Lapeer Foundry And Machine, Inc.

952 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Lapeer Foundry and Machine, Inc. and International Union, United Automobile, Aerospace and Agri- cultural Implement Workers of America, UAW and John J. Curran, Jr. and Lapeer Foundry and Machine, Inc. Employees' Committee, Party in Interest. Cases 7-CA-20895, 7-CA- 21140, 7-CA-21612, and 7-CA-21830 July 20, 1988 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND BABSON On July 29, 1983, Administrative Law Judge William A. Gershuny 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 conclusions2 as modified, and to adopt the recom- mended Order as modified and set forth in full below. 1. THE BARGAINING ORDER The judge found that commencing with the Union's organizational campaign , the Respondent engaged in a course of serious unfair labor prac- tices that affected virtually all employees at the 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 2 The judge found that William Childers Sr was an agent of the Re- spondent and that his conduct therefore was imputable to the Respond- ent The Respondent did not except to these findings The General Coun- sel has excepted to the judge's failure to find that Childers Sr was a su- pervisor under the Act In light of the adopted finding that the conduct of Childers Sr is imputable to the Respondent, we find it unnecessary to address the General Counsel's contention The judge further found that the Respondent did not violate the Act by refusing to recall employees Fenslau, Elmore, Campbell, Elder, Col- lins, Jenkins, and Spencer Although we adopt the judge's findings, we do not rely on his conclusion that the involvement of Fenslau, Elmore, and Campbell in the April 1982 theft of parts from the plant constituted a legitimate reason for the Respondent's refusal to recall them The record establishes that the Respondent recalled employee Cichoracki even though it knew that he was involved in the same theft We also do not rely on the judge's conclusion that Elmore's suspected involvement in the theft of plant equipment on June 30, 1982, constituted a legitimate reason for the Respondent's refusal to recall him because the record establishes that the Respondent did not have any evidence that Elmore committed this theft Furthermore, we do not rely on the judge's finding that Spen- cer's constant complaints about having to do foundry work constituted a legitimate reason for the Respondent 's refusal to recall him because the record does not show that Spencer made such complaints constantly plant.3 He concluded that these unfair labor prac- tices in the small unit precluded the possibility of holding a fair election . Noting that a majority of the Respondent's production and maintenance em- ployees had signed union authorization cards during June 1982,4 the judge concluded that the imposition of a bargaining order would best protect the employees' sentiments pursuant to NLRB v. Gissel Packing Co., 395 U.S. 575 (1969).5 The judge, however , did not make the bargaining order retroactive to June 30, the date on which the Re- spondent had embarked on its course of unlawful conduct. The General Counsel has excepted to the judge's failure to make the bargaining order retro- active to that date. We find merit in the General Counsel's exception. Although acknowledging that the Board has issued retroactive bargaining orders since Trading Port, Inc., 219 NLRB 298 (1975), the judge decided that the entry of a prospective bargaining order in this case would best effectuate the purposes of the Act. He reasoned, inter alia, that a retroactive bar- gaining obligation was inappropriate because the Union had failed to demand recognition when it obtained majority status, and because the retroac- tive order might have deleterious effects on the Re- spondent's already precarious financial condition. We note, however, that in Peaker Run Coal Co., 228 NLRB 93 (1977), the Board rejected the argu- ment that a retroactive bargaining order is inappro- priate in the absence of a demand for recognition and bargaining. See also Rodeway Inn of Las Vegas, 252 NLRB 344 fn. 3 (1980). Furthermore, specula- tion concerning the effects of a bargaining order on the Respondent's financial condition will not deter the Board from ordering relief that is necessary to remedy the Respondent's unlawful conduct and to restore the status quo ante. Accordingly, we find that, consistent with precedent, the Respondent's bargaining obligation should attach as of the date that the Respondent embarked on its unlawful an- tiunion campaign . Groves Truck & Trailer, 281 NLRB 1194 (1986); Martin City Ready Mix, 264 NLRB 450, 453 (1982). We shall therefore order the Respondent to bargain with the Union as of June 30. 3 These unfair labor practices included the Respondent's interrogation of employees about their union sentiments, solicitations of and promises to remedy employee complaints , threats to discharge or lay off employ- ees because of their union activities, and promises to employees of im- proved working conditions if they abandoned the Union The judge also found that the Respondent violated Sec 8(a)(2) and (1) by suggesting and assisting in the formation of an employee in-plant committee The Re- spondent did not except to these findings 4 All dates hereafter are 1982 unless otherwise indicated 5 The Respondent did not except to the judge's issuance of a bargain- ing order 289 NLRB No. 126 LAPEER FOUNDRY & MACHINE 953 II. THE UNILATERAL LAYOFF OF NOVEMBER 29 Having determined that the Respondent's bar- gaining obligation attached on June 30, we next consider the General Counsel's contention that the Respondent's unilateral layoff of seven employees on November 29 violated Section 8(a)(5). The General Counsel argues that the Respondent breached its duty to bargain by unilaterally laying off these employees without notice to the Union. In addressing this argument, we must determine what bargaining obligation the Respondent as- sumed concerning these layoffs, which were caused solely by economic factors. We note that, depend- ing on the factual situation and the allegations set forth in the complaint, Board decisions have re- quired employers to bargain over the decision to lay off for economic reasons and the effects of that decision or have required bargaining only over the effects of the decision to lay off.6 For the reasons set forth below, we conclude that an employer's decision to lay off employees for economic reasons is a mandatory subject of bargaining and that the Respondent violated the Act by failing to bargain over its layoff decision and the effects of that deci- sion. The Respondent's decision to lay off the employ- ees on November 29 constituted an economically motivated business decision that resulted in the loss of work for unit employees. In determining the Re- spondent's bargaining obligation in this circum- stance, we shall apply the principles set forth in Otis Elevator Co., 269 NLRB 891 (1984) (Otis).7 Al- though all four Board Members in Otis agreed that the employer's decision was not a mandatory sub- ject of bargaining, they applied different legal anal- yses in reaching their conclusions. The plurality opinion of Chairman Dotson and Member Hunter applied a two-factor test-whether the decision turned on a change in the nature or direction of the business or whether it turned on labor costs-and concluded that the decision turned on a change in the nature of the business. In a concurring opinion, 6 Compare Felbro, Inc., 274 NLRB 1268 (1985), enfd. in relevant part sub nom. Garment Workers Local 512 v. NLRB, 795 F.2d 705 (9th Cit. 1986); Gulf States Mfrs. Co., 261 NLRB 852 (1982), modified 704 F.2d 1390 (5th Cit. 1983); Peat Mfg. Co., 261 NLRB 240 (1982) (employer vio- lates Sec. 8(a)(5) by failing to bargain over the decision to lay off) with Intersystems Design Corp., 278 NLRB 759 (1986); Tylertown Wood Prod- ucts, 251 NLRB 515 (1980) (employer must bargain over the effects of the decision to lay off). 7 Otis concerned an employer's decision to consolidate its operations and transfer the bargaining unit work to another facility. The Board de- termined whether the employer was obligated to bargain over this deci- sion in light of the Supreme Court's holding in Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203 (1964), and First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981) (FNM). The Court held that the employ- er's decision in Fibreboard to subcontract unit work was a mandatory subject of bargaining, whereas it held in FNM that an employer's deci- sion to shut down part of its business was not a mandatory subject of bargaining. Member Dennis applied a two-step test: (1) wheth- er the decision was amenable to resolution through the bargaining process, and, (2) if so, whether the benefit for labor-management relations and the col- lective-bargaining process outweighed the burden placed on management. Concluding that the deci- sion to consolidate operations was not amenable to resolution through the bargaining process, she agreed that the decision was not a mandatory sub- ject of bargaining." Under either the two-factor or two-step test, we find that the Respondent's deci- sion to lay off the seven employees for economic reasons was a mandatory subject of bargaining. When a business is confronted with an economic problem such as declining sales, excessive invento- ry, or an unprofitable department, it may have sev- eral options to address this problem. Management may decide, for example, to lay off employees, to shut down the unprofitable department, or to con- solidate operations and transfer work to a more ef- ficient plant. Although job losses may result whether the decision is to lay off, shut down, or consolidate, the focus of the decision to lay off dif- fers from the focus of the other two decisions in a critical manner. In deciding to lay off employees, management directly alters employees' terms of employment. This decision, like the decision to reduce workers' wages, necessarily turns on labor costs because the decision itself is to modify terms of employment to save money during economic downturns. By contrast, the decisions in FNM to shut down and in Otis to consolidate part of the business involved a direct modification of the busi- ness structure. Those decisions had only a second- ary effect of altering employees' terms of employ- ment. Accordingly, pursuant to the Otis plurality two-factor test, the decision to shut down part of the business or consolidate operations affects the scope, direction, or nature of the business and need not be bargained.9 On the other hand, the decision to lay off turns on labor costs and must be bar- gained. The Otis two-step test of Member Dennis man- dates the same conclusion. A decision to lay off is predicated on the assumption that savings will accrue from reduced labor costs during a period when a full complement of workers is unnecessary. Labor-related considerations therefore form the basis for the decision. As a union has control over 8 In another concurring opinion, Member Zimmerman applied a test that encompassed only the first step of the Dennis two-step test. He also concluded that the employer's decision was not amenable to resolution through collective bargaining. 9 An employer may still be required to bargain over a layoff as an effect of these nonbargainable decisons , however. See Litton Business Sys- tems, 286 NLRB 817 ( 1987). 954 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD this labor-related factor, it can offer alternatives to the layoff, such as wage reductions, modified work rules, or part-time schedules for a larger group, to save the company money during the economic downturn. Accordingly, the layoff decision is ame- nable to resolution through the collective-bargain- ing process. With regard to the burden placed on the business, we note that a decision solely to lay off employees does not involve an investment of capital, an alteration of the company's basic oper- ations, nor a need for confidentiality. Although management has a legitimate concern with the need for speed and flexibility in effectuating a layoff to remedy its economic plight, we believe that the legal requirements that exist to ensure meaningful bargaining in a timely fashion address this concern adequately.1 ° We therefore find that the burden borne by management in having to bar- gain over an economic layoff decision is out- weighed by the benefit for the collective-bargain- ing process. In light of the above analysis, we conclude that the decision to lay off employees for economic rea- sons is a mandatory subject of bargaining. Conse- quently, an employer must provide notice to and bargain with the union concerning the decision to lay off bargaining unit employees and the effects of that decision. Our conclusion is consistent with those of several circuit courts of appeal that have addressed this issue. See, e.g., NLRB v. Advertisers Mfg. Co., 823 F.2d 1086 (7th Cir. 1987); Garment Workers Local 512 v. NLRB, 795 F.2d 705 (9th Cir. 1986); NLRB v. Carbonex Coal Co., 679 F.2d 200 (10th Cir. 1982). As the Seventh Circuit empha- sized in NLRB v. Advertisers Mfg. Co., supra at 1090: Laying off workers works a dramatic change in their working conditions (to say the least), and if the company lays them off without con- sulting with the union and without having agreed to procedures for layoffs in a collective bargaining agreement it sends a dramatic signal of the union's impotence. Layoffs are not a management prerogative. They are a mandatory subject of collective bargaining. Until the modalities of layoff are established in the agreement, a company that wants to lay off employees must bargain over the matter with the union. 10 As discussed below, once the employer has given the union notice of the proposed decision to lay off employees, we will require that the union make a timely request to bargain and will then require that the bar- gaining occur in a timely and meaningful fashion This requirement will ensure that the employees' bargaining representative will have the opportunity to propose less drastic alternatives to the proposed layoff. Moreover, the employer's duty to bargain will require meaningful negotiations concerning the decision to lay off, and not merely the notification to the union of a decision that is a fait accompli. To ensure meaningful negotiations, we will contin- ue to scrutinize the "totality of the [parties'] con- duct throughout the course of bargaining . . . ." Atlanta Hilton & Tower, 271 NLRB 1600, 1603 (1984). In light of the economic circumstances mo- tivating a company's decision to lay off employees, however, we will require that negotiations con- cerning this decision occur in a timely and speedy fashion. Thus, should a union fail to request bar- gaining in a timely fashion once the company has provided it with notice of the layoff decision, we will find that the company has satisfied its bargain- ing obligation. See, e.g., Paramount Liquor Co., 270 NLRB 339, 343 (1984); Smyth Mfg. Co., 247 NLRB 1139, 1168 (1980). Furthermore, the establishment of compelling economic circumstances may excuse a company's failure to bargain over the layoff deci- sion. See, e.g., Aquaslide `N' Dive Corp., 281 NLRB 219 fn. 2 (1986); Advertisers Mfg. Co., 280 NLRB 1185 (1986). We emphasize, however, that only in extraordinary situations will this exception apply. See Angelica Healthcare Services Group, 284 NLRB 844 (1987). To illustrate the limits of our holding, we stress that our analysis today applies only to an economi- cally motivated decision to lay off employees. We recognize that a managerial decision is often not easily categorized under a label such as layoff or consolidation. For example, the permanent contrac- tion of a company's work force, which might be viewed as a mass layoff, may be part of a change in the scope and direction of the business enterprise and, therefore, not bargainable under FNM, supra. In this regard, we reaffirm the caveat that "the ap- pellation of the decision is not important" to a de- termination of whether the decision requires bar- gaining. Otis, 269 NLRB at 893. Nothing in today's decision concerns an employer that shuts down a part of its business for economic reasons; the Court has made clear that bargaining over that decision is not required. FNM, supra. Nor does this decision affect in any way the Board's Otis rationale con- cerning an employer's decision to consolidate its operations and transfer work to another facility. Fi- nally, we do not address layoffs that occur pursu- ant to a collective-bargaining agreement. Applying our analysis to the present situation, we find that the Respondent violated Section 8(a)(5) and (1) through its unilateral layoff of the LAPEER FOUNDRY & MACHINE 955 seven employees on November 29. The General Counsel has not alleged that the layoffs occurred as a result of discriminatory reasons on the Re- spondent's part. Indeed, the record establishes that the layoffs resulted from a lack of orders. To ad- dress this economic problem, the Respondent de- cided to lay off seven employees without notifying the Union or bargaining over the decision. The layoff was not the result of the Respondent's deci- sion to change the nature or scope of the business. Rather, the decision was to effect changes in these employees' terms of employment to reduce labor costs during a period of economic difficulty. The Respondent was thus obligated to bargain over this decision. The record is devoid of evidence that this unilateral layoff was in accord with an established past practice whereby, the Respondent had laid off employees without notice to or bargaining with the Union. Nor has the Respondent demonstrated com- pelling economic circumstances justifying unilateral action. Cf. Aquaslide `N' Dive Corp., supra. Accord- ingly, the Respondent's failure to notify and bar- gain with the Union regarding the November 29 layoffs violated Section 8(a)(5) and (1). THE REMEDY Having determined that an employer violates the Act by failing to bargain over its decision to lay off employees, we must formulate a remedy that re- dresses the wrong committed. As the Supreme Court has observed, our "task in applying § 10(c) is to take measures designed to recreate the relation- ships that would have been had there been no unfair labor practice." Franks v. Bowman Transpor- tation Co., 424 U.S. 747, 769 (1975). With this re- sponsibility in mind, we conclude that ordering the employer to bargain with the union concerning the layoff decision, as well as the effects of that deci- sion, and to reinstate the laid-off employees with backpay constitutes the appropriate remedy for this decision-bargaining violation.'' See NLRB v. Sand- 11 By contrast, requiring bargaining over the decision and reinstate- ment with full backpay does not constitute an appropriate remedy for an effects-bargaining violation . In that situation, the propriety of the em- ployer's decision is not in question . In order to ensure that bargaining will occur over the effects of the decision, however, we order a limited backpay remedy pursuant to Transmarine Navigation Corp., 170 NLRB 389 (1968), should an employer fail to bargain over the effects. See Litton Business Systems, supra at 822 . This limited backpay remedy requires that backpay run from 5 days after the date of the Board 's decision until the occurrence of the earliest of the following conditions: (1) the date the employer bargains to agreement with the union on those subjects pertain- ing to the layoff about which the employer is required to bargain; (2) a bona fide impasse in bargaining ; (3) the failure of the union to request bargaining within 5 days of the Board 's decision and order or to com- mence negotiations within 5 days of the employer's notice of its desire to bargain with the union; or (4) the subsequent failure of the union to bar- gain in good faith; but in no event shall the sum paid to any of these employees exceed the amount he would have earned as wages from the dates on which he piper Convalescent Center, 824 F.2d 318 (4th Cir. 1987); NLRB v. Advertisers Mfg. Co., supra. The employer's backpay liability shall run from the date of the layoffs until the date the employees are rein- stated to their same or substantially equivalent posi- tions or have secured equivalent employment else- where. Backpay shall be based on the earnings that the employees normally would have received during the applicable period, less any net interim earnings, and shall be computed in the manner pre- scribed in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest to be computed in the manner prescribed in New Horizons for the Retarded. '2 We believe that the remedy requiring bargaining and full backpay relief furthers the purposes of the Act. This remedy provides an economic incentive for an employer to comply with the "rule that re- quires an employer to negotiate with the union before changing the working conditions in the bar- gaining unit . . . [thereby] prevent[ing] the em- ployer from undermining the union by taking steps which suggest to the workers that it is powerless to protect them." NLRB v. Advertisers Mfg. Co., supra. Furthermore, these discussions may result in less drastic alternatives being effected, or they may convince the union that the layoffs represent the only reasonable solution to the employer's econom- ic problem. As bargaining may preclude the neces- sity of laying off employees, we find that backpay commencing on the date of the layoff is warranted to remedy a failure to bargain. In making this de- termination, we recognize that a reviewing court may question this award of full backpay in the ab- sence of evidence demonstrating that bargaining would have prevented the layoffs. We do not re- quire such a showing, however, for two reasons. First, requiring a fording that bargaining would have prevented the layoffs to justify a backpay order requires the Board or a court to engage in a post-hoc determination of the economic situation, instead of letting the parties decide themselves at the time of the layoff. This requirement thus un- necessarily injects the Government into an area in which the collective-bargaining process should be permitted to function. Second, the requirement is was laid off or terminated to the time he was recalled or secured equivalent employment elsewhere, or the date on which the Re- spondent shall have offered to bargain, whichever occurs sooner; provided, however, that in no event shall this sum be less than these employees would have earned for a 2-week period at the rate of their normal wages when last in the Respondent's employ. [Id.] 12 In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after January 1, 1987, shall be computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U.S.C. § 6621. Interest on amounts accrued prior to January 1, 1987 (the effective date of the 1986 amendment to 26 U.S.C. § 6621), shall be computed in accordance with Florida Steel Corp., 231 NLRB 651 (1977). 956 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD contrary to our customary policy to order a re- spondent to restore the status quo when the re- spondent has taken unlawful unilateral action to the detriment of its employees. The "consequences of Respondent's disregard of its statutory obligation should be borne by the Respondent, the wrongdoer herein, rather than by the employees." Hamilton Electronics Co., 203 NLRB 206 (1973). See also Southwest Forest Industries, 278 NLRB 228 (1986). We therefore find that full backpay relief is appro- priate. Having found that the Respondent failed to bar- gain over the November 29 layoffs in violation of the Act, we shall order the Respondent to bargain with the Union concerning that layoff decision and the effects of that decision. The Respondent shall reinstate employees Childers, Krohn, Mauk, and D. Farrier and award them backpay as specified above. With respect to employees Hill, Kalar, and Miles, whose layoffs were converted to permanent layoffs on December 8, their backpay and reinstate- ment rights shall be cut off as of that date. We pro- vide the more limited remedy as to those three be- cause we have affirmed the judge's finding that, contrary to the General Counsel's allegations, the conversion of their temporary layoffs to permanent layoffs was not a sham done for unlawful motives and because the General Counsel did not allege that the unilateral decision to make the layoffs per- manent violated Section 8(a)(5) of the Act.13 ORDER The National Labor Relations Board orders that the Respondent, Lapeer Foundry and Machine, 19 We do not agree with our colleague that the Respondent failed to establish that employees Miles, Kalar , and Hill were permanently laid off or that the reinstatement and backpay rights of those employees should be left for the compliance stage of the proceeding Initially, we note that the General Counsel alleged in the amended complaint that the Respond- ent had permanently laid off those three employees on December 8. Fur- thermore, we have adopted the judge's specific finding that the Respond- ent decided to lay off those employees permanently for legitimate business reasons, i e., the lack of steady work for those employees to perform in the foreseeable future. The fact that two of them may have been recalled subsequently does not change the nature of the decision here. This per- manent layoff decision was independent of the November 29 decision to effect a temporary layoff The General Counsel chose to allege that the subsequent decision to make the layoffs permanent was discriminatory, but the judge dismissed that allegation and the General Counsel has not excepted to that dismissal Contrary to the implication of our colleague's dissent, whether the Respondent may have violated Sec 8 (a)(5) by decid- ing to make the layoffs permanent without notifying the Union or afford- ing it an opportunity to bargain over that decision cannot be ascertained because no violation of that section of the Act was alleged in the com- plaint or litigated at the hearing Thus, we conclude that the Respond- ent's action in making those three employees ' layoffs permanent has not been shown to be unlawflil and that those employees therefore would not have been employed by the Respondent as of December 8 regardless of the Respondent's earlier unlawful action . Consequently, the remedy of backpay should be tolled as of that date Finally, we do not leave this issue for compliance because the parties have litigated the lawfulness of the Respondent's permanent layoff decision and we have adopted the judge's conclusion regarding this issue Inc., Lapeer, Michigan, its officers, agents, succes- sors, and assigns, shall 1. Cease and desist from (a) Refusing to recognize and to bargain with the International Union, United Automobile, Aero- space and Agricultural Implement Workers of America, UAW or its designated local union as the exclusive bargaining representative of the employ- ees in the following appropriate unit: All production and maintenance employees, in- cluding tool room employees, shipping and re- ceiving employees, truck drivers, employed by the Respondent at the Lapeer plant, but ex- cluding office clerical employees, technical employees, professional employees, guards and supervisors as defined in the Act. (b) Interrogating employees concerning their union membership and sentiments. (c) Soliciting employee complaints and promising to remedy them as an inducement to employee re- jection of the Union as their bargaining representa- tive. (d) Threatening employees with discharge or layoffs because of their union activities. (e) Promising employees improved working con- ditions if they rejected the Union as their bargain- ing representative. (f) Creating, dominating, or interfering with the formation or administration of any labor organiza- tion (or in-plant committee) or contributing finan- cial or other support to it. (g) Unilaterally laying off employees without providing the Union with notice and opportunity to bargain about the decision to lay off employees, and the effects of that decision. (h) In any other 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 neces- sary to effectuate the policies of the Act. (a) Recognize and, on request, bargain with the Union as of June 30, 1982, as the exclusive bargain- ing representative of the employees in the above- described unit with respect to rates of pay, wages, and other terms and conditions of employment, and, if an understanding is reached, embody the understanding in a signed agreement. (b) On request, bargain with the Union concern- ing the decision to lay off employees on November 29, 1982, and the effects of that decision. (c) Reinstate and make whole those employees laid off on November 29, 1982, for any loss of pay or other employment benefits suffered as a result of its unlawful conduct in the manner set forth in the remedy portion of this decision. LAPEER FOUNDRY & MACHINE 957 (d) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (e) Post at its Lapeer, Michigan plant copies of the attached notice marked "Appendix." 14 Copies of the notice, on forms provided by the Regional Director for Region 7, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon re- ceipt and maintained for 60 consecutive days in conspicuous places including all places where no- tices to employees are customarily posted. Reason- able steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. MEMBER JOHANSEN, concurring in part and dis- senting in part. I join my colleagues in all aspects of this deci- sion except in their findings, reflected in the remedy portion of the decision, that the layoffs of employees Miles, Kalar, and Hill were converted to permanent layoffs on December 8, 1982, and that the make-whole remedy for these employees is tolled as of that date. In my view, there is no sub- stantive finding concerning the permanent layoff notices issued these employees December 8 on which to base a conclusion that the Respondent is purged of liability for its failure to bargain over the November 29 layoff. If, however, the Respondent can show that any of their jobs were abolished on December 8 or thereafter and thereby toll its obli- gations for reinstatement and backpay, it should raise those issues at the compliance stage of the proceeding. In that event, the burden is on the Re- spondent to prove that any one of these jobs is no longer available.) When the judge described these employees as being "on permanent layoff status," his language merely acknowledged the Respondent's description of the written notices it sent out on December 8. The judge's analysis did not purport to resolve whether the Respondent made a decision prior to 14 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 " 1 See Mastro Plastics Corp, 136 NLRB 1342, 1357-1358 (1962), enfd in pertinent part 354 F 2d 170, 176 (2d Cir 1965) December 8 to which no bargaining obligation at- tached or even that it made any decision at all before issuing the permanency notices. With no al- legation that the permanency notices violated Sec- tion 8(a)(5), there was no reason for him to resolve that issue, and thus his discussion of the notices in dismissing the 8(a)(3) allegations tracked the termi- nology of the notices themselves, which even the Regional Director adopted in issuing complaint. To attach any further meaning to the judge's language is to render a distinction without substance. 2 Two observations are made to justify a limited make-whole remedy for these employees: (1) the "conversion" to permanent layoff status on Decem- ber 8 "was not a sham done for unlawful motives"; and (2) the General Counsel did not allege the "conversion" independently to violate Section 8(a)(5). I neither take issue with these observations nor apprehend their relevance. The fact that the permanency notices were not "a sham" but genu- inely economically motivated no more mitigates the Respondent's liability for its unilateral action than the fact that the layoff announced 9 days ear- lier was itself a response to economic hardship. As set forth more fully in the remedy portion of this decision, our theory of violation has nothing to do with unlawful motive or lack of substantial business justification for the Respondent's unilateral action but is based on the fact of unilateral action itself. The Respondent was no more privileged to pro- ceed unilaterally when it declared some of the lay- offs permanent on December 8 than when it laid off the workers in the first place, and permanency notices did nothing to cure the defect of that uni- lateral action. As to the second observation-that allegations over the permanency notices were based not on Section 8(a)(5) but on Section 8(a)(3)-making no assumptions as to the legality under Section 8(a)(5) of the December 8 notices, I note the following: Because it is clear from the record that the Re- spondent did not offer to bargain over the Novem- ber 29 layoffs, it could not lawfully have made de- terminations about the permanency of any of those 2 References in the record to economic justification for the permanen- cy notices are too vague to support any viable distinction between the Respondent's action on the dates of the two sets of notices-and certainly insufficient to support a finding that the December notices were based on a decision to which no bargaining obligation would have attached Labels of "permanency" notwithstanding, two of the three employees were re- called within months to the same departments from which they had been laid off, and the Respondent's conflicting testimony concerning the third, Kalar, suggests that his work was either contracted out or absorbed by three other individuals after he was laid off-in neither case suggesting an unbargamable decision Respondent witness Rassey's testimony goes far in negating any inference as to a distinction of substance in that he twice could not recall whether the second set of notices announced a "definite" or "indefinite" layoff 958 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD layoffs based solely on economic data at hand on December 8. Rather, it would have had to base its projections also on the outcome of November 29 layoff bargaining-bargaining that had not oc- curred; or else it could only have assumed that those negotiations would have validated the deci- sion to effect an indefinite layoff on November 29; that Miles, Kalar, and Hill would have been among those lawfully placed on indefinite layoff on No- vember 29; and that further economic decisions could be lawfully predicated on those assumptions. These are the types of assumptions my col- leagues and I are unwilling to make in ordering the Respondent before bargaining to restore conditions to the status quo ante prior to November 29 by ex- tending full reinstatement and backpay relief to the other four employees laid off on that date. As stated in the remedy portion of the decision, it is not the Board's policy in cases of unbargained lay- offs to engage in a post-hoc determination of the parties' economic situation, and I am unwilling to do so here to conclude, as do my colleagues, that Miles, Kalar, and Hill would not have been em- ployed by the Respondent as of December 8 irre- spective of a failure to bargain on November 29. In short, with an unremedied refusal to bargain accru- ing from November 29, it is simply not possible to ascertain what the employment status of these em- ployees would have been when the Respondent as- serted its claim of exacerbated economic hardship on December 8 or to conclude that make-whole li- ability for their original layoffs has been negated upon that assertion even if the permanency notices were accomplished in otherwise full compliance with Section 8(a)(5). This is not to suggest that the Respondent is foreclosed from showing that any number of other events recognized as tolling make-whole liability, such as the elimination of jobs,3 cessation of perti- nent segments of its operations,4 or other decisions not subject to mandatory bargaining, have inter- vened either on December 8 or thereafter. Such issues may be raised and resolved at the compli- ance stage of this proceeding without the need to litigate a further charge. Accordingly, I cannot conclude that either of the stated justifications supports limiting the term of the make-whole remedy affecting these three employees. 8 See Mastro Plastics Corp., supra. 4 See, e.g., Collateral Control Corp., 288 NLRB 308 (1988) APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through representa- tives of their own choice To act together for other mutual aid or pro- tection To choose not to engage in any of these protected concerted activities. WE WILL NOT refuse to recognize or bargain with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW, or its designated local union as the exclusive bargaining representative of our em- ployees in the following appropriate unit: All production and maintenance employees, in- cluding tool room employees, shipping and re- ceiving employees, truck drivers, employed by the Respondent at the Lapeer plant, but ex- cluding office clerical employees, technical employees, professional employees, guards and supervisors as defined in the Act. WE WILL NOT interrogate employees concerning their union membership and sentiments. WE WILL NOT solicit employee complaints and promise to remedy them as an inducement to em- ployee rejection of the Union as their bargaining representative. WE WILL NOT threaten employees with dis- charge or layoff because of their union activities. WE WILL NOT promise employees improved working conditions if they reject the Union as their bargaining representative. WE WILL NOT create, dominate, or interfere with the formation or administration of any labor orga- nization (or in-plant committee) or contribute finan- cial or other support to it. WE WILL NOT unilaterally lay off employees without providing the Union with notice and op- portunity to bargain about the decision to lay off employees and the effects of that decision. WE WILL NOT in any other manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act. LAPEER FOUNDRY & MACHINE 959 WE WILL recognize and, on request, bargain with the Union as of June 30, 1982, as the exclusive bargaining representative of the employees in the above-described unit with the respect to rates of pay, wages, hours, and other terms of employment, and, if an understanding is reached, embody such understanding in a signed agreement. WE WILL, on request, bargain with the Union concerning the decision to lay off employees on November 29, 1982, and the effects of that deci- sion. WE WILL reinstate and make whole those em- ployees laid off on November 29, 1982, for any loss of pay or other employment benefits suffered as a result of our unlawful conduct in the manner set forth in the remedy portion of the Board's decision. trained, and referred by the Michigan Employment Secu- rity Commission to Respondent who received a tax credit for maintaining an on-the-job training program. Limited production began in January due to the lack of orders. During the next 6 months, Respondent was plagued with numerous customer complaints about prod- uct quality and frequent equipment breakdowns. Em- ployees were not laid off, but rather were used for plant rehabilitation so as not to jeopardize the Company's loan. During June 1982, a majority (18) of the approximate- ly 27 production and maintenance employees signed union authorization cards. A representation petition was filed on June 28 and served on June 29. By notice served August 27, a hearing on the petition was scheduled for September. However, none was conducted due to the filing of charges on July 6 and September 7, 1982, and January 10 and March 3, 1983. LAPEER FOUNDRY AND MACHINE, INC. John Ciamanitaro, Esq., for the General Counsel. Douglass A. Witters, Esq. (Clark, Hardy, Lewis, Pollard & Page), of Birmingham, Michigan, for the Respondent. DECISION STATEMENT OF THE CASE WILLIAM A. GERSHUNY, Administrative Law Judge. A hearing was conducted in Flint, Michigan, on May 10-13, 1983, on complaint issued April 15 , 1983, alleging a number of violations of Section 8(a)(1), (2), (3 ), (4), and (5) of the Act during the course of an organizational drive and seeking , inter alia, a bargaining order. On the entire record, including my observation of wit- ness demeanor, I make the following FINDINGS OF FACT AND CONCLUSIONS OF LAW I. JURISDICTION AND LABOR ORGANIZATION The complaint alleges, the answer admits, and I find that Respondent is an employer subject to the Act and that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. UNFAIR LABOR PRACTICES A. Background Respondent acquired the foundry at Lapeer at a bank- ruptcy sale and, with a $1 million loan from the Eco- nomic Development Corporation for the rehabilitation of the plant and equipment by May 1982, began the hiring process in September 1981. The prior owner had had se- rious problems with the union representing its employ- ees, had a poor reputation among its customers, and had gone into bankruptcy. The plant and equipment re- mained idle for more than 1-1/2 years and, at the time of acquisition by Respondent, were in a terrible state of dis- repair. Respondent hired many of the former employees, despite knowledge of their prior union membership; others, with no prior foundry experience, were screened, B. The Status of Childers Sr. The complaint alleges that Childers Sr., either as a su- pervisor or as an agent of Respondent , engaged in con- duct violative of Section 8(a)(1). Respondent contends that he was a leadman only and that his conduct is not attributable to it. Childers, with 23 years' foundry experience with the former owner, was one of the first employees hired in the fall of 1981 . Placed in charge of the automatic mold- ing operation, Childers, in 1982, worked directly under Plant Superintendent Cappella ; he was paid at the hourly rate of $7, in contrast to the $5 rate for other production employees; a number of admittedly nonsupervisory em- ployees similarly were paid $7 per hour; he assigned work to, and directed the work of, a number of produc- tion employees; he discussed complaints with employees and took their complaints to management ; he claimed to have authority to issue verbal reprimands and to suspend and discharge employees, although there is no evidence that such authority ever was exercised. With other de- partment leaders, he attended regular production meet- ings conducted by Cappella and President Rassey; and, at Rassey's request, he admittedly solicited grievances from production employees and interrogated them as to their involvement in the organizational campaign. There is grave doubt in my mind whether the evi- dence supports the contention of supervisory status. Childers was not salaried and there is no evidence that he exercised discretion in the production operation or the authority he claimed to possess when he gave an affi- davit to the Board. At the hearing, Childers, an older man, clearly was confused and testified that, although he had been offered that authority, he had refused to accept it. Moreover, there is evidence suggesting that no em- ployee believed him to have that authority and, indeed, employees seeking time off or with complaints went di- rectly to Rassey or Cappella. There is, however, no need to decide that issue be- cause the record clearly reflects that, at all relevant times, he was placed by Rassey in such a position that he would be considered by employees as its agent, as de- fined in Section 2(13) of the Act. B-P Custom Building 960 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Products, 251 NLRB 1337 (1980); Han-Dee Pack, 249 NLRB 725 (1980). Childers conveyed to employees information received from Rassey and Cappella about the Company's attitude toward organization; he was instructed by Rassey to de- termine the nature of employee complaints and to report to him; he was told by Rassey he was the "spokesman" for the employees; he was authorized to be Rassey's spokesman concerning the creation of an in-plant com- mittee; and he obtained from the front office the material and clerical assistance in early September to enable the employees to conduct an election to determine whether they wanted Petitioner or a committee to represent them. Thus, whether his authority rose to the level of a super- visor, Childers was placed by management in a position where employees reasonably could believe he spoke on their behalf. Accordingly, his conduct during the summer of 1982 is imputable to Respondent. C. Childers' June 30 Meeting with Employees On June 29, Respondent was served with the represen- tation petition. The next day, June 30, the plant's second furnace unexpectedly blew a coil, thereby shutting it down along with the other furnace that also was down for major repairs. A layoff of all nonessential employees was decided. In a morning meeting with Rassey concern- ing the furnaces, Childers was shown the petition and re- minded of their conversation the year before, in which Rassey said he would close the plant if the Union "got in." He was also asked to find out why the employees were unhappy and wanted a union. He did so shortly thereafter, while having lunch with a number of employees in the lunchroom. Within hearing of all, he said that he had just come from a meeting in the office; that Rassey was just served with the petition; that the furnace problem would necessitate a lengthy layoff; that two employees, Fenslau and Spencer, would not be recalled because employees had complained that their hourly rate ($7) was higher than theirs ($5); that management blamed Kolar, Fenslau, and Spencer for the Union; and that it was a bad time to organize. He also asked who had signed cards. I find and conclude that this meeting constituted an unlawful interrogation of employees about their union activities, an unlawful threat that employment would be denied to those employees responsible for the organiza- tional drive, and an unlawful promise that employee complaints would be remedied by not recalling certain employees whose hourly rates were higher than most production employees, all in violation of Section 8(a)(1) of the Act. Whether subsequent layoffs or refusals to recall certain employees were unlawful is considered below. D. Childers' Solicitation of Grievances Within days of the June 30 furnace breakdown and layoffs, Childers was asked by Rassey to find out what the employee problems were. He did so on a number of occasions, telling employees to inform him of their com- plaints. He then would relay the complaints to Rassey, who would straighten them out. Given the pendency of a representation proceeding, there is no question about Rassey's intent-it was to discourage employee support of a union as their bargaining representative by demon- strating his willingness to deal directly and promptly with their complaints. Such activity is violative of Sec- tion 8(a)(1). E. Respondent's Antiunion Animus The credible record evidence is overwhelming that, from September 1981 when it first began hiring its work force, management made it known that the plant would close if a union came in. Plant Superintendent Cappella testified that this attitude of the Company was "common knowledge." He admitted telling a number of employees that the Company could not afford "GM" wage rates. Rassey admitted telling job applicants that, if the Compa- ny had labor problems similar to those of the former owner, "I'd be forced to shut down, too." Other credible employee testimony reflects that, at various times, Rassey told them that he would not be afraid to shut down if a union came in and that he had told this to the city's redevelopment authority. In addition, on the morn- ing of June 30, following breakdown of the furnace and receipt of the petition, Rassey reminded Childers Sr. what he had told him in September-he would close the plant if a union came in . Rassey's intentions in telling this to all job applicants, including employees of the former owner who had been represented and who had seen the plant go into bankruptcy because of labor difficulties, were manifest-if you want continued employment, do not organize. This animus on the part of Respondent is highly rele- vant in considering the lawfulness of other conduct of Respondent. F. Cappella's Interrogation Plant Superintendent Cappella admitted asking an em- ployee, in early July after filing of the petition, if he had signed an authorization card. The employee, a relative of Cappella's wife, was at the Cappella home with his family and asked Cappella if the Company was going to "make it." Cappella replied that it would and asked if the employee had signed a card. The employee responded that he had not. However innocent this conversation may have been, it is, under the circumstances present here, violative of Section 8(a)(1) of the Act because of its tendency to interfere with the free exercise of the statu- tory right of employees to organize. G. Rassey's July 8 Meeting with Hill Credible evidence establishes that, on July 8, laid-off employee Hill returned to the plant to meet with Rassey about the continuation of his medical insurance coverage. During their conversation, Rassey said that he would sponsor ball teams, picnics, and bowling leagues (subjects never mentioned before); that he would initiate an incen- tive program; that the employees did not need a "third party," but that they could settle their problems directly with him; and that he had told the city he would close if a union came in. Rassey's statements constitute unlawful promises of benefits in order to undermine employee sup- LAPEER FOUNDRY & MACHINE port for the Union, an unlawful threat to cease doing business if forced to deal with a union, and an unlawful solicitation of grievances to be handled without the need for a bargaining representative, all in violation of Section 8(a)(1). H. Rassey's July 16 Meeting with Curran In support of the allegations of paragraph 12 of the complaint, employee Curran testified that, in a July 16 meeting with Rassey in the latter's office, Rassey told him the Company was "in trouble" with the Board and that he should keep his mouth closed about the Union; he inquired whether Curran had spoken with the Board and as to the substance of that conversation. During Ras- sey's lengthy testimony, he was not asked about this meeting. Nevertheless, paragraph 12 must be dismissed for want of proof, as I am unable to credit any of Curran's testi- mony, based primarily on my observation of his demean- or on the stand. He was aggressive and hostile and his testimony was exaggerated. Moreover, by his own ad- mission, Curran was having personality problems of such a bizarre nature as to cast serious doubts on his ability to accurately recount events and conversations. He regular- ly carried with him a tape recorder so that there would be no "misunderstandings" in his daily dealings with Rassey or Cappella. During another meeting with Rassey on September 10 (discussed below), Curran lost control of himself, throwing papers at Rassey and storming out of the office and the plant. The following morning, he returned to meet again with Rassey at the latter's office, armed with a tape recorder and accompanied by his wife, who was to serve as a witness. 1. The September 1 Meeting On the morning of September 1, 4 days after having been served with a notice scheduling a hearing for Sep- tember 8 on the representation petition, Rassey met with all employees. The credible testimony of employees Kalar, Stroup, and Hill and the admissions of Childers Sr. and Cappella establish that Rassey suggested the for- mation of an in-plant committee that would function in lieu of a union; that, with the assistance of management and on company time, the employees voted to be repre- sented by the committee rather than by the Union; that, thereafter, Cappella designated three employees to serve on that committee; that the committee never functioned; and that, thereafter, at the direction of Rassey and again on company time, a "decertification affidavit" was circu- lated among the employees. More specifically, Rassey advised the employees of the scheduled hearing; told them that, although he could not advise them what to do or assist them, if the hearing were to be canceled a decertification petition would be needed immediately; told them that they should consider whether they wanted a shop committee to serve as their bargaining representative; and suggested they give him three names of persons to serve on that committee. The employees thereafter conferred in private and on compa- ny time, during which time some employees stated that the plant would close if a union came in. They decided 961 to conduct a secret election that afternoon. With material and clerical assistance from the front office, ballots read- ing, "Would you like to form your own bargaining unit and your own committee to represent you?" were dis- tributed. Eighteen employees voted "yes" and eleven voted "no." The ballots were then stored in the office safe. The following day, Cappella designated three em- ployees to serve on the committee, which never came into existence otherwise. Thereafter, one employee was instructed by Rassey to circulate an affidavit addressed to the Board, advising that the employees wanted to be represented by an in-plant committee and not by Peti- tioner. There is no evidence as to the disposition of this document. I find and conclude that these acts on the part of Rassey and Cappella constitute a violation of Section 8(a)(1) and (2) of the Act and represent a bald attempt to interfere with and frustrate the statutory representation processes. J. The June 30-July 1 Layoffs and Subsequent Recalls 1. The layoffs On June 30, 1 day after being served with the petition, Respondent experienced a major, unexpected coil burn- out in its only remaining operational furnace. The other, at the time, was undergoing major repairs to its coils. There is no contention and the record does not suggest that a breakdown did not occur or that it was other than unforeseen. Nor is there any doubt about the fact that the breakdown left Respondent with no iron-pouring ca- pacity for some weeks. Eighteen employees , not essential to furnace repairs, were laid off on June 30 and July 1. All but one were card signers; one card signer was not laid off. The contention is that the layoffs were discriminatory and, thus, unlawful, as evidenced by their timing and the fact that, in the past when both furnaces were down, the entire work force was retained. I find and conclude that the June 30 and July 1 layoffs were not unlawful. The testimony of Cappella and Rassey in this respect is undisputed by any General Counsel witness with a knowledge of the plant's overall operation and is credible. When Respondent acquired the plant in September 1981, both furnaces were dismantled. One was operation- al by December and both by January. Normally only one furnace is used at any one time. Prior to June, there never was an occasion when both were down at the same time due to coil problems. When furnace relining was necessitated, it was done in a day or two and the employees were reassigned to plant and equipment reha- bilitation work generally, because Respondent was con- tractually obligated to complete plant rehabilitation by May 1982. On June 30, one furnace was down for repairs and the other "blew" a coil, requiring outside repairs, which nor- mally take from 3 to 6 weeks. Faced with severe budget- ary constraints (a fact not disputed), Rassey and Cappel- la, after consultations with the outside coil expert, laid off all employees not essential to the furnace teardown 962 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD and repair. Although there may have been work for some employees in the core, grinding, and molding oper- ations, it was decided not to continue those operations due to the uncertainty of a startup date and the fact that cores and moldings cannot be kept for any period of time. After further consultations with the expert, Re- spondent decided to attempt an innovative means of op- erating the furnance with fewer than all coils . By July 4, the experiment proved successful and the furnace was operational. Recalls began immediately. The Act preserves to all employers, including those who openly display antiunion animus, the right to make business decisions for good reasons, bad reasons, or simply no reason at all, so long as the actual reason is not an unlawful one. And if, as here, the credited evi- dence is suggestive of both a lawful and an unlawful reason for that decision (i.e., to lay off and recall certain employees), the employer nevertheless acts lawfully if the same decision would have been made even if there were no protected employee activities . NLRB v. Trans- portation Management Corp., 462 U.S. 393 (1983). I find and conclude that the layoffs of June 30 and July 1 were undertaken solely for legitimate business rea- sons and that, in any event, Respondent would have made the same layoff decisions irrespective of the em- ployees' involvement or suspected involvement in the or- ganizing effort. Never before had Respondent been faced with a com- parable operational crisis . In the past, there had been general rehabilitation work that was available to the em- ployees; in the past, the furnace shutdowns were for but brief periods ; and, in the past, similar budgetary con- straints were not experienced . Thus, the General Coun- sel's "past practice" theory is without credible factual support. In addition, the timing of the breakdown was simply fortuitous, there being no suggestion in this record of Respondent's involvement in the timing of the breakdown. It should be added, Respondent's imagina- tive method of bringing the furnace into full operation while the coil was being repaired not only suggests a strong profit motive on the part of this small business- man, but also dispels completely any inference of unlaw- ful motivation in the layoffs. 2. The recalls Several days after the June 30-July 1 layoffs, Re- spondent began the recall of employees. Of the 11 re- called, 10 were card signers and 1, Kalar, was a "sus- pected ringleader." Seven, all card signers, were not re- called. The decisions were made on the basis of a review of the work record of each, as reflected in company records and as personally known by Rassey and Cappel- la. In this connection, I credit their testimony, which I believe to be candid and convincing and consistent with the undisputed evidence of a startup operation plagued by costly equipment breakdowns, poor production qual- ity, slow sales, and tight budgetary constraints. On the other hand, the testimony of the seven employees not re- called was disturbingly exaggerated , painting an unreal picture of the operation and their duties. The circumstances surrounding the decision not to recall will be discussed separately as to each of the seven employees. Fenslau, a truckdriver and mechanic , was laid off on July 1 after completing a customer delivery . He had a "horrible" work record , with 13 warnings for being late (more than the other 6 employees combined ). Moreover, 2 months earlier, on April 23, 1982, in the presence of a police officer called to the plant , he admitted stealing parts from the plant valued at several thousand dollars, and implicated three other employees . Credible testimo- ny in this regard of the police officer, Rassey, and Cap- pella establishes that, after Rassey consulted with the police, each of the four was given another chance to prove himself, was put on job probation for 6 to 12 months, and was told to return the property immediate- ly. Criminal charges were not filed by Rassey . Some, but not all, of the property was returned and, while his work improved for a week or so, he developed an attitude of not wanting to work . Finally, Rassey learned from a cus- tomer that, during the course of Fenslau 's July 1 deliv- ery run, Fenslau told the customer that there would be a union at the foundry, that the foundry would be shut down, and that the customer should purchase his cast- ings elsewhere. Fenslau did not deny making these state- ments. As found above, Childers Sr. (Respondent's agent) told employees on June 30 that Fenslau would not be re- called because other employees were complaining of his higher rate of pay and that Fenslau was one of three sus- pected ringleaders in the organization drive . Childers, however, played no role in the final decision about recall. I am unable to find that the decision not to recall Fenslau was motivated by either of these factors. If Rassey wanted to placate the employees , he could simply have reduced Fenslau's hourly rate . As noted above, one of the other suspected ringleaders was recalled from the June 30 layoff. Absenteeism, tardiness, and employee theft are nation- al problems of epidemic proportions and neither this con- duct nor the making of disparaging statements to a cus- tomer concerning the viability of the employer is condu- cive to the maintenance of the kind of employer -employ- ee relationship that the policy of this Act seeks to foster. I find and conclude that Fenslau's union activities were not to any degree a motivating factor in the deci- sion not to recall him from layoff and that the decision about him was not unlawful , nor was his hourly rate a motivating factor. Elmore, the crane operator who handles tons of hot iron, frequently was found sleeping in the elevated cab of the crane and was reprimanded orally at least once for carelessly dropping a load . He, like Fenslau, admitted the theft of valuable parts from the plant and was put on job probation. Moreover, he was suspected by Cappella of having stolen plant equipment on June 30, when he was laid off. He was not a suspected organization leader. He had no prior foundry experience and was employed in the training program. LAPEER FOUNDRY & MACHINE As in the case of Fenslau, I find and conclude that his card-signing activity and his union support were not to any degree a motivating factor in the decision not to recall him and that the decision was lawful. Campbell, a job trainee who worked as a "floater" with no specific production job, had an excessive absen- teeism problem and received a warning for yelling at other employees. He was implicated by Fenslau in the plant thefts and, according to the police report, admitted his involvement. I find that his minimal protected activi- ty-card signing-was not to any degree a motivating factor in the decision not to recall him and that the deci- sion was lawful. Elder, also a job trainee with no prior foundry experi- ence, had difficulty following instructions and, partially as a result, received work-related injuries. In addition, he had falsely given as an application reference the name of a friend of Rassey, although he was not known to that person. The failure to recall him was not motivated to any degree by his union support or his activity in distrib- uting cards and the decision was lawful. Collins, a job trainee employed as a janitor and a card signer but not otherwise active in the campaign, had dif- ficulty performing his assigned work to the satisfaction of Cappella to the point of open disagreement. I find nothing in this record to indicate that the union activity at the plant played any role whatever in the decision not to recall him and that the decision was lawful. Jenkins, also a job trainee, had received a number of warnings for tardiness, was a slow worker, and openly stated he did not care to work in a foundry. Again, union activity played no role in the decision not to recall him and the decision was lawful. Spencer, with no foundry experience, was hired at an hourly rate to reconstruct and make repairs to the roof (which in part had fallen in), rather than contracting with an independent roofer to do the work. When not performing roofing work, he was used on various pro- duction jobs. He had difficulty working with Curran, who did roofing carpentry work, complained constantly about having to do foundry work or anything less than a total roof replacement. He, like Fenslau, was paid at a higher hourly rate than other production employees and was described by Childers Sr., on June 30, as a suspected ringleader. Like Fenslau, he was not recalled, I find, for reasons having nothing to do with the union activities at the plant or his hourly rate of pay. I find the decision to be lawful. K. The "Discharge" of Curran on September 10 In support of the allegations of paragraphs 18 to 20 of the complaint (the constructive discharge of Curran for the unlawful purpose of pacifying other employees who perceived favoritism), the General Counsel elicited the testimony of Curran and his wife (a nonemployee). The former testified that he was called to Rassey's office on September 10 where he was handed a three-quarter-inch- thick stack of AVOs (avoid verbal orders) and was asked to sign them to "pacify" some employees who thought him to be receiving special treatment; that he did not read the documents, thought the whole thing to be a joke, "saw red," and threw them back at Rassey, saying, 963 "I'm going to get out of here and do you and me a favor"; that he did not report to work the following morning, but instead returned to Rassey's office with a tape recorder and his wife as a witness; that Rassey again told him all he had to do was to sign the reprimands and everything would be all right; that he suggested to Rassey that he continue to work for him on a contrac- tual basis, to which Rassey agreed; and that he never re- turned to the plant thereafter, because he thought he was discharged. His wife corroborated his testimony, but contradicted him about the color of the reprimand slips. For reasons discussed above (see sec. II,H), I am unable to credit the testimony of Curran. In addition, his testimony about the documents simply is untrue: AVOs are not warning slips; they are white and not orange; and an entire pad of AVOs is not three-quarter-inch thick. Under the circumstances here, the testimony of his loyal wife similarly is not credited. I instead credit the testimony of Cappella, Rassey, and Office Manager Reside. Their testimony was convincing and consistent with undisputed facts relating to Curran's conduct on the job. Reside testified that, as she had done in the case of other employees, she prepared and gave to Rassey nine warning notices based on information ob- tained from Curran's timecards (failure to punch in or out; reporting late) and one slip based on Curran's unau- thorized entry into the office and his rummaging through the Company's accounts receivable files. After overhear- ing the discussion between Rassey and Curran on Sep- tember 10, she prepared one last slip, noting that Curran refused to accept the other warnings and "quit 9/10/82." Rassey testified that Curran was called in to discuss his work habits, which were changing for the worse; that Curran refused to look at the warning slips, threw them back at him, and left the office and plant before the end of the shift; that the following morning, he called Curran to inquire about a handsaw (Curran regularly carried both company and personal property on his truck) and Curran stated he would be right down to the plant; that Curran, his wife, and his tape recorder arrived soon after; that Curran admitted getting hot the day before, thinking that Rassey was "coming after me to fire me"; that he never demanded that Curran sign the notices; and Curran suggested they enter into a contractual relation- ship, to which he agreed. I find and conclude, based on the credited evidence, that Curran voluntarily quit his employment on Septem- ber 10 when confronted with undisputed evidence of im- proper conduct on the job; that Respondent's confront- ing Curran with such evidence was solely for the pur- pose of disciplining and counseling an errant employee; and that, in doing so, it was not Respondent's intent to pacify other employees who perceived that Curran was receiving favoritism from Respondent or who were seek- ing to organize a union . As to these allegations, the Gen- eral Counsel's contention is a severely strained one, ig- noring undisputed evidence of bizarre behavior and fla- grant disregard for company rules requiring use of the timeclock and the privacy of company business records. Curran's job was not in jeopardy on September 10. Rather, Respondent was exercising its protected right to 964 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD manage its business and direct its work force to ensure its continued viability. Curran, for reasons known best to himself, elected not to discuss his refusal/failure to clock in or out on a number of occasions and his unauthorized review of business accounts . This record can support but a single conclusion-that Curran voluntarily quit his em- ployment on September 10-and the allegations must be dismissed. L. The November 1982 Layoffs Paragraphs 22 and 31 of the complaint as amended allege the unilateral layoff of seven employees on No- vember 29 , 1982, without notice to the Union and with- out opportunity to bargain, in violation of Section 8(a)(5). The complaint does not allege the layoffs to be discriminatory in violation of Section 8(a)(3). It is undisputed that Respondent gave no notice to the Union of the layoffs and afforded it no opportunity to bargain over the decision itself or its effects. Of course, the Union had not at that time been certified or recog- nized as the bargaining agent for the unit employees. Whether Respondent was under a duty to bargain with the Union over the November 29 decision to lay off the seven employees and, if so , whether Respondent initially must reinstate the employees with backpay pending such bargaining are issues considered below in the remedy section of this decision. M. The Permanent Layoffs ofDecember 8, 1982 Paragraph 21 of the amended complaint alleges that three of the seven employees who were laid off on No- vember 29 were "permanently" laid off on December 8 because of their union activities and, in the case of one, for the additional reason that he threatened to take a va- cation pay claim to the Board. Although paragraph 30 of the complaint alleges only a violation of Section 8(a)(4), it is clear from the wording of paragraph 21 that the General Counsel intended to plead also a violation of Section 8(a)(3). However, no 8(a)(5) violation is alleged. One of those three, Miles, was not called to testify. Another, Kalar, testified that, when originally laid off, it was for "at least 2-3" weeks, but that on December 9 he received a written notice saying his layoff was perma- nent because there was no foreseeable need for his serv- ices, despite the existence of uncompleted work in the pattern shop; that the pattern shop had unsuccessfully tried to make new patterns and finally resorted to pur- chasing them from suppliers ; that new patterns needed adjustment before use ; that the level of pattern repair work decreased in the 6 months prior to his layoff; that, in November, he was unsuccessful in making a new pat- tern for a Chrysler job; that, during a December 8 meet- ing with Rassey concerning his claim for vacation pay, Rassey took the position that Kalar was ineligible, Kalar said he would call the Board about it and Rassey said, "go ahead"; and that the vacation pay claim was subse- quently disallowed by a state agency on grounds of ineli- gibility. The third employee, Hill, testified that on De- cember 12, Rassey told him he was permanently laid off because Respondent was no longer going to do corework (the work performed by Hill); that several weeks later Rassey called to inquire about the location of the notebook containing formulas for coremaking , so that a "few little jobs" could be done; that in March 1983, he was recalled to perform corework principally ; and that his union activity consisted solely of signing a card. Cappella and Rassey testified without contradiction that Miles was laid off because of a lack of steady work of the kind he performed . As to Hill's corework, both testified that there simply were no cores to be made for the foreseeable future and that Hill ultimately was re- called when work in the core department resumed. As to Kalar, again both testified that patterns for use at the foundry were made outside ; that a full-time patternmaker was not needed for the pattern repair work (which could be done part time by others); that, due to a severe de- cline in sales, there was insufficient work to keep Kalar busy 2 hours a day; that there was no foreseeable work for months; and that business considerations were the only reasons for Kalar's permanent layoff. For reasons set forth above, I credit the testimony of Rassey and Cappella over that of the employees . Again, it should be noted that the testimony of the employees was based on surmise and speculation , rather than on hard information about the operation of the plant and Respondent's business prospects. On the other hand, the testimony of Rassey and Cappella about to the Compa- ny's declining sales stands uncontroverted on this record. On this record, I find the conclusions to be inescap- able: that the three employees were put on permanent layoff status solely for legitimate business reasons , having nothing to do with their union activities or Kalar's vaca- tion pay claim and threat to "ball the Board"; that the same decision would have been made irrespective of such employee activity ; and that the December 8 deci- sion was not unlawful. REMEDY Having found that Respondent violated Section 8(a)(1) and (2) of the Act, Respondent will be directed to cease and desist therefrom and to post an appropriate notice to employees. Moreover, for reasons set forth below, Respondent will be directed to bargain with the Union on request. On June 28, 1982, when it filed a representation petition, the Union represented a majority (18) of the employees at the plant. By September 1, when Respondent succeed- ed in "convincing" the employees that they might want their own in-plant committee to represent them rather than the Union, that majority had been lost, with a ma- jority of the employees (18) now voting to reject the Union. Respondent's unlawful conduct during that period has been recited above and need not be repeated here. Moreover, the unit is small and, thus , any antiunion conduct tends to be magnified. Finally , the unlawful con- duct touched virtually every employee in the unit. Ac- cordingly, I find and conclude that, due to Respondent's serious and pervasive unfair labor practices, the possibili- ty of ensuring a fair election is slight, and employee sen- timent, on balance, would be better protected through a compulsory bargaining order. NLRB v. Gissel Packing Co., 395 U.S. 575 (1969). LAPEER FOUNDRY & MACHINE The more serious issue, however, is whether that bar- gaining order should be prospective or retroactive, i.e., whether the purposes of that Act would be served best by ordering reinstatement with backpay of the seven em- ployees laid off in late November for legitimate business reasons, all but three of whom were subsequently re- called (see sec. II,L and M, above), as a prerequisite to decision and/or effects bargaining . This issue was not ad- dressed in the General Counsel's brief. Since Trading Port, 219 NLRB 298 (1975), when a split Board rejected the prospective bargaining order ap- proach of Steel-Fab, 212 NLRB 363 (1974), it has been Board policy to make Gissel bargaining orders retroac- tive and each court of appeal that has considered the policy has endorsed it. Alumbaugh Coal Corp. v. NLRB, 635 F.2d 1380 (8th Cir. 1980); Hedstrom Co. v. NLRB, 629 F.2d 305 (3d Cir. 1980), cert. denied 450 U.S. 996 (1981); Ann Lee Sportswear v. NLRB, 543 F.2d 739 (10th Cir. 1976); and Plumbers Local 669 v. NLRB, 681 F.2d 11 (D.C. Cir. 1982). In Trading Port, bargaining was ordered as of the date of union demand for recognition. If ap- plied here, Trading Port would compel bargaining from a date prior to the November layoffs and would further re- quire the reinstatement of the seven employees with backpay as a condition precedent to such bargaining, be- cause notice and opport;unity to bargain was not given to the Union. This would be so, although the layoffs were not alleged to be violative of Section 8(a)(1) or (3) and were found above to be for purely legitimate busi- ness reasons related to a severe and continuing decline in business. Although strictly bound by Board precedent and policy, I nevertheless am of the opinion that Trading Port was not intended to be applicable to the circumstances of this case for a number of reasons: ( 1) Here, unlike Trad- ing Port, the Union never evidenced its majority status or made a demand for recognition. The Union had a majori- 965 ty status as of June 28 when it filed its petition, yet did not demand recognition. It made no recognition demand at the time of the initial unfair labor practice charge of July 6, 1982 (layoffs of June 30), even though it specifi- cally claimed in that charge to represent a majority of unit employees at the time. Nor did it seek recognition at the time it filed the second charge (company effort to es- tablish in-plant committee), when it knew it had lost ma- jority status due to Respondent's conduct. Rather, the Union delayed any contract with Respondent until No- vember 19 (almost 5 months after achieving majority status) and then, remarkably, it made a general, pro forma demand, at the request of the General Counsel, only for contract bargaining and not recognition (Jt. Exh. 1). The record thus compels the conclusion that the union letter of November 19 was solely for the purpose of litigative posturing. (2) The June layoffs (and the sub- sequent recalls) were not violative of Section 8(a)(1), (3), or (4) and were not alleged to be violative of Section 8(a)(5). (3) The November layoffs were not alleged to be unlawful under Section 8(a)(1) or (3) and were found to be dictated solely by legitimate business reasons. Given the absence of a demand for recognition, the propriety of the June layoffs, the legitimate business rea- sons for the November layoffs, the precarious nature of Respondent's financial condition resulting from his effort to resurrect a failed business (which is uncontroverted), the uncontroverted evidence of employee Fenslau's ef- forts to sabotage Respondent's business relationship with a customer, and the possibility that a retroactive bargain- ing order coupled with a restoration of the status quo might jeopardize the continuing viability of this small business and the remaining jobs, I am of the opinion that the purposes of the Act are best served and the interests of the parties best balanced by the entry of a prospective bargaining order, effective as of the date of this Order. [Recommended Order omitted from publication.]