Storer Cable Tv Of Texas, Inc., The Meca Corp., And Houston Community Cablevision, Inc.

STORER CABLE TV OF TEXAS 295 Storer Cable TV of Texas, Inc., The Meca Corpora- tion, and Houston Community Cablevision, Inc. and Communications Workers of America, AFL-CIO. Case 23-CA-10391 June 15, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On May 14, 1987, Administrative Law Judge Steven M. Charno issued the attached decision. The Respondent filed exceptions and a supporting brief, the Union filed a response to the Respond- ent's exceptions, and the General Counsel and the Union filed briefs in support of the judge's deci- sion. Thereafter, the Union filed a motion to sever and the Respondent filed a brief in opposition to that motion.' The National Labor Relations Board has delegat- ed its authority in this proceeding to ab three- member panel. The Board has considered the decision and the record in light of the exceptions and the briefs and has decided to affirm the judge's rulings, findings, 2 and conclusions as modified , and to adopt the rec- ommended Order as modified and set out in full below. The Respondent is a single employer that pro- vides cable television service to residential sub- scribers in the Houston, Texas metropolitan area. The Communications Workers of America (the Union) is the collective-bargaining representative of a Houston-area unit including "installers." The installers install, reconnect, and disconnect cable service in residential dwellings among other duties. In mid- 1984, the Respondent relied on out- side contractors to perform 85 to 90 percent of its installation and reconnection work . As a result of a decision to have all installation and reconnection work performed by its own employees in the Bay Area region of its Houston operations , the Re- spondent increased the number of installers em- ployed in the Bay area region from 6 to 14 at the i On December 30, 1988, the Board granted the motion to sever Case 23-CA-10357 from the present case in a decision reported at 292 NLRB 140. The Board also adopted the judge 's rulings, findings, and conclu- sions with respect to Case 23-CA-10357, and ordered the Respondent to cease and desist from refusing to bargain with the Union and to bargain, on request, with the Union. a 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 Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. outset of 1985.3 The Bay area region installers per- formed 10 to 50 percent of the installation and re- connection work in that area throughout 1985 and the first quarter of 1986. By the first quarter of 1986, only 8 of the 14 Bay area installers were per- forming installation and reconnection work. The Respondent asserts that, due to depressed sales, it decided to initiate a new marketing pro- gram in the Bay area that would commence in April 1986. As the marketing program was expect- ed to increase the amount of installation work sig- nificantly, the Respondent's regional vice president, Langendorf, asked for the preparation of a study showing the ability of the Bay area installers to handle the additional work. Comparing the cost of employing additional installers to perform the work against the cost of using outside contractors, the study showed that it would be significantly cheaper for the Respondent to use outside contractors to perform the installation and reconnection work. After receiving this study, Langendorf determined that the Respondent should use contractors to handle not only the additional work expected to be generated by the marketing campaign , but also the installation and reconnection work being per- formed by the installers. Accordingly, on April 17, 1986, the Respondent discharged five employees who were then performing installation work and reassigned the remaining employees performing that work to other positions. The Respondent did not provide the Union with notice of its decision and the resultant discharges, nor did it afford the Union the opportunity to bargain over these ac- tions. The judge found that the Respondent's unilateral decision to subcontract the in -house installation work and to discharge the five employees violated Section 8(a)(5) and (1) of the Act. In reaching his conclusion, the judge found that the Respondent's decision was not made for any legitimate business reason that would justify its refusal to give notice and bargain under the rationale of Otis Elevator Co., 269 NLRB 891 (1984). He found that the study relied on by the Respondent in reaching its decision was conceptually and methodologically flawed, that the decision was not made for the rea- sons stated by the Respondent's witnesses, and that the Respondent's asserted rationale underlying the decision was pretextual. The judge also found that the Respondent violated Section 8(a)(5) and (1) by failing to bargain over the effects of its decision.4 a These installers were included in the unit that the Union was later certified to represent on March 18, 1986. 4 The Respondent has not excepted to this finding and, accordingly, we adopt the judge's finding of a violation. 295 NLRB No. 34 296 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Although we affirm the judge's finding that the Respondent violated the Act by failing to give notice or the opportunity to bargain over its deci- sion, and the resultant discharges, we do so on the basis of the analysis below and find it unnecessary to rely on the judge's rationale. Initially, we are willing to assume arguendo that the decision to subcontract the in-house installation work and to discharge the five employees was mo- tivated by lawful business considerations. We now turn to the issue of whether, as alleged by the Gen- eral Counsel in the complaint, the Respondent's failure to provide the Union with notice of and the opportunity to bargain over this decision violated Section 8(a)(5) and (1).5 In determining whether the Respondent was ob- ligated to bargain over its decision to subcontract the in-house installation work, which resulted in the discharge of five employees, we apply the "two-factor" and "two-step" tests set forth in Otis Elevator Co., 269 NLRB 891 (1984). Under the two-factor test set forth in the plurality opinion of Chairman Dotson and Member Hunter-whether the decision turned on a change in the nature or di- rection of the business or whether it turned on labor costs-we find that the decision turned on labor costs. Although the Respondent contends that it altered the scope and direction of the enter- prise by characterizing its decision as a discontinu- ance of in-house installation work, the evidence does not support its contention. The decision to use subcontractors did not alter the nature of the Re- spondent's business. That is, the Respondent con- tinued to provide the same installation and recon- nection services for its Bay area customers that it provided before its decision to subcontract the S We reject the Respondent's contention that the 8(a)(5) allegations of the complaint must be dismissed because they failed to allege specifically that the Respondent's decision was a mandatory subject of bargaining. The complaint alleged that by subcontracting its in-house installation work and discharging five employees without notice to or bargaining with the Union, the Respondent violated Sec . 8(a)(5) and ( 1) As an em- ployer violates Sec. 8(a)(5) by failing to bargain over only a mandatory subject of bargaining, we find that the complaint was sufficient to place the Respondent on notice of the alleged violation In any event, our review of the record concerning the Respondent 's decision to subcon- tract the work and to discharge the employees indicates that the issue of whether the decision was a mandatory subject of bargaining was fully litigated. Furthermore, whether the General Counsel has met his burden of proving that the Respondent's decision was a mandatory subject of bargaining is the issue that we must decide in determining whether the Respondent violated the Act. Consequently, we do not agree with the Respondent's argument that the judge shifted the burden of proof on this issue from the General Counsel to the Respondent. We also find that the Respondent's reliance on R. L. Broker & Ca, 274 NLRB 709 (1985), is misplaced. The Board in R. L. Broker found that the complaint did not provide sufficient information to enable the Board to grant the General Counsel's Motion for Summary Judgment By con- trast, we find that the complaint allegations and the evidence adduced at the hearing in this case provide sufficient information to determine whether the Respondent's actions violated the Act. work.6 It did not, for example, close down its Bay area operation or phase out its installation and re- connection work. Cf. First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981). Rather, it re- placed the five employees performing installation and reconnection work with independent contrac- tors. Further, the Respondent decided to use sub- contractors instead of the existing employees pur- portedly because the study showed that the cost of using subcontractors was less than that of retaining the existing employees to perform the work. As the costs associated with retaining the employees in- volved primarily the payment of their salaries and benefits, we find that the decision to use subcon- tractors turned primarily on labor costs.7 We reach the same conclusion under the two- step test in Member Dennis's concurring opinion- (1) whether the decision was amenable to resolu- tion through the bargaining process and, (2) if so, whether the benefit for labor-management relations and the collective-bargaining process outweighed the burden placed on management . 8 The Respond- ent's decision to subcontract the installation and re- connection work was clearly amenable to resolu- tion through the bargaining process. In Collateral Control Corp., 288 NLRB 308 (1988), the Board noted that the Supreme Court found in Fibreboard Corp. v. NLRB, 379 U.S. 203, 211 (1964), that the decision to subcontract unit work was amenable to resolution through bargaining, and reaffirmed that finding in First National Maintenance Corp., supra at 680. Indeed, as the decision to subcontract exist- ing unit work here turned on the desire to reduce labor costs, the Union had control over this labor- related factor and could have offered alternatives such as wage reductions9 or expanding the scope of the employees' duties. See Lapeer Foundry & Machine, 289 NLRB 952 (1988); NLRB v. Westing- house Broadcasting (WBZ-TV), 849 F.2d 15, 23 (1st Cir. 1988). 8 Even after the Respondent decided to use subcontractors exclusively, performance of the installation and reconnection work remained under the ultimate control of the Respondent . As Langendorf indicated in his testimony, the Respondent's employees conducted field audits to ensure that the work performed by the subcontractors was proper. r Although the Respondent indicated that replacement of the existing employees would also save vehicle operational costs, those costs are neg- ligible compared to the labor costs and the thousands of dollars that the Respondent purportedly would have saved by using subcontractors. 8 The "amenability" test set forth in Member Zimmerman 's concurring opinion in Otis Elevator, supra, encompassed only the first step of the two-step test. B We are not persuaded by the Respondent 's argument that the Union "could not have agreed to sufficient concessions to have made continuing the in-house installation operation profitable ." By failing to give notice to the Union of its decision to subcontract , the Respondent denied the Union any opportunity to offer concessions or alternatives to the action chosen by the Respondent. STORER CABLE TV OF TEXAS 297 Having found the Respondent's decision to be amenable to resolution through bargaining, we also conclude that the benefit for the bargaining process outweighs the burden placed on the Respondent. The Respondent's decision to subcontract unit work did not involve extensive commitment of capital. We are not persuaded by the argument that the decision permitted the Respondent to allocate its capital assets more efficiently. Although the de- cision permitted the Respondent to reposition the employees' equipment and vehicles into other sec- tions of its operations, that ability to reallocate re- sources always exists when unit work is subcon- tracted or eliminated. Indeed, the employer in Fi- breboard was required to bargain over its decision to subcontract the maintenance work even though it could have reallocated its maintenance workers' tools and equipment after hiring the subcontractor. Furthermore, the fact that the Respondent was not required to purchase additional vehicles and tool- boxes for new employees is not evidence of capital savings, because the employees discharged as a result of the subcontracting decision already had vehicles and toolboxes. As noted above, we find that that the decision to subcontract the unit work did not involve any change in the nature of the Respondent's oper- ations. We also reject the Respondent's contention that the decision to subcontract was precipitated by a need for speed and flexibility. Although the Re- spondent has argued that it was necessary to hire subcontractors quickly in order to coincide with the anticipated increase in installation work arising from the marketing campaign, that reason does not explain why it was necessary to replace the exist- ing employees. An increase in the workload does not logically require a decrease in the number of employees to perform the work. The argument that using subcontractors gave the Respondent more flexibility to handle the "peaks and valleys" of in- stallation activity fails for the same reason. "Peak" activity may explain the decision to hire subcon- tractors to perform the additional work, but does not explain the decision to replace the existing em- ployees. Further, although decreases in activity could explain the need to eliminate installer posi- tions, the record establishes that the Respondent never employed fewer than five installers to handle the installation and reconnection work in the Bay area.10 Although the Respondent may have subse- quently decided that it was cheaper to use subcon- tractors to perform the existing unit work because 10 Even when outside contractors performed 85 to 90 percent of the installation and reconnection work in mid-1984, the Respondent em- ployed five or six installers in the Bay area. The Respondent subsequent- ly increased that number to 14 in 1985 of the lower labor costs, that factor is unrelated to the amount of installation activity. Finally, the record does not establish, nor has the Respondent argued, that a need for confidentiality precipitated the decision to subcontract the existing unit work. Consequently, we conclude that by requiring bar- gaining over the decision to subcontract, the bene- fit for the collective-bargaining process outweighs the minimal burden on the Respondent's business. Under any of the analyses set forth in Otis Eleva- tor Co., supra, we therefore find that the Respond- ent had a duty to provide notice to and bargain on request with the Union concerning the decision to subcontract the installation and reconnection work and to discharge the five employees. Our conclu- sion is consistent with that reached in Fibreboard, supra; Westinghouse Broadcasting, 285 NLRB 205 (1987), enfd. 849 F.2d 15 (1st Cir. 1988); and Col- lateral Control Corp., supra. In each of those cases, the employer, like the Respondent here, replaced unit employees with subcontractors to perform the same work. By contrast, this case does not involve the subcontracting of work that had been previous- ly performed in a facility or department that an employer closed as part of a restructuring of its op- erations. Thus, the Respondent's reliance on cases such as Kroger Co., 273 NLRB 462 (1984), UOP Inc., 272 NLRB 999 (1984), and Fraser Shipyards, 272 NLRB 496 (1984), is misplaced. Further, Ausa- ble Communications, 273 NLRB 1410 (1985), which the Respondent has also cited in support of its ar- gument, is distinguishable from the instant case. In that case, the employer experienced a large influx of installation work resulting from the addition of eight new channels to the services offered to its cable customers. The Board determined that the employer's decision to use subcontractors , instead of hiring more unit employees, to handle the addi- tional work was not subject to bargaining. Here, the General Counsel has alleged, and we agree, that the decision to subcontract the existing work and to discharge the existing employees was subject to bargaining. In light of the above analysis, we find that the Respondent's decision to subcontract the installa- tion and reconnection work and to discharge the five employees was a mandatory subject of bar- gaining. As the Respondent failed to provide the Union with notice of and the opportunity to bar- gain over this decision, we affirm the judge's find- ing that the Respondent violated Section 8(a)(5) and (1) and shall order an appropriate remedy below. 298 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD AMENDED REMEDY As the Respondent has violated the Act by fail- ing to bargain over the decision to subcontract unit work and to discharge five employees, as well as the effects of that decision, we shall order bargain- ing and full backpay relief in order to restore the status quo ante. See Lapeer Foundry & Machine, supra. 11 We note that there is no showing that such a remedy would be unduly burdensome. Fi- breboard, supra, 379 U.S. at 215-216. Accordingly, we shall order the Respondent to bargain with the Union concerning the decision to subcontract the installation and reconnection work and to dis- charge the five employees who were performing that work, and the effects of that decision. Further, the Respondent * shall offer reinstatement to em- ployees Boudreaux, Butler, Rios, Rose, and Spears and pay them backpay to compensate for any loss of earnings and other benefits they may have suf- fered as a result of their unlawful discharges. Back- pay shall run from April 17, 1986, the date of the employees' discharges, until the date the employees are offered reinstatement to their former jobs or, if those jobs no longer exist, to substantially equiva- lent positions. Backpay shall be based on the earn- ings that the employees normally would have re- ceived during the applicable period, less any net in- terim earnings, and shall be computed in the manner prescribed in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest to be computed in the manner prescribed in New Horizons for the Re- tarded, 283 NLRB 1173 (1987). We shall modify the judge's recommended Order to reflect these changes.12 ORDER The National Labor Relations Board orders that the Respondent, Storer Cable TV of Texas, Inc., the Meca Corporation , and Houston Community Cablevision, Inc., Houston, Texas, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain in good faith with the Communications Workers of America, AFL-CIO (the Union), as the exclusive collective-bargaining representative of the following unit: All dispatchers, technicians, warehousemen, installers, linemen and groundmen , converter 11 The judge relied on Gulf States Mfrs., 261 NLRB 852, 853 (1982), in formulating a remedy to make the discharged employees whole. In Lapeer, the Board discussed the remedy it would impose for decision-bar- gaining violations that result in the loss of employment. Accordingly, we rely on Lapeer in formulating a remedy to restore the status quo here 12 The Respondent has excepted to the judge's inclusion in his remedi- al order of a visitatonal clause Under the circumstances of this case, we find it unnecessary and shall delete the clause. See Cherokee Marine Ter- minal, 287 NLRB 1080 (1988) repair technician, and field service coordina- tors employed at the Respondent's six facilities located in the Houston, Texas metropolitan area (Bisbee Street, Airport Boulevard, Law- rence Road, FM 1765, Munson Road and Mayard Road), but excluding all other em- ployees, customer service representatives, cus- tomer sales representatives, local originations operator, receptionist, draftsperson (drafter), office clericals, guards, watchmen and supervi- sors as defined in the Act. (b) Refusing to bargain in good faith with the Union about the terms and conditions of employ- ment of the employees in the above-described unit. (c) Unilaterally subcontracting installation and reconnection work performed by unit employees, and discharging five employees, without providing the Union with notice and the opportunity to bar- gain about the decision to subcontract the unit work and to discharge the five employees , and the effects of that decision. (d) 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) Offer David M. Boudreaux Jr., M. J . Butler Jr., Tomas Rios, John T. Rose, and Stephen H. Spears immediate and full reinstatement to their former positions of employment or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges previously enjoyed. (b) On request, bargain in good faith with the Union concerning the terms and conditions of em- ployment of the employees in the above-described unit and the decision to subcontract installation and reconnection work performed by the unit employ- ees and to discharge five employees, and the effects of that decision. (c) Make whole David M . Boudreaux Jr., M. J. Butler Jr., Tomas Rios, John T. Rose, and Stephen H. Spears for any loss of earnings and other bene- fits they may have suffered as a result of their un- lawful discharges in the manner set forth in the remedy section of this decision. (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. STORER CABLE TV OF TEXAS (e) Post at each of its facilities in Houston, Texas, copies of the attached notice marked "Ap- pendix." 13 Copies of the notice, on forms provided by the Regional Director for Region 23, after being signed by the Respondent's authorized repre- sentative, shall be posted by the Respondent imme- diately upon receipt and maintained for 60 consec- utive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Re- spondent 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. " 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 ordered us to post and abide by this notice. WE WILL NOT refuse to bargain in good faith with the Communications Workers of America, AFL-CIO, as the exclusive collective-bargaining representative of the employees in the unit de- scribed below: All dispatchers, technicians, warehousemen, installers, linemen and groundmen , converter repair technician , and field service coordina- tors employed at the Respondent's six facilities located in the Houston, Texas metropolitan area (Bisbee Street, Airport Boulevard, Law- rence Road, FM 1765, Munson Road and Mayard Road), but excluding all other em- ployees, customer service representatives, cus- tomer sales representatives , local originations operator, receptionist, draftsperson (drafter), office clericals, guards, watchmen and supervi- sors as defined in the Act. WE WILL NOT refuse to bargain in good faith with the Union concerning your terms and condi- tions of employment. WE WILL NOT unilaterally subcontract installa- tion and reconnection work performed by unit em- ployees and discharge employees without provid- 299 ing the Union with notice and the opportunity to bargain about the decision to subcontract unit work and to discharge employees, and the effects of that decision. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the free exercise of your rights under Section 7 of the Na- tional Labor Relations Act. WE WILL, on request, bargain in good faith with the Union concerning the terms and conditions of your employment, the decision to subcontract in- stallation and reconnection work performed by unit employees and to discharge five employees on April 17, 1986, and the effects of the decision to subcontract unit work and to discharge those em- ployees. WE WILL offer David M. Boudreaux Jr., M. J. Butler Jr., Tomas Rios, John T. Rose, and Stephen H. Spears immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to sub- stantially equivalent positions, without prejudice to their seniority or other rights and privileges previ- ously enjoyed, and we will make those employees whole, with interest, for any loss of earnings and other benefits they may have suffered as a result of their unlawful discharges. STORER CABLE TV OF TEXAS, INC., THE MECA CORPORATION, AND HOUSTON COMMUNITY CABLEVISION, INC. Robert G. Levy, II, Esq., for the General Counsel. Nancy Noall, Esq. and Michael T McMenamin, Esq. (Walter, Haverfoeld, Buescher & Chockley), of Cleve- land, Ohio, for the Respondent. Sharon Groth, Esq. (Fickman, Van Os, Waterman, Dean & Moore), of Austin, Texas, for the Charging Party. DECISION STEVEN M. CHARNO, Administrative Law Judge. In response to a charge timely filed by the Communications Workers of America, AFL-CIO (Union), a complaint was issued on 15 May 1986, alleging that Storer Cable TV of Texas, Inc., the Meca Corporation and Houston Community Cablevision , Inc. (Respondent) violated Sec- tion 8(a)(1) and (5) of the National Labor Relations Act, by refusing to bargain with the Union concerning the unilateral decision to lay off five unit employees, the ef- fects of that decision and the term and conditions of em- ployment of bargaining unit employees . Respondent's answer denied the commission of any unfair labor prac- tice and asserted that the Board 's certification of the Union in a prior representation proceeding was invalid due to an allegedly inappropriate definition of the rele- vant bargaining unit. 300 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD A hearing was held before me in Houston, Texas, on 18 November 1986.1 At the hearing, it was stipulated that the unit employ- ees named in the complaint were terminated, rather than laid off, and the complaint and answer were accordingly amended. Briefs were filed by the General Counsel, Union, and Respondent under extended due date of 5 January 1987.2 FINDINGS OF FACT 1. JURISDICTION Respondent is a single employer engaged in providing cable television service to residential subscribers in the metropolitan area of Houston, Texas. During the 12 months preceding issuance of the complaint, Respondent, in the conduct of its business in Texas, purchased and re- ceived goods valued in excess of $50,000 from points outside the State and derived gross revenues in excess of $100,000. It is admitted, and I find, that Respondent is an employer engaged in commerce within the meaning of the Act. The Union is stipulated to be, and I find is, a labor or- ganization within the meaning of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. Certification and the Request to Bargain On 18 November 1985, the Union filed a representa- tion petition, which initiated Case 23-RC-5286. A hear- ing on the petition was held on 11 and 12 December. On 30 December, the Regional Director issued a "Decision and Direction of Election" which found the following unit to be appropriate: All dispatchers, technicians, warehousemen, install- ers, linemen and groundmen, converter repair tech- nician, and field service coordinators employed at the Employer's six facilities located in the Houston, Texas metropolitan area (Bisbee Street, Airport Boulevard, Lawrence Road, FM 1765, Munson Road, and Mayard Road), but excluding all other employees, customer service representatives, cus- tomer sales representatives, local originations opera- tor, receptionist, draftsperson (drafter), office cleri- cals, guards, watchmen and supervisors as defined in the Act. In an election held on 30 January 1986, a majority of Re- spondent's employees in the designated unit voted to be represented by the Union. The following day, the Board rejected Respondent's request to review the Regional Di- rector's election. By "Supplemental Decision" of 18 March, the Regional Director overruled Respondent's objections and certified the Union as the collective-bar- gaining representative of Respondent's employees in the designated unit. On 31 March 1986, the Union wrote Respondent re- questing bargaining. By letter of 7 April, Respondent de- clined to bargain, asserting invalidity of the Board's cer- tification based on an allegedly inappropriate bargaining unit and on the Board's failure either to set aside the election or to hold a hearing on Respondent's objections. The letter stated: "Accordingly, we have no choice but to decline to bargain with you until the NLRB in Wash- ington and/or the US Court of Appeals has ruled on the validity of objections." On 16 June 1986, the Board denied Respondent's re- quest for review of the Regional Director's "Supplemen- tal Decision." B. The Discharges At all times relevant hereto, Respondent's operations in the Houston region were divided into three separately managed and budgeted operating areas: Northwest Harris, South Houston, and the Bay Area. Among the functions performed by Respondent's installers in the Houston region were the installation and reconnection of cable service to residential dwelling units. In mid-1984, 85 to 90 percent of the installation work in each of the three operating areas was done by outside contractors and the remainder, by Respondent's service personnel, including installers. At that time, Northwest Harris had no employees with the title installer, while South Hous- ton and the Bay Area each had five to six. Beginning in 1985, Respondent increased the number of employees called installers in the Bay Area from 6 to 14, with the stated intention of performing all installation and reconnection work in-house. This intention was clearly abandoned no later than the beginning of 1986, since only 8 of the 14 installers in the Bay area at that time were performing duties relating to the installation or reconnection of service to residential dwelling units.3 Throughout 1985 and the first 3 months of 1986, install- ers in the Bay Area handled between 10- and 50-percent of the installation and reconnection work in that areas; the remainder was done by an outside contractor. In January 1986, Respondent's regional vice president, William Langendorf, decided to initiate a new marketing program in the Bay Area in April of that year, the inter- vening 3 months being required to hire and train sales personnel. Purportedly concerned over the increased volume of installation work the new marketing effort would generate,' Langendorf immediately asked Re- spondent's vice president for engineering, Ricky Luke, to prepare a study as soon as possible concerning the ability of the Bay Area's installers to handle the new work. Langendorf never checked on the status of Luke's work, I Respondent's unopposed motion to correct the transcript is noted and granted in part. 2 General Counsel 's motion that the parties' posthearing briefs be made part of the record will be granted. Accordingly, "Memorandum of Gen- eral Counsel to the Administrative Law Judge" is identified as G C Exh. 5; "Petitioner's Post-Hearing Brief," as C P. Exh. 1; and "Respondent's Brief to the Administrative Law Judge," as R. Exh 5. 8 Respondent's vice president of engineering so testified concerning the period from January through March 1986. 4 Langendorf testified that the Bay Area had 200 to 400 installations per month before the sales effort and that the campaign was expected to raise this figure to between 800 and 1200 installations per month. Lake testified that the Bay Area's average of 110 installations per month in- creased to 1200 as a result of the marketing campaign. STORER CABLE TV OF TEXAS 301 and Luke ultimately reported back around the beginning of April.5 A summary of Luke's study was placed in evidence, but no underlying documentation was made available. In preparing the study, Luke first selected the month of February 1986 as a test period and determined "the in- stallation and restart activity that was done by our in- house personnel" during that month , which amounted to 354 jobs. Although eight Bay Area installers did some in- stallation or reconnection work during February, Luke confined his study to five specific individuals. His choice was admittedly based solely on the criterion that these five employees would be terminated if the installer job title was eliminted.6 Luke then purported to derive an in-house cost of installation , based on an attribution of labor, operating and capital costs to the five employees, which he compared with a figure alleged to be the cost of having the 354 jobs done by an outside contractor. The study is seriously flawed in a number of crucial respects. Frist, the labor costs which Luke attributed to the five employees are directly controverted by Re- spondent's "salary histories" for those employees.? Second, no attempt was made to relate or compare the number of hours worked by the five installers. Indeed, if one uses Luke's estimates of how long each of the jobs should have taken,8 all 354 jobs could have been finished in 158 man-hours and could therefore have been accom- plished by a single installer, rather than five.9 Third, the study posits significant capital savings which are not substantiated in or otherwise supported by the record. Luke correctly asserts that the termination of five installers will allow Respondent to utilize the dis- charged installers' trucks and equipment at other points within its system. He then assumes that the value of repositioning this capital equipment may appropriately be measured by the equipment's undepreciated replacement cost new. An accurate valuation could have been ob- tained by using the value of the equipment reflected in Respondent's books of account or by using a value which took into account the age and future useful life of the equipment in question . Under any theory of valu- ation, however, the number of dollars saved by reposi- tioning capital equipment would obviously be reduced if fewer than five installers were discharged. The final flaw in the study involves calculation of the cost of having an outside contractor perform the 354 jobs. Luke admittedly used cost figures that were be- tween $ 1 and $4 per job lower than the actual charges of Respondent's contractor during February 1986. 10 Given the study's conceptual and methodological defects, as well as the absence of any evidentiary support for its conclusions, I find it to be without probative value. After receiving the study, Langendorf purportedly de- cided to eliminate the position of installer in the Bay Area and to subcontract all the area's installation and re- connection work to an outside contractor for the follow- ing reason : the anticipated increase in installation work in the Bay Area resulting from the new marketing effort; the need to achieve sufficient flexibility to accommodate peaks and valleys in the demand for installation; the desire to cut operating costs, including labor costs; the need to reposition capital ; "' and a desire to conform the Bay Area's practices to those of Northwest Harris and South Houston, where installation and reconnection work was allegedly no longer performed in house. As a result of increased subcontracting installation work in the Bay Area, Respondent's payments to its outside contrac- tor increased from $ 182,000 in 1985 to a projected $196,000 in 1986. Langendorfs decision directly resulted in the assign- ment of a job title to or the termination of each of the installers in the Bay Area. Without notification to or bar- gaining with the Union, Respondent discharged the fol- lowing installers on 17 April 1986: Stephen H. Spears, John T. Rose, Tomas Rios, M. J. Butler, Jr., and David M. Boudreaux, Jr. It was stipulated that the Union never requested bargaining concerning the effects of Respond- ent's decision to terminate the five employees and that Respondent never bargained with the Union concerning those effects. At the time of the discharge and in June 1986, Re- spondent employed nine installers in the South Houston area. Between 20 September and 22 October 1986, the service employees in South Houston installed cable serv- ice in over 600 residential dwelling units. t 2 C. Discussion Respondent contends that its 7 April 1986 and later failures to bargain with the Union were not unlawful be- cause the Board's cerification of the Union was invalid. This matter was fully litigated in Case 23 -RC-5286 and, 5 Given Luke's admission that he initially surveyed all the Bay Area's installation work during the first 3 months of the year for his study, he could not have begun the study before the end of March. 8 How Luke could have formulated an initial selection criterion based on the outcome of his study was unexplained and appears inexplicable, unless the study's outcome was a foregone conclusion. T The study employs an average monthly cost per employee for labor and associated benefits of $1333.31. Using one-twelfth of the employees' actual annual salaries as reflected in Respondent 's records, one derives an average monthly cost per employee of $1248 for labor and benefits. This discrepancy is troubling in view of Langendorfs testimony that Respond- ent's employees work 8 hours a day, 5 days a week , with no overtime 8 These appear as Luke's annotations on R. Exh. 4. 9 Even if one assumes an ample increase-say 50 percent-in the number of hours necessary to do the jobs in order to allow for travel time (an assumption by no means required by R. Exh . 4), the total labor and benefit cost for the in-house performance of all the work in the study would be $ 1872, rather than Luke's figure of $6,666.53 10 Also troubling is Luke's testimony that Respondent paid its outside contractor only $1500 a month for installations and reconnections in the Bay Area after installers were eliminated . If, as Luke also testified, $2,759.50 represents the outside contractor 's charges for doing 10 percent of the installation and reconnection work in the Bay Area during Febru- ary 1986, the total monthly cost for such work should approximate $27,000. The latter figure is supported by Respondent's purchase orders, which budget a minimum of $10,800 monthly for reconnections by the outside contractor. The monthly amount Respondent budgets for installa- tions by the contractor is not of record. 11 This reason was given in response to a leading question posed by Respondent's counsel. 12 The more than 600 overhead installations set forth in R Exh. 4 for for this period were clearly distinguished by Luke's lengthy explanation from the type of service required for multiple dwelling units According- ly, I reject Langendorfs testimony that 100 percent of the installations in the three Houston operating areas were made by an outside contractor after June 1986. 302 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD absent any showing of special circumstances or newly discovered evidence, Respondent's contention cannot be relitigated in this proceeding . See Pittsburgh Plate Glass Co. v. NLRB, 313 U.S. 146, 162 (1941); Sections 102.67(f) and 102.69(c) of the Rules and Regulations of the Na- tional Labor Relations Board . Accordingly, this defense is rejected, and I find that Respondent's 7 April refusal to bargain with the Union was an unfair labor practice violative of Section 8(a)(5) of the Act. Respondent also argues that its decision to terminate five employees on 17 April 1986 was a "decision con- cerning the commitment of investment capital and the basic scope of the enterprise" and was, therefore, not a mandatory subject of bargaining within the holding of Otis Elevator Co., 269 NLRB 891 (1984). The record does not support this argument in a number of respects. Frist, it is clear that Responent 's purported decision to subcontract all installation work and discharge five in- stallers was not made for the reasons advanced by Re- spondent's witnesses. Langendorf's asserted need for flexibility to handle varying levels of demand for installa- tion service, including any increase occasioned by a new marketing effort, is spurious. Because Respondent's in- house service personnel in the Bay Area never handled more than 50 percent of available installation work and the remainder was always given to an outside contractor, there was no possibility of Respondent either being unable to meet peaks in demand or of its in-house per- sonnel remaining idle during valleys in demand. Since Respondent never entertained the idea of altogether eliminating the subcontracting of installation in the Bay Area, t s one must conclude that Respondent already en- joyed complete flexibility with respect to the demand for installations. Maintenance of this flexibility did not re- quire the termination of five employees. Similarly, Langendorf's assertions that his decision to terminate employees would result in significant operating and capital savings are wholly unsupported, and at least partially contradicted , by the the record. Finally, Lan- gendorf's supposititious assertion of a desire to establish a uniform installation policy throughout the three Houston areas is gainsaid by the fact that the South Houston area did not cease to perform installations with its own per- sonnel after 17 April 1986. Indeed, this fact raises a seri- ous question as to whether Respondent actually decided to eliminate the in-house performance of installation work. 14 Also persuasive of the pretextual nature of Respond- ent's rationale are the indications in the record that Lan- gendorf's decision was made before he received Luke's 13 In response to a question from the bench , Luke testified that the portion of his study which purportedly focused on increasing the number of Bay Area installers was based on the assumption that some installa- tions would continue to be performed by an outside contractor. 14 In this context, it is troubling that Respondent allegedly increased its subcontracting in the Bay Area by at least 100 percent, while expenenc- ing an increase in billing from its subcontractor of less than 8 percent. Using the assumption in Respondent's study that 10 percent of the Bay Area' s installation work could be done by a subcontractor for $2757, Re- spondent should have experienced a monthly increase in subcontracting costs for the last 7 months of 1986 (during which in-house installations had allegedly been abandoned) of $13,785, or 90.89 percent, over its aver- age monthly costs in 1985. study. If any possibility had actually existed of hiring, training, and equipping additional installers to begin work at the time the new marketing effort began in April 1986, it would have been prudent for Langendorf to have been anxious about the progress of Luke's study and for Luke to have begun the study before the begin- ning of April. Neither occurred . Even stronger evidence of the fact that decision preceded rationale is Luke's ad- mission that he began his study with the assumption that five named installers would be terminated. For the foregoing reasons, I find that Respondent's de- cision which resulted in the termination of five employ- ees on 17 April 1986 was not made for any legitimate business reason which might cause that decision to fall within the holding of Otis Elevator Co., supra. Accord- ingly, I find that Respondent 's failures to give notice to or bargain with the Union concerning that decision are unfair labor practices in violation of Section 8(a)(5) of the Act. The final issue in this case is raised by Respondent's argument that it had no legal obligation to engage in bar- gaining over the effects of its decision since such bar- gaining was never requested by the Union. By letter of 7 April 1986, Respondent stated that it would not bargain with the Union while certification litigation was pending. For the Union again to request bargaining only 10 days later would have been a "totally futile gesture." See Lauren Mfg. Co., 270 NLRB 1307, 1309 (1984). The Union's failure to make a second request under the cir- cumstances of this case did not release Respondent from its legal obligation to engage in bargaining over the ef- fects of its decision to terminate five employees is an unfair labor practice violative of Section 8(a)(5) of the Act. CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce 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. All dispatchers, technicians, warehousemen, install- ers, linemen and groundmen, converter repair technician, and field service coordinators employed at Respondent's six facilities located in the Houston , Texas metropolitan area (Bisbee Street, Airport Boulevard, Lawrence Road, FM 1765, Munson Road and Mayard Road), but exclud- ing all other employees, customer service representatives, customer sales representatives, local originations opera- tor, receptionist, draftsperson (drafter), office clericals, guards, watchmen and supervisors as defined in the Act, constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. 4. The Union is now, and all times material herein has been, the exclusive representative for the purpose of col- lective bargaining of the employees in the aforesaid unit within the meaning of Section 9(a) of the Act. 5. By refusing on 7 April 1986 to bargain with the Union as the exclusive collective -bargaining representa- tive of employees in the aforesaid unit, Respondent has STORER CABLE TV OF TEXAS 303 engaged in and is engaging in an unfair labor practice in violation of Section 8(a)(1) and (5) of the Act. 6. By failing and refusing to give notice to and bargain with the Union concerning the termination of five em- ployees on 17 April 1986, Respondent has engaged in and is engaging in an unfair labor practice in violation of Section 8(a)(1) and (5) of the Act. 7. By failing to bargain with the Union concerning the effects of a decision to terminate five employees on 17 April 1986, Respondent has engaged in and is engaging in an unfair labor practice in violation of Section 8(a)(1) and (5) of the Act. 8. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Inasmuch as Respondent has engaged in unfair labor practices, I shall order it to cease such practices and to take affirmative action designed to effectuate the purpose of the Act. In order to remedy its unlawful refusal and failure to bargain, Respondent shall be ordered to bar- gain with the Union . To ensure that the unit employees are accorded the services of their selected agent for the period provided by law, the initial period of the certifica- tion shall be construed to begin on the date the Respond- ent begins to bargain in good faith with the Union. See Great Western Produce, 282 NLRB No. 17 (Nov. 12, 1986) (not reported in Board volumes); Mar-Jac Poultry Co., 136 NLRB 785 (1962). In addition, Respondent shall be required to make whole those employees it unlawfully terminated by paying them their normal wages from the date of their termination until the earliest of the follow- ing conditions is met : ( 1) Respondent and the Union reach an agreement, (2) a bona fide impasse is reached through good-faith bargaining, (3) the Union fails to re- quest bargaining within 5 days of receipt of Respondent's notice of its desire to bargain, or (4) the Union fails to bargain in good faith . See Gulf States Mfrs., 261 NLRB 852, 853 (1982). Backpay shall be calculated in accord- ance with the formula set forth in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest thereon computed in the manner set forth in Florida Steel Corp., 231 NLRB 651 (1977).15 [Recommended Order omitted from publication.] 15 See generally Isis Plumbing Ca, 138 NLRB 716 (1962).