Great Lakes Chemical Corp.

GREAT LAKES CHEMICAL CORP. Aquabrom, Division of Great Lakes Chemical Corp., as Successor to Bromine Division , Drug Re- search, Inc.; Tesco Chemical, Inc. and Interna- tional Union, United Automobile, Aerospace and Agricultural Implement Workers of Amer- ica, UAW. Cases 7-CA-13320 and 7-CA- 13487 30 June 1986 DECISION BY MEMBERS JOHANSEN, BABSON, AND STEPHENS This case is before the National Labor Relations Board on remand from the United States Court of Appeals for the Sixth Circuit, pursuant to the court's decision at 746 F.2d 334 (1984). The court's decision directs that the issue of whether Greats Lakes Chemical Corp. (Aquabrom or Great Lakes) is a successor to Drug Research, Inc. (Bromine) is to be determined in the first instance by the Board and not by the court upon recommendations that had been made by its Special Master. The court's remand is solely for the purpose of obtaining from the Board a determination of this issue.1 The parties have agreed to submit the remanded issue to the Board on the record before the court's Special Master. The parties have each filed a brief and reply brief. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. On the entire record and the briefs, the Board makes the following findings of fact and conclu- sions of law. On 1 July 1976 the Board certified the Union as the exclusive bargaining representative of the em- ployees of Bromine in an appropriate unit of its production and maintenance employees at its Adrian, Michigan plant. Bromine refused to recog- nize or bargain with the Union in order to test the validity of the certification. On 4 November 1977 the Board issued its Decision and Order in Drug Research, Inc., 233 NLRB 253, in which it found, inter alia, that Bromine had violated Section 8(a)(5) and (1) of the Act by refusing to recognize or bar- gain with the Union. The Board's Order directing Bromine to bargain on request was specifically made binding on Bromine's "successors and as- signs."2 Previously on 15 June 1977 Aquabrom had pur- chased the assets of Bromine and had taken over i The court has retained Jurisdiction of the case . 746 F 2d at 337 The issue of the proper remedial order in this case is not before the Board 2 233 NLRB at 265 The Court of Appeals for the Sixth Circuit en- forced the Board's order in full on 28 April 1980 621 F 2d 806. 1131 the operation and management of its business. Aquabrom admits that at the time of the takeover it was aware that a representation election had been held covering Bromine's employees, that the Union had won the election, that charges had been filed alleging unfair labor practices by Bromine, that a complaint had issued concerning those charges, and that there were proceedings pending before the Board regarding the charges and com- plaint. Immediately before the takeover, Bromine em- ployed 39 unit employees. As of 22 June 1977, 1 week after the takeover, Aquabrom employed a representative complement of 44 unit employees, 36 of whom were former Bromine employees.3 Aquabrom also retained all of Bromine's supervi- sors and its founder and president, Dr. Laurene O. Patterson.4 At the time of the takeover Aquabrom hired Frank Wheeler to serve as general manager of the facility. Wheeler communicated with the employ- ees through the former Bromine Production Man- ager Ed Zablotny. Zablotny in turn continued to direct the employees through the two former Bro- mine first level supervisors. Several months later Aquabrom hired Rod Costello as the plant manag- er. It is unclear what involvement Costello had in plant management. Before the takeover, Bromine's business office was located at 1219 E. Church Street, Adrian, Michigan, and its research and production plant was located in Adrian at 1406 E. Michigan Avenue. After the takeover, Aquabrom operated out of the former Bromine business office on Church Street and used the same research and pro- duction facilities located on Michigan Avenue. In 1979 Aquabrom built a new business office next to the Michigan Avenue plant. The business of Bromine consisted primarily of the manufacture of two products, sold under the trade names of Dihalo and Brom 55. Dihalo is a chemical used primarily to clean swimming pools. Brom 55 is a brominating agent used by pharma- ceutical companies. After the takeover Aquabrom continued the production and sale of these two products. It is well settled that a successor employer who acquires the predecessor's business with knowledge of the unfair labor practice charges against the predecessor is responsible for remedying the prede- cessor's unlawful conduct. Golden State Bottling Co. 8 Aquabrom actually hired all 39 of Bromine 's unit employees, but 4 of these employees were no longer employed by Aquabrom by 22 June 1977 4 Dr Patterson no longer had authority over personnel matters after the takeover 1 280 NLRB No. 66 1132 DECISIONS OF NATIONAL LABOR RELATIONS BOARD v. NLRB, 414 U.S. 168, 171 (1973). Aquabrom admits that when it acquired Bromine it was aware of the unfair labor practice charges pending against Bromine. It disputes, however, that it is a "succes- sor" to Bromine. The Board's traditional test for successorship status, affirmed by the Supreme Court in NLRB v. Burns Security Services, 406 U.S. 272 (1972), is whether there is substantial continui- ty, in the employing enterprise. In determining whether there is substantial continuity the Board has considered several factors including continuity in employees, supervisors, employee skills and functions, business location, and equipment and types of product lines.5 A review of these factors here demonstrates that there is "substantial continu- ity in the employing enterprise," and thus that Aquabrom is a successor to Bromine. Concerning employee continuity, a clear majori- ty (36 out of 44) of Aquabrom's employees on 22 June 1977 were former Bromine employees. Fur- thermore, Aquabrom hired all of Bromine's super- visors, who continued to serve in their supervisory positions. Regarding continuity of employee skills and functions, there is no evidence that the em- ployees' day-to-day production and packaging work changed at the time of takeover. Concerning continuity of business location and equipment, Aquabrom used the same research and production plant as Bromine, and Aquabrom also used the same business office as Bromine. There is no evi- dence of any change in equipment at the time of the takeover. Finally, regarding continuity in types of product lines, Aquabrom continued the produc- tion and sale of Dihalo and Brom 55. Despite this continuity in the employing enter- prise, the Respondent asserts that because several changes occurred after Aquabrom took over Bro- mine's operation and hired a representative comple- ment of employees it is not a successor. In December 1977, many months after the take- over, Aquabrom put into operation an addition to the plant designed to manufacture a raw material used in its production of Dihalo. Previously, this material had been purchased from another compa- ny. The only evidence of impact of this additional operation on the unit employees is that six produc- tion employees were promoted to the postition of chemical operator. This position appears to involve work similar to but more complex than the em- ployees' prior production work. Over the next several years Aquabrom expanded its production line to include additional bromine 5 See, e g, Premium Foods, Inc, 260 NLRB 708, 714 (1982), enfd 709 F.2d 623 (9th Cir 1983) See also NLRB v Wayne Convalescent Center, 465 F 2d 1039, 1041 (6th Cir 1972) ("hiring of a large portion of the predecessor's employees is persuasive in finding successorship status"). chemical agents. In 1979 it began producing Spa- brome, which is a sanitizing agent for hot tubs. In 1980 it began producing Bromocide, which is an antifouling chemical for cooling towers. In 1981 it started producing Photobrome, which is used in chemical tanks for the film industry. This increase in types of products sold, however, required the hiring of only six additional employees. Also, each of these bromine derivatives, like the original prod- ucts, are for use as sanitizing agents. Thus, Aqua- brom did not change to a different line of products but rather merely continued its production and sale of chemical agents. In 1980 Aquabrom also began manufacturing its own Brominator tanks for dispensing Dihalo. Pre- viously Aquabrom had purchased assembled tanks and modified them. Apparently this change result- ed merely in the conversion of certain part-time positions into two full-time positions. Sometime after the takeover, Aquabrom also changed the sizes of the cartons in which it sold its bromine agents. This change required the addition of one warehouse worker. During the years following its takeover, Aqua- brom revised its marketing strategy. It shifted its sales emphasis from commercial pool owners to home pool owners. Aquabrom also abandoned its distributorship arrangement and instead sold direct- ly to dealers as well as its former distributors whom it thereafter treated as dealers. Aquabrom also hired additional sales staff in an attempt to expand its sales effort. The record further shows that Aquabrom made changes in certain personnel policies during the years following the takeover. In 1977 it revised the annual plant shutdown policy (which thereafter re- quired fewer layoffs) and instituted an antinepotism policy (which was not applied to pre-1977 hires) and new salary review, seniority, progressive disci- pline, and informal job bidding systems.6 Aqua- brom also began holding safety meetings. In 1978 Aquabrom made improvements in plant air quality in response to an earlier citation by the Michigan Department of Public Health, and began providing safety shoes and glasses. It also provided the Adrian plant employees with a pension plan. In 1979 Aquabrom instituted an informal grievance procedure and a stock ownership plan. In 1981 Aquabrom provided medical coverage and life in- surance to the Adrian plant employees, modified its overtime policy, and began hiring through the Michigan Employment Security Commission refer- ral program. Aquabrom also increased the employ- ees' holiday pay in 1977, 1980, and 1982. 6 Aquabrom formalized its bidding system several years later GREAT LAKES CHEMICAL CORP. Aquabrom's reliance, however, on these and the other long-term changes discussed above establish- ing the absence of successorship status is misplaced. The vast majority of these changes even if other- wise relevant occurred well after the time relevant to the successorship determination, i.e., when Aquabrom hired a representative complement of employees.' It should also be noted that even if these changes had occurred during the relevant time, the determination of whether a new employer is a successor "does not focus on whether the new employer has become a bigger or better business."8 Changes over time in a business operation can be expected whether or not there is a change in own- ership. The critical focus of inquiry is not the extent of change, but rather whether the change is ' See, e g., Hudson River Aggregates, 246 NLRB 192 (1979), enfd. 639 F 2d 865 (2d Cir 1981) 8 NLRB Y Jeffries Lithograph Co, 752 F 2d 459, 465-466 (9th Cir 1985) 1133 of the kind that would affect the employees' repre- sentational desires." In this regard Aquabrom con- cedes that the changes had no effect on the em- ployees' job classification, skills, or duties except in one minor respect involving only six employees. Furthermore, although Aquabrom also made sever- al personnel policy changes, even assuming any rel- evance to successorship, these alone could not be considered so extreme as to alter a finding of successorship. Accordingly, we find that Aquabrom is a succes- sor to Bromine and therefore that it is under a duty to recognize and bargain with the Union as the cer- tified collective-bargaining representative of its production and maintenance employees. In accord- ance with the remand, this decision may be filed with the United States Court of Appeals for the Sixth Circuit. 8 Premium Foods, 709 F.2d at 627