Shell Ray Mining, Inc.

466 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Shell Ray Mining, Inc. and United Mine Workers of America District 17, Subdistrict II. Cases 9- CA-23075 and 9-CA-23553 30 September 1987 DECISION AND ORDER BY MEMBERS BABSON, STEPHENS, AND CRACRAFT conclusions, but not to adopt the recommended Order. 2 ORDER The National Labor Relations Board orders that the settlement agreement in Case 9-CA-23075 be reinstated and the complaint in this case be dis- missed. On 13 April 1987 Administrative Law Judge Robert T. Wallace issued the attached decision. The General Counsel filed exceptions and a sup- porting brief, and the Respondent filed an answer- ing brief. 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, I and I 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 The judge credited former President and Owner Ray Bailey 's testimo- ny denying that he told the employees on 4 June 1986 that as owners they could work the mine and pay themselves $100 a day In light of the judge's finding that no reference was made to payment of below-scale wages on 4 June, we find it unnecessary to rely on the judge's discussion in par. 15 of the findings of fact and analysis section of his decision that such a statement, if made, amounts to no more than a "suggestion" what the employees might do on becoming owners and does not constitute "bargaining." We agree with the judge's finding that the General Counsel failed to establish a prima facie case that employee Collins was discriminatorily discharged Therefore, we find it necessary to rely on the judge's state- ment that "a decision not to retain (rehire) [Collins] because he declined to become an owner would not have violated any right protected under the Act " The General Counsel has excepted to the judge's conclusion that the Respondent did not violate Sec 8(a)(4) of the Act by ceasing its mining operations and laying off employees on 2 May 1986 Although we agree with the judge's conclusion, we find merit in the General Counsel's argu- ment that the judge incorrectly applied the Board's decision in Wright Line, 251 NLRB 1083 (1980). The judge incorrectly concluded that the Respondent's burden of proof under Wright Line was to show that its "primary motivation [for closing the mine and laying off employees] was to avert or minimize economic loss rather than to punish those responsi- ble for the filing [of the charge] " The Board's analysis in Wright Line requires the General Counsel to establish a prima facie case that employ- ees' protected conduct was a motivating factor in an employer's decision If the General Counsel meets her initial burden, then the burden shifts to the Respondent to demonstrate that the decision would have been made even in the absence of the protected activity The record indicates that as a result of the reduction in the per-ton puce of coal paid by National Mining Corporation, the Respondent could no longer continue its operation absent cost reductions Constrained by this economic situation, the Respondent in early March 1986 bypassed the Union, ignored its obligations under the applicable collective-bargain- ing agreement, and dealt directly with employees for reduced wages and benefits Operations at the mine under the new arrangement continued until 1 May 1986, when the Respondent was notified that an unfair labor practice charge had been filed by the Union alleging an 8(a)(5) violation. The Respondent immediately shut down operations Based on these facts, we find that the General Counsel has established a prima facie case that the closing of the mine was unlawfully motivated The Respondent has shown, however , that its decision to close the mine on 2 May 1986 was not made in retaliation for the filing of the charge, but was motivated by economic situation that existed at the time the charge was filed The Respondent realized that , by bringing to light its unlawful agreement to pay the employees reduced wages and benefits, the charge, if meritorious and successfully prosecuted, would undo the significant cost savings that the Respondent had sought to achieve, with the result that the Respondent would again be faced with an operation that was not economically viable Rather than face the prospect of run- ning the mine under such conditions, the Respondent decided to close Thus, we find that the Respondent has rebutted the General Counsel's prima facie case and established that its decision to close the mine was based on economic considerations 2 The judge found , and we agree, that the Respondent did not commit any unfair labor practices after the settlement agreement in Case 9-CA- 23075 was approved Under these circumstances , the judge should have reinstated the settlement agreement and dismissed the complaint in its en- tirety See Carlsen Porsche Audi, 266 NLRB 141, 153 (1983) The Re- spondent has not excepted to the judge's finding that its presettlement conduct violated Sec. 8(a)(5), and we therefore adopt that finding pro forma We do not adopt the judge 's recommended cease-and-desist order and shall instead order that the settlement agreement be reinstated Garey E. Lindsay, Esq., for the General Counsel. Donald R. Johnson, Esq. (Shott & Johnson), of Bluefield, West Virginia, for the Respondent. Thomas H. Zerbe, Esq. and David J. Hardy, Esq., for the Charging Union. DECISION STATEMENT OF THE CASE ROBERT T. WALLACE, Administrative Law Judge. On charges filed by the Union on 24 April and 22 September 1986, a consolidated complaint was issued on 7 October. Trial was held on 20 and 21 November. The complaint, as amended at the trial, alleges that Respondent Shell Ray Mining , Inc., violated Section 8(a)(1), (3), (4), and (5) of the National Labor Relations Act by dealing directly with employees instead of their designated bargaining representative (the Union), by fail- ing to observe the terms of an applicable collective-bar- gaining agreement, and by discharging an employee for engaging in a protected activity. Based on the entire record , including my observation of the witnesses and after due consideration of briefs filed by the General Counsel and Respondent, I make the following FINDINGS OF FACT AND ANALYSIS Respondent, a West Virginia corporation, is engaged in mining coal for National Mining Corporation , at a site located in or near Iaeger, West Virginia. The coal mined by Respondent is shipped to National 's facility at Pine- 286 NLRB No. 41 SHELL RAY MINING ville, West Virginia, pursuant to a service contract whereby Respondent can sell coal only to National. During the 12-month period immediately preceding the trial, Respondent received revenues in excess of $50,000 from National, and the latter sold and shipped coal valued in excess of $50,000 from its Pineville facility di- rectly to points outside the State of West Virginia. I find that Respondent and National are employers engaged in commerce within the meaning of Section 2 (2), (6), and (7) of the Act. At all times pertinent Respondent was a signatory to a collective-bargaining agreement with the Union, and I find that the latter is a labor organization within the meaning of Section 2(5) of the Act. Respondent began operations in 1977 . In November 1985, it closed the mine on being informed that National would no longer receive coal. Three months later Re- spondent was advised that National would again receive coal, but only at a price of $21.42 per clean ton. This represented approximately 22 percent less than the rate previously paid by National and it continued to offer only the lower rate up to and through the time of trial. Operating at the higher rate during 1985, Respondent sustained an operating loss for tax purposes of $4030. It had a gross income of $327,236 with deductions amount- ing to $331 ,266. The latter included $34,500 in officers salaries $28,381 in taxes, $31,128 in interest paid, $141,155 in equipment depreciation, $ 13,814 in other de- preciation, and $5175 in payments to the Union for em- ployee retirement benefits. On 3 March 1986 and shortly after receipt of the price reduction notice, Respondent's president (Ray Bailey) called a meeting of employees and advised them that the Company could not afford to mine coal at the lower price unless substantial reductions in cost could be achieved . After explaining that savings would have to come mainly from labor because other costs had been cut to the bone, he proposed that they forgo all wages and benefits under the contract in excess of $ 100 per day and hospitalization insurance; and he told them that even with those reductions operations would have to be on a month-to-month basis. Finally, and to keep the scheme secret from the Union, he insisted that acceptance of the lesser compensation be unanimous and manifested by their signing a written agreement. Present at the meeting was the entire complement (eight) of laid-off employees consisting of. Floyd Graham, Bilton Kennedy, Jack Osborne, Elmer Rowe, Rockie Bailey, Mickey Steele, Teddy Bailey, and Mere- dith Collins . Except for the latter two, all promptly signed . The decliners , however, orally agreed to work under the new arrangement . Unsatisfied, Ray Bailey de- layed reopening for about 3 weeks during, that time he went to Collins' home at least twice . During the course of those visits he urged Collins to sign observing, among other things, that "it was a shame [for him] to keep the men out of work," that the men harbored "hard feelings" against him and were "mad at him" for not signing. Col- lins acquiesced and signed sometime in late March, and Ray Bailey ordered reopening of the mine about 31 March, this notwithstanding his failure to get Teddy Bai- ley's signature. 467 Respondent's actions (all admitted) in bypassing the Union, ignoring its obligations under the applicable col- lective-bargaining agreement, and dealing directly with employees for reduced wages and benefits, patently vio- lated Section 8(a)(5) and (1) of the Act. Pacific Intercom Co., 255 NLRB 184 (1984). Operations at the mine under the unlawful agreement continued through 1 May. On that day Ray Bailey re- ceived notification from the Board that a charge alleging the 8(a)(5) violation had been filed by the Union. He promptly ordered the mine closed effective on 2 May; and in a letter dated 16 May he advised the Board's Re- gional Director of the shutdown explaining that he took the action because he could not operate the mine eco- nomically. He added : "I'm glad this [the charge] was brought up before we worked too long. Because if you rule against me, I can pay the UMWA contract for the month they worked , but I couldn't have if we had worked longer." On 30 May and with approval of the Regional Direc- tor, Respondent, through Bailey, entered into a settle- ment agreement with the Union in which it promised to abide by the contract and to see that the men were com- pensated in full thereunder for the time they had worked. As noted below the Regional Director later set aside the agreement and issued the complaint. At the trial, counsel for the General Counsel requested and was granted permission to amend the complaint to allege that the mine closing was in retaliation for the filing of the charge and therefore violative of Section 8(a)(4). I find no violation . Although the charge indeed triggered the closing, I am not persuaded that it was the basic cause of the closing . Instead, I credit Respondent's claim that in light of the drastic reduction in the per -ton price of coal it would not have reopened the mine in the first instance absent the prospect of achieving significant cost savings. So it was loss of that prospect as a perceived likely result of the filing of the charge that caused the closing. In effect, Respondent's primary motivation was to avert or minimize economic loss rather than to punish those re- spoi Bible for the filing . It has met its burden of proof under Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert . denied 445 U.S. 989 (1982). Respondent called a meeting of employees on 4 June. All were present except Mickey Steele and Teddy Bailey, the latter being hospitalized . He advised them of the settlement agreement, told them they were perma- nently laid off, and gave each of them checks the amount of which represented the difference between what he had paid them during the 1-month reopening and what he should have paid them under the contract . After a brief silence, employee Floyd Graham got up and re- turned his endorsed check to Ray Bailey . In his words: "I told Mr. Bailey that I didn't feel that he owed me the money. I told him that when I give . . . my word, you can take it and deposit it in the bank , just like your money. What I told you I mean. And what I tell you, I'll do." One by one, all the others endorsed their checks and returned them . As they were about to leave one of the men asked Bailey what was going to happen. He an- 468 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD swered that he was trying to sell the mine. There ensued a discussion the result of which was an agreement (G.C. Exh. 5) between the stockholders (Ray Bailey and his relatives) and all the employees (except Collins) whereby the former agreed to transfer to the latter title to all the assets (principally machinery and work vehicles) and stock of the Company in return for their payment of $600,000 on an installment plan. There was no initial de- posit, and the buyers agreed to retain Ray Bailey and his brother on the payroll as controller and superintendent, respectively. Operations at the mine under the purchase agreement resumed on the following day and continued on through the time of the trial. On 7 October the Regional Director revoked the set- tlement agreement and issued the complaint in this pro- ceeding. Therein it is alleged that Respondent on 4 June, and contrary to that agreement, again violated Section 8(a)(5) by dealing directly with employees for reduced wages and benefits. There is no contention in the com- plaint that the new "owners" received less than the wages and benefits called for in the collective-bargaining agreement for work performed by them on and after 5 June. This is because an allegation to that effect was de- leted on request of counsel for the General Counsel made at the outset of the trial and after he had examined Respondent's records. i I find no violation of any bargaining obligation. The agreement on 4 June is not shown to be anything other than what it purports to be, i.e., a sale of the Baileys' entire interest in the Company effective as of the date it was memorialized in writing (13 June), subject to rever- sion of assets, except stock, in the event the buyers de- faulted on payments or other stated obligations. In es- sence, therefore, the transaction was financial and mana- gerial in nature and not of a type giving rise to a duty to bargain. See General Motors Corp., 191 NLRB 951 (1971), enfd. sub nom. Auto Workers v. NLRB, 470 F.2d 422 (D.C. Cir. 1972); National Car Rental Systems, 252 NLRB 159 (1980). In reaching this conclusion I have considered and found lacking in merit the General Counsel's contention that the agreement entered into on 4 June was in reality nothing more than a plan to allow employees to pur- chase the Company and its assets in the future, and was "specifically" contingent on their retaining employee status during the term of the plan. That view, however, lacks evidentiary support and is contrary to consistent and credited testimony of participants as well as the plain meaning of language used in the written agreement. In particular, I note that, taken in context, Ray Bailey's ref- erence in his testimony to the employees as "future owners" (Tr. 41) simply reflects his understanding of what they would become if, following discussion on 4 June, they agreed to participate in the buyout. Also, the contract of sale is devoid of any requirement that the new "owners" continue to work at the mine, and the t As later developed at the trial, those records did not include the daily logs of hours worked by individuals Respondent 's superintendent explained that he threw those records away promptly after phoning in the data to Ray Bailey only evidence of an oral understanding in that regard is supplied by Floyd Graham. He testified (Tr. 203-205) that he and his fellow shareholders agreed among them- selves that anyone who ceased to work at the mine would surrender his stock to the others, and that the sell- ers were not party to that arrangement , and I credit his testimony. Further, the General Counsel claims that Ray Bailey unlawfully bargained for reduced wages and benefits by telling the men on 4 June that as owners they could work the mine and pay themselves $100 a day. Assuming it was made, the statement amounts to no more than a suggestion about what they might do on becoming owners. It does not constitute "bargaining." In any event, the statement is found in the midst of a rambling discourse (Tr. 78-79) of Meredith Collins and is immedi- ately followed by an inconsistent assertion, to wit: that Ray went on to tell them that if the absent Teddy Bailey opted not to be an owner "you have to let him work and pay him union scales." In this circumstance, and in light of Ray's denial (Tr. 44-45 and 154), I decline to find he made any reference to payment of below-scale wages on 4 June. The final allegation is that Respondent violated Sec- tion 8(a)(3) by discharging Collins because he engaged in protected activities. Here too, I find no merit in the claim. On leaving the meeting on 4 June Collins, by his own admission (Tr. 77 and 115), knew that the men had de- cided to go back to work on the next day (Thursday) and, contrary to his testimony (Tr. 79), he was aware that he had an option to return even though he was not party to the purchase agreement. As to at option, I credit: (1) testimony of Ray Bailey and others that it was expressly stated at the meeting and (2) a statement to that effect (Tr. 110) by Collins in an affidavit given on 10 September.2 But Collins did not report for work on Thursday. Nei- ther did he appear on Friday, although on that day he had his daughter go to the office and pick up the settle- ment check ($482.12) he had endorsed and returned to Ray Bailey. He was again absent on Monday, but late that afternoon he phoned the superintendent and asked if ,.you all want me to come . . . to work tomorrow?" He had not previously called in regard to his absence nor did he then offer any explanation to the supervisor. In response, the supervisor said he would take a poll since "it's up to the men [now]." He promptly did so, and their decision (conveyed to Collins about 8 p.m. that evening) was that they viewed him as having quit and "they was just going to leave it like that," i.e., not rehire him. They were familiar with a custom of employers in the area to consider a miner as having quit when he was absent for more than 1 day without explanation. Collins' claim that it was not observed by Respondent fails be- cause, when pressed, he was unable to provide any perti- nent example of a waiver. z In pertinent part the statement reads "Ray Bailey [at the meet- ing] told us . that if any employee didn't want to but the mine out, that employee must be paid union scale " SHELL RAY MINING 469 In the circumstances, I am not persuaded that Re- spondent's action in dropping Collins from the rolls (even if viewed as a discharge) was discriminatory or otherwise unlawful. In this, I recognize that Respond- ent's principals may have been displeased with him for retrieving the settlement check and for not participating in the buyout. But those matters are not shown to have motivated the termination.3 Rather, it was a direct result of his extended unannounced absence and failure to pro- vide any explanation therefor. Moreover, a decision not to retain (rehire) him because he declined to become an owner would not have violated any right protected under the Act. Also intenable is a theory that the principals terminat- ed Collins out of fear that he would inform on them re- garding future violations of the collective-bargaining agreement. There simply is no evidence that they ever intended to pay less than the wages and beneifts called for in the agreement; and, as noted above, an allegation that they in fact paid less was deleted from the complaint on request of counsel for the General Counsel. CONCLUSION OF LAW I find that Respondent violated Section 8(a)(5) and (1) of the Act in the particulars and for the reasons stated 8 It is noted that Rocky Bailey is still on the company payroll (albeit on sick leave) even though he too cashed a settlement check , and that Steele continues to work at the mine despite the fact that he chose not to become party to the buyout above; and that it is not shown to have violated the Act in any other respect; and that the unfair labor practices here found to have been committed affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY The violations found to have been committed have been satisfied by virtue of Respondent's compliance with the settlement agreement (G.C. Exh. 4) effected on 30 May 1986. In this regard, the checks given to the discri- minatees on 4 June appear fully to have compensated them for Respondent's failure to pay wages and benefits called for in the collective-bargaining agreement for work performed between 4 March and 2 May 1986, and there is no allegation or proof that their act of endorsing and returning the checks to Respondent was anything other than free and uncoerced. Further, it appears that the language in the notice required to be posted by Re- spondent pursuant to the settlement agreement adequate- ly addresses the violations found, and that it was proper- ly posted about 5 June and remained so for the required 60-day period. In these circumstances, the policies of the Act will be served fully by the Order entered below. There is no need for the visitatorial clause requested by the General Counsel. [Recommended Order omitted from publication.]