Jeld-Wen Of Everett, Inc.,

118 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Jeld-Wen of Everett, Inc.,i Employer-Petitioner and Lumber Production and Industrial Workers Union, Local 1054, affiliated with the Puget Sound District Council , Lumber and Sawmill Workers; Western Council of Lumber, Produc- tion and Industrial Workers, Union-Petitioner. Cases 19-RC-10958 and and 19-RM-1871 31 July 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN, BABSON, STEPHENS, AND CRACRAFT On 31 December 1985 the Regional Director for Region 19 issued a Supplemental Decision and i Subsequent to the Board's grant of review, the then Employer, E A Nord, Inc (Nord), filed a motion for reconsideration claiming that the representation proceeding had become moot as Nord no longer existed because another company, Jeld-Wen of Everett, Inc (Jeld-Wen), had purchased Nord's assets in Chapter 11 bankruptcy proceedings In its motion, Nord argued that Jeld-Wen was not a party to this proceeding and, therefore, could not be bound by a certification of the Union unless it was found to be an alter ego or successor employer to Nord Nord asserted that no such relationship existed The Union, however, filed a response to Nord's motion in which it argued that Jeld-Wen was a suc- cessor employer to Nord and thus the representational issues raised by the petitions had not become moot' From the facts presented, it appeared that there had been no cessation or change in the operation of the plant during the change in ownership, nor had there been any change in the employee complement Accordingly, the Board, on 9 July 1986, issued a Notice to Show Cause why Jeld-Wen should not be substituted for Nord in this proceeding The responses to the Notice to Show Cause from Nord, Jeld-Wen, and the Union, however, raised substantial and material issues of fact which the Board found warranted a hearing regarding whether Nord had ceased to exist and whether there was any single/joint employer, alter ego, or successor employer relationship between Nord and Jeld-Wen Therefore, on 19 September 1986, the Board remanded the case to the Regional Director for a hearing and the issuance of a supple- mental decision on these issues On 18 December 1986 the Regional Director issued his supplemental decision finding Jeld-Wen a successor employer to Nord Specifically, he found that Jeld-Wen has continued the same business operations at the Nord site using substantially the same work force to perform the same jobs using Nord equipment and methods of production to produce the same types of products for the same customers as Nord In addition, Jeld- Wen retained Nord's plant manager, personnel director, and floor super- visors, and working conditions remained substantially the same Thus, the Regional Director concluded that although Jeld-Wen had made changes in some benefits and purchased some new equipment, these factors were insufficient to offset the other factors which overwhelmingly pointed to a finding of successorship He therefore found that Jeld-Wen is a successor to Nord Magnolia Manor Nursing Home, 260 NLRB 377 (1982) The Re- gional Director also found that Jeld-Wen's purchase of Nord's assets through a bankruptcy reorganization did not defeat a successorship find- ing No request for review was filed by any of the parties with respect to this decision As Jeld-Wen is a successor employer to Nord, Jeld-Wen is the proper subject of the organizational interests of Nord's former employees We have therefore substituted Jeld-Wen as the party in interest in this pro- ceeding In so doing , we find that Nord's contention in its motion for re- consideration that substitution of Jeld-Wen for Nord would violate the bankruptcy court's order that Jeld-Wen acquire Nord's assets "free and clear of all claims, liens or interests" is without merit Our substitution of Jeld-Wen for Nord, like the Regional Director's finding that Jeld-Wen is a successor employer, is not precluded by the fact that Jeld-Wen pur- chased Nord's assets in bankruptcy Report on Challenges and Certification of Results in which he sustained the challenges to the ballots of 464 economic strikers finding them ineligible to vote in the election as they had been engaged in an economic strike for more than 12 months, and cer- tified the results of the election. This election was a rerun of the first election, conducted within 12 months after the commencement of the economic strike, but set aside due to the Employer's miscon- duct. In accordance with Section 102.67 of the Board's Rules and Regulations, the Union filed a timely request for review of the Regional Direc- tor's decision. The Board, by mailgram order dated 2 June 1986, granted the Union's request, as this case raises the novel question whether replaced strikers,2 eligible to vote in an initial election held within 12 months of the inception of an economic strike, should be allowed to vote in a rerun election held outside the 12-month period of Section 9(c) of the Act where the rerun election is necessitated by misconduct. The Board has considered the entire record in this case, including the parties' briefs on review, and makes the following findings. Pursuant to the Regional Director's Decision and Direction of Election dated 15 June 1984, an elec- tion was conducted on 11 July 1984 among the Employer's employees. Both the striking employ- ees, who had been engaged in an economic strike since 14 July 1983 when contract negotiations be- tween the Employer and the Union broke down, and their replacements voted in this election. The election resulted in challenged ballots sufficient in number to affect the results of the election. In addi- tion, the Union filed timely objections to the elec- tion, as well as an unfair labor practice charge in Case 19-CA-16949 on 7 August 1984. A complaint issued in the unfair labor practice case on 27 Sep- tember 1984, amended on 15 November and 20 De- cember 1984, alleging 8(a)(1) violations. On 17 Oc- tober 1984 the Regional Director consolidated the representation case with the unfair labor practice case for hearing before an administrative law judge. During the hearing, the parties voluntarily 2 It is unclear from the evidence before the Board whether all the challenged employees are permanently replaced economic strikers The only finding with respect to the replacement of the strikers is that made by the administrative law judge in E A Nord Co, 276 NLRB 1418, 1419 (1985), in which he stated that "[w]hen the Union struck on July 14, 1983, approximately 500 employees joined the strike Only a few of those returned to work, but the Company hired strike replacements and addi- tional employees until there were approximately 700 employees on the job " We have assumed, for purposes of this decision, that all the striking employees were permanently replaced To the extent that any of the strikers were not permanently replaced, the voting eligibility of such strikers is of course unaffected by this decision as they remain eligible to vote so long as the Employer has not eliminated their jobs or discharged or refused to reinstate them for misconduct or they have not abandoned interest in their jobs See Gulf States Paper Corp, 219 NLRB 806 (1975) 285 NLRB No. 19 JELD-WEN OF EVERETT, INC. resolved most the challenges and the judge ordered a recount of the ballots. The final tally of ballots showed that 528 votes were cast for the Union, 619 votes against, with only 25 votes challenged. As the remaining challenged ballots were insufficient in number to affect the outcome of the election, they were not resolved. The judge sustained the Union's election objections, however, because of considerable employer misconduct, ordered the election set aside, and directed a second election. The Board affirmed. E. A. Nord Co., 276 NLRB 1418 (1985). The second election was conducted on 4 Decem- ber 1985. According to the official tally of ballots, 20 votes were cast for the Union, 287 votes were cast against the Union, and there were 509 chal- lenged ballots, a number sufficient to affect the re- sults of the election. No objections to the election were filed. Acting pursuant to Section 102.69 of the Board's Rules and Regulations, the Regional Director in- vestigated the challenges and, on the entire record, found that of the 509 challenged ballots at the second election 464 belonged to economic strikers who had been engaged in an economic strike for more than 12 months. The Regional Director, rely- ing on Gulf States Paper Corp.,3 Wahl Clipper Corp.,4 and Pacific Tile Co.,5 found that since the strikers had been engaged in an economic strike for more than 12 months, they were ineligible to vote in the rerun election. He therefore sustained the challenges to their ballots. The remaining 45 chal- lenged ballots were not determinative. According- ly, the Regional Director certified the results of the election, concluding that a majority of the valid votes plus challenged ballots had not been cast for the Union. The eligibility of replaced strikers to vote in a Board-conducted election is governed by Section 9(c)(3), as amended in 1959. The objective of the 1959 amendment was to eliminate the Taft-Hartley total prohibition against eligibility for replaced eco- nomic strikers in representation elections in order to prohibit unfair "union busting" practices by em- ployers who under Taft-Hartley could precipitate a strike for the purpose of replacing strikers, call for an NLRB election in which the replacements vote against the union, and thus get rid of the union., The House and the Senate adopted different tac- tics to meet this objective. The proposal passed by the Senate, substantially identical to the Eisenhow- 3 219 NLRB 806 (1975). 4E 195 NLRB 634 (1972). e 137 NLRB 1358 (1962). s Cong Rec July 8, 1959 at 9118 (Senator Goldwater), reprinted in 2 Leg Hist 1290(1) (LMRDA 1959) 119 er administration's proposal on the issue, struck from Taft-Hartley the prohibition on voting by economic strikers and directed that they vote under regulations prescribed by the Board. The House version contained the Taft-Hartley prohibi- tion on voting by strikers, but prohibited the hold- ing of an election on a petition by another union for 6 months, if recognition was not an issue when the strike began, and, if the petition for an election was by an employer, the prohibition was for 12 months.7 In conference, the following language, which became Section 9(c)(3), was substituted for the Senate and House proposals: Employees engaged in an economic strike who are not entitled to reinstatement shall be eligi- ble to vote under such regulations as the Board shall find are consistent with the pur- poses and provisions of this Act in any elec- tion conducted within twelve months after the commencement of the strike. The Conference Committee's analysis states that Section 9(c)(3) was amended . . . so as to permit employees engaged in an economic strike, even though they have been replaced, to vote in a representation election, under regulations promulgated by the Board. Such strikers are entitled to vote during the first 12 months after the commencement of the economic strike. [1 Leg. Hist. at 941.] The debate preceding this final compromise lan- guage suggests that the adopted 12-month period stemmed primarily from two concerns. The first was the length of time replaced economic strikers would be vested with the right to vote ' on an equal basis with replacements and thus empowered to affect the results of an election.8 The second was the "factual and practical question of the extent of the genuine interests of replaced economic strikers in the issues which will be determined in the elec- tion." Wahl Clipper Corp., supra at 636.9 7 Cong. Rec Aug. 20, 1959 at 15120 (Senator Goldwater), 2 Leg. Hist at 1360(3); H.R. Conf. Rep 1147 on S 1555 (Sept. 3, 1959), 1 Leg. Hist at 941 8 Cong. Rec Apr 21, 1959 at 5731 (Senator Javits), 2 Leg Hist. at 1064(3); Cong Rec. A May 21, 1959 at A 4308 (Congressman Kearns, 2 Leg Hist at 1750(3)). 9 The Employer contends that the reference in Sec 9(c)(3) to "any election" forecloses the eligibility to vote in all elections outside the 12- month period, whether'they are first or second elections. The Employer, however, fails to cite any legislative history in support of this contention. Further, given that the above-discussed House version prohibited the filing of petitions during different time periods depending upon the identi- ty of the moving party, we find it dust as likely that the choice of the word "any" in the conference language was intended to address the elimination of these distinctions rather than eligibility in rerun elections 120 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Senator Javits of New York, a proponent of re- storing the right of replaced economic strikers to vote, admitted finding troublesome and difficult the question how long that right should continue. i 0 He said, [u]ltimately we may be receptive to some limi- tation of time, but the problem of time has not arisen practically. What has happened practi- cally is that when an unreasonable time has elapsed, people float away, and as a practical matter, are not sufficiently interested to come forward and vote. [2 Leg. Hist. at 1064 (3).] On this subject, Senator Case of South Dakota, said: I believe everyone would have to admit that if one loses his right to vote by engaging in a concerted stoppage of work, the right to strike has been effectively curtailed, crippled, and defeated. However, Senator Case called the time within which the right to vote may be exercised, a sub- stantive matter, i i and went on to say: I do not want them [replaced economic strikers] to forfeit the right to vote too soon; but I think there should be a time limit, and in the absence of any specific provision in the act it should be clear that the National Labor Re- lations Board itself should have the right, by regulation, to prescribe the time within which the voting right may be exercised. [2 Leg. Hist. at 1065 (1-2).] These statements are instructive in formulating a rule which balances Congress' primary objective to grant replaced economic strikers the right to vote in Board elections during the strike with its desire to impose reasonable time limitations on that right. Given the concerns which prompted the 12-month eligibility period, we read Section 9(c)(3) as requir- ing that replaced economic strikers be empowered to affect the results of an election for at least 12 months after the commencement of a strike. To find replaced economic strikers ineligible to vote in the rerun of an election held during the 12-month eligibility period because the rerun election is out- side the 12-month period would deprive them of this power. This is so because a rerun election is a repeat election, standing in the place of another election which has been tarnished because the con- ditions denied voters a free choice and thus set aside. The results of a set-aside election are vacated and the results of the rerun election, free of objec- tionable conduct by any party, are substituted for them. In this case, the vote of replaced economic strikers, otherwise enfranchised by Section 9(c)(3), would be nullified and their intended power to affect the election outcome rendered a fiction unless they are found eligible to vote in rerun elec- tions held outside the 12-month period of Section 9(c)(3). Even Senator Case, who, as noted above, advocated some time limit on the eligibility of re- placed strikers to vote, indicated "if we deny the right to vote to economic strikers, we effectively defeat the right to strike." 12 We will not interpret Section 9(c)(3) in such a way to defeat the right to strike by totally denying replaced economic strik- ers the congressionally vested power to affect the choice of bargaining representative. We further find the practical considerations aired during congressional debates fail to support an in- terpretation of Section 9(c)(3) that would prohibit replaced economic strikers from voting in a rerun election held more than 12 months from com- mencement of the strike. The legislative history suggests that Congress sought to select a reasona- ble time period for holding an election during which replaced economic strikers would not lose interest in the election's outcome. Congress select- ed the 12-month limitation period clearly in the belief that it represented a reasonable time. Presum- ably, then, an election conducted within a 12- month period draws the interest of those potential- ly affected by the outcome. It is doubtful that re- placed strikers who have voted in such an election, when it is set aside, will suddenly lose interest be- cause the 12-month period of Section 9(c)(3) has passed. More likely, their interest will be sustained by virtue of the fact that the election they voted in does not count and that a rerun election will take place. Surely, the participation by 464 replaced economic strikers in the rerun election in this case evinces an abiding concern in the election's out- come. Our interpretation of the 12-month limitation period of Section 9(c)(3) as not prohibiting re- placed strikers from voting in rerun elections, such as the one in this case, is completely consonant with the voting entitlement mandated by the 1959 amendments and the directive therein that the Board formulate regulations regarding voter eligi- bility which "are consistent with the purpose and provisions of the Act." Recognizing as the thrust of Section 9(c)(3) that replaced strikers not be dis- enfranchised, the Board has determined it appropri- ate to waive its usual practice of declining to direct an election in the face of unresolved unfair labor ° Cong Rec. Apr 21 , 1959 at 5731, 2 Leg He,t at 1064(3) Cong ReL Apr 21, 1959 at 5732, 2 Lcg Hhht at 1065(1) 12 Id JELD-WEN OF EVERETT, INC. practice charges affecting the unit involved in a representation proceeding, in order to hold an elec- tion within 12 months of the beginning of an eco- nomic strike.13 Here an election was held within the 12-month period, but because of election mis- conduct it has been set aside. To formulate in this circumstance a regulation that would withhold from the replaced strikers the right of every em- ployee to participate in an election which reflects a free and untrammeled choice' 4 because more than 12 months have passed since the strike began, would give undue significance to the 12-month period of Section 9(c)(3) while ignoring the strik- er's more fundamental statutory right to exercise a free choice. Further, to hold the strikers ineligible to vote in the rerun election, the Board would be evading its statutory duty to' assure that elections are properly conducted. The Board's general goal in this regard is to conduct elections under conditions as nearly ideal as possible to determine the uninhibited de- sires of employees and to provide "an atmosphere conducive to sober and inrormed exercise of the franchise, free not only from interference, restraint and coercion violative of the Act, but also from other elements which prevent or impede a reasona- ble choice." 15 To date, neither the replaced strik- ers nor any other unit employees have had the ben- efit of such an environment in which to decide whether or not they wish to be represented by the Petitioner. The rerun procedure is routinely used by the Board to remedy this deprivation of statuto- ry rights. For the Board to hold that the replaced economic strikers were not entitled to such an op- portunity while other unit employees were, would penalize the economic strikers solely on the basis of their protected strike activity. Such a holding, in the absence of an explicit statutory command, would be inconsistent with the fundamental pur- poses and provisions of the Act. Finally, the equities in this situation rest with the replaced strikers. Their right to vote, unquestioned in the set-aside election, must not be destroyed by the misconduct of others--conduct beyond their control and beyond the permissible bounds this Board has drawn to assure properly conducted elections. Our holding that replaced economic strikers are eligible to vote in a rerun election held more than 12 months from the commencement of the strike, when they were eligible to vote in the set-aside election held within the 12-month eligibility period, is not inconsistent with Wahl Clipper Corp., supra. 19 See generally American Metal Products Co., 139 NLRB 601 (1962). 14 Dal-Tex Optical Co, 137 NLRB 1782 (1962) 15 Sewell Mfg. Co, 138 NLRB 66, 70 (1962). 121 That case involved a first election, and the Board held that replaced economic strikers are not eligi- ble to vote in such an election held more than 12 months after the commencement- of an economic strike.' 6 The Board there did not consider what, if any, effect the 12-month eligibility period of Sec- tion 9(c)(3) should have on the voting rights of those same strikers in a rerun election. Nor is our holding inconsistent with the Board's usual practice of setting the eligibility date for the rerun election to include all employees in the unit found appropriate who are employed during the payroll period ending immediately preceding the date of the election notice.'' The purpose of estab- lishing a more current eligibility list, rather then reusing the list from the original election, is to adjust for changes in the work force. In this way, individuals who have voluntarily quit or have been lawfully terminated, and have no current relation- ship with the employer, are removed from eligibil- ity because they have no entitlement to a voice in the election outcome. In contrast, during an ongo- ing economic strike, the status of replaced econom- ic strikers vis-a-vis their employer remains the same absent affirmative evidence indicating that their employment has ended. Thus, like those working behind the picket line during the eligibility period for the first election, and employed during the eli- gibility period for the rerun election, replaced strik- ers must be considered eligible to vote in the rerun election. Accordingly, we shall apply the 12-month limita- tion period of Section 9(c)(3) to the first election alone, reverse the Regional Director's decision, and find that these replaced economic strikers are eligi- ble to vote in any rerun election necessitated by election misconduct. We would treat the rerun as merely a subsequent phase of the first election for purposes of determining the voting eligibility of the replaced economic strikers. That is, because the first election was conducted within the 12-month limitation period, we find that the strikers have met the requirements of Section 9(c)(3) and are eligible to vote in any rerun of that election that may be required. 16 Wahl Clipper Corp., supra at 636; Gulf States Paper Corp., supra at 806. 17 Unlike the instant case, the replaced strikers in Wagner Electric Corp., 127 NLRB 1082 (1960), were not enfranchised in the set-aside first election by Sec. 9(c)(3), and the duration of the strike was not a consider- ation in determining their eligibility to vote in the rerun election, Rather the strike was an intervening event, precipitated by the Employer's mis- conduct in the first election, and ending about 5 months later, before the rerun election took place The Board there declined to use the eligibility period established for the set-aside election, and sustained the challenges of the replaced strikers on the grounds that under Sec 9(c)(3) they were ineligible to vote in the rerun election because the strike had come to an end prior thereto 122 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Accordingly, the case is remanded to the Re- gional Director who is directed to open and count the ballots of the economic strikers and to take any further appropriate action which may be required. ORDER It is ordered that this case is remanded to the Regional Director, who is directed to open and count the ballots of the employees found to be eli- gible in accordance with the Board's Rules and Regulations and a revised tally of ballots issued and served on the parties. In the event the 45 unre- solved challenges become determinative, the Re- gional Director is directed to take any further ap- propriate action that may be required.