Fall River Dyeing & Finishing Corp

FALL RIVER DYEING CORP 839 Fall River Dyeing & Finishing Corp and United Textile Workers of America, AFL-CIO, Local 292 Case 1-CA-20391 19 October 1984 DECISION AND ORDER BY MEMBERS ZIMMERMAN, HUNTER, AND DENNIS On 27 January 1984 Administrative Law Judge Burton S Kolko issued the attached decision The Respondent filed exceptions and a supporting brief, and the General Counsel filed a brief in support of the judge's decision 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, and conclusions and to adopt the recommended Order ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Fall River Dyeing & Finishing Corp, Fall River, Massachu setts, its officers, agents, successors, and assigns, shall take the action set forth in the Order MEMBER HUNTER dissenting Contrary to my colleagues, I would dismiss the complaint allegation that the Respondent violated Section 8(a)(5) and (1) of the Act by refusing to recognize and bargain collectively with the Union, Textile Workers Local 292 As of the date that the Union made its recognition demand on 19 October 1982 the Respondent did not have even a repre sentative complement of employees and did not have such complement until 15 January 1983, the date on which the judge and my colleagues have 1 In Its exceptions the Respondent challenges inter aim the judge s reliance on certain testimony We interpret this as a challenge to the judge s implicit credibility findings 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 363 (3d Cir 1951) We also agree with the judge that the Respondent Incurred a bargain mg obligation in mid January 1983 It was at that point that the Respond ent first employed a substantial and representative complement of its work force (a majority of which it is undisputed the Union represented when those employees worked for the Respondent s organized predeces sor) Thus in mid January the Respondent had one shift in full operation and had started a second shift All job titles had been filled since the pre vious November and by mid January the Respondent employed more than 50 percent of those it would ultimately employ in the vast majority of existing job classifications Indeed at the critical time the Respondent employed nearly two thirds the number it planned to ultimately have Furthermore with the addition of the second shift the Respondent added no new skills to its work force imposed a bargaining obligation Thus at the time the Respondent denied recognition on 21 October 1982, it had no obligation to recognize the Union In the absence of any evidence that the Union re newed its request for recognition subsequent to Oc tober 1982 at a time when the Respondent would have been obligated to honor such a request under successorship principles,' there is no basis for find ing that the Respondent unlawfully refused to rec ognize the Union ' I find It unnecessary to consider the Respondent s argument that the judge erred in imposing a bargaining obligation on the date that a repre sentative complement of employees was employed by the alleged succes sor employer and that the proper date for determining whether any bar gaining obligation may arise pursuant to a recognition demand of a union which represented the predecessor s employees is the date that the al leged successor employed a full complement of employees DECISION STATEMENT OF THE CASE BURTON S KOLKO Administrative Law Judge Upon a charge filed on November 1 1982 by the United Tex tile Workers of America AFL-CIO Local 292 a corn plaint issued on December 21 1982 against Fall River Dyeing & Finishing Corp (Respondent) alleging viola tion of Section 8(a)(1) and (5) of the Act The matter was heard before me in Boston Massachusetts on May 2 1983 and was briefed on August 5 1983 The case centers around whether Respondent is a suc cessor to Sterlingwale Corp If it is the second question anses—did it violate the Act by refusing to recognize and bargain with the Union? I find that Respondent is a successor and did violate the Act by refusing to recog nize and bargain with the Union once it had a represent ative complement of workers the majority of whom were former employees of Sterlingwale Successorship Sterlingwale Corp in Fall River had been in business for over 30 years before it closed in 1982 The business involved mainly the dyeing and finishing of textiles and a small amount of retail sales Sterlingwale had handled both flat goods and corduroy fabrics Although it had been both a converter of fabrics and a commission dyer it moved more toward commission dyeing as it suffered economically Converter work meant that goods were purchased by Sterlingwale then dyed and finished for sale in the mar ketplace Commission dyeing involved the receipt of goods from a customer the dyeing and finishing of the goods and the return of those goods to the customer Leonard Ansm president of Sterlingwale testified that from an employee s viewpoint the production process for either converter goods or commission goods was the same In addition the production process for corduroy and flat goods was similar (Corduroy required back sizing and some cutting and post cutting inspection ) 272 NLRB No 127 840 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Ansin testified that beginning in 1979 Sterlingwale had financial problems By February 1982 Ansin decided to close Sterlingwale On February 12 he laid off all the production employees 1 From then until August 1982 Sterlmgwale maintained a skeletal existence A few people were still employed there throughout this period They maintained the building shipped out remaining goods and kept watch over the machinery In August Sterlingwale went under There was an assignment for the benefit of creditors An auction was held of Sterling wale s property Through a series of complex transac lions Respondent purchased all the machinery equip ment furniture and fixtures of Sterlingwale It pur chased some of Sterlingwale s materials and inventory at auction It bought Sterlingwale s premises and moved in during September 1982 The traditional test for determining successorship is whether there is substantial continuity in the employing enterprise 2 The factors used in making this determina non are (1) business operations (2) plant (3) work force (4) jobs and working conditions (5) supervisors (6) ma chmery equipment and methods of production and (7) product or service 3 Respondent places great emphasis on the fact that it is solely a commission dye house while Sterlingwale was mainly a converter of fabric Respondent urges that this results in a difference in the nature and identity of the enterprise I disagree The business is like Sterlingwale dyeing and finishing of fabric The fact that Respondent does something different before and after the production process is completed does not result in any essential dif ference The enterprise is not identical but it is similar Respondent uses the same production building with the same machinery as Sterlingwale did It retained most of the same job classifications (Respondent has no retail store and fewer inspectors of fabric ) Norman Rego an employee for 20 years at Sterlingwale and now em ployed by Respondent testified that as far as he can tell the machines are the same the jobs are the same and the supervision is the same (Tr 113-115) Respondent did not start a new service or product line Continuity of customers has also been considered as a factor in determining continuity in the employing Indus try General Counsel Exhibit 10 indicates that in dollar volume over one half of the current customers of Re spondent were customers of Sterlingwale Thus a sub stannal part of Respondent s business is linked with Ster lingwale On these bases I conclude that Respondent was a successor to Sterlingwale 4 ' Sterlingwale employees were represented by United Textile Workers Local 292 in a production and maintenance unit for about 30 years Such recognition was embodied in successive collective bargaining agreements the most recent of which was extended to Apnl 1 1981 (G C Exh 13) 3 NLRB v Burns Security Services 406 U S 272 279-281 (1972) 3 Grico Corp 265 NLRB 1344 1345 (1982) 4 I make this finding despite the fact that there was a 7 month hiatus between the ending of Sterlingwale and the beginning of Fall River Dyeing Generally a hiatus is only material in determining successorship status when there have been other substantial changes in the enterprise Grico Corp supra United Maintenance & Mfg Co 214 NLRB 529 532 (1974) Demand for Bargaining A new employer has an obligation on request to bar gain with the Union if a majority of the unit employees hired were unit employees of the predecessor employer The demand for bargaining by the Union must be made when the new employer is operating at a representative capacity However if the new employer is not at that ca pacity at the time of the demand the demand is of a con firming nature Once the employer reaches a representa tive capacity the bargaining obligation will attach Respondent hired its first employees on September 20 1982 The Union demanded recognition by letter dated October 19 1982 Respondent denied recognition by letter dated October 21 1982 Twenty one employees had been hired by October 22 Eighteen of them were former Sterlingwale employees Herbert Chace who had worked at Sterlingwale and is now executive vice president and secretary for Respond ent testified that after the first hinngs in September the employees spent approximately 4-6 weeks of startup cleaning repairing machines and so forth Then they began 4-5 weeks of experimental production just to make sure everything was in working order (Tr 185- 187 ) Chace agreed with employee Rego s testimony that the first shift was at almost full operating level when a second shift was commenced in January 1983 Chace also testified that their production goal was to have two full shifts working by mid April Respondent asserts that since a full complement of workers was not reached until then it is at that point that one should inquire as to the status of former Sterlingwale employees Presumably this argument is pressed because the evidence indicates that in the week ending March 24 1983 former Sterlingwale employees were for the first time a mmonty of the unit However the standard to be used indicated by the Board is representative complement not full comple ment 5 By late November 1982 employees had been hired in all job titles Accounts receivable in November 1982 from previous months totaled $145 001 38 (Tr 188) Clearly the business was gearing up Since we have tes timony from Chace and Rego above which points to January 1983 as a time when the plant was running one shift at full capacity I find that the duty to bargain with the Union attached for Respondent in mid January 1983 Respondent contends that since it did not purchase Sterlingwale directly it should not be held to be a suc cessor This argument fails since direct purchase from a predecessor is not a prerequisite to successorship 6 Since Respondent has refused to bargain with the Union it has violated Section 8(a)(5) and (1) of the Act CONCLUSIONS OF LAW 1 Respondent Fall River Dyeing & Finishing Corp is an employer within the meaning of Section 2(2) of the 5 Gm° Corp supra 6 Cf Makaha Valley Inc 241 NLRB 300 303 (1979) where an inter veiling trusteeship did not defeat successorship status FALL RIVER DYEING CORP 841 Act and engaging in commerce within the meaning of Section 2(6) and (7) of the Act 7 2 United Textile Workers of America AFL-CIO Local 292 is a labor organization within the meaning of Section 2(5) of the Act 3 The following employees constitute a unit appropn ate for collective bargaining within the meaning of Sec tion 9(b) of the Act All production and maintenance employees at the Fall River plant including the electrician electri clan s helper and mechanics but excluding all ex ecutives office clerical and plant clerical employ ees second hands guards and professional employ ees and supervisors as defined in the Act 4 United Textile Workers of America AFL-CIO Local 292 has been and is the exclusive representative of all employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act 5 By refusing about January 15 1983 and at all times thereafter to recognize and bargain collectively with the above named labor organization as the exclusive repre sentative of all its employees in the appropriate unit Re spondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act 6 The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec lion 2(6) and (7) of the Act THE REMEDY Having found that Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act it shall cease and desist therefrom and on request bargain collectively with the Union as the exclusive representative of all em ployees in the appropriate unit 8 ORDER The National Labor Relations Board orders that the Respondent Fall River Dyeing & Finishing Corp Fall River Massachusetts its officers agents successors and assigns shall 1 Cease and desist from (a) Refusing to bargain collectively with United Tex tile Workers of America AFL-CIO Local 292 as exclu sive representative of the following unit 7 Based on a projection of its operations since about August 1982 at which time Respondent commenced operations Respondent in the course and conduct of its business of dyeing and finishing textiles and re lated products will annually provide services valued in excess of $50 000 for customers located outside the Commonwealth of Massachusetts and in excess of $50 000 for enterprises located within Massachusetts who themselves are directly engaged in Interstate commerce 8 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 All production and maintenance employees at the Fall River plant including the electrician electn , clan s helper and mechanics but excluding all ex ecutives office clerical and plant clerical employ ees second hands guards and professional employ ees and supervisors as defined in the Act (b) In any like or related manner interfering with re straining or coercing its employees in the exercise of their rights under Section 7 of the Act 2 Take the following affirmative action to effectuate the policies of the Act (a) On request bargain with the above named Union as exclusive representative of employees in the above de scribed unit with respect to rates of pay wages hours and other terms and conditions of employment and if an agreement is reached embody it in a signed contract (b) Post at its Fall River Massachusetts plant copies of the attached notice marked Appendix 9 Copies of said notice on forms provided by the Regional Director for Region 1 after being duly signed by Respondent s au thonzed representative shall be posted by it immediately upon receipt thereof and be maintained by it for 60 con secutive 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 such notices are not altered defaced or coy ered by any other material (c) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re spondent has taken to comply 9 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 Na tional Labor Relations Board shall read Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the Nation al 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 WE WILL NOT refuse to bargain collectively with United Textile Workers of America AFL-CIO Local 292 as the exclusive representative of the following unit All production and maintenance employees at the Fall River plant including the electrician electn clan s helper and mechanics but excluding all ex ecutives office clerical and plant clerical employ ees second hands guards and professional employ ees and supervisors as defined in the Act WE WILL NOT in any like or related manner interfere with restrain or coerce our employees in the exercise of the rights guaranteed them under Section 7 of the Act 842 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL, on request, bargain collectively with the standing is reached, embody such understanding in a aforesaid Union as the exclusive representative of all em- signed agreement. ployees in the appropriate unit descnbed above with re- spect to rates of pay, hours of employment, and other FALL RIVER DYEING & FINISHING CORP. terms and conditions of employment and, if an under-