J F Morris Co.

J F MORRIS CO J F Moms Company and Francis W Schantz, a Single Employer and Local 124, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, AFL-CIO Case 7-CA-27865 February 8, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND HIGGINS Upon a charge filed by the Union on March 15, 1988, as amended on April 18, 1988, the General Counsel of the National Labor Relations Board issued a complaint against J F Morns Company and Francis W Schantz, a Single Employer, the Respondent, alleging that it has violated Section 8(a)(1) and (5) of the National Labor Relations Act Although properly served copies of the charge, amended charge, and complaint, the Re- spondent has failed to file an answer On June 20, 1988, the General Counsel filed a Motion for Summary Judgment On June 23, 1988, the Board issued an order transferring the proceed- ing to the Board and a Notice to Show Cause why the motion should not be granted The Respondent filed no response The allegations in the motion are therefore undisputed The National Labor Relations Board had dele- gated its authority in this proceeding to a three- member panel Ruling on Motion for Summary Judgment Section 102 20 of the Board's Rules and Regula- tions provides that the allegations in the complaint shall be deemed admitted if an answer is not filed within 14 days from service of the complaint, unless good cause is shown The complaint states that unless an answer is filed within 14 days of service, "all the allegations in the complaint shall be deemed to be admitted to be true and shall be so found by the Board " Further, the undisputed alle- gations in the Motion for Summary Judgment dis- close that the Regional Attorney for Region 7, by letter dated May 13, 1988, notified the Respondent that unless an answer was received by May 27, 1988, a Motion for Summary Judgment would be filed In the absence of a good cause being shown for the failure to file a timely answer, we grant the General Counsel's Motion for Summary Judgment On the entire record, the Board makes the fol- lowing FINDINGS OF FACT I JURISDICTION 869 The Respondent, J F Morris Company, a Michigan corporation, had been engaged in operat Ing a cartage company at its Ecorse, Michigan place of business until February 1, 1988, at which time it moved to Melvindale, Michigan During the year ending December 31, 1987, a representative period, the Respondent in the course and conduct of its business operations provided services valued in excess of $50,000 for National Steel Corporation, Great Lakes Steel Division, located in Ecorse, Michigan During the same calendar year, Great Lakes Steel sold and shipped from its Ecorse, Michigan facility products, goods, and materials valued in excess of $50,000 directly to points out- side the State of Michigan We find that the Re- spondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act and that the Union is a labor organization within the meaning of Section 2(5) of the Act II ALLEGED UNFAIR LABOR PRACTICES At all material times, Respondents J F Morris Company and Francis W Schantz have been alter egos and a single employer within the meaning of the Act i Since about August 28, 1985, the Union has been the designated and recognized exclusive collective- bargaining representative of the employees in the following appropriate unit All full-time and regular part-time truck driv- ers and employee owner-operators employed by Respondents at Respondent-Morris' Ecorse, Michigan, place of business, but excluding all guards and supervisors as defined in the Act Recognition has been embodied in a collective bar- gaining agreement effective until March 31, 1988 The Union continues to be the exclusive represent- ative under Section 9(a) of the Act Since about September 15, 1985, without provid- ing the Union the notice required by Section 8(d) of the Act, the Respondent has failed to pay wage rates and make fringe benefit fund contributions as required by the collective-bargaining agreement and has retained employees' paycheck deductions intended as contributions to the fringe benefit 1 Respondent Schantz is president and chairman of Respondent J F Morns Company s board of directors Schantz possessed or exercised sole control over the business functions and labor relations of Respondent J F Morns Company solely determined to subcontract the Respond ent s payroll functions and to reimburse and sell its operating license In addition Schantz was personally and individually involved in the unfair labor practices herein found 292 NLRB No 94 870 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD funds 2 Further, in December 1987, without pro- viding the Union prior notice and an opportunity to bargain, the Respondent engaged Atlantic West- ern Personnel Leasing Company as a payroll agent of its unit employees in order to evade its obliga tions under the collective-bargaining agreement, and, in March 1988 , sold its Michigan operating li- cense to Able Cartage of Michigan , Inc, and trans- ferred its unit employees to that company Based on the above, we find that the Respondent has refused to bargain collectively with the Union as the exclusive representative of the unit employ ees by, without prior notice to the Union, unilater- ally changing terms and conditions of employment and by refusing to bargain over the effects of its decision to terminate its operations by selling its operating license , all in violation of Section 8(a)(5) and (1) of the Act CONCLUSIONS OF LAW I By failing since September 15, 1985, without providing the Union notice required by Section 8(d) of the Act, to pay wage rates and make fringe benefit fund contributions required by the collec tive-bargaining agreement and by retaining employ- ees' paycheck deductions intended as contributions to the fringe benefit funds, the Respondent has en- gaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(1) and (5) and Section 2(6) and (7) of the Act 2 By engaging another company as the payroll agent of its unit employees and by selling its oper- ating license to another company and transferring its unit employees to that company, without giving the Union prior notice and an opportunity to bar gain over the effects of its decision to terminate its operations, the Respondent has engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(1) and (5) and Section 2(6) and (7) of the Act 2 Despite the language of Sec 10(b) of the Act which provides in rel evant part that no complaint shall issue based on any unfair labor prac tice occurring more than six months prior to the filing of the charge with the Board the Board has held that the limitation period is tolled until the adversely affected party receives actual or constructive notice of the alleged unlawful conduct Drukker Communications 258 NLRB 734 (1981) and Wisconsin River Valley Council (Skippy Enterprises) 211 NLRB 222 226-227 (1974) enfd 532 F 2d 47 (7th Cir 1976) Because the Respondent failed to file any answer to the complaint specifically one pleading the affirmative defense of Sec 10(b) it obviously cannot meet what would have been its burden-to show that the Union had knowledge of the alleged unfair labor practices more than 6 months before it filed the charge Accordingly the violations and remedy shall be found to have commenced with the Respondents failure to abide by the contract See Burgess Construction 227 NLRB 765 766 (1977) enfd 596 F 2d 378 (9th Cir 1979) REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act 3 We shall order the Respondent to make the re- quired contributions to the union fringe benefit funds and to transmit to the funds the contributions it has failed to make since September 15, 1985 4 We shall also order the Respondent to make whole unit employees for any loss of benefits caused by its failure to make these required fund contributions and to reimburse employees for any expenses ensu- ing from the Respondent's unlawful failure to make such contributions, as set forth in Kraft Plumbing & Heating, 252 NLRB 891 fn 2 (1980), enfd 661 F 2d 940 (9th Cir 1981) We shall further order the Re spondent to make all affected unit employees whole for losses they incurred by virtue of its fail- ure to pay the proper wage rates since September 15, 1985 Such backpay shall be computed in ac cordance with Ogle Protection Service, 183 NLRB 682, 683 (1970), enfd 444 F 2d 502 (6th Cir 1971) Interest on reimbursements and backpay shall be computed in the manner prescribed in New Hori- zons for the Retarded 5 We shall order the Respondent to bargain with the Union over the effects of the cessation of its operations on the Respondent's employees repre- sented by the Union With respect to this require- ment, and in order to create circumstances under which the obligation to bargain will be accompa- nied by economic consequences, we shall order the Respondent to pay its employees, in addition to the backpay owed from September 15, 1985, until the date the Respondent's operations ceased, amounts at the rate of their normal wages when last in the Respondent's employ from 5 days after the date of this Decision and Order until the occurrence of the earliest of the following conditions (1) the date the Respondent bargains to agreement with the Union on those subjects pertaining to the effects of the Respondent's cessation of operations, (2) a bona fide impasse in bargaining, (3) the failure of the 3 Because it is apparent from the General Counsel s motion that the Respondent closed its operations in March 1988 we find it appropriate to require the Respondent to mail copies of the notice to all unit employees employed at the time of the closure See e g Print Quic 262 NLRB 857 862 fn 19 (1982) 4 Any interest or other additional amounts owed with respect to these fund contributions shall be calculated in the manner set forth in Merryweather Optical Co 240 NLRB 1213 (1979) 5 283 NLRB 1173 (1987) Interest will be computed at the short term Federal rate for the underpayment of taxes as set out in the 1986 amend ment to 26 U S C § 6621 Interest on amounts accrued before January 1 1987 shall be computed under Florida Steel Corp 231 NLRB 651 (1977) J F MORRIS CO Union to commence negotiations within 5 days of the Respondent's notice of its desire to bargain with the Union, or (4) the subsequent failure of the Union to bargain in good faith, but in no event shall this additional sum paid to any of these em- ployees exceed the amount each would have earned as wages from the time the Respondent dis- continued its operations to the time each secured equivalent employment elsewhere, or the date on which the Respondent offers to bargain, whichever occurs first, provided, however, in no event will this sum be less than the employees would have earned for a 2-week period at the rate of their normal wages when last in the Respondent's employ Backpay shall be based on earnings that the employees would normally have received during the applicable period, less any net interim earnings, and shall be computed on a quarterly basis 'n the manner set forth in F W Woolworth Co, 90 NLRB 289 (1950), with interest thereon computed in the manner prescribed in New Hori- zons for the Retarded, supra ORDER The National Labor Relations Board orders that the Respondent, J F Morris Company and Fran- cis W Schantz, Melvindale, Michigan, its officers, agents, successors, and assigns, shall 1 Cease and desist from (a) Failing to bargain with the Union by failing to make required contributions on behalf of its unit employees to union fringe benefit funds, by retain- ing deductions from employees' paychecks intend- ed as contributions to the union fringe benefit funds, and by failing to pay unit employees the contractually required wage rates (b) Failing and refusing to bargain with the Union by engaging another company as the payroll agent of its unit employees and by selling its oper- ating license to another company and transferring its unit employees to that company, without giving the Union prior notice and an opportunity to bar- gain over the effects of terminating its operations (c) In any like or related manner interfering with, restraining, or coercing employees in the ex ercise 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) Pay into the funds, on behalf of its unit em- ployees, those contributions it failed to make as a result of its unlawful discontinuance of fund pay- ments, in the manner set forth in the remedy sec- tion of this Decision and Order (b) Make whole unit employees for any losses in wages and expenses they may have suffered as a 871 result of the failure to adhere to the collective-bar- gaining agreement, in the manner set forth in the remedy section of this Decision and Order (c) On request, bargain collectively with the Union with respect to the effects on its unit em- ployees of its decision to terminate its operations, and reduce to writing any agreement reached as a result of such bargaining The appropriate unit is All full-time and regular part-time truck driv- ers and employee owner operators employed by Respondents at Respondent Morris' Ecorse, Michigan, place of business, but excluding all guards and supervisors as defined in the Act (d) Make whole its unit employees by paying those employees employed when the Respondent terminated its operations normal wages plus inter- est and in the manner set forth in the remedy sec tion of this Decision and Order (e) 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 and other money due under the terms of this Order (f) Mail signed and dated copies of the attached notice marked "Appendix" to the last known ad- dresses of all unit employees as of the sale of the Respondent's business 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 mailed by the Respondent immediately upon receipt (g) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply B 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 R-lations Board 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 WE WILL NOT fail to make required contribu tions on behalf of our unit employees to the union fringe benefit funds 872 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD WE WILL NOT retain deductions from employee paychecks, which were intended as contributions to the union fringe benefit funds WE WILL NOT fail to pay unit employees the contractually required wage rates WE WILL NOT engage another company as the payroll agent of our employees or sell our operat- ing license to another company without giving the Union prior notice and an opportunity to bargain in good faith over the effect on our employees of our decision to close our operations WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act WE WILL pay into the union fringe benefit funds those contributions we failed to make as a result of our unlawful discontinuance of fund payments WE WILL make unit employees whole for any losses or expenses they may have suffered as a result of our unilateral discontinuance of fund con- tributions and our failure to pay contractually re- quired wage rates , with interest WE WILL make unit employees whole by paying those terminated when we closed our operations normal wages for the period specified by the Na- tional Labor Relations Board, with interest WE WILL, on request, bargain collectively with the Union with respect to the effects on our unit employees of our decision to close our operations, and reduce to writing any agreement reached as a result of such bargaining All full time and regular part-time truck driv- ers and employee owner-operators employed by Respondents at Respondent Morris' Ecorse, Michigan, place of business, but excluding all guards and supervisors as defined in the Act J F MORRIS COMPANY AND FRAN- CIS W SCHANTZ, A SINGLE EMPLOY ER