H. B. Design & Mfg., Inc.

H B DESIGN & MFG 73 H. B. Design & Mfg., Inc. and Local Lodge No. 28, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO. Case 22-CA-16183 July 16, 1990 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS CRACRAFT AND OVIATT On December 27, 1989, Administrative Law Judge D Barry Moms issued the attached deci- sion The General Counsel filed exceptions and a supporting bnef The National Labor Relations Board has delegat- ed its authonty in this proceeding to a three- member panel The Board has considered the decision and the record in light of the exceptions and bnef and has decided to affirm the judge's rulmgs, fuldmgs, 1 and conclusions only to the extent consistent with this Decision and Order On November 14, 1988, the Respondent pur- chased the assets, mventory, and equipment of J W Runge & Co (Runge) Followmg the pur- chase, the Respondent continued to manufacture the same product as its predecessor, from the same location and with the same customers At the time of purchase, the Respondent employed 11 employ- ees from its predecessor's work force of 15 Based on these facts, the judge found the Respondent to be the legal successor to Runge 2 Runge had been party to successive collective- bargaining agreements with Local Lodge No 316, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO (Local 316), the most recent of which was effective from February 27, 1987, through February 26, 1990 Effective Apnl 1988, Local 316 merged with Local Lodge No 28, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO (Local 28) In November or December 1988, the business manager of Local 28 made a demand for recognition on the Respondent Despite bemg in- formed of the merger, the Respondent refused to recognize Local 28 Pnor to the purchase of Runge, the Respond- ent's presidents assured the Runge employees that 1 No exceptions have been filed to the judge's finding that the Re- spondent violated Sec 8(aX1) of the Act by Interrogating employees con- cerning their union activities 2 No exceptions have been filed to this finding 3 The Respondent's president was employed as the general manager of Runge they would have jobs with the Respondent, with- out indicating that they would be expected to work under different terms and conditions of employ- ment Following the purchase, the Respondent's president again met with the employees and at that time informed them of changes in their terms and conditions of employment 4 Thereafter, the Re- spondent ceased making pension fund contnbutions required under Runge's contract with Local 316, and stopped deducting union dues as required under that contract Several months later the Re- spondent granted a wage mcrease to its employees All these changes were accomplished without notice to Local 28 and without bargaining The judge found that these changes would constitute unlawful unilateral changes under NLRB v Burns Security Services, 406 U S 272 (1972), if the Re- spondent had been required to bargain with Local 28 5 The judge concluded, however, that the Re- spondent was not obligated to bargain with Local 28 The judge correctly set forth the Board's well- established position that mergers between unions at the local or International level are valid when it is shown (1) that the members of the constituent unions were given an opportunity to consider and vote on the proposed change through a democratic process and (2) that the identity of the representa- tive remains essentially unchanged See, eg, F W Woolworth Go, 285 NLRB 854 (1987) The judge found that the Respondent had failed to meet its burden of demonstrating a lack of due process in the election m this case The judge found further, however, that the record was "barren of sufficient evidence for a finding that the identity of the rep- resentative remains essentially unchanged" In the absence of such a showing, the judge concluded that the Respondent had no duty to recognize or bargain with Local 28, and therefore did not vio- late the Act by unilaterally implementing changes in the unit employees' terms and conditions of em- ployment The General Counsel contends in his exceptions that the judge erred in allocating to the General Counsel the burden of demonstrating continuity of bargaining representative following the merger The General Counsel argues that the burden of af- firmatively demonstratmg a change in identity is properly allocated to the party making such a claim We agree The party seeking to avoid an 4 These changes Included diminished holiday and vacation benefits 'No exceptions have been filed to this finding Under Burns, when It is perfectly clear that a successor employer plans to retain the old employ- ees and makes no mention of changes in employment conditions, the suc- cessor is obligated to bargam concerning initial terms and conditions of employment See, e g • Fremont Ford, 289 NLRB 1290, 1294 (1988) 299 NLRB No 12 74 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD otherwise binding bargaining obligation by assert- ing a change in the bargaining representative fol- lowing a merger bears the burden of demonstrating that change National Posters, 289 NLRB 468 (1988), Insulfab Plastics, 274 NLRB 817, 821 (1985), enfd 789 F 2d 961 (1st Cir 1986) The Respondent has failed to present any evi- dence to demonstrate a change in identity of the bargaining representative Local 316 and Local 28 are affiliated with the same International union Further, the International representative to Local 316 also assisted Local 28, following the merger, by meeting with the Respondent and demanding recognition The business manager of Local 28 also testified that the collective-bargaining agreement between Local 316 and Runge came under his di- rection in early 1988 and that the Respondent's em- ployees continued to be dues-paying members of Lo'cal 28 despite the Respondent's failure to deduct union dues In the absence of a showing by the Re- spondent of any evidence of a lack of continuity between Local 316 and Local 28 following merger, we find that the Respondent violated Section 8(a)(5) and (1) of the Act by failing and refusing to bargain collectively with Local 28 and by unilater- ally implementing changes in its unit employees' terms and conditions of employment . , AMENDED CONCLUSIONS OF LAW 1 Delete paragraph 5 2 Insert the following as paragraphs 3 and 4 and renumber the subsequent paragraphs "(3) At all times material, Local Lodge No 28, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO (Local 28) has been the exclusive repre- sentative for purposes of collective bargaining in the following unit, which is a unit appropnate for collective bargaining within the meaning of Section 9(b) of the Act "All employees regularly employed at Re- spondent's Jersey City facility excluding office and clerical employees, guards, watchmen, temporary employees, engineers, draftsmen, part-time employees who work less than 20 hours per week, salesmen, and supervisors as defined in the Act "(4) By refusing on request to recognize and bar- gain collectively with Local 28 and by unilaterally ceasing to make pension fund contnbutions and unilaterally changing wages, vacation, and holiday benefits, the Respondent violated Section 8(a)(5) and (1) of the Act" AMENDED REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act We shall order the Respondent to recognize and, on request, bargain collectively with Local 28 as the exclusive representative of all employees in the above-named appropriate unit concerning rates of pay, wages, hours, and other terms and conditions of employment and, if an understanding is reached, embody the understanding in a signed agreement We shall further order the Respondent to rescind, on request, its unilateral changes in vacation, holi- day, and pension benefits, and any other terms and conditions of employment, and to make all affected unit employees whole for losses, if any, they in- curred by virtue of the Respondent's unilateral changes to their wages, fnnge benefits, and other terms and conditions of employment in accordance with Ogle Protection Service, 183 NLRB 682 (1970), with interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987) The Respondent shall remit all payments it owes to the employee pension fund and reimburse its employees in the manner set forth in Kraft Plumbing di Heating, 252 NLRB 891 fn 2 (1980), enfd mem 661 F 2d 940 (9th Cir 1981), for any expenses resulting from the Respondent's failure to make these payments Any additional amount due the pension fund shall be de- termined in the manner set forth in Merryweather Optical Go, 240 NLRB 1213, 1216 fn 7 (1979) ORDER The National Labor Relations Board orders that the Respondent, H B Design & Mfg, Inc. Jersey City, New Jersey, its officers, agents, successors, and assigns, shall 1 Cease and desist from (a) Refusing to recognize and bargain collective- ly with Local Lodge No 28, International Brother- hood of Boilermakers, Iron Ship Builders, Black- smiths, Forgers and Helpers, AFL-CIO as the ex- clusive bargaining representative of employees in the following appropnate unit All employees regularly employed at Respond- ent's Jersey City facility excluding office and clencal employees, guards, watchmen, tempo- rary employees, engineers, draftsmen, part- time employees who work less than 20 hours per week, salesmen, and supervisors as defined in the Act (b) Unilaterally changing wages, holiday, and va- cation benefits, and any other terms and conditions H B DESIGN & MFG 75 of employment of bargaining unit employees, and unilaterally ceasing to make pension fund contribu- tions (c) Interrogating employees for activities protect- ed by Section 7 of the Act (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) On request, bargain with the above-named labor organization as the exclusive representative of all employees in the above-described appropriate unit concerning rates of pay, wages, hours, and other terms and conditions of employment and, if an understanding is reached, embody the under- standing in a signed agreement (b) On request of Local 28, rescind its unilateral changes in the unit employees' holiday, vacation, and pension fund benefits, and any other terms and conditions of employment implemented in Novem- ber 1988, 6 and make affected employees whole for any losses they may have suffered as a result of these unilateral changes from November 1988 until it negotiates in good faith with Local 28 to agree- ment or to impasse, in the manner set forth in the remedy section of the decision (e) Remit all payments to the unit employees' pension fund that it unilaterally ceased to make and make the fund whole in the manner set forth in the remedy section of the decision and make all pay- ments until it negotiates in good faith with Local 28 to agreement or to impasse (d) Post at its facility in Jersey City, New Jersey, copies of the attached notice marked "Appendix "7 Copies of the notice, on forms provided by the Re- gional Director for Region 22, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply 6 Nothing herein shall be construed as requiring the Respondent to reduce current wage levels See Mr Clean of Nevada, Inc , 288 NLRB 895 fn 7 (1988) 7 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 recognize and bargain in good faith with Local Lodge No 28, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO as the exclusive bargaining representative of employ- ees in the following appropriate unit All employees regularly employed at our Jersey City facility excluding office and cleri- cal employees, guards, watchmen, temporary employees, engineers, draftsmen, part-time em- ployees who work less than 20 hours per week, salesmen, and supervisors as defined in the Act WE WILL NOT unilaterally change wages, holi- day, and vacation benefits, and any other terms and conditions of employment for bargaining unit em- ployees, and we will not unilaterally cease making pension fund contributions WE WILL NOT interrogate employees for activi- ties protected by Section 7 of the National Labor Relations Act WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of rights guaranteed you by Section 7 of the Act WE WILL, on request, bargain with Local 28 as the exclusive representative of all employees in the above-described bargaining unit concerning rates of pay, wages, hours, and other terms and conditions of employment and, if an understanding is reached, embody the understanding in a signed agreement WE WILL rescind, on request of Local 28, the unilateral changes we implemented in our unit em- ployees' holiday, vacation, and pension fund bene- fits, and any other terms and conditions of employ- ment, and WE WILL make affected employees whole for any losses they may have suffered as a result of our unilateral changes WE WILL remit all payments to the unit employ- ees' pension fund that we unilaterally ceased to make, and make all payments until we negotiate in good faith with Local 28 to agreement or to im- passe H B DESIGN & MFG , INC 76 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Olivia Garcia Boullt, Esq , for the General Counsel Henry Benson, of Jersey City, New Jersey, for the Re- spondent Daniel V Kearney, of Bayonne, New Jersey, for the Charging Party DECISION STATEMENT OF THE CASE D BARRY MORRIS, Administrative Law Judge This case was heard before me in Newark, New Jersey, on June 12, 1989 1 Upon a charge filed on February 22, a complaint was issued on March 31, alleging that H B Design & Mfg, Inc (Respondent) violated Section 8(a)(1) and (5) of the National Labor Relations Act (the Act) Respondent filed an answer denying the commis- sion of the alleged unfair labor practices The parties were given full opportunity to participate, produce evidence, examine and cross-examine witnesses, argue orally, and file briefs A brief was filed by the General Counsel On the entire record of the case, including my obser- vation of the demeanor of the witnesses, I make the fol- lowing FINDINGS OF FACT I JURISDICTION Respondent, a New Jersey corporation with an office and place of business in Jersey City, is engaged in the manufacture of heat exchangers Respondent admitted, that based upon a projection of its operations since No- vember 14, 1988, it annually sells and ships from its New Jersey facility goods, valued in excess of $50,000, to cus- tomers located outside the State of New Jersey I find that Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act In addition, based upon the evidence in the record, I find that Local Lodge No 28 (Local 28), International Brotherhood of Boilermakers, Iron Ship Builders, Black- smiths, Forgers and Helpers, AFL-CIO (IBB) is a labor organization within the meaning of Section 2(5) of the Act II THE ALLEGED UNFAIR LABOR PRACTICES A The Issues The issues in this proceeding are 1 Is Respondent the legal successor to J W Runge & Co ? 2 Is Local 28 the successor of Local 3169 3 Did the Respondent engage in the unfair labor prac- tices alleged m the complaint? B The Facts 1 Respondent is the legal successor of Runge On November 14, 1988, Respondent purchased the assets, mcludmg the inventory and equipment of J W All dates refer to 1989 unless otherwise specified Runge & Co Respondent presently has the same custom- ers as the predecessor, and the equipment and inventory purchased by Respondent remained in the same location and is being used to manufacture heat exchangers, the same product manufactured by the predecessor At the time of the purchase Runge had approximately 15 em- ployees When Respondent commenced its operations, it began with 11 employees, all of whom had previously worked for Runge The only other employee hired by Respondent was the wife of Henry Benson, Respondent's president and owner, who was hired as a receptionist and bookkeeper Benson himself had previously been general manager of Runge All of the other employees continued in the same positions they previously held with Runge The Board has evolved a set of criteria to determine whether legal successorship exists The relevant ques- tions include (1) whether there has been a substantial continuity of the same business operations, (2) whether the new employer uses the same plant, (3) whether he has the same or substantially the same work force, (4) whether the same jobs exist under the same working conditions, (5) whether he employs the same supervisors, (6) whether he uses the same ma- chinery, equipment, and methods of production, and (7) whether he manufactures the same product or offers the same services J-P Mfg, Inc , 194 NLRB 965, 968 (1972), Band-Age, Inc , 217 NLRB 449, 452-453 (1975), enfd 534 F 2d 1 (1st Cu- 1976) Based on the above, Respondent clearly meets the cri- teria necessary for it to be deemed the legal successor of Runge 2 Bargaining relationship Runge and Local No 316, IBB (Local 316) had been parties to collective-bargaining agreements since 1972, the most recent of which is effective from February 27, 1987, through February 26, 1990 Local 316 and Local 28 merged effective April 1988 2 Prior to the purchase of Runge by Respondent, Benson met with Runge employees, advising them of his progress in the negotiations to purchase the Company Several days after the purchase, Benson again met with the employees and for the first time informed them of changes in their benefits Local 28 had not been given notice of any changes in the terms and conditions of em- ployment nor had Respondent bargained with Local 28 After the purchase, Respondent ceased making pension contributions and stopped deducting union dues In Feb- ruary 1989 Respondent granted a wage increase, without notifying or negotiating with Local 28 In November or December 1988 Daniel Kearney, busi- ness manager of Local 28, had a discussion with Benson, at which time Local 28 made a demand for recognition 2 Charles Thompson, IBB International representative, testified that the merger hearings were held in the fall of 1988 and employers were not notified until then However, the merger was "backdated" to be effective as of Apnl 1988 H B DESIGN & MFG 77 Respondent refused to recognize the Union In January 1989 Benson, Kearney, and Thompson met The union representatives told Benson that there had been a merger and Local 28 had taken the place of Local 316 Benson replied that he did not consider Respondent to be the legal successor of Runge and for that reason he did not believe that Respondent was bound to the contract In NLRB v Burns Security Services, 406 U S 272 (1972), the Supreme Court made it clear that a successor is entitled to set the initial terms of employment on which it will hire the predecessor's employees However, in cases where the successor plans to retain the old em- ployees, and makes no mention of changes in employ- ment conditions, the Board has held that the successor must bargain concerning initial terms and conditions of employment Royal Vending Services, 275 NLRB 1222, 1227-1228 (1985) As admitted by Benson, at the time he told the Runge employees that they had jobs with the new company, he did not make any changes in their terms and conditions of employment After the purchase, Benson for the first time informed the employees of changes in their benefits and in February 1989 he in- creased their wages In the event Respondent would be required to bargain with the Union, these would consti- tute unlawful unilateral changes 3 Successorship of the Union Thompson testified concerning the relationship be- tween Local 28 and Local 316, as follows In 1988 approximately in Apnl, it became apparent to me as the service representative to Local 316, that their membership had dwindled and their ex- penses were exceeding their income and it was evi- dent that m a short period of time they would not be able to survive I took the steps that are neces- sary in such cases to protect the interest of the members and made a recommendation after discus- sion with Mr Kearney of Local 28 that a por- tion of the membership be transfered into Local 28 [and] the remainder be merged into Local 638 Thompson further testified that members of Local 316 employed at Runge were notified in writing that a hear- ing was to be held regarding the proposed merger and that the merger was accomplished in accordance with the International's constitution The Board has long held that mergers between unions at the local or International level are valid when it is shown that the members of the constituent unions were given an opportunity to consider and vote on the pro- posed change through a democratic process and when the identity of the representative remains essentially un- changed F W Woolworth Co, 285 NLRB 854 (1987) Thompson testified that the merger was accomplished in accordance with the International's constitution and that members of Local 316 employed at Runge were notified in writing that a hearing was to be held regarding the proposed merger In addition, Kearney testified that after the merger Respondent's employees expressed their desire to remain members of Local 28 As stated in Insul- fob Plastics, 274 NLRB 817, 821 (1985), enfd 789 F 2d 961 (1st Cir 1986), the burden of establishing the irregu- larity of an affiliation election falls upon the Respondent I believe that Respondent has not shown that the constit- uent unions were not given an opportunity to consider and vote on the proposed change through a democratic process 4 Continuity of identity As stated above, for the merger to be effective, it must also be shown that the identity of the representative re- mains essentially unchanged This record contains virtu- ally no evidence concerning the nature of Local 28 or of its predecessor, Local 316 Basically the only evidence is the testimony of Thompson that a "portion" of the mem- bership of Local 316 was transferred into Local 28 with the remainder being merged into Local 638 In addition, Thompson testified that both Local 316 and Local 28 are affiliated with the IBB In Insulfab Plastics, supra, 274 NLRB at 823, in discussing the substantial continuity of the bargaining agent, the Board pointed out that both before and after the merger the union had the "same offi- cers, the same members, the same constitution, the same bank account and the same dues" In National Posters, 289 NLRB 468, 471 (1988), the Board stated In making assessments of bargaining "continuity," however, the Board has not expressly created pre- sumptions about the particular nature of the modifi- cation, but rather has generally examined each case to determine the effect of the changes, if any, on the essential identity of the bargaining representa- tive "[S]tructure, administration, officers, assets, membership, autonomy, bylaws, size, and temtonal jurisdiction," NLRB v Pearl Bookbinding Co, 517 F 2d 1108, 1111 (1st Cir 1985), have all come under scrutiny, while none of these factors has been de- nominated as critical or dispositive, it is obvious that some are of more significance than others In this record there has been no consideration of any of the above-mentioned factors The only testimony is that both Local 28 and Local 316 belong to the same International and that a "portion" of the Local 316 mem- bers transferred into Local 28 Indeed, the testimony that only a "portion" of the Local 316 members were trans- ferred into Local 28 might of itself indicate that substan- tial continuity does not exist In any event, the record is barren of sufficient evidence for a finding that the identi- ty of the representative remains essentially unchanged Accordingly, I am constrained to find that Respondent has no duty to recognize or bargain with Local 28 5 Interrogation During February 1989 Local 28 representatives met with Benson, at which time the employees were also present The Union met separately with the employees and Benson testified that the union representatives told him they had taken a vote among the employees and that the employees had voted for the Union The record shows that a few days later Benson asked the employees individually about the vote and "the men said they had 78 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD not voted for the union" I find that Benson's interroga- tion of his employees regarding their vote violated Sec- tion 8(a)(1) of the Act CONCLUSIONS OF LAW 1 H B Design & Mfg, Inc is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act 2 Local Lodge No 28, IBB is a labor organization within the meaning of Section 2(5) of the Act 3 By interrogating employees concerning their union activities, Respondent has engaged in unfair labor prac- tices within the meaning of Section 8(a)(1) of the Act 4 The aforesaid unfair labor practices constitute unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act 5 The Respondent did not violate the Act in any other manner alleged in the complaint THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, I find it necessary to order Re- spondent to cease and desist therefrom and to take cer- tam affirmative action designed to effectuate the policies of the Act [Recommended Order omitted from publication ]