Harvard Industries, Inc.

1102 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Elastic Stop Nut Division of Harvard Industries, Inc. and Local 726, United Automobile, Aero- space and Agricultural Implement Workers of America. Cases 22-CA-14033 and 22-CA- 14073 June 13, 1989 DECISION AND ORDER BY MEMBERS JOHANSEN, HIGGINS, AND DEVANEY On March 5, 1987, Administrative Law Judge Raymond P. Green issued the attached decision. The Respondent filed exceptions and a supporting brief,' and the Charging Party and the General Counsel filed answering briefs. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings,2 and conclusions and to adopt the recommended Order.3 ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Elastic Stop Nut Division of Harvard Industries, Inc., Union, New Jersey, its officers, agents, successors, and as- signs, shall take the action set forth in the Order. I The Respondent has requested oral argument The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties 2 The Respondent has excepted to some of the judge's credibility find- ings The Board's established policy is not to overrule an administrative 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 Car 1951) We have carefully examined the record and find no basis for reversing the findings 3 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 US C § 6621 Interest on amounts accrued prior to January 1, 1987 (the effective date of the 1986 amendment to 26 US C § 6621), shall be computed in accordance with Florida Steel Corp, 231 NLRB 651 (1977) The General Counsel has requested a visitatorial clause Under the cir- cumstances of this case, we find it unnecessary to include such a clause See Cherokee Marine Terminal, 287 NLRB 1080 (1988) Mitchell A. Schley and John Gibbons Esqs., for the Gener- al Counsel. Allan Dabrow, Donald Bush, David M. Schloss, and David McCarthy, Esqs. (Pechner, Dorfman, Wolffe, Rounick & Cabot), of Philadelphia, Pennsylvania on behalf of the Respondent Thomas J. Giblin, Esq., Stephen H. Gelb, Esq ., of Cran- ford, New Jersey , on behalf of the Charging Party. DECISION STATEMENT OF THE CASE Raymond P Green, Administrative Law Judge. These consolidated cases were heard by me on various days in March through August 1986. The charge in Case 22-CA-14033 was filed by the Union on 19 September 1985 and was amended on 25 November 1985. The charge in Case 22-CA-14073 was filed by the Union on 11 October 1985. Thereafter the Regional Director of Region 22 of the National Labor Relations Board issued a consolidated complaint and notice of hearing on 26 November 1985. In substance this alleged: 1. That for many years the Union has represented cer- tain employees of the Elastic Stop Nut (ESNA) Division of Amerace Corporation. 2. That on or about 12 April 1985 the Respondent (Harvard Industries), purchased the assets of ESNA from Amerace and has, since said date, continued to op- erate it in substantially the same manner as had Amerace. 3. That since on or about 8 April 1985 the Respondent has failed and refused to hire a large proportion of the persons employed by Amerace who were represented by the Union because of their affiliation with the Union and because Respondent intended to avoid any obligation to recognize or bargain with the Union as a "successor" to Amerace. 4. That but for the failure to offer employment to former Amerace employees as described above, Harvard would have been a "successor" to Amerace having a legal obligation to recognize and bargain with the Union. 5. That on various occasions since 9 April 1985 the Respondent has advised the Union that it would not rec- ognize it as the collective-bargaining agent of the em- ployees at ESNA 6. That on or about 15 April the Union commenced a strike against ESNA which was honored by inter alia, certain former Amerace employees who were offered employment by Harvard. 7. That the aforesaid strike was caused and prolonged by Harvard's unfair labor practices of refusing to hire certain employees of Amerace and of refusing to recog- nize the Union as the collective-bargaining representa- tive. 8 That on 8, 21 and 23 May 1985 Respondent dis- charged certain employees who formerly worked for Amerace, who were offered employment by Harvard, but who honored the strike described above in paragraph 6. Based on the record as a whole including credibility findings based on demeanor grounds and after reviewing the briefs of the parties, I make the following FINDINGS AND CONCLUSIONS A. Jurisdiction There is no dispute and I find that the Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 294 NLRB No. 88 HARVARD INDUSTRIES I also conclude that the Union is a labor organization within the meaning of Section 2 (5) of the Act. B Operative Facts The Union has since 1945 represented what essentially can be described as the production and maintenance em- ployees of Elastic Stop Nut at a plant located in New Jersey. As defined by the last contract , the collective bargaining unit includes: All production , non-production , maintenance and factory clerical employees of the Company em- ployed at its plants and warehouses in New Jersey, but does not cover office and other clerical employ- ees, guards and watchpersons, field and safety in- spectors, time study employees, messenger, techni- cal and laboratory employees (including draftsper- sons, engineers, chemists, metallurgists and techni- cians), stationery store employees, salespersons, out- side service persons, nurses, stock handlers in the Accounting Department, administrative and profes- sional employees, executives, and all or any supervi- sory employees with authority to hire, promote, dis- charge, discipline, or otherwise effect changes in the status of employees or effectively recommend such action. Prior to 12 April 1985, Elastic Stop Nut (ESNA) was a division of a company called Amerace Inc. ESNA con- sisted of four facilities which were located in Union, New Jersey; Pocohontas, Arkansas; Chicago, Illinois; and Montreal, Canada. Of these, the two manufacturing facilities were at Arkansas and New Jersey It was at the latter of these two manufacturing facilities that the Union represented certain employees i ESNA was and is engaged in the manufacture of metal fastening devices (i.e., nuts). At Pocohontas it manufac- tures nuts for general use whereas at New Jersey, the manufacturing is done for the aerospace industry. Ac- cordingly, the nuts made at New Jersey are made to more demanding specifications than are those made in Arkansas. Among the customers for the New Jersey plant are the U S . government and various aircraft manu- facturers. The record in this case indicates that ESNA hit its peak in the late 1950's when it was an independent com- pany and before it was taken over by Amerace Thus, at one time the workforce at the New Jersey facility ex- ceeded 1500 employees. In 1968 Amerace acquired ESNA and by this time the workforce had declined to about 700 employees . In 1973 a separate manufacturing plant was established in Poco- hontas, Arkansas. According to Gary Anderson,2 Amerace basically viewed ESNA as a "cash cow." He states that Amerace ' The Chicago facility is involved in warehouse functions and the Montreal facility is a sales office At one time certain employees at the Pocohantus plant were unionized However they were not at the time of the event herein 2 Prior to April 15, 1985, Mr Anderson was the division controller of ESNA under Amerace After ESNA was taken over by Harvard. Mr Anderson continued in that position 1103 drew money out of ESNA but let the company's physi- cal plant decline by minimizing investment for improve- ments. He also states that in 1983 Amerace set unreason- able net profit goals for ESNA and announced that if these goals were not met, (16 percent after tax return), ESNA would either be sold or closed . According to Mr. Anderson, in 1984 Amerace began looking around for a purchaser for ESNA . (At about the same time Amerace was also looking to sell off some of its other divisions as well). By 1985 the production and maintenance work- force of ESNA had declined to about 450 to 500 em- ployes and of this number about 250 worked at theNew Jersey plant In the meantime, the Union and Amerace negotiated a new 2-year collective -bargaining agreement which ran from 2 June 1984 through 30 May 1986.' In July 1984 Dr. Hurley3 and Stuart Coleman4 of Har- vard Industries visited ESNA for the purpose of explor- ing the possibility of purchasing the division . According to Mr. Coleman, the president of ESNA (Jim Kerestes), told them that the reason the company was doing so badly and the reason it could not be turned around was because of the terms of the collective -bargaining agree- ment. Similarly, when representatives of Harvard spoke to the managerial employees of ESNA, the latter group cited the union contract as being a major obstacle to the company's ability to efficiently manufacture and deliver the product . Among the troublesome items mentioned in- cluded: (1) the great reliance on seniority for promotions and transfers ; (2) an incentive system which was too complicated to manage and which generated disputes; (3) too many job classifications which inhibited flexibility; and (4) a grievance-arbitration procedure which made it difficult to discipline the work force. Harvard Industries is a conglomerate business enter- prise. In the past Harvard Industries has generated growth by acquiring other business enterprises. In all past instances where Harvard has purchased a company with a unionized work force the standard scenario has been that Harvard has negotiated with the Union for changes in the extant collective-bargaining agreement, has hired the existing work force , and has recognized the existing union. In all of these instances , Mr. Coleman has been the person involved in these transactions on behalf of Harvard 5 Subsequent to the summer visit by Dr. Hurley and Mr. Coleman, Harvard hired James Duke as a consultant. Mr Duke, who at one point in the past had been the president of ESNA, was hired essentially to evaluate ESNA 's operations so that Harvard could decide wheth- er to acquire the company . As such, Mr. Duke spent a great deal of time at ESNA over the next several months observing its operations and sitting in on its management meetings . Additionally, other managers associated with 3 Dr Hurley is the chief executive officer of Harvard Industries 4 Stuart Coleman was a vice president of Harvard Industries and was in charge of "Human Resources " In effect, this meant that Mr Coleman was in overall charge of all matters relating to employment Mr Cole- man was also on Harvard's board of directors 5 Mr Coleman testified as to the acquisition by Harvard of Harman Automotive, Rubber Products Co and Anchor Swan The latter also was a division of Amerace which was acquired at an earlier date 1104 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Harvard visited ESNA and talked to ESNA's manage- ment Finally, Harvard contracted with the Arthur An- derson Company, an outside consulting firm, to make an independent evaluation of ESNA's operations. In November 1984 the Arthur Anderson Company de- livered a report to Harvard and among other things rec- ommended that the New Jersey plant be moved to Ar- kansas. In a memo from Mr. Duke to Dr. Hurley con- cerning the Anderson report, Mr. Duke wrote as fol- lows: The report presents goals and means for their achievement for the transition of operations, of Esna from Amerace to Harvard Industries. The fundamentals are: 1. The ability to operate the Union, N.J. plant in a non-unionized environment. 2. Rearrangement of production processes and their (partial or full) transfer to. the Pocohontas plant to improve material flow and productivity. 3. Achievement of the transition through use of existing finished goods and work-in-process invento- ries and, most importantly, reduced lead times for newly originated parts. 4. Investments in plant, equipment, personnel and organization to improve overall effectiveness and profitability. As to the prospective takeover, Mr. Coleman testified that he recommended to Dr. Hurley that it would be im- possible to work with the collective-bargaining agree- ment. He also testified that unlike Harvard 's past practice of seeking to negotiate with unions for modifications of existing contracts, he recommended and Hurley agreed that no such action occur in this case. He testified: Q. [W]hy didn't you try to modify the contract in this situation and recognize the Union? A. We thought it would be impossible to, even if you made a million modifications , we thought it was an impossible instrument to work with and we had made a lot of changes, particularly in the bene- fits and all other conditions and we just didn't, we thought it was an impossible job to do. Similarly Dr. Hurley testified. Q. My question, now that we've laid those pre- liminaries out, is why wasn't the collective bargain- ing agreement at the Elastic Stop Nut Division of Amerace either assumed or renegotiated? A. Well, after a review of the operations, after the recommendations of the management people it was determined that it was in the best interests of the company not to recognize the union and not to operate under that collective bargaining agreement. A. The decision was made not to assume the col- lective bargaining agreement because it was not op- erating properly and the advice of the management and the people reviewing the operations was that we start fresh. At the same time that Harvard was evaluating ESNA's operations, ESNA's management was also discussing ways to make its operations more efficient. It seems that these discussions took place not only for their inherent utility but also to make ESNA a more appealing bride. Among the various items discussed, it seems that in May or June 1984, Mr. Kerestes initiated a study of a manu- facturing process called the Cell concept. When it was pointed out to Mr. Kerestes that implementation of such a concept might infringe on the job classification provi- sions of the union contract, he replied that for purposes of planning, the union contract should not be considered. Basically the Cell concept was described by the wit- nesses as being a rearrangement of the factory's machin- ery on the plant floor so that the products are made in a more continuous fashion with less travel to and from various procedures. In this regard, it does not seem to me to involve the introduction of new machinery or new processes or any other major changes in the production procedures. At most, the Cell concept was contemplated as simply a reshuffling of the factory layout in the hope of having a more efficient configuration. At the time of this hearing, (more than a year after Harvard's acquisi- tion of ESNA), the Cell concept had not been imple- mented. Had it been implemented, its effect on employ- ees may have been to require them to learn how to oper- ate more than one machine and to be more flexible about their job assignments. According to Mr. Mason,6 in February 1985 he worked on a project which involved taking all job appli- cations that ESNA had received from January 1985 and coding them according to applicant and skill. He states that the purpose of this was: (1) to consider the possibili- ty of setting up a second shift7 and (2) gathering infor- mation for use by any potential buyer. In essence the evaluation of the unionized employees was done hastily and in two parts Each employee was evaluated by his own supervisor who gave an overall score of 1 to 10. The same employee was then evaluated by the personnel department under the direction of Mr. Techanchuk which also gave an overall score of 1 to 10 At the conclusion, the two scores were averaged As far as the line supervisor's were concerned, they apparently were told not to consider union affiliation or activities in arriving at their score. What is interesting, however, is the tendency of the employees'supervisors to score them higher than the personnel department under Mr Techan- chuk, who among other things, was hired by Harvard to make the final decision as to whether or not to hire any particular Amerace employee who applied for a job at 6 Mr Mason, under Amerace was the plant manager of ESNA's New Jersey plant Under Harvard he was plant manager from 15 April to 22 April 1985 After that he specialized in computer operations 7 At this time orders had picked up and by the time of the acquisition on 12 April 1985, ESNA's backlog was up Also a second shift had been added In March 1985 ESNA began another project to evaluate each of its hourly (i e , union represented), employees at the New Jersey plant This evaluation process was initiated by Mr Kerestes and was carved out under the direction of Messrs Mason, Cuccarole, and Tehanchuk It is of some interest and significance that these evaluations were done only of the bargaining unit employees at the New Jersey plant and nothing similar was done for any of the other employees of ESNA HARVARD INDUSTRIES Harvard.8 And in that respect, Mr. Tehanchuk testified that he was told by Harvard's representative, Mr Cole- man, not to hire people who were active in the Union. Assuming that I believe Mr. Tehanchuk, (and I do), this makes the evaluations essentially meaningless insofar as the Respondent may wish to rely on them as a defense to the 8(a)(3) allegations. On March 29, 1985, Harvard and Amerace executed an agreement whereby Harvard purchased ESNA. Also purchased as part of the agreement was another division of Amerace called Caco Pacific. The effective date of the takeover was to be 12 April 1985. On 29 March 1985 Amerace posted the following: NOTICE TO EMPLOYEES On March 29, 1985, Amerace Corp. and Harvard Industries have entered an agreement for the sale of all assets of the Esna Division of Amerace and the Caco-Pacific Division of Amerace to Harvard In- dustries. Also on this date Amerace delivered a letter to the Union which read- Be advised that effective approximately April 12, 1985, Amerace is selling and transferring all of the assets of the ESNA Division to Harvard Industries. Simultaneously therewith, the employment of all employees in the bargaining unit will be discontin- ued. We are prepared to meet with you at a mutually convenient time to discuss the impact of this deci- sion on the employees covered by our labor agree- ment. We would suggest scheduling a meeting for March 29, 1985, at 2:30 p.m. in the ESNA confer- ence room. The Respondent argues that it intended, upon the take- over, to operate the ESNA Union, New Jersey plant with a startup crew and as a partial operation. Thus, Stuart Coleman at one point in his testimony stated that he thought it might take 1 or 2 months to get the plant fully started and that he intended to hire a startup group for Monday, 15 April consisting mainly of skilled people. Nevertheless other testimony by Respondent's wit- nesses indicates to me that Harvard intended to have the New Jersey and the Arkansas plants running at full steam within the first week of the takeover and with more than mere "start up" work forces. Thus, James Duke, the man who Harvard intended to have in overall charge of New Jersey operations, testified that in his opinion Harvard needed at the start of operations, about 200 employees, half skilled and half nonskilled. David 8 In R Exh 8 1 note the following 48 employees were rated the same by supervision and by the personnel department, 150 were given lower ratings by the personnel department than by supervision Of these, 48 were downgraded so that their average scores were 5 1 /2 or below (Harvard asserts that six was basically the minimal grade in order for a former Amerace employee to be hired) Thirty employees got higher rat- ings by the personnel department Yet in almost all of the latter cases the employees involved had gotten very low ratings by their supervisors so that even with the higher average scores they were still below six 1105 Fursman testified that Harvard's plan regarding the New Jersey facility was to have regular production going on Monday, 15 April. Similarly Mr. Cuccarole testified that he anticipated that Harvard would be ready to run within a few days and expected to begin operating by Wednesday April 17. Although Mr. Coleman spoke of beginning with a partial operation and a startup crew, he also testified that as far as numbers of employees were concerned, he intended to overhire, (i e hire more em- ployees than might be needed). In this regard, he stated that if it turned out that they were overstaffed, they could later reduce through attrition. According to Mr. Coleman, his past experience has been that even when he has overhired, the company has usually not had to lay off any employees thereafter. As part of the planning process preliminary to the takeover, Mr. Cuccarole made up a list of Amerace hourly employees whose retention by Harvard would be essential in order for operations to be effectively contin- ued. This relatively small group of people, (about 34), were either foremen, setup persons (i.e. people who set up the machines for operation), a few tool and die makers and a number of other job categories.9 All of the salaried employees except for ESNA's president Mr. Kerestes, and its "director of human resources, Arthur Bradly, were retained by Harvard.1O It also is noted that according to Mr. Mason, at the time of the takeover, orders had risen, backlog was up and a second shift had been started. Mr. Mason further testified that at a meet- ing he attended in early April 1985, Mr. Coleman said that Harvard was going to start up on 15 April, (in a partial operation mode), and that the operation would be union free. In early April want ads were placed in various New Jersey newspapers. Among the jobs requested were; drivers, machinists, machine operators, platers, quality control process inspectors, tool and die makers and grinders. - On April 8 the following notice signed by Stuart Cole- man was placed on the ESNA bulletin boards: TO: ALL HOURLY EMPLOYEES RE: EMPLOYMENT WITH HARVARD Effective April 12, 1985 Harvard Industries will buy the assets of ESNA and Amerace will termi- nate all activities at Union , New Jersey plant. On Monday, 15 April, 1985, the Elastic Stop Nut Division of Harvard Industries-the "new" compa- ny-will begin partial operations. 0 See R Exh 29 10 In fact, virtually all of ESNA's employees throughout the country, except for the bargaining unit employees at New Jersey were retained by Harvard This was explained by Harvard as resulting in large part from the fact that all nonunion employees of ESNA were entitled to severance pay if they were laid off or discharged This severance pay liability, ac- cording to Harvard, effected the purchase price of ESNA Thus, if Har- vard agreed to retain employees who were covered by the severance pay policy, the purchase price of the company was reduced As part of the contract of sale, Harvard and Amerace agreed that if any employee cov- ered by the severance pay policy was discharged within 90 days of the takeover, Harvard and Amerace would share the cost of the severance pay liability to that employee 1106 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Those ESNA employees interested in employ- ment with Elastic Stop Nut may apply at the Best Western Coachman Inn, Exit 136 , Garden State Parkway, Clark NJ, 8 AM to 8 PM, Monday .through Friday, April 8 to 12. Applications may also be obtained at the State Employment Office in Elizabeth and at other locations to be announced later. On April 8 Harvard began interviewing people for the ESNA plant. This took place at the Coachman Inn and Harvard utilized a number of interviewers borrowed from related companies . Mr. Tehanchuk was, however, employed by Harvard to have the final say as to any Amerace employees who applied for jobs and the other interviewers were required to check with him if they spoke to any persons employed by Amerace. Mr. Tehanchuk who was present at the Coachman all 'day on April 8 and the early part of April 9 credibly tes- tified that before the interviewing process began, Mr. Coleman had a meeting with the interviewers . Accord- ing to Mr. Tehanchuk, Mr. Coleman told them that he wanted skilled people predominately and if people from ESNA came in, he wanted to hire only the skilled people or those people considered exceptionally fine em- ployees. He states that Mr. Coleman went on to say that he wanted to establish a quota of 25 percent for the ESNA employees to be hired; that the purpose of the quota was to maintain ESNA employees as a minority so as to avoid a union. I t Tehanchuk testified that Mr. Cole- man further said that they should avoid any types that would be union oriented. Although Mr. Tehanchuk testi- fied that Mr. Coleman used the phrase , "startup work- force," he asserts that Mr. Coleman set no limit on over- all hiring and in fact instructed them to hire as many people as possible for the following Monday. On April 9, the Union's principal officers, Pete Anton- ellis and Francis Mershon, along with an International representative Bill Kane, had a meeting with Mr. Bush, an attorney representing Harvard . At this meeting the Union requested recognition from Harvard and Mr. Bush said that his law firm had promised Harvard a union free environment. When Mershon brought up the fact that Harvard had recognized the existing unions when it pur- chased other companies, Mr. Bush said that the collec- tive-bargaining agreement at ESNA was pretty compli- cated and that they did not think they could get any- thing from the Union. Mershon replied that the Union was willing to negotiate to which Mr . Bush said that Harvard was not assuming the contract and that it wished to offer its own wages and benefits. Mershon states that Bush said that as Harvard was not a signatory to the contract it was not obligated under law to assume the contract or to recognize the Union unless more than 50 percent of the work" force were UAW people. Ac- cording to Mr. Mershon, Mr. Bush said that theUnion could organize the employees and had a right to file a petition for an election. He also states that Mr. Bush told 11 Respondent's witness, David Fursman, in describing the meeting, said that Mr. Coleman told the group that Harvard was planning to open the company on Monday, 15 April, "union free and without a union con- tract in place." him to apply for work at Harvard ; that some of the best supervisors were former union officials. On the evening of April 9, Mr. Mershon, at a meeting of the Union's membership, notified them of the conver- sation with Mr. Bush and told them to make applications for jobs. He also told them that the Union's position was that under a successor clause in the contract, Harvard was obligated to recognize the Union . He also asserted that the Union's position was that Harvard was obligated to hire all of the employees. On April 10, ESNA posted the following notice.' TO ALL SHOP EMPLOYEES This memorandum is to officially notify all hourly shop employees that they are being laid off from the Esna Division Amerace Corporation as of the end of their shift on Friday, April 12, 1985. On April 11 , another notice was posted. PLEASE MAKE ARRANGEMENTS TO CLEAN OUT ALL LOCKERS AND REMOVE ALL PERSONAL ITEMS FROM THE 'PLANT BY THE END OF YOUR SHIFT ON FRIDAY, APRIL 12, 1985. • ANYONE SCHEDULED FOR THE SECOND SHIFT ON FRIDAY, APRIL 12, 1985, IS TO REPORT FOR WORK ON THE DAY SHIFT (7 A.M.) In the meantime, interviews were taking place at the Coachman during the week of April 8. On April 9, Mr. Tehanchuk quit because he received a threatening tele- phone call and he was replaced by Ed Von Linden. When former employees of Amerace went to the Coach- man to be interviewed they were told by the interview- ers or by Mr. Fursman in group speeches, that Harvard was not assuming the collective-bargaining agreement; that certain fringe benefits would be different; that there was going to be a union free environment ; and that em- ployees would be expected to do more than one limited job. In all, of the 240 hourly employees who were- em- ployed at ESNA on April 12, 221 made direct applica- tions for jobs at Harvard during the week of April 8. Further, Mr. Mershon, on Friday, April 12 tendered a letter to Harvard applying for jobs on behalf of the entire bargaining unit. This read: To Whom It May Concern: Please be advised that Local 726 UAW hereby makes application for employment with your firm on behalf of all of the Bargaining Unit members currently employed by Amerace/ESNA Division. This application and any applications previously filed by members should not be viewed as a waiver of any rights which the Union or the members have either under the law or under the collective bar- gaining Agreement currently in effect with Amerace/ESNA Division. HARVARD INDUSTRIES If there are any particular forms, documentation or procedures which you require, please forward to the undersigned for review During the week of April 8, Harvard offered jobs to 75 persons who were not formerly employed by Amer- ace. It also offered jobs to 68 former Amerace employees in the following categories: Set up operators 30 Foremen, Tool 2 and Die Room employees 11 Inspectors 6 Platers 2 Shipping clerk 1 Expediters 2 Weighpersons 1 Storekeeper 1 Die Setter 1 Operators 5 Machinists 1 Miscellaneous 4 All of the former Amerace employees who were offered jobs were also offered basically the same wages as they had at Amerace. However, the fringe benefits were dif- ferent. Thus they were offered a different pension pro- gram, different health insurance, different vacations etc. On Sunday, April 14, the Union held a meeting at which the membership present (about 200 employes), de- cided to commence picketing on Monday, 15 April. They also decided that no one should go to work for Harvard unless all the employees who had worked at the New Jersey facility were hired. On Monday, 15 April the Union's membership en- gaged in mass picketing at ESNA and almost all of the former Amerace employees who were offered jobs did not cross the picket line. Homemade signs were dis- played by the people during this first week. Also leaflets were handed out which read: PLEASE DON'T TAKE MY JOB!!! HARVARD INDUSTRIES IS HIRING SCABS For over 40 years the Employees of the ESNA DIVISION of the AMERACE CORPORATION have been members of the United Auto Workers. We have a contract in effect until 1986. Effective this week AMERACE sold our plant to HARVARD INDUSTRIES Our contract binds any new owner to the terms of our Agreement HARVARD INDUSTRIES is not honoring that Agreement and is being unfair to you. There are no new positions available-these jobs are ours today and will be ours tomorrow) You are being offered jobs at 40% less than we currently make, and we are not going to let that happen! 1107 We've worked hard and efficiently for many years for this Company. Our families depend on these jobs. PLEASE DON'T LET HARVARD INDUSTRIES TURN YOU INTO A SCAB Because of the refusal of those former Amerace em- ployees who had been offered jobs by Harvard to report to work, Harvard, for several months had a great deal of difficulty in getting production going on an efficient basis According to Sue Czernick, the materials manager under both Amerace and Harvard, the plant was running badly after the takeover because of the lack of skilled people who used to work for Amerace and who were on strike. Also, Mr. Cuccarole testified that after the take- over, the plant was operating at about 25 percent effi- ciency because of the lack of skilled employees. As a result of the above, Harvard made a concerted effort to convince those former Amerace employees to whom it had offered jobs to come to work. This was done by repeated telephone calls to those people by Har- vard's management. (All former Amerace managers) When this did not meet with success, Harvard sent a letter to most of these people which, according to Mr Fursman, was intended to encourage them to come to work. This read: 12 Dear Fellow Employee: Several weeks ago Harvard Industries offered, and you accepted, a position at Elastic Stop Nut Although you accepted a position with Elastic Stop 12 This letter was sent to the following persons E Gilbert Bataille Jr Frank Bosefskie Louis Coscia Anthony Gargano Ferris George Charles Gleason Vernell Green Michael Gross John Inderweis Ronald Kish Joseph Kolibas Robert Lake John Luby Frank McCray Charles McFeeley Albert Mayfair Stanley Marsnick Chester Matlosz Edward Mosca Eugene O'Boyle Anna May Olive William Pagha Michael Palmer Russell Padora John Prodziewicz Andrew Pyar Jr Anthongy Rauseo Wieslaw Rozumilowicz Joseph Setzer Edward Shakleford Leroy Wilkinson Emil Woitowicz Joseph Woitowicz Clyde Cricle Roger Nittolo Alex Silva Olga Streeter (Pat) Peter Doroskhenko Nathan Moore Anthony Nasissi Joseph Ocilka 1108 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Nut, you have neither reported to work nor stated a desire to continue to be considered for future em- ployment. For that reason, your employment status will be changed immediately to reflect the fact that you have voluntarily resigned and/or have been permanently replaced. Although we realize that the UAW's mass picket- ing may have prevented many of our employees from coming in to work at decent paying jobs and good benefits, the company has and will continue to operate and has, by obtaining an order of the court, taken action to protect the safety of all our employ- ees. Elastic Stop Nut will not be intimidated by the UAW into closing down or moving elsewhere. We will operate this plant with the nearly 200 employ- ees who have reported to work so far, including many of our former Amerace work force who have come through the pickets. , It is very disturbing that the UAW's activity may have not only prevented many good people, such as yourself, from using their skills and abilities, but may have deprived so many hard working people of important benefits such as hospital and surgical insurance. Even the State of New Jersey has stated that the Union picketing may have jeopardized all former Amerace emloyees' unemployment benefits. We want you to know that we harbor no ill feel- ings toward you and understand that the threats and harrassment from the UAW. have made you a victim, too If you would like to be considered for employ- ment in the future, please send us a letter by Friday, May 17, 1985 indicating that you would like to keep your application in our active file. If you have ob- tained or are seeking other employment, we wish you every success. Thereafter on May 21, Harvard sent a letter to another group of former Amerace employees who had been of- fered jobs 13 This read: We regret that you have decided to voluntarily resign from Elastic Stop Nut, Division of Harvard Industries. This letter confirms our recent telephone conversation with you in which you informed us of your intent not to accept employment with us. We want to wish you success in your future en- deavors and would ask you to notify us in writing by June 1st if you would like to be considered for employment in the future. is This was sent to the following people r,1 August Alexy William Beirne Frank Caporusso Anthony DeNunzio Anthony DiGeronimo Raymond Gaughan Earl Gillespie Andrew Lech Eugene O'Boyle John Skiendziel Richard Szotak Kenneth Wetzel Ralph Wusthoff Andrew Laskowski Finally, on May, 23 another letter was sent to certain per- sons who apparently did not receive the first letter. This letter was identical to the letter of May 8. As noted above, Mr. Cuccarole asserted that the pur- pose of the above noted letters was to encourage those people to come to work. He also testified that after the letters were sent, Harvard continued to telephone those, employees in an effort to get them to report. When asked when these subsequent phone calls were made, Mr. Cuccarole was somewhat vague and indicated that the calls resumed shortly before this hearing opened. 14 Ms. Czerniak (the materials manager at Amerace and at Harvard), testified that on one occasion after the take- over she spoke with Ed Von Linden about offering jobs to two former Amerace employees who had not been of- fered jobs at the Coachmen and whose services she felt were needed. (Von Linden was the person at the Coach- men after April 8, who had the final say as to whether any former Amerace employee should be offered a job). Ms. Czerniak credibly testified that Mr. Von Linden, (who was now the plant superintendent), responded that it would probably be difficult to get those people onto the list of rehires because if more than 50 percent of the bargaining unit people were rehired, the Union would come back in. Although there were difficulties that Harvard faced in getting the New Jersey plant operating because of the continued picketing and the refusal by many of skilled former Amerace employees to report to work, it never- theless did get things moving and manufacturing did go forward. As to a comparison between Harvard's oper- ation of the New Jersey facility as compared to Amer- ace's, the parties stipulated that: 1. Harvard continued to sell products to substantially the same customers as did Amerace. 2. Harvard continued to purchase materials from sub- stantially the same suppliers as did Amerace. 3. Harvard used substantially the same raw materials as did Amerace. 4. Harvard sold substantially the same products as did Amerace. Harvard asserts that it has changed operations at the New Jersey facility. Among the items mentioned are: (1) a greater degree of subcontracting; (2) the proposed Cell Concept; and (3) greater capital investment in the plant. Yet when one looks at the alleged changes, they appear to to be relatively insignificant especially when viewed in the light of the fact that under Harvard, ESNA is making basically the same product; using essentially the same machines and skills to do so; using the same raw materials from essentially the same suppliers; and selling its products to basically the same customers. Moreover, despite the alleged increase in subcontracting under Har- vard, the fact remains that as of March 1986 the total number of hourly factory workers was not significantly 14 Mr Von Linden testified that he, Mr Cuccarole, and Ms Czerniak made phone calls from May through December 1985 to a list of 15 former Amerace employees that had skills "we desperately needed" He did not testify who those people were or when the calls were made with any precision HARVARD INDUSTRIES different than the number that were employed by Amer- ace as of April 1985.15 Also, although there was testimony regarding Har- vard's capital improvement program , this did not con- vince me that ESNA, under Harvard, was making a sig- nificant change in the direction of the business. There is no doubt that in 'running this business profitably, Har- vard intended to and did invest more money into replac- ing old machinery and updating the plant equipment. Yet the largest approved expenditure for 1986 in the capital improvement plan was simply to repair the factory's roof and this represented $422,000 of the $544,148 spent through March 19, 1986. Moreover I do not consider particularly relevant Re- spondent's arguments concerning the Cell concept which was first discussed under Amerace, was discussed further under Harvard and which was not implemented at the time of this hearing. Further, even if it had been imple- mented, I do not see how this concept would have been a significant change in the employing enterprise. C. Analysis The record in this case shows that Harvard after its purchase of ESNA from Amerace continued to be en- gaged in the same business. Further , the record estab- lishes that as far as ESNA as a whole, Harvard operated at the same plants, using essentially the same equipment, made essentially the same products and sold them to es- sentially the same customers. Moreover, apart from the hourly employees at ESNA's New Jersey factory, Har- vard hired virtually all of the remainder of ESNA's em- ployees. Insofar as the ESNA plant at New Jersey which, prior to the sale had employees represented by the Union, the record demonstates that apart from a few relatively minor changes, (the new roof being the most significant in terms of dollars spent), the operations of that plant were carried out in basically the same manner as had been done under Amerace.16 While it may be that Har- IS Walter Gordon, a manager employed both by Amerace and Har- vard, testified about subcontracting under each company Basically his testimony was that under Harvard there was an increase in the level of subcontracting that had been done under Amerace and that in a few cases this new subcontracting eliminated a number of job classifications Thus, he testified that the janitorial and guard service was subcontracted under Harvard This affected about 9 to 12 employees He testified that the cafeteria services were eliminated thereby affecting three to four em- ployees Gordon asserted that increased subcontracting in the nylon-slit- ting department and the function of cutting off slugs reduced the number of employees in the respective jobs by about four Finally he testified that increased subcontracting eliminated positions in the tool room Yet the evidence show that as of April 1985 there were 27 persons in the tool room and in March 1986 there were 24 employees in that department If anything, the evidence suggests to me that the reason there was an in- crease in subcontracting of tool and die work was because Harvard was having difficulty filling those jobs 16 In Inland Container Corp, 267 NLRB 1187 (1983) the Board held that certain changes made by a purchaser were insufficient to negate the "substantial continuity of the employing enterprise " In that case, where the purchaser was held to be obligated to recognize and bargain with the Union representing he predecessor 's employees, the company had updat- ed the plants machinery , had relocated a shipping dock and had moved 3 walls in order to improve the flow of materials 1109 yard reduced the number of job classifications it appears to me that essentially the same functions were carried out in much the same manner, using substantially the same equipment with a work force having basically the same skills and total number of employees as had existed under Amerace. Given the above, it seems to me that the only factor remaining which would determine if Harvard is a `'suc- cessor" to Amerace having a legal obligation to bargain with the Union at the New Jersey facility is whether Harvard refused to hire a substantial portion of Amer- ace's employees so as to avoid the bargaining obligation. For if 1 ,conclude that "but for unlawful considerations, the continuity of the predecessor's employee complement would have been maintained," then it would follow that Harvard,would, under the NLRA, be obligated to recog- nize and bargain with the Union. American Press, 280 NLRB 937 (1986); Love's Barbeque Restaurant No. 62, 245 NLRB 78, 79 (1979). There is no doubt in my mind that Harvard discrimin- atorily refused to hire all but a relatively small percent- age of the Amerace employees because it wished to avoid having either, to assume the union contract or having to bargain with the Union. The intention to avoid any bargaining obligation to the Union was to my mind, manifestly clear from the testimony of Harvard's own witnesses including'Dr. Hurley and Mr. Coleman. Thus they testified that unlike their normal past practice in similar takeovers, where Harvard retained the work force, recognized the Union and negotiated contract modifications, they chose not to do so in this instance be- cause they felt that the union contract was too burden- some and that the Union probably would be too inflexi- ble. Accordingly, they decided not only that Harvard was not 'going to assume the existing collective-bargain- ing agreement but that Harvard, upon the takeover, would not recognize the Union. In short, they decided that when Harvard began operating the ESNA plant in New Jersey, it would be run in a "union free environ- ment " Moreover it is my conclusion that after reviewing ESNA's operations and the union contract, and after consulting with labor counsel, Harvard recognized that it could only insure that it would not have to deal with this union by making certain that Amerace employee's com- prised a minority of the new work force. Based on the record as a whole, it is my opinion that Mr. Coleman, (as he asserted), intended, on Harvard's behalf to overhire and have the ESNA factory in New Jersey operating as quickly as possible after the takeover. In fact, Mr. Duke, who was to be ESNA's president under Harvard, and who was deeply involved in the preparation for the takeover, testified that in his opinion ESNA would require at least 200 hourly paid employees in order to continue operations. Likewise Mr. Fursman and Mr. Cuccarole stated that they expected to have op- erations going by no later than April 17 I therefore reject Respondent's assertion that it intend- ed, upon the takeover, to begin with a small startup crew and to have a limited operation at the plant. On the con- trary, the evidence convinces me that Harvard intended to have this factory operating at full capacity as soon as 1110 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD possible with a work force that would be larger than their initial needs. With respect to the hiring process, (mainly conducted at the Coachman Inn, some distance from the factory), the Respondent argues that it kept no tallies, logs or other records of the people interviewed and either of- fered or not offered jobs. It wishes me to conclude that it therefore could not have imposed a quota as to the hire of the predecessor's employees. Yet the evidence shows that prior to April 8, manager's of Amerace who also were going to work for Harvard made lip a list of bargaining unit employees whose skills would be neces- sary to maintain operations and to whom jobs would be offered. I believe that this hire list or a substantially simi- lar list was used by Harvard to offer jobs to the former Amerace employees. In fact based on this record, I be- lievethat Harvard's intention was to refuse to hire any Amerace employee unless an employee had particular skills which made him necessary for Harvard to operate the plant ' I credit the testimony of Mr. Techanchuk to the effect that prior to the interviewing process at the Coachman on 8 April, he was told by Mr. Coleman that insofar as Amerace employees were concerned, Harvard wanted to hire only skilled people or those who were considered to be exceptionally fine employees. I also credit Mr. Te- chanchuk's testimony that Mr. Coleman said that he wanted to establish a quota of 25 percent of Amerace employees to be hired so that they would constitute a minority of the work force and would therefore allow Harvard to avoid a union.17 In this respect, Mr. Techan- chuk's testimony regarding a quota.was corroborated by the credible testimony of Ms. Czerniak who worked as a manager at ESNA under both Amerace and Harvard. As will be recalled she talked with Mr. Von Linden some- time after the takeover about the possibility of hiring two former employees whereupon Mr. Von Linden respond- ed that he did not know if it would be possible to add them to the list because of the quota on hiring former Amerace employees. In sum, I conclude that the Respondent discriminatori- ly refused to hire the vast majority of the former Amer- ace employees because of its desire to avoid recognizing or bargaining with the-Union. As such I conclude that Harvard Industries violated Section 8(a)(1) and (3) of the Act on 15 April as to all of those Amerace employees to whom it had not made a job offer. 18 1 " I note that Harvard during the week of 8 April offered jobs to 68 Amerace employees, almost all of whom were in skilled job classifica- tions or were otherwise necessary to the operation of the factory This ,,would be about 27 percent of Amerace's bargaining unit work force as of .12 April Assuming as I do that Harvard wanted to operate ESNA with- 'out a break after the takeover, and that Mr Coleman intended to over- hire, offers to 68 Amerace employees would just about equal the 25 per- cent quota figure is In view of Harvard's plan not to hire any Amerace employees unless such employee was necessary to continue plant operations, I con- clude that the General Counsel need not show that particular employees made direct applications with Harvard for jobs In any event I note that the Union by letter delivered on 12 April did apply for jobs on behalf of all of Amerace's bargaining unit employees Having concluded that Harvard discriminatorily re- fused to employ the Amerace employees, I conclude that but for this discrimination, there would have been a con- tinuity of employees from the predecessor to the succes- sor. Accordingly pursuant to applicable law, Harvard therefore was under an obligation to recognize and bar- gain with the Union when it took over the plant's oper- ations and its refusal to do so constitutes a violation of Section 8(a)(5) of the Act. Given the unlawful refusal to hire the former Amerace employees and the concommitant illegal refusal to recog- nize and bargain with the Union, I also conclude that the strike which' the Union commenced on 15 April was an unfair labor practice strike. NLRB v Birmingham Publish- ing Co., 262 F.2d 2 (5th Cir. 1958); American Map Co, 219 NLRB 1174, 1182 (1975). The next question is whether Respondent, as alleged by General Counsel, discharged in May 1985 the em- ployees who were offered jobs but who did not report to work because they did not cross the Union's picket line. The General Counsel bases this allegation on the letters sent to these employees on 8, 21, and 23 May, 1984, which are quoted infra. The Respondent, on the other hand, asserts that these letters were intended to get these people to come to work, and that they were in no way intended to act as discharges. As stated by the Board in Ridgeway Trucking Co, 243 NLRB 1048, 1049 (1979): The test for determining "whether an employer's statements constitute an unlawful discharge depends on whether they would reasonably lead the employ- ees to believe that they had been discharged," and "the fact of discharge does not depend on the use of formal words of firing. . . It is sufficient if the words or actions of the employer would logically lead a prudent person to believe his tenure had been terminated "19 In this case I conclude that the Respondents unlawful- ly discharged the employees involved as alleged by the General Counsel. Thus, in the identical letters sent on 8 and 23 May, the receivers were told inter aka that their employment status would be changed "to reflect the fact that you have voluntarily resigned and/or have been per- manently replaced." (There is no evidence that anyone had been permanently replaced .)20 The letters went on to say that if "you would like to be considered for em- ployment in the future, please send us a letter by Friday, 17 May 1985 indicating that you would like to keep your application in our active file." The letter sent to those on 21 May, also could reasonably be construed as a dis- charge. It states inter alia, that the company regretted that the employees have voluntarily resigned. It further 1s See also Dublin Town Ltd, 282 NLRB 307 (1986) In cases where the employer's statements creates ambiguity or confusion as to whether employees are discharged, the ambiguity is resolved against the employ- er Pennypower Shopping News, 253 NLRB 85 (1980) 20 As unfair labor strikers, rather than economic strikers the employee involved could not, under the law , be permanently replaced and would not lose their right to immediate reinstatement upon an unconditional offer to return to work NLRB v Mackay Radio & Telegraph Co, 304 US 333 (1938) HARVARD INDUSTRIES goes on to tell these strikers that Harvard wished them success in their future endeavor and asked them to "notify us in writing by June 1st if you would like to be considered for employment in the future." It seems to me that the people who received these let- ters could reasonably construe them as constituting no- tices of discharge. In this respect, it is of little conse- quence what the company intended, if "its words or ac- tions . . . would logically lead a prudent person to be- lieve his tenure had been terminated." Ridgeway Trucking Co., supra. See also Conair Corp., 261 NLRB 1189, 1189- 1190 (1982), modified 721 F.2d 1355 (D.C. Cir. 1983). Nor do I find that the company's subsequent actions would mitigate against a finding that these people had been discharged. Although the Respondent asserts that it did not preclude any of these people from applying for their jobs, and that it made subsequent efforts to get them to go to work, it was vague as to the details of those subsequent efforts (as to whom and when such ef- forts were made), and Mr. Cuccocole's testimony indi- cates to me that it re-offered employment to those people only just before the hearing in this case opened. In view of the above, I conclude that the Respondent unlawfully discharged, in violation of Section 8(a)(1) and (3) of the Act, all of the employees to whom it sent the letters of 8, 21, and 23 May 1985.21 Finally the General Counsel argues that the Respond- ent violated Section 8(a)(1) and (5) of the Act by unilat- erally changing the terms and conditions of employment for the employees in the bargaining unit. In NLRB v. Burns Security Services, 406 U.S. 272, 295 (1972), the Court held that a successor employer neither had an obligation to assume the predecessor's collective- bargaining agreement nor the obligation to bargain with the Union before establishing the initial terms and condi- tions of employment. The Court stated: Although a successor employer is ordinarily free to set initial terms on which it will hire the employ- ees of a predecessor, three will be instances in which it is 'perfectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appropriate to have him initially consult with the employees' bargaining representa- tive before he fixes terms. In other situations, how- ever, it may not be clear until the successor em- ployer has hired his full complement of employees that he had a duty to bargain with a union, since it 21 Even if some of those persons only refused to cross the picket line because of fear, this would be of no legal consequence In Dave Castellano & Sons, 277 NLRB 453, 454 ( 1985), the Board stated It is well established that nonstriking employees who refuse to cross a picket line their fellow employees maintain , make common cause with the strikers, and may not be lawfully discharged for their activities Ashtabula Forge, 269 NLRB 774, 774-775 (1984) In Ashta- bula Forge the Board specifically held that the Act protects an em- ploye's refusal to cross a picket line even where the employee's sole reason is a fear of personal bodily injury The Board reasoned that "the focal point of the Board's inquiry is the nature of the activity itself, the employee's motives for engaging in the activity are irrele- vant " [Footnotes omitted I In citing the above case, I do not mean to imply that the Respondent has proven that any particular bargaining unit employees refused to cross the picket line because of fear will not be evident until then that the bargaining representative represents a majority of the employ- ees in the union as required by § 9(a) of the Act. In subsequent cases, the Board has concluded that where a purchaser has illegally refused to hire the sell- er's employees, the buyer would be presumed to have re- tained substantially all of those employees and therefore would not be entitled to set initial terms of employment without first consulting the Union . American Press 280 NLRB 937 (1986); Love's Barbecue Restaurant No. 62, 245 NLRB 78 (1979), enfd. in relevant part 640 F.2d 1094 (9th Cir. 1981); State Distributing Co., 282 NLRB 1048 (1987). Having concluded that the Respondent violated Sec- tion 8(a)(1) and (3) of the Act by discriminatorily refus- ing to hire the bargaining unit employees of Elastic Stop Nut, Division of Amerace , at the New Jersey plant I must therefore conclude, under the applicable case law, that Harvard was not free to establish the initial terms and conditions of employment and was obligated to first bargain with the Union about such changes. Not having done so, I conclude that the Respondent in this respect violated Section 8(a)(1) and (5) of the Act.22 CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By refusing to hire employees of Elastic Stop Nut Division of Amerace Corporation at the Union, New Jersey plant on 15 April 1985 because they were repre- sented by the Union, the Respondent has violated Sec- tion 8(a)(1) and (3) of the Act. 4. By refusing to recognize and bargain with the Union at the aforesaid plant on 15 April 1985 as the col- lective-bargaining representative of the employees in the unit described below, the Respondent has violated Sec- tion 8(a)(1) and (5) of the Act. 5. The strike which the Union commenced on 15 April 1985 was an unfair labor practice caused by the unfair labor practices described above in paragraphs 3 and 4 22 Although this allegation was not specifically made in the consolidat- ed complaint, the issue was fully litigated and all facts necessary to the resolution of this issue were before me As stated by the court in Free- Flow Packaging Corp v NLRB, 566 F 2d 1124, 1 131 (9th Car 1978) Where an issue is fairly tried, even though it has not been specifi- cally pleaded, the Board "could render a decision based upon the issues actually tried without ordering amendment or it could order amendment to conform to proof" Frito Co v NLRB, 330 F 2d 458, 465 (9th Cir 1964) Thus, although a specific charge is not made in the original complaint, "the Board is not precluded from finding an unfair labor practice if the parties have fully litigated the issue " NLRB v Klaue, 523,F 2d 410, 415 (9th Cir 1975) Accord, REA Trucking Co v NLRB, 439 F 2d 1065, 1066 (9th Cir 1971), Owens- Corning Fiberglas Corp v NLRB, 407 F 2d 1357, 1361 (4th Cir 1969), American Boiler Manufacturers Assoc v NLRB, 366 F 2d 815, 821 (8th Cir 1966), Associated Home Builders of Greater East Bay Inc Y NLRB, 352 F 2d 745, 753-755 (9th Cir 1965) 1112 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 6. By discharging, on 8, 21 , and 23 May 1985 certain employees for honoring the Union's picket line, the Re- spondent has violated Section 8 (a)(1) and (3) of the Act. 7. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. 8. The appropriate bargaining unit consists of: All production, non-production, maintenance and factory clerical employees of the Company em- ployed at its plants and warehouses in New Jersey, but does not cover office and other clerical employ- ees, guards and ' watchpersons, field and safety in- spectors, time study employees, messenger, techni- cal and laboratory employees (including draftsper- sons, engineers, chemists, metallurgists and techni- cians), stationery store employees, salespersons, out- side service persons, nurses, stock handlers in the Accounting Department, administrative and profes- sional employees, executives, and all or any supervi- sory employees with authority to hire , promote, dis- charge, discipline, or otherwise effect changes in the status of employees or effectively recommend such action. THE REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, it is recommended that it cease and desist therefrom and take certain affirmative action designed to effectuate the Act. With respect to the 8(a)(3) allegations it is recommend- ed that Respondent offer employment to those former union represented employees of Elastic Stop Nut Divi- sion of Amerace (Union, New Jersey plant), to whom it did not make offers of employment. Said offers are to be made for their former jobs or, if those jobs no longer exist, to substantially equivalent positions of employment, without prejudice to their seniority or other rights and privileges previously enjoyed, discharging, if necessary to make room for them, employees hired from sources other than Elastic Stop Nut Division of Amerace, and make them whole for any loss of earnings that they may have suffered due to the discrimination against them from 15 April 1985 until a proper offer of reinstatement, less net interim earnings, as prescribed in F. W. Wool- worth Co., 90 NLRB 289 (1950), with interest to be com- puted in the manner prescribed in Florida Steel Corp., 231 NLRB 651 (1977). See generally Isis Plumbing Co., 138 NLRB 716 (1962). As to those former Amerace employees who I have concluded were discharged by the letters of Respondent dated 8, 21, and 23, May, I shall recommend that they respectively be offered reinstatement to those jobs that they had been offered during the week of 8 April 1985, or if those jobs no longer exist to substantially equivalent positions of employment without prejudice to their se- niority or other rights and privileges previously enjoyed. For the purposes of computing backpay, the backpay period shall start as of the date of the unlawful dis- charges, (i.e., the dates on which the Respondent sent these letters to the respective employees). Backpay shall continue until the Respondent made or makes a valid offer of reinstatement. Abilities and Goodwill, 241 NLRB 27 (1979). Backpay for this grup shall also be computed with interest in the manner prescribed in F. W. Wool- worth Co., Florida Steel Corp., supra; and Isis Plumbing Co., supra. In accordance with Sterling Sugars, 261 NLRB 472, (1982), I shall also recommend that Respondent expunge from its files any reference to the discharges or refusals to hire of the above classes of employees and notify them in writing that this has been done and that evi- dence of these unlawful actions will not be used as a basis for future personnel actions against them. With respect to the 8(a)(5) refusal-to-bargain allega- tions, I shall recommend, in accordance with American Press supra, that the Respondent be required to recognize and bargain with Local 726 United Automobile, Aero- space and Agricultural Implement Workers -of America in the appropriate collective-bargaining unit, and, if agreement is reached, to reduce the agreement to a writ- ten contract. In addition, I shall recommend that the Re- spondent cancel, on request by the Union, changes in rates of pay and benefits unilaterally effectuated and to make the employees whole by remitting all wages and benefits that would have been paid absent such changes from 15 April 1985 until the Respondent negotiates in good faith with the Union to agreement or to impasse. Finally, I shall recommend a broad cease-and-desist pro- vision. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed23 ORDER The Respondent, Elastic Stop Nut Division of Har- vard Industries Inc., Union, New Jersey, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to recognize and bargain collectively with Local 726, United Automobile, Aerospace and Agricul- tural Implement Workers of America. as the exclusive collective-bargaining representative of its employees in the following appropriate unit: All production, non-production, maintenance and factory clerical employees of the Company em- ployed at its plants and warehouses in New Jersey, but does not cover office and other clerical employ- ees, guards and watchpersons, field and safety in- spectors, time study employees, messenger, techni- cal and laboratory employees (including draftsper- sons, engineers, chemists, metallurgists and techni- cians), stationery store employees , salespersons, out- side service persons, nurses, stock handlers in the Accounting Department, administrative and profes- sional employees, executives; and all or any-supervi- sory employees with authority to hire , promote, dis- charge, discipline, or otherwise effect changes in 23 If no exceptions are filed as provided by Sec. 102.46 of the Board's Rules and Regulations, the findings, conclusions , and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses. HARVARD INDUSTRIES 1113 the status of employees or effectively recommend such action. (b) Making changes unilaterally in the rates of pay and benefits of the employees in the above unit without notice to and bargaining with the above Union. (c) Refusing to hire or otherwise discriminating against employees in their hire or tenure of employment because they are members of, or gave support to, Local 726, United Automobile, Aerospace and Agricultural Imple- ment Workers of America, or any other labor organiza- tion. (d) Discharging employees because they honored the strike and picket lines established by the Union. (e) In any other manner interfering with, restraining, or coercing employees in the exercise of the rights guar- anteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Offer immediate and full employment to all em- ployees who as of the week ending 12 April 1985, were employed by Elastic Stop Nut, Division of Amerace Corporation who were employed at the Union, New Jersey facility and who were in the aforesaid collective- bargaining unit, without prejudice to their seniority or any other rights or privileges previously enjoyed, dis- charging, if necessary employees hired from sources other than the Elastic Stop Nut Division of Amerace, Union, New Jersey plant to make room for them. (b) Offer immediate and full reinstatement to all em- ployees who were discharged as per the Respondent's letters of 8, 21, and 23 May 1985, said reinstatements to be without prejudice to their seniority or any other rights or privileges previously enjoyed, discharging if necessary any persons hired to replace them. (c) Make whole all of the employees in the classes de- scribed above in subparagraphs (a) and (b) for any loss of earnings they may have suffered in the manner described in the remedy section of this decision. (e) Recognize and, on request, bargain collectively with Local 726, United Automobile, Aerospace and Ag- ricultural Implement Workers of America as the exclu- sive collective-bargaining representative of the employ- ees described in paragraph 1(a) above, and, if an agree- ment is reached, embody that agreement in an executed written contract. (f) On request of the above Union, restore the status quo ante which existed prior to the implementation of the unilateral changes made by the Respondent with regard to the rates of pay, wages, and other terms and conditions of employment in the unit described above, and make the employees whole by remitting all wages and benefits that would have been paid absent such changes, plus interest, from 15 April 1985 until it negoti- ates in good faith with the Union to agreement or to im- passe, in the manner set forth in the remedy section of this decision. (g) Preserve and, on request, make available to the Board or its agents for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (h) Post at its office in Union, New Jersey, copies of the attached notice marked "Appendix "24 Copies of the notice on forms provided by the Regional Director for Region 22, after being duly signed by Respondent's au- thorized representatives shall be posted for 60 consecu- tive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that the notices are not altered, defaced, or cov- ered by any other material. (i) Notify the Regional Director in writing within 20 days from the date of this Order, what steps have been taken to comply. For the purpose of determining or se- curing compliance with this Order, the Board, or any of its duly authorized representatives, may obtain discovery from the Respondent, its officers, agents, successors, or assigns, or any other person having knowledge concern- ing any compliance matter, in the manner provided by the Federal Rules of Civil Procedure. Such discovery shall be conducted under the supervision of the United States court of appeals enforcing this Order and may be had upon any matter reasonably related to compliance with this Order, as enforced by the court. 24 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 " APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has or- dered us to post and abide by this notice Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through representatives of their own choice To act together for other mutual aid or protec- tion To choose not to engage in any of these protect- ed concerted activities. WE WILL NOT refuse to recognize and bargain collec- tively with Local 726, United Automobile, Aerospace and Agricultural Implement Workers of America, as the exclusive collective-bargaining representative of its em- ployees in the following appropriate unit. All production, non-production, maintenance and factory clerical employees of the Company em- ployed at its plants and warehouses in New Jersey, 1114 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD but does not cover office and other clerical employ- ees, guards and watchpersons, field and safety in- spectors, time study employees, messenger, techni- cal and laboratory employees (including draftsper- sons, engineers, chemists, metallurgists and techni- cians), stationery store employees , salespersons, out- side service persons, nurses, stock handlers in the Accounting Department , administrative and profes- sional employees, executives, and all or any supervi- sory employees with authority to hire, promote, dis- charge, discipline, or otherwise effect changes in the status of employees or effectively recommended such action. WE WILL NOT make changes unilaterally in the rates of pay and benefits of the employees in the above unit without notice to and bargaining with above Union. WE WILL NOT refuse to hire and otherwise discrimi- nate against employees to avoid bargaining with a union. WE WILL NOT discharge employees because they hon- ored the strike and picket line established by the Union commencing on 15 April 1985. WE WILL NOT in any other manner interfere with, re- strain, or coerce you in the exercise of the rights guaran- teed you by Section 7 of the Act. WE WILL offer immediate and full employment to all employees who as of the week ending 12 April 1985 were employed by Elastics Stop Nut Division of Amer- ace Corporation who were employed at the Union, New Jersey facility and who were in the aforesaid collective- bargaining unit, without prejudice to their seniority or any other rights or privileges previously enjoyed, dis- charging if necessary employees hired from other sources to make room for them. WE WILL offer immediate and full reinstatement to all employees who were discharged by the Respondent's let- ters of 8, 21, and 23 May 1985, said reinstatements to be without prejudice to their seniority or any other rights or privileges previousl enjoyed, discharging if necessary any persons hired to replace them. WE WILL make whole all of the employees in the classes described above for any loss of earnings they may have suffered. WE WILL recognize and, on request, bargain collec- tively Local 726 United Automobile, Aerospace and Ag- ricultural Implement Workers of America, as the exclu- sive collective-bargaining representative of the employ- ees described above, and, if an agreement is reached, embody that agreement in an executed written contract. WE WILL, on request of the above Union, restore the status quo ante which existed prior to the implementation of the unilateral changes made by us with regard to the rates of pay, wages, and other terms and conditions of employment in the unit described above, and make the employees whole by remitting all wages and benefits that would have been paid absent such changes, plus interest, from 15 April 1985 until negotiations in good faith with the Union to agreement or to impasse. ELASTIC STOP NUT DIVISION OF HARVARD INDUSTRIES, INC.