Aircraft Peerless, Inc.,

National Labor Relations Board - Board Decisions

Aug 4, 1959

124 N.L.R.B. 310 (N.L.R.B. 1959)

310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
supervisors as defined in the Act," constitute separate appropriate
units for the purposes of collective bargaining within the meaning of
Section 9 (b) of the Act :
A. All technical employees, including senior engineers, project en-
gineers, junior engineers, laboratory technicians, technicians, and
draftsmen.
B. All production and maintenance employees, including plant
clerical employees, stock and file clerks, the secretary to the Super-
visor of the Quality Control Department, group leaders, truckdrivers,
janitors, and quality control employees.'2
[Text of Direction of Elections omitted from publication.]
n The parties stipulated that group leaders were not supervisors , but agreed to exclude
the following as supervisors : Cox (drafting department ) ; Martin and Apple ( engineer-
ing department) ; Glasener , J. Swendell , and W. Swendell ( machine shop ) ; Hullehan
and Kilpatrick ( production ) ; Balgar ( purchasing ) ; Deihl ( quality control ), and Sweitzer
(maintenance).
19 The inclusions and exclusions , as specified , include those agreed to by the parties,
as well as those considered herein.
Aircraft Peerless, Inc. and Lodge No. 113, International Associa-
tion of Machinists , AFL-CIO. Case No. 13-CA-2733. August 4,
1959
DECISION AND ORDER
On April 22, 1959, Trial Examiner John C. Fischer issued his Inter-
mediate Report in the above-entitled proceeding, finding that the
Respondent had engaged in and was engaging in certain unfair labor
practices and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the copy of the Interme-
diate Report attached hereto. Thereafter, the Respondent filed ex-
ceptions to the Intermediate Report and a supporting brief.
Pursuant to the provisions of Section 3(b) of the Act, the Board
has delegated its powers in connection with this case to a three-
member panel [Chairman Leedom and Members Rodgers and
Jenkins].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Inter-
mediate Report,' the exceptions and brief, and the entire record in this
' We correct the following inadvertent inaccuracies in the Intermediate Report: (1) The
Trial Examiner refers to a transfer of stock of the Peerless Tool and Engineering Com-
pany, whereas no such transfer took place ; (2) the Trial Examiner refers to "Christ-
mas 1958" on several occasions, whereas the Christmas period involved herein was
Christmas 1957. ( 3) Two sentences relating to events occurring in September 1957,
which are inadvertently repeated in the Trial Examiner 's detailing of events occurring
on February 10, 1958, are stricken from the Intermediate Report.
124 NLRB No. 39.
AIRCRAFT PEERLESS, INC. 311
case, and hereby adopts the findings, conclusions, and recommenda-
tions of the Trial Examiner except as modified herein.
1. We find, as did the Trial Examiner, that at all times material the
Union represented a majority of the Respondent's employees in the
unit found to be appropriate 2 As is more fully set forth in the Inter-
mediate Report, the Respondent in declining to recognize the Union
did not base its refusal on any doubt as to its majority status. The
reason advanced by the Respondent for denying recognition was its
alleged fear that if it did so it might complicate its position with the
tax authorities. The reason thus offered by the Respondent is not one
cognizable under the Act as justification for an employer's refusal to
recognize and bargain with its employees' representative. We accord-
ingly find, in agreement with the Trial Examiner, that the Respond-
ent's refusal to recognize and bargain with the Union in these cir-
cumstances was violative of Section 8 (a) (5) and (1) of the Act.
In so concluding that the Respondent's conduct was violative of the
Act, we deem it unnecessary to decide, and do not pass upon, the ques-
tion of whether the Respondent was a successor employer to Peerless
Tool and Engineering Company.
ORDER
Upon the entire record in this case and pursuant to Section 10(c)
of the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that Respondent Aircraft Peerless,
Inc., Chicago, Illinois, its officers, agents, successors, and assigns, shall :
1. Cease and desist from :
(a) Refusing to bargain collectively with Lodge No. 113, Inter-
national Association of Machinists, AFL-CIO, as the exclusive repre-
sentative of all the employees in the appropriate unit with respect
to rates of pay, wages, hours of employment, or other conditions of
employment.
(b) In any manner interfering with the efforts of Lodge No. 113,
International Association of Machinists, AFL-CIO, to bargain col-
lectively with the Respondent.
2. Take the following affirmative action which it is found will ef-
fectuate the policies of the Act :
(a) Upon request, bargain collectively with Lodge No. 113, Inter-
national Association of Machinists, AFL-CIO, as the exclusive repre-
sentative of all employees in the appropriate unit, and embody any
understanding reached in a signed agreement.
s The unit comprises all production and maintenance employees at the Respondent's
'Chicago plant , excluding clerical and professional employees , guards, and supervisors.
Production and maintenance units are traditional , statutory units within the meaning
of Section 9(b) of the Act . The Respondent , moreover , in its answer to the complaint,
admitted that such a unit is an appropriate one.
312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(b) Post at its plant at Chicago, Illinois, copies of the notice at-
tached hereto marked "Appendix A." 3 Copies of said notice, to be
furnished by the Regional Director for the Thirteenth Region (Chi-
cago, Illinois), shall, after being duly signed by the Respondent's
authorized representative, be posted by the Respondent immediately
upon receipt thereof, and maintained by it for 60 consecutive days
thereafter, in conspicuous places, including all places where notices to
employees are customarily posted. Reasonable, steps shall be taken
by the Respondent to insure that said notices are not altered, defaced,
or covered by any other material.
(c) Notify the Regional Director for the Thirteenth Region in
writing, within 10 days from the date of this Order, as to what steps
have been taken to comply herewith.
3 In the event that this Order is enforced by a decree of a United States Court of
Appeals, there shall be substituted for the words "Pursuant to a Decision and Order"
the words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an
Order."
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that :
WE WILL NOT interfere with the efforts of Lodge No. 113, Inter-
national Association of Machinists, AFL-CIO, to bargain collec-
tively with us. All our employees are free to become or remain
members of this Union, or any other labor organization.
WE WILL bargain collectively upon request with Lodge No. 113,
International Association of Machinists AFL-CIO, as the ex-
clusive representative of all employees in the appropriate bargain-
ing unit described hereinafter, with respect to rates of pay, wages,
hours of employment, or other conditions of employment, and if
an understanding is reached, embody such understanding in a
signed agreement.
The bargaining unit is :
All production and maintenance employees at our Chicago,
Illinois, plant, excluding clerical and professional employees,
guards, and supervisors as defined in the National Labor
Relations Act.
AIRCRAY r PEERLESS, INC.,
Employer.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
AIRCRAFT PEERLESS, INC.
INTERMEDIATE REPORT
313
STATEMENT OF THE CASE
This proceeding, -brought under Section 10(b) of the National Labor Relations
Act, as amended ( 61 Stat. 136 ), was heard at Chicago , Illinois, on December 1 and
2, 1958, pursuant to due notice, with all parties represented and participating in the
hearing. The complaint, which was -issued on October 15 , 1958, by the General
Counsel of the National Labor Relations Board and which was based on charges
duly filed and served , alleged that Respondent has since October 1, 1957, and at
various times thereafter refused to bargain with the Union as the exclusive repre-
sentative of its employees in an appropriate unit, in violation of Section 8(a)(5)
and (1 ) of the Act . Respondent answered on October 24, 1958, denying that it had
engaged in unfair labor practices as alleged, challenged the jurisdiction of the
Board, and denied that the Union had been the representative for purposes of
collective bargaining of a majority of the employees in the appropriate unit as
alleged in the complaint.
Upon the entire record in the case, and from my observations of the witnesses,
I make the following:
FINDINGS OF FACT
1. THE LABOR ORGANIZATION INVOLVED
Lodge No. 113, International Association of Machinists , AFL-CIO , is a labor
union within the meaning of Section 2(5) of the Act , and represents all production
and maintenance employees at Respondent 's plant in a unit appropriate for collec-
tive-bargaining purposes within the meaning of Section 9(b) of the Act.
It. RESPONDENT 'S BUSINESS ; JURISDICTION
Respondent is now, and at all times material herein has been, a corporation duly
organized under and existing by virtue of the laws of the State of Illinois , and has
maintained an office and place of business at Chicago , Illinois, where it is now, and
at all times material herein has been, engaged in the manufacture of machine parts
and related products . Respondent , in the course and conduct of its business opera-
tions during the calendar year 1958 to date, manufactured , sold, and shipped
machine parts valued at in excess of $50,000 directly to points outside the State
of Illinois . For purposes of this Act , Respondent is the successor to Peerless Tool
and Engineering Company which was, and at all times material herein has been, a
corporation duly organized under and existing by virtue of the laws of the State of
Illinois. At all times material herein, Peerless Tool and Engineering Company main-
tained an office and p lace of business at Chicago , Illinois, where it was engaged in the
manufacture of machine parts. Peerless Tool and Engineering Company, in the
course and conduct of its business operations during the calendar year 1957, manu-
factured , sold, and shipped machine parts valued at in excess of $ 50,000 directly to
points outside the State of Illinois . I find that Respondent is, and at all times
material herein has been, engaged in commerce and affects and has affected com-
merce within the meaning of Section 2(6) and ( 7) of the Act, and that it would
effectuate the policies of the Act to assert jurisdiction herein.
III. THE UNFAIR LABOR PRACTICES
Peerless Tool was first organized in 1938 by Edward Reither, Lena Reither, and
James R. Hills to engage in the manufacture of aircraft engine parts in the city
of Chicago . At some later date, possibly in 1951, the Lawrenz family , Otto B.
Lawrenz and Edna S. Lawrenz , his wife, with their two sons, Melvin and Wesley,
took over the stock of the corporation and operated the plant and business, which
was located at 4431 West Division Street, Chicago, Illinois. In 1946, the plant's
production and maintenance employees , which then numbered about 185, voted at
a Board-conducted election to be represented by the Die and Toolmakers Lodge 113
of the International Association of Machinists , AFL-CIO. Respondent 's counsel,
Stickler, who represented the Peerless Tool Company before it ceased doing business
on September 23, 1957, conceded at the hearing that from the time that Lodge 113
was certified by the Board in April 1946 until it ceased its business operations in
September 1957, it was the majority representative of the Peerless Tool production
and maintenance employees . Collective -bargaining contracts covering the wages,
hours , and working conditions of the production and maintenance employees of
Peerless Tool were executed during those years, the last contract being negotiated
in June 1957 to expire in June 1958.
314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
This last contract between Peerless Tool and Lodge 113 contained the usual!
recognition and union-security clauses. It was made -binding on Peerless Tool and
its "successors and assigns." Since at least 1951, Peerless Tool financed its business,
operations with capital furnished by the National Acceptance Corporation of
Chicago, Illinois. To secure its loans, National Acceptance held a chattel mortgage
on all of the machinery and equipment in the plant and it also had factoring:
arrangements on all of its accounts receivable, as well as a factor's lien on all the
raw materials, work in process, and inventory. At the time Peerless Tool ceased.
doing business on or about September 23, 1957, it owed National Acceptance the
sum of $299,702.43. For some years past also, the U.S. Internal Revenue Service
had been checking the Peerless plant operation and its income from the plant for
the years 1943 to 1945, inclusive. At one time the Revenue Service claimed that
Peerless Tool owed the Government over $1,000,000 in corporate income taxes.
However, attorneys for Peerless Tool resisted this claim and the amount of the tax.
deficiency was finally determined in August 1957. At that time the Revenue Service
notified Peerless Tool that its final tax deficiency was slightly more than $400,000..
It demanded that Peerless Tool make payment of this amount.
While the dispute with the Revenue Service was in progress and during May
1956, the Lawrenz family created another corporation known as the Aircraft
Peerless, Incorporated, the Respondent herein. According to Melvin Lawrenz, an.
officer of Peerless Tool, this corporation was formed in May 1956, and was kept in
an inactive state to be used "in case we ran into trouble. We knew that we had a tax.
lien that we were going to be faced with." The new corporation was registered to
do business at 4431 West Division Street, Chicago, Illinois, where the plant of the
Peerless Tool was located, and it was authorized to engage in the same type of
production as Peerless Tool-that is, the manufacture of aircraft engine parts. The
title of the plant building where Peerless Tool operated was held in the name of
Edna S. Lawrenz, the wife of Otto B. Lawrenz, president of Peerless Tool. The
new corporation was, like the old, controlled exclusively by members of the Lawrenz
family. Only one significant change appears in the stock ownership structure of the
new corporation. Otto B. Lawrenz and Edna S. Lawrenz, the parents, relinquished
control of their stock and turned over their shares to their son, Melvin E. Lawrenz,.
who assumed the leadership and control of the new corporation and became its;
president. A small amount of the stock was given to Melvin E. Lawrenz, Jr., the son,
of Melvin E. Lawrenz, to enable him to become a director and officer of the new
corporation.
Prior to Peerless Tool ceasing to do business on September 23, 1957, the produc-
tion work at the plant was supervised and directed by William R. McEvilly.
McEvilly's aunt, M. Evelyn McEvilly, was its assistant secretary-treasurer. When,
the new corporation was established, William R. McEvilly became its vice president
and his aunt became secretary-treasurer. Melvin E. Lawrenz, Jr., was then made
assistant secretary-treasurer. However, neither William R. McEvilly nor his aunt,.
M. Evelyn McEvilly, own any stock in the Respondent corporation. The Lawrenz
family stockholdings in Peerless Tool Company were, in the reorganization of the
business in September 1957, concentrated in the hands of Melvin E. Lawrenz, Sr.,
who owns 99 percent of the stock. Otto B. Lawrenz, the father and former presi-
dent of Peerless Tool, was given the job as general production manager of the plant
with McEvilly as his assistant.
Faced with the necessity of making a tax payment of over $400,000, the Lawrenz
family decided, as they had long planned to do, to abandon Peerless Tool Corpora-
tion and carry on the business in the name of the Respondent, the Aircraft Peerless,
Incorporated, which had been organized in May 1956 to meet the situation when:
and if it occurred. However, the Lawrenz family was advised by its attorneys that
they could not escape the payment of the tax by directly transferring the assets
and equipment of Peerless Tool to the new corporation because the new corpora-
tion would then be held liable for the tax as a transferee. As explained by the
Respondent's counsel at the hearing and in his brief, he was very careful to arrange
matters so that the new corporation would take over the business in such a manner
that it would not be held liable for the tax and other obligations of Peerless Tool.
One of the problems facing the Respondent's attorney in this respect was the
collective-bargaining contract of Lodge 113, which recited that it was binding upon
Peerless Tool "and its successors and assigns ." As further explained by the Re-
spondent's attorney in his brief, he did not want the new corporation to incur any
obligations of Peerless Tool because he feared that the Revenue Service would
seize upon such evidence to impose the tax on the new corporation on the theory
of transferee liability.
Mr. Arthur Netrefa, the IAM business agent assigned to the Peerless Tool plant,.
credibly testified that in September 1957 he was invited by the Lawrenz family to,
AIRCRAFT PEERLESS, INC. 315
attend a conference at the plant office on the morning of September 21, 1957. At
this conference, Melvin E. Lawrenz and Otto B. Lawrenz, the father, assisted by
Attorney Stickler, explained the tax situation to him and the plans they had to
continue operating the plant in the name of the new corporation . They told him
that Peerless Tool could not pay the tax and that the corporation's assets were in
imminent danger of being taken over by the Government agents to secure the tax
lien. They further explained to him that they did not wish to interrupt the operations
of the plant in any way and that they wanted the employees to stay on the job
without losing a paycheck. They informed him further that if the IAM would
cooperate in the transfer of the business from Peerless Tool to the Respondent
corporation the men could continue working without interruption. When Netrefa
asked him if the new corporation was ready to assume the obligations of the con-
tract it had with Peerless Tool, they indicated that they could not do that because
it might compromise them with the Revenue Service. They further pointed out
to him that since it was planned that the new corporation should take over the
business indirectly through a foreclosure sale to be conducted by the National
Acceptance Corporation on its chattel mortgage foreclosure and on its factors liens,
the new corporation could not be expected to assume the contract obligations of
Peerless Tool with the Union. They assured him, however, that if the Union went
along with the plan the employees would not lose a day's work and that their
paychecks would be as good under the new corporation as they had been under
the old.
After much discussion, it appears that Netrefa was persuaded to go along with the
plan. He was then requested to appear at the plant on the following Monday
morning, September 23, 1957, to explain the situation to the employees and obtain
signed application blanks for new employment with the new corporation. On the
same day, September 21, 1957, National Acceptance Corporation served Peerless
Tool with a notice of chattel mortgage foreclosure and of a public auction sale of
the assets of Peerless Tool on September 27, 1957. These notices were posted at
the several places in and around the plant on September 21, 1957. Custodians of
National Acceptance arrived at the plant on the following Monday, September 23,
but the plant continued to operate as usual without interruption . Netrefa appeared
at the plant on Monday morning, September 23, to address the employees and
explained the plan of the Lawrenz family to operate the business in the name of
the new corporation. He explained the situation of the Company in relation to
its tax problem and what was expected of them. He also told them that the Union's
contract had to be canceled in order for the plant to continue operating under the
new corporation. There was some protest on the part of Union Shop Steward
Anthony B. Chmielak and some of the other employees when they heard that the
contract would have to be canceled. However, Melvin Lawrenz assured them that
if they went along with the new corporation now it would go along with them
later.
Later in the day when Netrefa returned to the plant to address the night-shift
employees , Chmielak, still not convinced , engaged in a discussion prior to the meet-
ing with Netrefa and Attorney Stickler over the binding effect of the Peerless Tool
contract upon the new corporation. He was then told by both Stickler and
Netrefa not to insist upon it. When Netrefa addressed the employees of the night
shift that afternoon, he assured them that if the employees went along, with the new
corporation, it would go along with them later. With these assurances, all of the
employees on both shifts agreed to the plan and signed employment application
blanks for new employment with the new corporation. All the employees also
executed new forms to comply with the Espionage Act because the new corporation,
would, like the old, continue to manufacture aircraft parts for defense purposes.
The plant continued to operate normally during the entire week of September 23,
1957, while the custodians of the National Acceptance Corporation were in posses-
sion of the plant.
On September 27, 1957, the National Acceptance Corporation, with slight
resistance from other bidders, purchased all the assets, equipment, accounts receiv-
able, and other property of Peerless Tool for the sum of $225,500. On September
30, 1957, National Acceptance turned the assets over to the new corporation and
reinstated its chattel mortgage, its factoring arrangements on the accounts receivable,
and its factors lien on the raw materials and inventory exactly as it had previously
arranged with Peerless Tool. In addition to having no break in the production while
the transition from the old to the new corporation was taking place, the record
shows that the production methods employed by the new corporation were identical
to those used by Peerless Tool; the same work classifications and employees were
continued in the plant; the former Peerless Tool supervisory and nonsupervisory
employees were hired; and the same work schedules and work shifts were employed.
316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The wage rates and other general work conditions which had existed when Peerless
Tool operated the business were adopted by the new corporation.
In the months following the taking of possession of the plant by the new corpora-
tion, its officers dealt with the union representatives in substantially the same manner
as they had done while Peerless Tool was operating the business. The same union
shop steward and shop committee continued to function as before and any questions
or grievances which arose were discussed with the same shop steward and the same
union shop committee that had taken care of the employee matters when Peerless
Tool operated the plant. Sometime in October 1957, President Melvin Lawrenz
inquired of Shop Steward Chmielak whether the employees still had a union in
the plant and if so whether they still wanted Lodge 113 to represent them. Chmielak
told him he would make a check of the employees and let him know. Later
Chmielak returned to inform him that a check of all the employees in the plant
indicated that they still wanted Lodge 113 to represent them.
Shortly after the new corporation took possession of the plant, a few employees
were laid off. Later in October and November 1957, several more employees were
laid off. At the time that Peerless Tool gave up the plant and Respondent took
it over, there were approximately 74 production and maintenance employees in
the plant. The Respondent's attorney conceded at the hearing that Lodge 113
represented at least 63 of these employees at that time. It was also stipulated by
the Respondent's attorney at the hearing that on January 1, 1958, the Respondent's
work force had been reduced by layoffs to 40 employees and that 28 of these
employees were then represented by Lodge 113. It was further stipulated that by
the end of February 1958, there were only 24 employees left in the unit and that
Lodge 113 represented 18 of these employees at that time. Thus, it is apparent,
and I formally find, that Lodge 113 represented a majority of the Respondent's
production and maintenance employees working at the plant in the period between
September 23, 1957, and at least up until the end of February 1958.
During the months of October and November 1957, Union Agent Netrefa
attempted to persuade the Respondent's representatives to sign a new contract with
Lodge 113, but each time he was told they could not do so because it might com-
promise the new corporation with the tax authorities. During this period, the
Respondent's representatives indicated to the union shop steward and other union
representatives that they would give all of the same conditions when a new contract
was executed with the Union with the possible exception of the seniority clause
of the contract.
Shortly before Christmas 1958, a meeting was held between the Respondent's
representatives and Union Agent Netrefa and Shop Steward Chmielak. The pur-
pose of the meeting was to discuss what concessions the new corporation would
make to the Union when the new contract was executed. During the meeting
Otto B. Lawrenz stated he had gotten along well with the Union, he liked it, and
he would "go along" with it. Turning to his son, Melvin, and Assistant Plant
Manager McEvilly, he asked them if that was all right with them. Both responded
in the affirmative. Otto Lawrenz then told the union agents that he would be
willing to give the employees the same conditions they had had before when they
worked for Peerless Tool, except that they could no longer get the 3 weeks'
vacation with pay. President Melvin Lawrenz and Assistant Plant Manager
McEvilly indicated they were willing to go along with such a contract. However,
no definite agreement seems to have been reached at this conference and no
indication was given when the new contract would be executed.
A few days before Christmas 1958 the Respondent posted a notice at the plant that
,there would be no half-holiday allowed to the employees on Christmas Eve and New
Year's Eve. When the employees were working for Peerless Tool, they were always
given these half-holidays and provision for them had been made in the contract.
The Respondent's announcement, taking away the half-holidays from the employees,
aroused the anger of the employees and Union Shop Steward Chmielak again urged
his argument that the Peerless Tool contract provisions were binding on the Re-
spondent. In addition to rejecting this claim, Assistant Manager McEvilly announced
that the Respondent could no longer recognize or deal with Lodge 113 as the bargain-
ing agent of the employees.
On January 21, 1958, International representatives of the IAM, accompanied by
Business Agent Netrefa, conferred with the Respondent's attorney, Stickler, at his
office. At this conference, the union representatives requested that Respondent recog-
nize Lodge 113 as the majority representative of the Respondent's production and
maintenance employees and negotiate a new contract with it. Stickler again stated
that the Respondent could not do so because he feared complications with the tax
authorities. On January 24, 1958, the JAM International representative, J. W. Ram-
sey, sent a letter by certified mail to the Respondent, informing it that a majority of
AIRCRAFT PEERLESS, INC. 317
its production and maintenance employees had authorized Lodge 113 to represent
them for the purposes of collective bargaining and requested a conference with the
Respondent's representatives for the purpose of negotiating a contract. When the
Respondent failed to answer this letter, Lodge 113 filed a petition with the Board's
Thirteenth Regional Office in Chicago (13-RC-5846). The petition recited that at
that time the Respondent had 22 employees in the unit.
At a joint conference held at the Regional Office on February 10, 1958, the Re-
spondent indicated it was willing to agree to a consent election being held. (These
notices were posted at several places in and around the plant on September 21, 1957.)
Custodians of the National Acceptance Corporation arrived at the plant on the fol-
lowing Monday but the plant continued as usual without any interruption. Although
the union representatives first were inclined to accept this offer, they later, after con-
sulting with their counsel, rejected the offer and indicated that they would withdraw
the petition. On the following day, February 11, 1958, the Union withdrew its peti-
tion and filed an 8(a) (5) charge, alleging that the Respondent had refused to bargain
with the Union. At no time after January 21, 1958, when the Union formally de-
manded recognition and bargaining rights, did the Respondent's representatives ques-
tion the Union's claim that it represented a majority of the Respondent's production
and maintenance employees. Its refusal to grant recognition and bargaining rights
to Lodge 113 was not based on any doubt as to its majority status but on its fear of
complications with the tax authorities if it did so. Indeed, at the hearing, Respond-
ent's counsel conceded that Lodge 113 represented a majority of the Respondent's
employees during and after the period when the demands for recognition were being
made in January and February 1958.
Conclusion
The Board has long held that a bargaining relationship once established by a
certification to a union as a majority representative of a unit of employees runs with
the "employing industry" and that a mere change of ownership does not absolve a
successor from the duty to bargain with the certified union.' In the present case, I
conclude that on the basis of the facts found by me and recited above, the Respondent
took over intact the business operated by Peerless Tool and continued to operate it
with the same employees and without any substantial change in the operations. Al-
though the Respondent is a separate corporate entity, the facts indicate it is controlled
by the members of the Lawrenz family, the same group of persons who controlled
and operated the Peerless Tool Company. The evidence is clear that the Respondent
corporation was organized by the Lawrenz family for the sole purpose of continuing
their business in the name of the new corporation in the event that Peerless Tool
Company could not solve its tax difficulties with the Government.
On the basis of the facts found, I conclude that the Respondent is the successor of
Peerless Tool, and that it is obliged, under well-settled Board law, to recognize the
majority status of Lodge 113, which was first established by the Board in an election
held in April 1946. The evidence indicates clearly that Lodge 113 had a majority
status which continued without a break from the time it was certified in 1946 to the
time when Lodge 113 again demanded recognition and bargaining rights from the
Respondent in January and February 1958. Although I am convinced that Business
Agent Natrefa made some arrangement with the Lawrenz family not to press the legal
claim of the Union, the Respondent was bound to honor the substantive terms of the
contract which it had with the Peerless Tool Company. I disagree with the Respond-
ent's contention that because he had so agreed he was thereby giving up the Union's
representative rights as the majority agent of the employees. The Board has fre-
quently held that a disclaimer of employee representation must be clear and
unequivocal.
I find and conclude upon all of the facts that the Union did not surrender its right
to represent the employees when it agreed not to insist that the new corporation as-
sume the obligation of the contract which it had executed with the Union. On the
contrary, I find that both the union representatives and the Respondent's representa-
tives considered the Union's majority status to continue in existence after the Re-
spondent took over the business and that it was only a question of negotiating a new
contract with the Respondent corporation at some time in the future when the Re-
spondent's attorney thought it safe to do so.
'Investment Building Cafeteria, 120 NLRB 38; Alamo White Truck Service, Inc.,
1'22 NLRB 1174. N.B.: The Intermediate Report of the Alamo case was written by
John C. Fischer, the Trial Examiner in this case.
318 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
That the Respondent 's representatives understood this to be the situation is in-
dicated by the conversation they had with the union representatives at the conference
which took place at the Respondent 's plant shortly before Christmas 1958. At this
conference , the Lawrenzes , both father and son, indicated their willingness to sign a
new contract with the Union based generally on the terms of the old contract. Hav-
ing found that the Respondent is a true employer successor of Peerless Tool in the
operation of the plant where the employees represented by the Union were employed,
it follows that it is bound by the bargaining relationship and majority status of the
Union established by the Board certification issued in May 1946. The mere fact that
the certificate was issued so long ago is immaterial in the circumstances of this case
since the record shows that there has been a continuity of the majority status of
Lodge 113 without any break from the time the certificate was issued.
In such a situation and in view of all of the other facts and circumstances in this
case, I conclude that the mere change in ownership of the employment enterprise
from Peerless Tool to National Acceptance and from National Acceptance to the
Respondent was not so unusual a circumstance as to effect the bargaining rights of
the Union , which were acquired by the issuance of the Board certification and main-
tained and continued in effect continuously thereafter until the Union again demanded
recognition in January 1958. The Respondent 's contention that since it did not
acquire the business directly from Peerless Tool it cannot be considered the business
successor of Peerless Tool is without merit . Cf. Butler Chemical Co., 116 NLRB
1041 at 1049 . The Respondent 's reliance on N.L.R.B. v. Birdsall-Stockdale Motor
Company, 208 F. 2d 234 (C.A. 10), and Symns Grocer, 109 NLRB 346, is mis-
placed . In those cases , the Board made an exception to its successor rule in cases
where a purchaser of the business who had no previous connection with the seller
buys the business without knowledge of unfair labor practices committed by the
seller. Since the character and composition of the bargaining unit remained intact
after the transfer of the business to the Respondent , and there was no substantial
change in the character of the employing enterprise , the obligation to bargain,
which was imposed by statute upon Peerless Tool, remained upon the Respondent
as the successor employer of the employees included in the bargaining unit.
Where, as here, no essential attribute of the employment relationship has been
changed as a result of the transfer , the certification continues with undiminished
vitality to represent the will of the employees with respect to their choice of a bar-
gaining agent , and the consequent obligation to bargain subsists notwithstanding the
change in the legal ownership of the business enterprise . The Respondent has failed
to show that the majority status of the Union was in any way impaired by the trans-
fer of the business from Peerless Tool to the Respondent.2
For the above reasons I conclude that beginning with at least January 21, 1958,
the Respondent violated Section 8 ( a)(5) of the Act when it is refused to meet and
negotiate a new contract with Lodge 113, International Association of Machinists,
AFL-CIO.
It is consequently found that the following employees of the Respondent consti-
tute a unit appropriate for the purpose of collective bargaining within the meaning
of Section 9(b) of the Act: All production and maintenance employees at Respond-
ent's plant , excluding clerical and professional employees , guards, and supervisors
as defined in the Act.
It is further found that at all times since July 18, 1957, Lodge No. 113 , Interna-
tional Association of Machinists , AFL-CIO, has been the representative for the
purpose of collective bargaining of a majority of employees in the appropriate unit,
and by virtue of Section 9(a) of the Act has been and is now the exclusive repre-
sentative of all employees in said unit for the purpose of collective bargaining with
respect to rates of pay, wages , hours of employment , or other conditions of
employment.
It is also found that on January 21, 1958 , and at all times thereafter , the Respond-
ent failed and refused to recognize and to bargain with the International Association
of Machinists as the exclusive representative of the employees in the appropriate unit.
It is further found that by the above-described action the Respondent interfered
with , restrained , and coerced its employees in the exercise of rights guaranteed in
Section 7 of the Act.
2 N.L.R.B. v. Blair Quarries , Inc., 152 F . 2d 25 (C.A. 4) ; Northwest Glove Co., Inc.,
74 NLRB 1697; Simmons Engineering Co., 65 NLRB 1 3T3; Stonewall Cotton Mitts, 80
NLRB 325.
JEWEL TEA CO., INC., EISNER FOOD STORES DIVISION
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
319
The activities of the Respondent set forth in section III, above , occurring in con-
nection with the operations of the Respondent described in section I, above, have
:a close, intimate, and substantial relation to trade, traffic, and commerce among
the several States, and tend to lead to labor disputes burdening and obstructing
-commerce and the free flow of commerce.
V. THE REMEDY
Having found that the Respondent has engaged in unfair labor practices , it will
be recommended that it cease and desist therefrom and take certain affirmative
action to effectuate the policies of the Act.
It having been found that the Respondent has refused to bargain collectively with
Lodge No. 113, International Association of Machinists , AFL-CIO, thereby interfer-
ing with , restraining , and coercing its employees , it will be recommended that the
Respondent cease and desist therefrom . It will be further recommended that the
Respondent , upon request , bargain collectively with Lodge No. 113, International
Association of Machinists , AFL-CIO, with respect to rates of pay, wages , hours of
,employment , and other terms and conditions of employment of employees within
the appropriate unit, and if an understanding is reached , embody such understanding
in a signed agreement.
Upon the basis of the foregoing findings of fact , and upon the entire record in
the case, I make the following:
CONCLUSIONS OF LAW
1. Lodge No. 113, International Association of Machinists , AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the Act.
2. All production and maintenance employees at Respondent 's plant , excluding
clerical and professional employees , guards, and supervisors as defined in the Act,
constitute a unit appropriate for the purposes of collective bargaining within the
meaning of Section 9(b) of the Act.
3. Lodge No. 113, International Association of Machinists , AFL-CIO, was, on
July 18, 1957, and at all times since has been , the exclusive representative of all
employees in the appropriate unit for the purpose of collective bargaining within
the meaning of Section 9(a) of the Act.
4. By refusing to bargain collectively with Lodge No. 113, International Asso-
ciation of Machinists , AFL-CIO, as the exclusive bargaining representative of the
employees in the appropriate unit , the Respondent has engaged in and is engaging
in unfair labor practices within the meaning of Section 8(a)(5) of the Act.
5. By said acts the Respondent has interfered with, restrained , and coerced its
employees in the exercise of rights guaranteed in Section 7 of the Act, thereby
engaging in unfair labor practices within the meaning of Section 8(a) (1) of the Act.
6. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]
Jewel Tea Co ., Inc., Eisner Food Stores Division and United
Retail Workers Union (Independent ), Petitioner. Case No.
13-RC-6478. August 4,1959
DECISION AND CERTIFICATION OF REPRESENTATIVES
Pursuant to a stipulation for certification upon consent election,
executed by the parties on March 23, 1959, an election by secret ballot
was conducted on April 11, 1959, under the direction and supervision
of the Regional Director for the Thirteenth Region among the em-
ployees in the appropriate unit. At the conclusion of the election, the
124 NLRB No. 35.