Pilgrim Industries, Inc.

244 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Pilgrim Industries, Inc. and United Food and Com- mercial Workers, Local 540, AFL-CIO, CLC. Case 16-CA-12241 30 September 1987 DECISION AND ORDER BY MEMBERS JOHANSEN , BABSON, AND STEPHENS On 24 March 1986 Administrative Law Judge Richard J. Linton issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel filed a brief in support of the judge's decision. 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,2 and conclusions and to adopt the recommended Order.3 We find that the Respondent did not prove either actual loss of majority status by the Union or a reasonably based doubt of the Union's majority status sufficient to justify its refusal to bargain. In concluding that the Respondent did not have a rea- sonably based doubt of majority, we have consid- ered the evidence that the Respondent possessed on the date it refused to bargain relating to the number of employees on checkoff, the percentage of Spanish-speaking vis-a-vis English-speaking em- ployees of checkoff; the comments made by em- ployees to management representatives concerning their feelings about the Union; the Union's attempt to solicit cards; and the length of the bargaining history with the predecessor, and find that the Re- spondent did not have a reasonably based doubt of majority. In so concluding, we do not rely on the judge's finding that if the Respondent had estab- lished such a doubt of the Union's majority status, the burden would then pass to the General Counsel to prove majority in fact. The Board has not sub- 1 At the hearing the Union moved to strike Personnel Manager Meeks' testimony regarding certain comments made by employees Benavides and Pleasant about the Union The judge overruled the motions and stated in reference to Pleasant's comment that he would "receive it for whatever weight it has " In sec III,A, 1 of his decision, the judge reversed his rul- ings and granted the Union's motions to strike the testimony We agree with the judge's initial rulings, and we have considered these employee statements as part of the record evidence z The judge's statement in sec III,A,3 of his decision that the Re- spondent uses "some" production process formerly used by Pluss-Tex should read the "same" production process a The General Counsel requests that the recommended Order be modi- fied to include a visitatorial provision authorizing the Board , for compli- ance purposes, to obtain discovery from the Respondent pursuant to Fed- eral Rules of Civil Procedure under the supervision of the United States courts of appeals enforcing this Order Under the circumstances of this case, we find it unnecessary to include such a provision scribed to this analysis . See Bartenders Assn. of Po- catello, 213 NLRB 651 (1974), and particularly footnote 21 of that decision. Although it is not crit- ical to our finding, we also find that the Union, in fact, had a majority. The Respondent contends that the judge failed to note that the June 1985 dues- checkoff list shows employee Benavides had been terminated, thus reducing the number of employees on checkoff to 100 and precluding a finding of ma- jority status. Although the June checkoff list indi- cates that Benavides was terminated and did not have any dues remitted to the Union that month, a "comparison chart" put into evidence by the Re- spondent shows that at the end of June 1985, 101 unit employees were on dues checkoff. Furthermore, we note that it makes no difference whether that report of 101 checkoffs improperly includes employee Benavides , because a reduction of that figure by 1 would not change the result as to proof of the Union's majority status. This is so because we agree with the judge that the 2 quality control employees should be excluded from the unit, producing a total of 304 unit employees. To the 100 or 101 employees on checkoff, the judge properly added 53 who signed valid authorization cards solicited by union organizer Aguirre in May 1985. Aguirre's uncontroverted testimony estab- lished that, although most of the cards are in Eng- lish and the employees spoke only Spanish, he ex- plained the cards to all of the signers in their own language. See Ruby Concrete Co., 213 NLRB 724, 727 (1974), enfd. 519 F.2d 1395 (6th Cir. 1975); NLRB v. American Art Industries, 415 F.2d 1223, 1228-1229 (5th Cir. 1969), cert. denied 397 U.S. 990 (1970). Therefore, the Union possessed the sup- port of at least 153 unit employees out of 304-a majority of the unit. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Pilgrim In- dustries, Inc., Lufkin, Texas, its officers, agents, successors, and assigns, shall take the action set forth in the Order. Wayne A. Rustin, Esq. and Glyn Cook, Esq., for the Gen- eral Counsel. Allen P. Schoolfreld Jr., Esq. (Schoolfield and Smith), of Dallas, Texas, for the Respondent. James L. Hicks Jr., Esq. (Hicks, Gillespie, James & Lesser), of Dallas, Texas, for the Charging Party. 286 NLRB No. 21 PILGRIM INDUSTRIES 245 DECISION STATEMENT OF THE CASE RICHARD J. LINTON, Administrative Law Judge. This case involves a successor employer, who refused on 26 June 1985, to recognize and bargain with an incumbent union, Local 540 I find that Pilgrim Industries, Inc. was a successor employer under the law, that it was obligated to recognize and bargain with Local 540, and that Local 540 in fact represented a majority of the employees on 26 June 1985 when, on the asserted ground of a good- faith doubt as to majority status, the successor employer refused to recognize and bargain with Local 540. This case was tried before me in Lufkin, Texas, on 22 October 1985 pursuant to the 22 November 1985 com- plaint issued, an thereafter amended, by the General Counsel of the National Labor Relations Board through the Acting Regional Director for Region 16 of the Board. The complaint is based on a charge filed 22 July 1985 by United Food and Commercial Workers Union, Local 540, AFL-CIO, CLC (Union or Local 540) against Pilgrim Industries , Inc. (Respondent).' By its answer Respondent admits certain factual mat- ters but denies violating the Act. On the entire record, including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed by the General Counsel2 and the Re- spondent, I make the following FINDINGS OF FACT 1. JURISDICTION A Texas corporation, Respondent operates a plant in Lufkin, Texas, where it processes, packages, and sells chicken broilers. During the past 12 months Respondent sold and shipped, from points within Texas, goods and products valued in excess of $50,000 directly to points outside the State of Texas. I find that Respondent is an employer within the meaning of Section 2(2), (6), and (7) of the Act. ment, inventory) and not the stock liabilities, organiza- tion, or corporation of Pluss-Tex (1:86, 101-105).3 Actual closing of the sale did not occur until 14 June (1:85). Pilgrim testified that Respondent grows, processes, and markets chickens and eggs. Respondent employs about 3500 employees in 28 different kinds of plants (5 of these are processing plants, including the Lufkin facility), located in 12 cities and 3 States , all in one integrated and centralized business system controlled by Pilgrim from Respondent's headquarters in Pittsburg, Texas (1:85, 97).4 During the last 30 years or so that Pluss-Tex operated the Lufkin facility, Local 540 represented certain em- ployees under successive collective -bargaining agree- ments (CBA) with Pluss-Tex (1:38, 88, 98). By its terms the latest CBA covered the period 31 May 1982 to (Monday) 3 June 1985 (G.C. Exh. 4). In article I of that CBA Pluss-Tex recognized the Union as the "Certified"5 collective-bargaining representative in the following unit: All production employees at the Employer's Lufkin, Texas plant; excluding all maintenance employees, truck drivers, office clerical employees, guards, watchmen, assistant managers, foremen, foreladies and all other supervisors as defined in the Act. Representatives of Pluss-Tex and the Union met on 16 and 22 May for the purpose of negotiating a renewal CBA (1:39-41). Apparently no renewal agreement was reached on 22 May, and the record does not disclose whether Pluss-Tex Local 540 had scheduled a third meeting . In any event, over the weekend of 25-26 May employees informed Union Represenatative Allen R. Lewis of a rumor that the plant was being sold (1:42-43). On Monday, 27 May, Lewis telephoned Plant Manager Elray Woods concerning the rumor, and Woods told him that the plant was being sold to Respondent (1:43). By letter dated 28 May, Pluss-Tex wrote Local 540's office in Dallas as follows (G.C. Exh. 8): II. LABOR ORGANIZATION INVOLVED Respondent admits, and I find, that Local 540 is a labor organization within the meaning of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES A. Facts 1. Refusal to recognize and bargain For many years before 3 June 1985, Pluss-Tex Poultry Company (Pluss-Tex) operated a poultry plant in Lufkin, Texas. On 3 June Respondent began operating the plant pursuant to an agreement under which Respondent made an asset purchase of the facility. According to Respond- ent's chief executive officer (CEO), Lonnie A. "Bo" Pil- grim, Respondent purchased only assets (plant, equip- ' All dates are for 1985 unless otherwise indicated 2 By letter dated 25 November 1985, Local 540's counsel adopted the General Counsel's brief Dear Mr. Lewis: This is to give Local 540 notice that Pluss-Tex Poultry has entered into an agreement with Pilgrim Industries of Texas for the sale of Pluss-Tex Poultry Lufkin, Texas processing facilities. This sale is to be consumated on close of business June 1, 1985. Sincerely, /s/ James H. Pluss James H. Pluss 3 Citations to the one-volume transcript of testimony are by volume and page 4 As a map reflects, Pittsburg, in Camp County (G C Exh 10), is lo- cated about 150 or so miles north of Lufkin, which itself is in east Texas 5 In his brief (at 3), counsel for the General Counsel asserts, "The Union was certified by the Board as the collective bargaining representa- tive of Pluss-Tex employess in the approved bargaining unit on June 9, 1955, pursuant to an election conducted on June 2, 1955 " This informa- tion is outside the record, and counsel did not submit a posthearing stipu- lation of the parties , nor attach to his brief copies of the appropriate doc- uments requesting that I take official notice of these asserted facts 246 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The following day, Wednesday , 29 May, Union Repre- sentative Lewis telephoned Respondent 's CEO, Lonnie Pilgrim, concerning the sale (1:43, 89, 98). Lewis and Pil- grim dispute the contents of the conversation . Lewis tes- tified that he asked Pilgrim to continue the CBA on a day-to-day basis. Pilgrim declined, because he did not know what he would be agreeing to, but that the em- ployees should not worry because he planned to make no changes at this time and that they would process chick- ens as in the past . Lewis said he would send Pilgrim a copy of the contract. Pilgrim stated that he would ap- point a committee of two persons to contact Lewis by the end of the week to set up a meeting to negotiate a contract (1:43-44). Pilgrim testified that Lewis telephoned the afternoon of 29 May and said he wanted to meet and negotiate a contract. Responding, Pilgrim said he was not interested in that because he had disavowed the contract , and that Respondent was not purchasing Pluss-Tex but only the assets. Pilgrim added that when the sale was complete he would have two persons, his complex manager and plant manager, talk to Lewis concerning whatever he was pro- posing (1:89, 98-99). Dated the same day, 29 May, a letter from Pilgrim to Lewis reads (G.C. Exh. 7):e Dear Sir: This is to notify you that Pilgrim Industries, Inc. disavows your contract of this date with Pluss-Tex Poultry of Lufkin, Texas. We have no knowledge of the contract terms or what you propose. We will schedule a meeting as soon as we have a convenient time for you and our representatives. Sincerely, /s/ Lonnie A. Pilgrim Lonnie A. "Bo" Pilgrim Chief Executive Officer Except for Lewis' final testimony about meeting to ne- gotiate a contract and the question of the timing of the letter,' there is no significant inconsistency between the two versions. I find that essentially everything was said as Lewis and Pilgrim described, with the exception of negotiating a contract. Pilgrim, I find, said they would meet to discuss whatever Lewis (the Union) was propos- ing. In Pilgrim's mind there apparently was a difference, with Lewis' version possibly indicating recognition of the Union, whereas in Pilgrim's version he would be meeting only as a matter of courtesy, with all his options left open (including recognizing the Union and negotiat- ing a CBA if he so chose). In this same timeframe Pluss-Tex distributed the fol- lowing memo, enclosing a 1.5 page history of Respond- ent (G.C. Exh. 10):8 Pilgrim testified that he dictated the letter that morning (1.99-100). I find that he dictated it that afternoon following his conversation with Lewis 9 As I have found, Pilgrim dictated the 29 May letter after his conver- sation of that date with Lewis a The parties stipulated that the memo was enclosed in the pay enve- lope given to employees in late May (1.60) TO ALL EMPLOYEES Pluss-Tex Poultry, P. T. Poultry Growers and J.M. & S. Company have been acquired by Pilgrim In- dustries of Texas . The acquisition should be com- pleted in the month of June. There will be no changes in the management team when Pilgrim Industries takes possession of the business. A short history of Pilgrim Industries is included in your pay envelope. Sincerely, /s/ James H. Pluss James H. Pluss Hearing nothing further from Pilgrim or Respondent's committee, Lewis telephoned Pilgrim on Monday, 3 June. Pilgrim, Lewis testified, exclaimed that he had been bogged down in paperwork and therefore had been unable to call Lewis. Pilgrim said he could meet on 12 June unless he called to say he would need more time (1:45, 47-48). On 11 June Pilgrim said he would have to postpone their meeting until after the sale was complete. They agreed to meet 26 June (1:48). With Respondent's representatives arriving late, the parties met the afternoon of Wednesday, 26 June. Present for Local 540 were Union Representatives Allen R. Lewis and Shaun Aguirre and employees Della Rus- sell, Mary Newton, and Gloria Gomez. Representing Re- spondent were Plant Manager Elray Woods and Attor- ney Allen P. Schoolfield (1:48-49). At the meeting Schoolfield stated that Respondent would not recognize or bargain with the Union because it had no obligation to do so. This was so, Schoolfield explained, because Re- spondent had purchased only the assets , not the stock, and therefore was not a successor. Schoolfield added that there would be no changes at that time. Schoolfield also rejected Lewis' contention that the ' Union had the right to file and process grievances.9 Eventually, on 9 July, Respondent sent a one-sentence letter from attorney Schoolfield to the Union's attorney, James L. Hicks Jr., with a copy to Lewis, reading (R. Exh. 1; 1:61): Dear Mr. Hicks: Pursuant to the request of Local Union No. 540, United Food and Commercial Workers, AFL-CIO, to bargain with Pilgrim Industries at its plant in Lufkin, Texas, please be advised that the company will bargain when the union has established majori- ty status in an appropriate bargaining unit. Sincerely, /s/ Allen P. Schoolfield, Jr. Allen P. Schoolfield, Jr. Attorney for Pilgrim Industries 9 Concerning the contents of this meeting, Union Representative Lewis testified without contradiction (1:49-50). In par 11 of its answer Re- spondent states that on and before 26 June it refused to bargain with the Union "unless and until a majority was established in an appropriate unit." PILGRIM INDUSTRIES 247 Pilgrim testified that before he purchased the assets from Pluss-Tex, Jim Pluss told him of the about-to-expire CBA, that Pluss said the Union was weak, and that al- though he (Pluss) had never challenged the Union he (Pluss) did not think it represented a majority of the em- ployees. According to Pilgrim, he responded by telling Pluss that it was immaterial because he was buying only assets (1:86-88, 101). Pilgrim also testified that before he refused to bargain he was aware that of about 300 employees at the plant, only about 100 were on dues checkoff (1:90). Two other reasons Pilgrim testimonially gave for be- lieving that Local 540 did not represent a majority of the employees were (1) union representatives appeared to be unsuccessful in attempt to solicit union authorization cards (1:90), and (2) some employees told him the week of 10 June that they were not getting any benefits for the dues they were paying to the Union (1:90-95). On the first of these two reasons Pilgrim's testimony is very skimpy, and then only that union agents were "per- sistently" talking to employees "trying" to sign them (1:90).10 Regarding the second point, Pilgrim could iden- tify only one employee (Eugene Stephens),11 and that was by his nickname (1:90-94). According to Pilgrim, Stephens told him that the Union was of no value to the employees because they simply collect dues and do noth- ing for the employees (1:90-91). Regarding the others, Pilgrim simply overheard some unidentified, and unnum- bered, employees in the break room expressing the com- plaint that they did not feel they received any benefit for the union dues they were paying (1:95). Regarding the point of employee dissatisfaction, Per- sonnel Manager Michael Meek testified that around Jan- uary-March employee Tommy Benavides complained to him about the amount of union dues and said he wanted out of the Union (1:196), and employee Cathy Pleasant expressed doubt to him regarding whether she made the correct decision on joining the Union (1:198).12 At the hearing, I overruled the Union's objections that this evi- dence was irrelevant. I now reverse that and grant the Union's motions to strike the evidence on the ground that these expressions of irritation do not constitute state- ments of no desire to be represented by the Union. Plant Manager Woods testified that ever since he was hired as a supervisor in July 1978 he has observed union agents, including Lewis, Aguirre, and another with cards in their hands and talking to employees yet the employ- ees walked away. Based on this, and his opinion that Local 540 represents only a few employees who have complaints, and the fact that fewer than a majority are signed up for dues checkoff, Woods believes the Union does not represent a majority of the employees (1:114- 117). This testimony by Woods is of very little legal sig- nificance. 10 To be considered above is other evidence on this point from other witnesses of Respondent. 11 Plant Manager Elray Woods identified the name of Stephens for the record (1:129). 12 Personnel/payroll clerk Nora Layton similarly testified concerning Benavides and Pleasant (1:255). Layton places her conversation with Pleasant in May, and testified that Pleasant later told her she had gotten her card back from the Union. Layton reported this to Meek (1:257-258). Marvin K. Stanley was hired by Pluss-Tex as labeling supervisor about 9 months before Respondent took over (1:233). During May Stanley observed Union Organizer Aguirre in the cafeteria on numerous days apparently (he did not overhear the conversations) soliciting signatures, but he never saw Aguirre sign anyone. He admits that Aguirre could have signed employees without his know- ing about it. Stanley's testimony has only marginal rel- evance to the issues. Supervisor Fredrico Alvarez described overhearing a dozen or so employees about mid-June complaining that the Union's business agents wanted money so they could pay off the notes on their cars and houses, and that he did not report this to anyone until he reported the matter to Attorney Schoolfield a week or two before the hear- ing (1:223-224, 230-231). I now grant the Union's motion to strike on the basis of irrelevance (1:231). Not only were the comments of no legal significance, Respondent did not consider them in forming its refusal to recognize and bargain position, which it expressed on 26 June. Personnel clerk Laura J. Hernandez testified that before Respondent took over in June, and while union business agents were soliciting signatures, employee Monica Martinez exclaimed that she signed only because the union agents kept pestering her, and Lourdes Villan- ueva wanted to know if she could register a complaint against the Union for bothering her and Angelina Alva- rez with persistent efforts to get them to sign. Two other employees would come and hide in the personnel depart- ment to avoid the soliciting. Hernandez also testified that she reported to Meek her overhearing employees at dif- ferent times in the lunchroom say they did not want or need the Union. Personnel/payroll clerk Nora Layton testified that just about every week employee Floyd Nobles asked her to type a letter in which he gave notice of withdrawal to the Union.. and that Ana Aguillar, in 1983, had asked about getting out of the Union (1:253-254). Apparently Layton never typed such a letter. It is clear that neither Aguillar nor Nobles never followed through. The parties stipulated to the authenticity of General Counsel's Exhib- it 3 and that it is a list of 101 employees from whom Pluss-Tex, as of 2 June, was deducting union dues and forwarding such dues to the Union (1:15-16). Aguillar is the first name on page one, and Nobles is named on the second page of the the three-page list. Layton did not testify that she reported Nobles' requests to management, and Pilgrim did not testify that he heard of this matter before 26 June. I attach no weight to the evidence con- cerning Aguillar and Nobles. Personnel Manager Meek did not testify that he passed the reports of his personnel clerks on to Pilgrim at any time, particularly before 26 June, nor did Pilgrim so tes- tify. Pilgrim testified that the union business agents were "persistently" trying to sign up employees, and he speci- fied seeing, and talking to, Union Representative Shaun Aguirre the week of 10 June (1:90-93). Aguirre credibly testified that the last time he was at the plant was in May (1:259). Union Representative Lewis also testified that 31 May was the last day he and Aguirre were at the plant (1:67). 248 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD As Lewis explained, before the CBA expired, the union representatives had free access to the plant, on proper notice on their arrival to management, to confer with employees about grievances and signing authoriza- tion cards during their nonworking time (1:68-70). Plant Manager Woods testified that the union agents had "full run" of the plant (1:114). There is no dispute that a big percentage of the em- ployees speak Spanish and are Spanish surnamed. Lewis estimates the number at over 60 percent (1:71, 78).'3 Personnel Manager Meek testified that none of the au- thorization cards that the Union had turned in were in Spanish, but were English only, and that most of the em- ployees who speak Spanish speak only that language (1:165, 168). Union Organizer Aguirre identified 53 authorization cards that the Union solicited in May that were never turned over to Pluss-Tex or to Respondent (1:260, 266; G.C. Exh. 11). Aguirre confirms that some of the cards are in Spanish, but most are in English (1:260, 264). The General Counsel properly counts these cards in deter- mining the number of unit employees represented by the Union. 2. Unilateral changes There is no dispute that Respondent made certain uni- lateral changes after it took over operation of the plant on 3 June. Thus, the pleadings establish that in June Re- spondent unilaterally granted employees a 15-cent-an- hour wage increase and implemented a new retirement program for them.' a On 4 August, also without bargaining with the Union, Respondent instituted a second shift.15 There is no ev- dience that any new job classifications or skills were added by the creation of the second shift. Plant Manager Elray Woods testified the installation of the day shift caused the starting time of the day shift to be moved back from about 6:50 a.m. to about 7:50 a.m. (1:29-31). For the startup training process of about 3 months, the presence of the new shift reduced the hours (number not disclosed) worked by the day shift (1:32-33). And before the second shift was installed, the day shift worked some overtime hours (1:34). There is no evidence that Respondent notified employ- ees at the time it assumed operating the plant on 3 June, or when it closed the purchase on 14 June, that it con- templated any changes in their terms and conditions of employment. Because the impact on employees by these unilateral changes was either beneficial (wage increase) or adverse (changing shift start times significantly, reducing hours for 3 months, and eliminating overtime), I shall find them to be unlawful if I find that Respondent illegally refused to recognize and bargain with the Union. 3. Successor employer factors Elray Woods was plant manager under Pluss-Tex, and he retained that position when Respondent assumed op- eration of the facility on 3 June (1:21-22). Indeed, Re- spondent hired en masse all Pluss-Tex employees, both supervisory as well as rank-and-file (1:23-25). The parties stipulated that Respondent uses the same equipment and some production process formerly utilized by Pluss-Tex (1:27). This is in keeping with Pilgrim's tes- timony that Respondent purchased the plant, the inven- tory, and the equipment (1:86). Woods testified that essentially the same product is produced as before-chill-packed chickens (1:25). Pil- grim testified that Respondent basically retained all of Pluss-Tex's customers, although Respondent now serv- ices some of them from its other plants (1:107, 108). Pil- grim testified that Respondent has expanded the number of customers by 75 percent (1:106). This last item is relat- ed to Respondent's addition of a second shift in August (1:106). Control of the organization, as previously noted, is centralized at Respondent's Pittsburg headquarters where Pilgrim personally sets Respondent's labor policies (1:97). Respondent also moved the Lufkin plant's payroll and accounting function to Pittsburg as part of Respondent's centralized system (1:96-97).16 4. Unit composition and majority status The parties dispute the union placement of certain em- ployees. This issue bears on the question of majority status. Computation of the number of all unit employees at the plant in June must begin with the testimony of Per- sonnel Manager Meek and the ethnic analysis reports he prepared as of the last (workday) of each month (1:201, 219-220). The June report reflects that status as of Friday, 28 June (1:201; G.C. Exh. 2). The parties rely on the June report in making their contentions. However, the May report reflects the status as of Friday, 31 May.' 7 That also would have been the last workday before Monday, 3 June, when Respondent assumed oper- ation of the plant. Thus, the report for 31 May would be much closer to the 3 June date than the 28 June report.' 8 On the other hand, the latter is much closer to the 26 June meeting date of the parties when Respondent announced that it would not recognize or bargain with Local 547.19 19 Union Organizer Shaun Aguirre confirms that the number of em- ployees is large although he does not know the percentage (1265) 14 Although counsel for the General Counsel represents that the date of these changes was 28 June (Br at 4), the specific date is not disclosed in the record. 15 Respondent contends that the second shift doubled the work force (Br. at 4, 6). Counsel for the General Counsel asserts that Respondent hired 250 employees for the new shift (Br. at 4) There is no record evi- dence reflecting even the approximate number of employees hired for the second shift. 16 Respondent still needs at least a payroll clerk in Lufkin, for Person- nel Manager Meek testified that witness Nora Layton serves as the pay- roll clerk (1 165) Layton also is a personnel clerk (1 252) 17 The report itself states "May, 1985" without giving the exact date (G C Exh 9) Based on Meek's testimony, however, it is clear that it would be as of the last workday, or Friday, 31 May 18 It also would be closer to the date of 29 May when, as alleged in complaint par. 10, the Union requested Respondent to bargain 19 Complaint par I I that Respondent violated Sec 8(a)(5) "Commenc- ing on or about June 26" by refusing to recognize and bargain with the Union PILGRIM INDUSTRIES In any event, there is very little differance, and a dif- ference of only one in the total (323 for May and 322 for June). In the disputed categories there also are only slight differences: sanitation (24 employees for May, 23 for June); nonlabor (11 employees for May, 14 for June). All parties agree that the 18 maintenance employees must be excluded.20 If we use, as the parties have, the June report, that brings the total of hourly employees to 304. The General Counsel would exclude, and the Re- spondent would include, the 23 sanitation employees (de- partment 40) and the 14 nonlabor employees (department 45). There are 2 other disputed categories, 2 quality con- trol employees, and 20 part-time employees. The General Counsel would exclude these, and the Respondent would include them. The 20 part-time employees are not includ- ed in the number of hourly employees (1:218). Of the four disputed classifications, the group of part- time employees can be resolved immediately. Personnel Manager Meek testified that the part-time employees ac- tually are classified as casual employees because they have no regular hours, work no designated days, receive no benefits other than the hourly pay for the classifica- tion of work they do when they actually work, and the members of the 20 are not always the same (1:217-218). As explained by Union Representative Allen R. Lewis, who has serviced the contract since about 1970, the Union agreed that Pluss-Tex could hire up to about 20 employees on a daily basis to fill in for absentees and to keep the regular employees from being disciplined, and that they were not to be considered in the unit (1:50, 51). Meek testified that he does not count these casual em- ployees in his reports (1:218). I shall exclude them as well. This leaves the total unchanged at 304. Meek testified that although the quality control em- ployees previously were counted in the nonlabor group (department 45), since sometime in 1983 they, being only two employees, have been counted separately (1:175, 200-201). That raises the employees total to 306. Howev- er, Union Representative Lewis credibly testified that the Union agreed about 6 years ago to remove the two qual- ity control employees from the unit so they could attend supervisory meetings (1:54-55, 72).21 Based on this histo- ry of exclusion, I shall leave the quality control employ- ees out of the unit. That returns the number to 304. Plant Manager Woods testified that the sanitation em- ployees come in after the production employees leave and they clean the plant, sanitize it, and prepare it for the next day's chicken kill (1:109, 122-123). He considers them part of production and in the unit (1:35, 120, 161). Union Representative Lewis testified that the sanitation employees were never treated as being part of the CBA and that the Union never represented them, but there is no evidence that this was by virtue of a mutual under- standing. Woods (1:36, 112-113) and Personnel Manager Meek (1:174, 199, 203-206) testified that the 14 employees 20 Both reports (May and June) reflect the same total of 18 mainte- nance employees . The expired contract excludes maintenance employees (G.C. Exh. 4). 21 Lewis testified that, before the mutually agreed exclusion, the qual- ity control employees were included (1:54, 72-73, 272). 249 listed in department 45, nonlabor, are garbage truckdriv- ers, janitors, general laborers, water treatment employ- ees, and an employee who sweeps up feathers.22 Lewis testified that the Union has never represented these em- ployees (1:54, 272). As with the sanitation employees, however, there is no evidence that this was the result of an agreement with Pluss-Tex or a mutual (or even unilat- eral) misunderstanding. The General Counsel argues that even if the figure for the bargaining is left at 30623 the Union still enjoyed ma- jority status by virtue of the 101 employees on checkoff, plus the additional 53 employees signed in May, making a total signed of 154 (Br. at 10). That number, 154, is slightly more than a majority of the unit total of 306. At this point I need not resolve the unit placement of the sanitation employees and the nonlabor employees. B. Analysis and Conclusions 1. Applicable legal principles The test for determining successorship is whether there is substantial continuity in the employing enter- prise.24 Where there is such a continuity, the presump- tion of majority status by the union under the predeces- sor, such as established by a collective-bargaining agree- ment as here, is not affected by a change in ownership.25 The traditional factors used in making this determina- tion are: (1) business operations, (2) plant, (3) work force, (4) jobs and working conditions, (5) supervisors, and (6) machinery, equipment, and methods of production.26 Whether considered as part of the business operations factor or as an independent criterion, continuity of sup- pliers and customers also has been weighed in determin- ing continuity in the employing industry.27 And in making the determination, it is immaterial that the new employer purchased only the assets of the predecessor employer.28 Fall River Dyeing Corp.; Grico Corp., supra. To preserve stability in bargaining, there is a presump- tion that the union with which the predecessor had a collective-bargaining agreement continues to retain ma- jority status.29 Arising from the CBA, this presumption of majority status attaches regardless of whether the original bargaining relationship followed Board certifica- 22 The "non labor" classification apparently is a term designating em- ployees who are not involved in direct labor jobs of killing and process- ing chickens. 23 If the May figures are used , the total would be 305 (323 less the 18 maintenance employees). 24 NLRB Y. Burns Security Services, 406 U.S. 272 (1972); Grico Corp., 265 NLRB 1344, 1345 (1982), enfd. 730 F.2d 767 (9th Cir. 1984). 25 Grico Corp., supra. 2e Fall River Dyeing Corp., 272 NLRB 839, 839-840 (1984), enfd. 775 F.2d 425, 428 (1st Cir. 1985); Grico Corp., 265 NLRB 1344, 1345 (1982), enfd. 730 F.2d 767 (9th Cir. 1984). 27 Id. 28 Physical assets do not pass free of any legal liens they may be bur- dened with , and as an experienced businessman , Pilgrim would know that. Similarly, if successorship attaches, then the duty to recognize and bargain with the bargaining representative serves as a kind of lien on the purchase. 29 Landmark International Trucks, 257 NLRB 1375, 1383 (1981), enf. denied on other grounds 699 F .2d 815, 817 (6th Cir. 1983). 250 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD tionS° or voluntary recognition by the employer.31 For a certified union, the presumption is irrebuttable for I year following its certification, and rebuttable thereafter. Thomas Industries, supra. With a union voluntarily recog- nized by the employer, the initial presumption is irrebut- table for only a reasonable time, after which the pre- sumption becomes rebuttable. Tajon Inc., 269 NLRB 327 (1984). Where the factors to be reviewed in successorship cases have been considered and a conclusion reached that the purchasing employer is a Burns successor, the obligation to bargain with the representative of its prede- cessor's employees attaches by operation of law. Land- mark, supra; Harley-Davidson Co., 273 NLRB 1531 (1985). Even so, the presumption of a majority status is a rebuttable one. Harley-Davidson, supra. A successor em- ployer may overcome that presumption by demonstrat- ingS2 either (1) that the bargaining representative no longer enjoys majority support on the date of the em- ployer's refusal to bargain, or (2) it has a good-faith and reasonably grounded doubt of the union's continued ma- jority support. Sofco, Inc., 268 NLRB 159, 160 (1983); Grico Corp., supra at 1346. Stated differently, the established rule is that an em- ployer may withdraw recognition if it demonstrates, on the date of withdrawal and in a context free of unfair labor practices, that the union (1) in fact had lost its ma- jority status, or (2) that the withdrawal was predicated on a reasonable doubt, based on objective considerations, of the union's majority status. Master Slack Corp., 271 NLRB 78, 84 (1984); Abbey Medical/Abbey Rents, Inc., 264 NLRB 969 (1982), enfd. mem. 709 F.2d 1517 (9th Cir. 1983). The employer's burden is a "heavy one," Distribution Services West, 262 NLRB 764, 772 (1982), for the evi- dence must be "clear, cogent, and convincing." Hutchin- son-Hayes International, 264 NLRB 1300, 1304 (1982); Forbidden City Restaurant v. NLRB, 736 F.2d 1295, 1297 (9th Cir. 1984). This is a "high standard of proof," which requires more than unfounded speculation of a subjective state of mind. Hutchinson-Hayes, supra. Moreover, evidence of dissatisfaction with the union, to be of any significance, must come from the employees themselves, not from the employer on their behalf. Mont- gomery Ward & Co., 210 NLRB 717 (1974). This does not mean that at trial the employer is required to call the employees as witnesses and elicit the testimony from them directly. Sofco, supra at fn. 9; Naylor, Type & Mats, 233 NLRB 105, 107-108 (1977). An employer may rely only on quoted comments of the employees, but not on self-serving general assertions by the employer that in its opinion the employees did not support the union. Sofco, supra at fn. 10. 90 Thomas Industries v NLRB, 687 F 2d 863, 864-865 (6th Cir 1982), Guerdon Industries, 218 NLRB 658 (1975) 31 Landmark, supra The Board has overruled Landmark on another point not material here Harley-Davidson Co, 273 NLRB 1531 (1985) 33 The burden is on the successor employer, for the union is not re- quired to substantiate anew its majority status Aircraft Magnesium, supra at 1346 2. Discussion and conclusions a. Successorship Applying the foregoing principles, I find that, by oper- ation of law, Respondent became the successor of Pluss- Tex when it assumed operation of the Lufkin plant on 3 June.33 Practically every factor to be considered com- pels that conclusion. At the time of the transfer in early June everything and everyone passed en masse to Re- spondent. So far as the record indicates, not a single minute of production was lost in the changeover to Re- spondent. There were some changes in the business operation, but these were principally in administrative functions, which, as the record shows, had no impact on the bar- gaining unit. The eventual addition of a second shift and more customers simply enhanced the security of the em- ployees' jobs. As phrased by the court in NLRB v. Fall River Dyeing Corp., 775 F.2d 425 429 (1st Cir. 1985): The critical inquiry is whether any changes in oper- ation have significantly altered the employees' working conditions, the employment relationship, and correspondingly, the employees' expectations and needs with regard to representation. There were no such changes here. Accordingly, I find that Pluss-Tex's obligation to bargain with the Union passed to Respondent when the latter became the former's successor-in-law at the Lufkin plant. We turn now to consider whether Respondent carried its burden of showing that it was justified in refusing to recognize and bargain with the Union. b. Majority status As to the second option (good-faith doubt), I find that Respondent's showing of objective considerations was in- sufficient to support a good-faith doubt. Most of the comments supervisors or other witnesses heard were no more than criticisms (union agents wanted dues so they could pay off car and house notes) having no legal sig- nificance because they failed to express a desire not to be represented by the Union. Of those who expressed a desire to withdraw from the Union, the number is very small. However, if the combination of only a third of Re- spondent's employees being on dues checkoff, with su- pervisory observations in May that union business agents appeared to be unsuccessful in persuading employees to sign cards, is sufficient to support a good-faith doubt by Respondent that Local 540 represented a majority of the unit, then the burden would pass to the General Counsel to prove that on the critical date of refusal to recognize (26 June) the Union in fact represented a majority of the employees in the unit.34 In our case the General Counsel made that demonstration. 33 My conclusion would be the same even if the critical date is 14 June when the sale/purchase was closed and the title to the properties sold passed to Respondent $4 Landmark International Trucks v NLRB, 699 F 2d 815, 819 (6th Or 1983) PILGRIM INDUSTRIES 251 Because the Union (by either presumption or fact) rep- resented a majority of unit employees on 26 June, I find that, as alleged, Respondent violated Section 8(a)(5) of the Act by refusing to recognize and bargain with Local 540. shall not order Respondent to rescind any of the unilat- eral changes that, as described, it has made. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed35 c. Unilateral changes unlawful If Respondent's refusal to recognize and bargain had been lawful, then the unilateral changes would have been permissible. Master Slack Corp., 271 NLRB 78, 85 (1984). Because Respondent's refusal to recognize and bargain with the Union was unlawful, the unilateral changes were illegal. Peat Mfg. Co., 251 NLRB 1117 at fn. 4 (1980), enfd. mem. 673 F.2d 1339 (9th Cir. 1982). CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Local 540 is a labor organization within the mean- ing of Section 2(5) of the Act. 3. On 3 June 1985 Respondent became the successor employer to the employees in the bargaining unit de- scribed below. 4. The following employees constitute a unit appropri- ate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All production employees at the Employer's Lufkin, Texas, plant; excluding all maintenance employees, truck drivers, office clerical employees, guards, watchmen, assistant managers, foremen, foreladies and all other supervisors as defined in the Act. 5. At all times material Local 540 has been the exclu- sive collective-bargaining representative of all the em- ployees in the unit described above for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 6. By refusing on and after 26 June 1985 to recognize and bargain with the Union, Respondent has violated Section 8(a)(5) and (1) of the Act. 7. By unilaterally, without consulting the Union, grant- ing unit employees a 15-cent-per-hour pay increase and installing a new employee retirement plan, all in June 1985, and by instituting a second shift on 4 August 1985, Respondent has violated Section 8(a)(5) and (1) of the Act. 8. The unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has committed the unfair labor practices as alleged, I shall order it to cease and to take affirmative action designed to effectuate the polcies of the Act. Nothing shall be construed as requiring Respondent to rescind the pay increase granted employees in June 1985. As the General Counsel asserts that the Union, consider- ing (all) the unilateral changes as, beneficial to the em- ployees, does not seek rescission (Br. at 7), and because the Union has adopted the General Counsel's brief, I ORDER The Respondent, Pilgrim Industries, Inc., Lufkin, Texas, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to recognize and bargain with Local 540 as the exclusive bargaining representative of all the em- ployees in the unit described below, and by making uni- lateral changes without notifying and bargaining with Local 540. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Recognize and, on request, bargain with the Union as the exclusive representative of the employees in the following appropriate unit concerning terms and condi- tions of employment and, if an understanding is reached, embody the understanding in a signed agreement: All production employees at the Employer's Lufkin, Texas, plant; excluding all maintenance employees, truck drivers, office clerical employees, guards, watchmen, assistant managers, foremen, foreladies and all other supervisors as defined in the Act. (b) Post at its Lufkin, Texas plant copies of the at- tached notice marked "Appendix."36 Copies of the notice, on forms provided by the Regional Director for Region 16, after being signed by the Respondent's au- thorized representative, shall be posted by the Respond- ent immediately upon receipt and maintained for 60 con- secutive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director in writing within 20 days from the date of this Order what steps Respondent has taken to comply. For the purpose of determining or securing compliance with this Order, the Board, or any of its authorized representatives, may obtain discovery from the Respondent, its officers, agents, successors, or assigns, or any other person having knowledge concern- ing any compliance matter, in the manner provided by the Federal Rules of Civil Procedure. Such discovery shall be conducted under the supervision of the United sa If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations , the findings, conclusions, and recommended Order shall, as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses 36 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." 252 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD States court of appeals enforcing this Order and may be had upon any matter reasonably related to compliance with this Order, as enforced by the court. 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 or- dered us to post and abide by this notice. WE WILL NOT refuse to recognize and bargain with Local 540 as the exclusive bargaining representative of all the employees in the unit described below. WE WILL NOT unilaterally change your wages, hours, or other terms and conditions of employment without notifying and bargaining with Local 540. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act. WE WILL, on request, bargain with United Food and Commercial Workers Union, Local 540, AFL-CIO, CLC and put in writing and sign any agreement reached on terms and conditions of employment for our employ- ees in the bargaining unit: All production employees at the Employer's Lufkin, Texas, plant; excluding all maintenance employees, truck drivers, office clerical employees, guards, watchmen, assistant managers, foremen, foreladies and all other supervisors as defined in the Act. PILGRIM INDUSTRIES, INC.