's ability to offer alternatives." It therefore appears that these two Board members would determine that a managerial decision of a category three type would be amenable to bargaining only if it turned on labor costs, even if in a particular case, a union was in a position to offer alternatives. In this respect I do not believe that this is what the Court intended in First Na- tional Maintenance. On the other hand, Board Members Dennis and Zimmerman, in their concurring opinions, did not automatically equate labor costs to the question of whether a decision is amenable to bargaining. In the present case, the evidence establishes that Re- spondent's decision to relocate was motivated by the 970 DECISIONS OF NATIONAL LABOR RELATIONS BOARD commencement of a foreclosure action on the New York City building and Respondent's belief that the State of New Jersey would offer it a sizeable loan in return for its promise to employ more residents of that State. It is clear that prior to its sale of the New York City facility, the Company did not have the resources to pay off the bank loan nor many of its other debts. Thus, the Re- spondent's decision to relocate was based solely on eco- nomic factors wholly independent from the employment relationship between Respondent and its New York City employees. Moreover, the Union was not in a realistic position to make labor cost concessions which would have helped forestall the foreclosure action and alleviate the Company's serious financial plight as contractual pay rates at the New York City plant were only marginally above the federal minimum wage level, and other bene- fits were minimal. Under such circumstances, it seems to me that bargaining over the decision to relocate would likely have been futile. See, e.g., NLRB v. Transmarine Navigation Corp., 380 F.2d 933 (9th Cir. 1967), remand- ing 152 NLRB 998 (1965), NLRB v Rapid Bindery, 293 F.2d 170 (2d Cir. 1961), modifying 127 NLRB 212 (1960); NLRB v. Royal Plating & Polishing, 350 F.2d 191 (3d Cir. 1965), enf. denied in relevant part 148 NLRB 545 (1964); Raskin Packing Co., 246 NLRB 78 (1979). I therefore conclude that the Company was under no stat- utory obligation to bargain over its plant relocation deci- sion in this case. Although Respondent was under no duty to bargain with Local 140 over its plant relocation decision, it was, however, obligated to bargain with the union over the effects of this decision on company employees. Garment Workers v. NLRB, 182 NLRB 958 (1970), enfd. 463 F.2d 907 (D.C. Cir. 1972). As the Supreme Court held in First National Maintenance Corp. at 681-682: There is no dispute that the union must be given a significant opportunity to bargain about these mat- ters of job security as part of the "effects" bargain- ing mandated by § 8(a)(5). See, e.g., NLRB v. Royal Plating & Polishing Co., 350 F.2d 191, 196 (CA 3 1965); NLRB v. Adams Dairy, Inc., 350 F.2d 108 (CA 8 1965), cert. denied. 382 U.S. 1011 (1966). And, under § 8(a)(5), bargaining over the effects of a decision must be conducted in a meaningful manner and at a meaningful time , and the Board may impose sanctions to insure its adequacy. The General Counsel contends that Respondent failed to fulfill its "effects" bargaining obligation by condition- ing negotiations on the withdrawal of all charges against the Company before the NLRB and reinstatement of em- ployees on the acceptance of Local 148's contract terms. The General Counsel argues that such conditional bar- gaining violated Section 8(a)(5) because it amounted to no bargaining at all. On the other hand, the Company maintains that it did, in fact , offer to and did engage in good-faith bargaining concerning the effects of the relo- cation decision and that such bargaining was thwarted by Local 140's insistence that the Company recognize it as the bargaining agent at the Jersey City facility. The record reveals that the Company offered to bar- gain over the effects of its plant relocation decision and did sit down with Local 140 to exchange proposals. Con- trary to the General Counsel's contention, I find that the Company's offer of reinstatement, in return for the Union's acceptance of Local 148's contract terms and the withdrawal of charges, fell short of unlawful condition- ing bargaining . In so concluding, I note that Respondent did not refuse to bargain over the effects of the reloca- tion unless the Union agreed to its terms and did not pre- clude the reinstatement of employees in Jersey City without such an agreement. See National Family Opinion, 246 NLRB 521 (1979). The Company negotiator's May 13 letter, in fact, asked the Union to respond if the terms offered by the Company were "acceptable" thereby af- fording the Union the opportunity to reject the proposals and offer counterproposals . The Union, however, failed to respond with a counteroffer, and no further communi- cations were exchanged . In Carlsen Porsche Audi, 266 NLRB 141 (1983), the Board agreed with the administra- tive law judge's conclusion that it is permissible for ne- gotiating parties to discuss nonmandatory subjects of bar- gaining, such as the withdrawal of unfair labor practice charges, so long as such matters are "not held out as a condition on which agreement depended." Because the Company in the instant case did not represent that its participation in effects bargaining and conclusion of an agreement depended on Local 140's withdrawal of charges and acceptance of Local 148's contract terms, I find that Respondent did not refuse to bargain over the effects of its plant relocation decision in violation of the Act. Having concluded that the Company was not obligat- ed to bargain over its plant relocation decision and that it did, in fact, engage in effects bargaining as required by the Act, the next question is whether the Company and Local 148 violated the Act by concluding a supplemental collective-bargaining agreement to cover the Jersey City employees on relocation. The facts in this case indicate that when the Company purchased the new plant facility in Jersey City, it intend- ed to transfer the work done at its Union City and New York City facilities. Recognizing that its contract with Local 148 was still in effect and anticipating that many of its Union City employees would opt to transfer to Jersey City, the Company on April 25, 1983, extended the terms and conditions of its existing agreement with Local 148 to cover its Jersey City employees. The exten- sion agreement, however, was executed before the Com- pany had offered to employ its Local 140 members at the Jersey City facility. At the same time, it annnounced to the public that it intended to employ , at some point in the future, a total of 200 workers at the new plant. On relocation to the new plant, of 44 production employees, only 2 came from New York City, while 28 transferred from Union City, and the rest were new hires. The record does not indicate that any of the Company's former New York City employees thereafter took jobs in Jersey City In fact, approximately 6 months after the re- location, the Company's production staff had increased to a total of approximately 68 employees, and none of METROPOLITAN TELETRONICS the former New York City employees were working for the Company at this time. In her excellent brief, the General Counsel argues that the Company and Local 148 violated the Act by reaf- firming their collective-bargaining relationship and con- cluding a supplemental agreement to cover the Jersey City employees at a time when the new facility was not yet fully operational but merely undergoing renovations and the Company did not employ a representative com- plement of employees. Specifically, the General Counsel points to the fact that the Company recognized Local 148 as the bargaining agent at its new plant at the same time that it publicly asserted that it intended to hire a total of 200 employees at the Jersey City facility. Ac- knowledging that Respondent never hired the 200 em- ployees it predicted it would hire, the General Counsel contends that the lawfulness of the recognition is deter- mined at the time recognition was extended and not by subsequent events. It is clear to me that given the complement of employ- ees at the Jersey City facility and the nature of the relo- cation involved, the Respondent was obligated to contin- ue its recognition of Local 148 as the bargaining repre- sentative at the new plant. The Board has held on numerous occasions that an "existing and effective collective-bargaining agreement will remain in effect following a relocation, provided op- erations and equipment remain substantially the same at the new location, and a substantial percentage of the em- ployees at the old plant transfer to the new location." Westwood Import Co., 251 NLRB 1213, 1214 (1980). See also Tricor Products, 234 NLRB 65 (1978), Fairlawn Care Center, 233 NLRB 1025 (1977), W. T. Grant Co., 197 NLRB 955 (1972), and International Paper Co., 150 NLRB 1252 (1965). Thus, for example, the doctrine was expressed in General Extrusion Co., 121 NLRB 1165, 1167 (1958), in which the Board, in discussing its con- tract-bar rules, stated: Thus, we shall adhere to the rule that a contract does not bar an election if changes have occured in the nature as distinguished from the size of the op- erations between the execution of the contract and the filing of the petition, involving (1) a merger of two or more operations resulting in creation of an entirely new operation with major personnel changes; or (2) resumption of operations at either the same or a new location , after an indefinite period of closing, with new employees . However, a mere relocation of operations accompanied by a transfer of a considerable proportion of the employ- ees to another plant, without an accompanying change in the character of the jobs and the func- tions of the employees in the contract unit , does not remove a contract as a bar. Notwithstanding the general statement of principle quoted above, questions anse in relocation cases regard- ing what will constitute a substantial percentage of em- ployee transfers and at what point in time do we measure whether a substantial percentage of the new work force is composed of transferees from the old location. 971 In Westwood Import Co., the Board made it plain that after a relocation, a company would continue to be obli- gated to honor the existing contract, even when the transferees did not comprise a majority of the work force at the new location when it became fully operational. In that case, the Board concluded that when approximately 40 percent of the new work force was composed of transferees, that would constitute a substantial percent- age. See also W. T Grant Co., 197 NLRB 955 (1972). In Westwood, the Board further indicated that the de- termination of whether a substantial percentage of the work force at the new location is composed of transfer- ees should be made when the new facility becomes fully operational. Obviously, this leaves some degree of leeway and it does not appear that the point of measure- ment must necessarily be either at the commencement of operations, or when the new location has reached its maximum level of employment. In a relocation of the nature involved herein, it can be expected that the transfer of equipment and employees will occur expeditiously, rather than gradually, and oper- ations will begin quickly. In Lqmmert Industries v. NLRB, 578 F.2d 1223 (7th Cir. 1978), enfg. 229 NLRB 895 (1977), the Seventh Circuit enforced the Board's holding that the company violated Section 8(a)(5) of the Act when it withdrew recognition after a relocation where 19 of the 26 employees of the new work force consisted of transferees at the commencement of oper- ations. The company's argument that the employee com- plement should have been measured several months after the opening was rejected and the court stated at 578 F.2d 1223: Although we need not decide whether the Compa- ny would have properly been ordered to bargain with the Union if at the opening of the new plant, less than a majority of the employees came from the Union represented facility, we have no question but that the appropriate point of analysis is ordinarily the date the new facility opened and began full op- erations. Replacements after that date do not, in most situations, affect the presumption of the Union's continuing majority status. Those replace- ments are presumed to support the Union in the same ratio as those they replace. In addition, the court noted at 578 F.2d 1224: Moreover, even if the employer demonstrates that an expansion is contemplated , the Board will not delay the bargaining obligation if, as here , the Com- pany has hired a substantial and representative com- plement of empoyees. Similarly in Lutheran Homes & Hospitals, 233 NLRB 1499 (1977), the Board held that the employer was obli- gated to apply the contract it had with the Union at its old facility on relocation and the commencement of its same operations and functions at a new facility . On that date, the Board found that at least 22 employees were transferred to the new facility and 16 new hires were also working at the time. Over the course of the follow- mg 2 weeks, 10 additional new hires began working. The 972 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Board ruled that the employer's "obligation to bargain with the Union is determined as of the time it began its operations at the new location and is not affected by the subsequent hiring of additional employees alone." It is clear that in making the determination whether an existing contract survives a "mere relocation," the Board and the Courts are balancing the rights of certain em- ployees to retain their bargaining representative and con- tract rights after a relocation against the rights of other employees to select whether or not they wish to have that Union as their representative or any representation at all. For example, in Hudson Berlind Corp., 203 NLRB 421 (1973), the Company purchased two warehouses from different employers, the employees of which were repre- sented by two different unions. When the Company merged both warehouses and the employees into a new facility, it recognized the Union which represented the larger group of employees . In that circumstance, the Board held that the Company violated Section 8(a)(2) of the Act by unilaterally selecting among rival union claims, and thereby depriving the employees of their right to select which union, if any, they wished to repre- sent them . It nevertheless is noted that the facts of the instant case are distinguishable from those in Hudson Ber- lind, as the latter case involved a merger and consolida- tion of two facilities into an entirely new operation and because rival unions were each making legitimate repre- sentational claims. In the present case, only two employ- ees at the Jersey City facility were formerly represented by Local 140. Therefore, Local 140 had no colorable claim of representation for the Jersey City employees, and the General Counsel does not and cannot assert a Midwest Pipingz theory to support her argument that the recognition violated the Act. 2 Midwest Piping, 63 NLRB 1060 (1945) In that case, the Board held that a company may not initially recognize one union (even when it rep- resents a majority of the employees ), when a second union has made a colorable claim of representation for the same group of employees. It is noted that the Mid-West Piping doctrine has been subsequently modified in Bruckner Nursing Home, 262 NLRB 955 (1982), and RCA Del Canbe, 262 NLRB 963 (1981). Thus, the critical question is whether the Company's continuing recognition of Local 148 at the Jersey City facility comports with the legal tests enunciated in Gen- eral Extrusion, et al. The Company's operations remained substantially the same after the relocation to Jersey City with no change in the character of the jobs. Secondly, at the commencement of operations in late April, the 28 Union City employees who had transferred to the Jersey City facility constituted 64 percent of the new work force, a much greater percentage that that found by the Board in Westwood to be substantial. Accordingly, the Company was obligated to continue its recognition of Local 148 on relocation to Jersey City notwithstanding the fact that the Company contemplated hiring a total of 180 to 200 more employees at some point and, in fact, hired about 24 additional employees after the relocation. Given the Company's precarious economic situation, its expectation of expansion at the time of the relocation could be characterized as uncertain at best and was no- where near being realized as of the date of the hearing in this case. Because the Company had hired a substantial representative complement of employees when it com- menced operations in Jersey City, I find that it was obli- gated, under Section 8(a)(5) of the Act, to continue to recognize Local 148 as the lawful bargaining agent of its employees at the new facility. CONCLUSIONS OF LAW 1. The Respondent, Metropolitan Teletronics Corpora- tion, is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Bedding, Curtain, & Drapery Workers Union, Local 140, United Furniture Workers of America, AFL-CIO, and Local 148 a/w International Union of Allied Novel- ties and Production Workers, AFL-CIO, are labor orga- nizations within the meaning of Section 2(5) of the Act. 3. The Respondents have not engaged in the unfair labor practices alleged in the complaint. [Recommended Order for dismissal omitted from pub- lication.]