Allied Chemical Corp.

National Labor Relations Board - Board Decisions

Jun 29, 1965

153 N.L.R.B. 849 (N.L.R.B. 1965)

UNION TEXAS PETROLEUM, ETC. S49
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered , defaced, or covered by any other material.
Employees may communicate directly with the Board 's Regional Office, Federal
Office Building , Room 2023 , 550 Main Street , Cincinnati , Ohio, Telephone No. 381-
2200 , if they have any question concerning this notice or compliance with its
provisions.
Union Texas Petroleum , a Division of Allied Chemical Corpora-
tion and Oil , Chemical and Atomic Workers International
Union, Local 4-243, AFL-CIO, Case No. 23-CA-1556. June 29,
1965
DECISION AND ORDER
On November 21, 1963, Trial Examiner Benjamin B. Lipton issued
his Decision in the above-entitled proceeding, finding that the
Respondent had engaged in certain unfair labor practices and recom-
mending that it cease and desist therefrom and take certain affirma-
tive action, as set forth in the attached Trial Examiner's Decision.
The Respondent thereupon filed exceptions to the Trial Examiner's
Decision and a brief in support thereof. The Charging Party filed
cross-exceptions, a brief in support of the Trial Examiner's Decision,
and a brief in answer to the Respondent's exceptions. The General
Counsel submitted a brief in support of the Trial Examiner's Decision.
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, as amended, the National Labor Relations Board has
delegated its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Brown 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 Trial
Examiner's Decision, the exceptions and cross-exceptions, the briefs,
and the entire record in this case, and finds merit in certain of the
exceptions of the Respondent. Accordingly, the Board 1 hereby adopts
the findings, conclusions, and recommendations of the Trial Examiner
only to the extent that they are consistent herewith?
The record herein clearly demonstrates, and we find, that the
Respondent intended at all times to take over the Winnie plant, pur-
chased from Texas Gas Corporation, in a shutdown condition. The
I Member Brown concurs in the result herein
a Respondent ' s motion for oral argument is denied . Further , we find without merit the
Respondent 's allegation of bias on the part of the Trial Examiner in his analysis of cer-
tain of the facts herein There is no basis for finding that bias existed merely because
the Trial Examiner resolved some of the important factual conflicts arising in this proceed-
ing in favor of one side rather than the other . As the Supreme Court has stated, ". . .
[T]otal rejection of an opposed view cannot of itself impugn the integrity or competence
of a trier of fact." N.L.R B. v. Pittsburgh S.S. Company, 337 U S. 656, 659 (1949).
153 NLRB No. 71.
796-027-66-vol. 153-55
850 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
record further demonstrates, and we find, that Respondent planned to
convert all the existing production areas from a gasoline refinery to
a plant producing petrochemicals .3 Although title to the plant passed
to the Respondent on December 31, 1961, the plant was not actually
shut down until February 14,1962. It is evident from the record, how-
ever, that this passage of title was accomplished on December 31 solely
as an accommodation to Texas for purposes unrelated to the matter
here under consideration.4
During the 6-week period between December 31 and the Febru-
ary 14 shutdown date, the Respondent assumed the responsibility for
the cost of running the plant but engaged Texas to operate it on a
cost-plus-fixed-fee basis. In our view, the record contains insufficient
evidence to warrant a finding that, during this period, the relationship
between the Respondent and Texas, under which Texas operated the
plant, was one of joint or coemployers or one of agency, which would
constitute Allied the employer of the Winnie employees and obligate
it to bargain with the Union representing these employees.
Contrary to the Trial Examiner, we find that the Respondent's rep-
resentative, Quinn, who was assigned to the Winnie plant during the
December 31-February 14 period, did not engage in such activities
or possess such authority over the day-to-day operations of the plant
as to warrant a finding that the Respondent was a joint or coemployer
with Texas (or that Texas was the Respondent's agent). The record
demonstrates that Quinn did no more than pass upon expenditures
in excess of $500, including items involving major repairs of existing
equipment, all of which, if not scrutinized by the Respondent, might
have resulted in waste when the conversion was undertaken.
Nor do we find that the Respondent's traffic manager, Herrington,
directed the work of the rackmen and pumpers employed by Texas at
the Winnie plant during this period. Herrington was employed at the
Respondent's Houston sales office which had taken over Texas' sales
functions, but which was completely divorced from the production
and maintenance facilities at Winnie. (It has not been contended that
the takeover of Texas' sales functions by the Respondent constitutes
evidence with respect to the relationship of the two companies at the
Winnie plant.) Herrington forwarded sales memorandums either in
writing or orally to these employees. The memorandums contained
information as to the number of the truck or tank cars to be loaded;
the scheduled arrival of barges; the type of product to be loaded on, or
unloaded from, the truck, tank car, or barge; and the amount of the
load. We find that these memorandums were no more than routine
3 Seven million dollars had been budgeted by the Respondent for this substantial
conversion.
S The Respondent had not desired to take over the plant until sometime thereafter, in-
asmuch as its conversion plans would not be completed by December 31.
UNION TEXAS PETROLEUM, ETC. 851
communications between a central traffic department and the depart-
ment in a particular plant which is responsible for shipping and
receiving.
The record demonstrates that the plant was shut down and that all
of the production and maintenance employees were terminated prior
to the Respondent's physical takeover of the premises, as had been
originally planned by the parties to the sale of the plant. There was
never any deviation from the intent of the Respondent to receive, and
the intent of Texas to transfer, to shutdown plant. The type of work
to be performed at the plant, the products, and the customers for these
products, were to be different after the plant was shut down and con-
verted. We find no evidence in the record to indicate that the shut-
down of the plant, or the layoff of the production and maintenance
employees, was motivated by union animus on the part of the Respond-
ent. Rather, we find that the parties to the sale consummated their
bargain in the manner bargained for and with the legitimate business
interests of both in mind.
Consequently, we find further that in these circumstances the
Respondent had no obligation to bargain with the Union with respect
to Texas' employees.5 In this connection we note that Texas continued
to bargain with the Union with respect to terms and conditions of
employment of its employees, including severance pay, throughout the
December 31-February 14 period, and thereafter, until all outstand-
ing matters were agreed upon between the Union and Texas.
Accordingly, and unlike the Trial Examiner, we find that the
Respondent has not violated Section 8 (a) (3), (5), and (1) of the Act,
and we shall order that the complaint be dismissed in its entirety.
[The Board dismissed the complaint.]
5 Cf Chenrock Corporation, 151 NLRB 1074, where the purchaser of a plant had
continued to produce the same products, had retained the same clientele , and had hired
most of the former employees to perform the same work , but attempted to deal unilaterally
with certain other, union represented , employees with respect to terms and conditions of
their hire and employment . The Board held the latter to be employees of the purchaser
and ordered the purchaser to bargain with the employees ' representative.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
This proceeding involves allegations by the General Counsel of the National Labor
Relations Board that Union Texas Petroleum, a Division of Allied Chemical Corpo-
ration, herein called the Respondent, engaged in unfair labor practices in violation
of Section 8(a)(1), (3), and (5) of the Act.1 A hearing was held before Trial
Examiner Benjamin B. Lipton in Houston, Texas, from June 25 through 28, 1963.
'The original charge was filed on January 17 and served on January 18, 1963, and an
amended charge was filed on March 8 and served on March 12, 1963. The employers
named in the charges were Union Texas Petroleum, a Division of Allied Chemical Corpo-
ration ; Texas Gas Corporation ; Pan American Petroleum Corporation ; and Carl M. Loeb
Rhoades & Co . On April 23, 1963, the complaint was issued by the General Counsel,
naming only the Respondent herein.
852 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
All parties were represented and participated in the hearing and were afforded full
opportunity to examine and cross -examine witnesses , to argue orally on the record,
and to file briefs Respondent 's motion to dismiss the complaint is disposed of in
accordance with the findings below. Briefs received from all parties , including a
reply brief from Respondent , have been duly considered.
Upon the entire record in the case ,2 and from my observation of the demeanor of
the witnesses , I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Allied Chemical Corporation , herein called Allied Chemical , is a New York corpo-
ration engaged generally in the production of chemicals and chemical products.
Union Texas Petroleum is a division of Allied Chemical engaged in the business of
oil and gas exploration , development , processing , and refining of petroleum energy
products and petrochemicals , with facilities in several States of the United States,
including Oklahoma, Texas , and Louisiana . Union Texas Petroleum owns, operates,
and maintains a plant in Winnie , Texas, known as the Winnie refinery , which is
particularly involved in this proceeding . During the 12 months preceding issuance
of the complaint , Respondent in the course of its operations at its Texas facilities had
a direct outflow of products in interstate commerce valued in excess of $50,000, and a
direct inflow of materials valued in excess of $50,000. Respondent admits, and I find,
that it is engaged in commerce within the meaning of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Oil, Chemical and Atomic Workers International Union, Local 4-243, AFL-CIO,
herein called the Union , is a labor organization within the meaning of the Act.
III THE UNFAIR LABOR PRACTICES
A. Introduction and summary of events 3
The alleged unfair labor practices stein directly from Respondent 's actions relating
to its purchase , effective December 31, 1962,4 of the physical assets of the Winnie
refinery and related facilities from Texas Gas Corporation , herein called Texas Gas,
which in operating these facilities for many years had bargaining relations with the
Union as certified representative of the production , operating , and maintenance
employees . The Union 's current bargaining agreement with Texas Gas was expressly
excluded from the terms of the sale From January 1 through February 14, under a
separate "Operating Agreement ," Respondent retained Texas Gas as a contractor to
operate most of the purchased facilities . On February 14, Respondent terminated
the operating agreement , the facilities in substantial part were shut down, and the
hourly paid employees , represented by unions , were terminated . Most other employ-
ees and supervisors of Texas Gas had been hired by Respondent . At least for a time
after February 14, the Winnie refinery was run on a reduced scale by former Texas
Gas supervisors together with a contingent of employees brought in by Respondent
from its other plants. Beginning about February 26, Fluor Maintenance , Inc., herein
called Fluor, entered upon the Winnie premises to perform all maintenance , repair,
and construction work, pursuant to an independent contract executed with Respond-
ent. In March , Respondent invited employment applications from the former Texas
Gas operating employees , but not from the maintenance employees .5 Early in June,
with refinery operations resumed on a fuller scale , Respondent had a complement of
37 hourly paid employees , excluding employees in maintenance work. Of the 37
-thus employed , 11 were former Texas Gas employees.
2 An exhibit received from Respondent after the hearing is admitted as Respondent's
Exhibit No 62A.
s The summary appears desirable for an Initial understanding of the issues.
• Unless otherwise specified , all dates in the months from October through December
are in the year 1962, and those in the months from January through July are in the
year 1963.
5 As stipulated , the Texas Gas payroll as of February 8 reflects employment of 87 hourly
paid employees , including 14 maintenance employees , constituting the bargaining unit of
the Union . Also included on this payroll were eight pipefitters and five electricians and
instrumentmen, separately represented by craft unions The complaint alleges discrimina-
tion as of February 14 against 72 named employees represented by the Union.
UNION TEXAS PETROLEUM, ETC. 853
B. Contentions and issues
Concerning Section 8(a)(3), the complaint alleges, in substance, that Respondent
was discriminatorily motivated in terminating or causing the termination on Febru-
ary 14 of 72 employees represented by the Union. The broad contentions are that
Respondent's purpose underlying all its actions was to take over the Winnie plant
without employing the existing hourly paid employees because of their union repre-
sentation; that Respondent resorted to the device of the operating agreement in having
Texas Gas, as a purported independent contractor, continue to run the plant for a
period after January 1 until Respondent was ready in its own name to assume control
with the personnel it desired; and that Respondent, by terminations and refusals to
hire, effectively eradicated the Union's majority status at the plant. The General
Counsel makes clear that this aspect of the complaint is rested upon grounds that
Respondent acted to remove the union-represented employees as a group, and does
not allege separate cases of discrimination against any individual employees. At the
same time, the General Counsel relies upon all the evidence, including Respondent's
hiring procedures in testing and selecting applicants for staffing the Winnie plant, to
establish Respondent's overall discriminatory motive
Concerning Section 8(a)(5), the General Counsel's reasoning is that Respondent,
as owner, actually exercised effective control over the Winnie operation during the
period of the operating agreement from January 1 through February 14; that Texas
Gas during this period was not an independent contractor but merely an agent of
Respondent; that Respondent was in legal effect a coemployer with Texas Gas; that
Respondent was therefore obliged to bargain with the Union, and that beginning on
January 11 it refused to do so upon the Union's requests. Relying upon actual evi-
dence of the Union's majority after January 1, the General Counsel makes no conten-
tion that Respondent is legally the successor of Texas Gas for the purpose of binding
it to the Union's certification or the Union's current contract with Texas Gas.e In
separate counts, the complaint asserts that Respondent generally failed to bargain
with the Union, and that it engaged in specific violations by. unilaterally effecting a
partial shutdown of the Winnie refinery and causing the termination of specified
hourly paid employees; refusing to bargain with the Union concerning the effects upon
these employees of the decision to shut down the Winnie refinery, unilaterally subcon-
tracting maintenance work out of the bargaining unit; and failing to give prior notice
to and consult with the Union concerning the decision to shut down the Winnie
refinery and the decision to subcontract the maintenance work. As a remedy for the
alleged Section 8(a) (5) violations, the General Counsel seeks, in addition to a bar-
gaining order, the reinstatement and backpay for the specified hourly paid employees,
in order to restore the situation to status quo ante.
Respondent defends essentially as follows: It had acquired the Winnie refinery for
the purpose of converting the basic nature of the plant from production of energy
products to that of petrochemicals. The operating agreement with Texas Gas, func-
tioning strictly as an independent contractor, became necessary when Respondent
found that its engineering plans were not sufficiently advanced to begin with the
planned conversion of the plant after it took title on January 1. However, with the
additional time until February 14, Respondent was prepared with its engineering
designs, and it promptly terminated the independent contract and had Texas Gas
deliver the refinery in a shutdown condition. The conversion processes were then
begun and have since proceeded as rapidly as possible. At no material time were
the hourly paid employees represented by the Union legally employees of Respondent,
and Respondent was therefore never under an obligation to bargain with the Union.
Under the program for petrochemical conversion, Respondent subcontracted out all
maintenance and new construction, which required a much larger number of craft
employees than were employed in maintenance work on the Texas Gas, it required
fewer but more skilled and versatile employees to operate the Winnie refinery; and it
utilized surplus employees from its other plants to staff the operating functions at
Winnie. On an equal and nondiscriminatory basis, Respondent examined and made
selections to fill the available operating jobs from two groups of applicants. former
Texas Gas employees and surplus operating employees from its other plants. Respond-
ent has no antiunion history or union animus, and denies any discriminatory motive
in connection with its conduct.
Respondent introduced in considerable volume testimony and exhibits, mainly of a
technical character, to demonstrate the plans and progress made to convert the Winnie
6 Cf , e g , N.L R B. v. Auto Ventshade, Inc., 276 F. 2d 303 (CA 5), enfg. 123 NLRB
451 ; N.L R.B. V F. G. McFarland and S. R. Hullinger, d/b/a McFarland & Hullinger, 306
F. 2d 219 (CA. 10), enfg 131 NLRB 745
854 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
plant for production of petrochemicals. However, the General Counsel does not
challenge the point that Respondent pursued plans to improve on the Texas Gas
operations with a view to producing higher octane gas and recovering petrochemicals.
The question remains whether Respondent was motivated to exclude from available
jobs the hourly paid employees represented by the Union so as to avoid obligation
to bargain with the Union.
C. Management personnel
The following are officers of Respondent Union Texas Petroleum (15 plants) :
J. Howard Marshall, president; Howard G. Teverbaugh, vice president, natural gas
plants; John A. Sutherland, general manager, plant operations; Douglas F. Pierce,
director of administration for petrochemicals; Clyde V. Quinn, area superintendent of
eastern division; Elton Gotcher, plant manager of Winnie plant as of February 15;
Edwin Ekholm, technical director for petrochemicals (hired December 18); and
E. Paul Wilkenson, director of sales.
In addition, those hired from Texas Gas are as follows: A. C. Gladden, executive
vice president; Earl D. Elliott, secretary and general counsel; R. M Woolfolk, manu-
facturing superintendent (hired by Respondent January 1); R. T. Neville, general
superintendent (hired by Respondent February 14 and terminated May 15); Charles
Albritton, plant superintendent (hired by Respondent on February 14); Jesse Cating,
personnel and safety director (hired by Respondent on February 14); James C. Ellis,
maintenance-construction supervisor (hired by Respondent on February 14 and
terminated on April 23); M. F. Krueger, operating foreman (hired by Respondent
February 14); Walter T. Niedert, chief engineer (hired by Respondent February 14);
and R. C. Herrington, manager of traffic (hired by Respondent January 1).
D. The pertinent evidence
1. Preceding Respondent's ownership of plant
Commencing in 1949, after a Board certification, the Union continuously repre-
sented in collective bargaining a unit of production, operating, and maintenance
employees at the Winnie plant and the Port Neches terminal.? Two other unions,8
not involved herein, represented respectively separate craft units of five electricians
and eight pipefitters. In 1952, the Winnie facilities were sold by the original owner,
McCarthy Chemical Company, to Texas Gas, which continued the same operations.
A collective-bargaining contract existed between Texas Gas and the Union with a
term from September 16, 1961, to March 16, 1963. Separate contracts were also in
effect covering the craft electricians and pipefitters. The other employees of Texas
Gas, e.g., truckdrivers, pipeline employees, and office employees, were unrepresented.
In April 1962, Union Texas Natural Gas Corporation, which operated in various
States 14 natural gas liquid plants and a number of marketing facilities, was acquired
by Allied Chemical and became a division thereof under the name of the instant
Respondent. None of the 14 plants involves basic refinery operations (as conducted
at the Wmnie plant in question), and none is engaged in the production of petro-
chemicals. There is no union representation at any of the 14 operating plants,
although it was adduced that the Teamsters Union represents certain warehouse and
shipping employees of Respondent in the Minneapolis-St. Paul area.
At the end of 1961, the former Union Texas began considering the acquisition of
the Winnie facilities 9 at the same time that it was contemplating construction of a
petrochemical complex at Geismar, near Baton Rouge, Louisiana.10
In October 1962, after reviewing detailed studies and engineering plans which had
been drawn up for the purpose, the board of directors of Allied Chemical adopted a
resolution for the purchase of the Winnie facilities from Texas Gas. An extract of
the certified minutes in evidence reflect, in substance, the following:
1. Its Union Texas division has been seeking entry into the natural gas market in
eastern Texas and has reviewed the operations of Texas Gas Corporation which sup-
plies 20 to 25 percent of the industrial gas sold in the area. Texas Gas and a wholly
7 See McCarthy Chemical Company, 86 NLRB 14; 98 NLRB 1084.
s Local Union 479, International Brotherhood of Electrical Workers, AFL-CIO, and
Local Union 195, United Association of Journeymen and Apprentices of the Plumbing
and Pipefitting Industry, AFL-CIO.
6 The testimony of Respondent President Marshall that it was Allied Chemical which
then considered the purchase of Winnie is apparently inaccurate.
10 At the time of the hearing, June 1963, the Geismar project was still in the "planning
and engineering stage."
UNION TEXAS PETROLEUM, ETC. 855
owned pipeline corporation own and operate a natural gas liquids plant and gasoline
refinery at Winnie, Texas; a terminal at Port Neches;11 and a gas collecting and
distributing system with 400 miles of pipeline in the area. Gas liquids removed from
natural gas are sold as LPG (propane), except for natural gasoline and concentrates,
which are processed and sold as gasoline.
2. Its Union Texas division, as a major producer, with substantial natural gas
reserves and no outlets in that area, is in a good position to strengthen participation
in the growing markets now served by Texas Gas, and could improve on the latter's
operations by producing higher octane gasoline and by recovering aromatic chemicals
(i.e., petrochemicals) 12 for other Allied Chemical divisions. Acquisition of Texas
Gas and its subsidiary is particularly desirable because it would provide an immediate
entry into a growing market for locked-in reserves of Union Texas.
3. Following acquisition of the assets of Texas Gas, it would be proposed to install
facilities at an estimated cost of $6 million to produce aromatic chemicals (petro-
chemicals) and to upgrade gasoline, bringing the total investment to $27 million. The
portion of the $6 million spent to produce aromatic chemicals at Winnie "would
reduce expenditures of about twice that amount which would otherwise be spent for
the same purpose at Geismar, Louisiana."
4. Pretax income of Texas Gas now approximates $2.6 million on sales of $27.5
million, and it is estimated by 1964, sales revenues will increase to approximately $40
million, and that with increased efficiencies pretax income will be increased to $5
million per year.
The foregoing authentically reveals the purposes of Allied Chemical in acquiring
the Winnie facilities: principally to provide entry into the natural gas market in the
eastern Texas area; to obtain an existing profitable operation with an estimated sub-
stantial improvement in income by 1964; and to undertake improvement of the Winnie
operation by producing higher octane gasoline and recovering pertochemicals.la
On December 5, Respondent and Texas Gas executed a "Purchase Agreement"
under which Respondent would acquire the main physical and other assets of Texas
Gas, excepting such assets as cash, accounts receivable, patents, and trademarks 14
Respondent would assume specified liabilities of Texas Gas, including long-term
indebtedness. However, expressly excluded from the terms of the purchase were the
existing collective-bargaining contracts and other agreements relating to employment
and employee benefits. Closing of the purchase transaction was to be consummated
on or before December 31. Certain provisions in the lengthy document may be
noted, viz:
1. "Respondent represents that it desires to purchase the physical facilities described
..' . and to make modifications in said gasoline plant at Winnie, Texas, so as to cause
said plant to be converted to a petrochemical plant which will primarily supply a
source of raw materials for the chemical industry. . . ." 15
2. "Texas Gas will give its employees affected hereby due and proper notice of the
sale contemplated hereby and the termination of their employment unless Texas Gas
wishes to retain such employees in other capacities "
Respondent President Marshall testified that Respondent would have preferred to
acquire the Winnie plant "around the first or the middle of February" 1963, but that
Texas Gas insisted , for tax reasons, on consummating the sale by the end of 1962.
"Located about 25 miles from, and having connecting pipelines with, the Winnie plant.
It is elsewhere described as a deepwater terminal on a tract containing approximately 82
acres with a pertinent loading, dock , and storage facilities for 265 , 000 barrels.
12A "common definition" of a petrochemical , given in the record, is that it is a pure
compound derived from petroleum , which is further processed into useful end products ;
e.g., plastics, synthetic fibers, and rubber. From other testimony, it appears that an
"energy product " of an oil refininery may be made into a "petrochemical " by a process
of further refinement . The record is not clear as to the precise point of purity in which
an energy product could be called a petrochemical.
13 Cf. Respondent Vice President Teverbaugh 's testimony that the primary reason for
which Respondent acquired the Winnie plant was to convert it for the production of
petrochemicals.
14 For purposes of this case , I find no distinction , as Respondent appears to allege, be-
tween purchase of assets and purchase of the business.
'- This passage does not seem to have any essential purpose as part of the purchase
agreement . It appears to be a gratutious statement of a conclusion . Probative evidence
of the reasons for the Winnie acquisition is contained in the October 1962 minutes of
the Allied Chemical board of directors , supra.
856 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
He also stated that as of December 5, the date of the purchase agreement, and antici-
pating a closing of the transaction by the year end, Respondent had hoped to begin
its "change-over" or conversion operation by the first or middle of February.
Secretary and General Counsel Elliott of Texas Gas credibly testified that, proba-
bly at the end of the first week in Decembei, Executive Vice President Gladden of his
company gave him a draft of the operating agreement to evaluate from a legal
standpoint. Thereafter, on several occasions, he negotiated changes in the draft with
the Respondent's officials, primarily with Administration Director Pierce. On Decem-
ber 21 one of his last discussions with Pierce took place without reaching final
agreement. On December 22, at a meeting attended by several Texas Gas officials 16
Elliott notified the three unions at the plant, inter alia, that an operating agreement
was being negotiated and they would be advised when the agreement was final; and
that it was the intention of Texas Gas to perform this service of operating the plant
for Respondent "for some period of time." 17 By December 28, the operating agree-
ment (as will be described below) was fully negotiated, and it was executed on that
date.18
Previously, on December 26, Texas Gas had filed with the secretary of state of
Texas formal notice of an intent to dissolve the corporation. The certificate of disso-
lution intent duly recorded by the State of Texas shows, among other things, a resolu-
tion of the board of directors of Texas Gas, dated November 20, 1962, to dissolve the
company pursuant to a detailed plan set forth, and to sell and dispose of the assets
within a period of not more than 12 months.
18 Gladden, General Superintendent Neville, Plant Superintendent Albritton, Personnel
Director Cating, and Attorney Karl Mueller.
"Elliott also advised the unions that the purchase contract was entered into on Decem-
ber 5 ; that Texas Gas would abide by its contract obligations with the unions during the
period of the operating agreement ; and that if title passed to Respondent, as expected,
Texas Gas would negotiate with the employees matters relating to severance of employment.
18 The testimony is conflicting as to when Respondent first considered and began negotiat-
ing the operating agreement with Texas Gas. Elliott's version appears the more plausible
in light of other evidence, and particularly as he negotiated the agreement and testified
in some detail concerning the matter. Gladden was not called and Pierce was not ques-
tioned on the point. Respondent's President Marshall firmly testified that Respondent
gave first consideration to the necessity for the operating agreement and started negotia-
tions in the week following Christmas. Ekholm, hired as Respondent 's technical director
on December 18, had previous to his employment been away in Europe and out of touch
with Respondent. He testified that, immediately upon his being hired, he began a study
of the status of Respondent's engineering plans for Winnie and delivered his oral report
thereon to President Marshall during Christmas week The opinion he rendered was that
Respondent had misconstrued the extent to which engineering was available for immediate
use in the field, that it was not ready to undertake heavy field construction work at that
time, and that such work would have to be postponed (It may be noted there that
Respondent had not begun heavy field construction work at Winnie at the time of the
hearing in June 1963 ) Earlier, in a memorandum dated December 4, Respondent's
engineering staff had projected a shutdown of the Winnie plant and a takeover by Re-
spondent as of December 28 The record shows that a good deal of preliminary work was
necessary before field construction work could begin, and that even the initial engineering
plans prepared for Respondent in the December 4 memorandum projected the earliest
date for beginning construction work as July 12, 1963 I do not believe Ekholm's advice
to Respondent "after a quick survey" was instrumental, as Respondent argues, in caus-
ing Respondent to seek the operating agreement with Texas Gas As shown by Elliott's
testimony, Respondent had decided at least early in December to have the operating
agreement. It is reasonably inferable that other reasons impelled this decision The
December projections of the engineering staff concerning the plant takeover were based
upon limited information of a technical character ; but the decisions were necessarily made
at the top, giving effect to other considerations, such as preparedness for staffing the
Winnie plant and negotiations with Fluor for subcontracting the maintenance work.
Respondent's Vice President Teverbaugh testified that the decision to enter into the operat-
ing agreement was made only after Respondent had received Ekholm's advice He in-
sisted that Elliott (Respondent's witness) was in error, and that the first draft of the
operating agreement was not prepared until December 18 or 19 Teverbaugh's testimony
appears to conflict not only with that of Marshall but with that of Ekholm, who first came
on the job December 18, unprepared, and did not give his report on the status of the
engineering until after December 25.
UNION TEXAS PETROLEUM, ETC. 857
On December 28, as above noted, a document entitled "Operating Agreement" was
signed by Respondent and Texas Gas, to be effective after 11:59 p.m. on Decem-
ber 31. It included the provisions, in substance:
1. Texas Gas "agrees to operate the Properties as an independent contractor, sub-
ject to the terms and conditions ... set forth."
2. The "Properties" consist of the gasoline plant at Winnie, Texas, and the deep-
water terminal at Port Neches, with all component parts thereof, including adjoining
houses, dock and storage facilities, machinery, equipment, materials and supplies
pertinent to or useful to the operation of said plant and terminal; and all physical
properties constituting the transportation and gathering systems of the pipeline opera-
tion, including all component parts thereof.
3. Texas Gas shall, as requested by Respondent by prior instructions, operate,
maintain , repair, and renovate the properties, and perform such other work or serv-
ices requested in writing by Respondent to operate and keep said properties in a con-
dition satisfactory to the Respondent. Such work shall include but not be limited
to routine operation and maintenance, emergency work, janitorial services, turn-
around work, and other miscellaneous services for plant pipeline and terminal opera-
tions and maintenance ; and Texas Gas shall perform such supplemental services as
equipment inspections, as may be requested by Respondent from time to time.
4. Texas Gas shall supply all personnel required properly to perform the work
described, but not in excess of the number now employed, except on written authority
of Respondent. Texas Gas is not permitted to subcontract or assign any part of the
contract to any other person without written consent of Respondent.
5. Respondent shall furnish all equipment, materials, supplies, small tools, and
major and minor items of construction equipment, except small tools and equipment
at a cost not to exceed $500 which Texas Gas may acquire for Respondent' s account,
and items needed in emergency situations.
6. In compensation, Texas Gas was to be reimbursed for its payroll costs and
general expenses , plus a monthly fee of $7,500. To be reimbursable, any other
cost incurred by Texas Gas shall first be approved in writing by Respondent.
7. The agreement was to remain in effect until April 1, 1963, unless earlier termi-
nated by either party on 15 days' advance written notice.
8. Texas Gas agrees that on termination of the operating agreement it will termi-
nate the employment of its employees with due and proper notice.
On December 3 1, in accordance with the terms of the purchase agreement of
December 5, closing of the purchase transaction took place and title passed to
Respondent.19
2. Period of operating agreement from January 1 to February 14
On January 1, at the inception of its formal ownership , Respondent assumed the
direction of the Winnie operations , with the exception of the natural gas pipeline
system and the plant refinery, and marketed all products under Respondent's name
and trademark . It promptly hired from Texas Gas-Woolfolk, manufacturing super-
intendent, and Herrington , traffic manager . And it transferred to its payroll the bulk
of the accounting , legal, office , and sales staffs at the Houston office, and the traffic
department at the Winnie plant , including truckdrivers . These employees hired were
not represented by any union. The Winnie plant continued to produce essentially the
same products with the same complement of employees.
By letter dated December 31, Respondent informed Executive Vice President
Gladden of Texas Gas with respect to the operating agreement , inter alia , that "hourly
paid employees will not exceed in number in each job classification those now
employed by you"; that "salaries and wage rates are not to exceed those paid by
Texas Gas Corporation on December 15, 1962"; that bills of sale for certain purchases
by Texas Gas should be submitted to Respondent 's official representative ; and that
Respondent designated Clyde V. Quinn as its official representative at the gasoline
plant, pipeline , and terminal facilities.20
11 Marshall's testimony that it was quite uncertain until almost the morning of Decem-
ber 31 whether the purchase agreement would be consummated is patently in conflict with
all other evidence , e g , Respondent's plans, commitments, the purchase agreement, the
operating agreement, and the filing for dissolution by Texas Gas prior to December 31.
10 Respondent's letter was not answered by Gladden until January 31, a month later
Gladden's letter stated that Respondent's communication was received on January 22. I
do not accept this statement as fact, particularly as Respondent made no attempt to ex-
plain the obviously unreasonable lapse from the actual date of its letter. Gladden's letter
858 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On January 1, Gladden informed General Superintendent Neville that Quinn would
be at the plant as Respondent's representative, in charge of any repair for which
money had to be spent; that nothing was to be done without first checking with Quinn;
that anything other than normal maintenance 21-any repair work, new equipment,
or overhaul-would have to be cleared by Quinn; to check with Quinn on everything
to be done-on products, or desire to make any change-and to do whatever Quinn
said about it. Also, Neville was told that payment of vouchers would be approved by
Quinn, or in his absence by Gotcher.22 At that time, Neville was not aware of the
contents of the operating agreement, and at no time had been given a copy of that
contract. On January 1, Quinn set up an office at the Winnie plant; and until Febru-
ary 14 he was at the plant a majority of the time, with Gotcher available in his
absence. Thereafter, Quinn "more or less took over," was consulted by Neville as
the man in charge for the owner of the plant, and gave orders to Neville, as well as
to Operating Foreman Krueger, Personnel Director Cating, and Maintenance-
Construction Supervisor Ellis. Any money spent had to be approved by Quinn or
Gotcher.
From January 1 to February 14, full responsibility on behalf of Texas Gas for
supervising the Winnie plant was left to Neville, subject to Gladden's initial instruc-
tion concerning Quinn's authority.23 Theretofore, Manufacturing Superintendent
Woolfolk had, on a regular weekly basis, held staff meetings concerning plant prob-
lems and conducted inspection tours of the plant. After January 1, this function and
supervision over the plant's operations was not assumed by any Texas Gas official
superior to Neville, and no service was performed concerning the conduct of opera-
tions at the plant from the Houston office of Texas Gas.
Specific instances of Quinn's exercise of authority over operations and personnel
were described in evidence. Thus, for example, on January 11, Neville called
together the staff to meet with Quinn to obtain his clearance to perform a variety of
repair work which the staff desired to have done. Quinn approved certain of the
repairs and advised that the remainder be held up. Neville complied with these
instructions.24
During the period of the operating agreement, it is indisputable that Respondent
directed the work of 10 rackmen at the Winnie refinery and 4 terminal pumpers at
Port Neches, all of whom were in the Texas Gas bargaining unit represented by the
further stated , among other things, that his "understanding of the contract required only
that you notify us in writing whom you are going to designate as your company's official
representative." (There is no such provision in the operating agreement.) Gladden
pointed out that the contract does not contain a limitation relative to wage increases and
therefore Texas Gas could not agree that salaries and wage rates will not exceed those
paid on December 15. Note has been made of the month's delay in the reply of Texas
Gas, and its attempt to cover up the delay. If, as it later stated, Texas Gas disagreed
with Respondent's interpretation of the contract, it would have sought an immediate clar-
ification in order to carry out its functions as contractor. In the circumstances, it is in-
ferable that the prompting cause of the late reply lay in the interim developments of the
Union filing the charge herein and the Union attempting to bargain with Texas Gas for a
5-percent pattern wage increase , infra.
a Defined as "light repairs."
22 Gotcher, brought in from another plant of Respondent, became plant manager at
Winnie after February 14.
23 However , Neville "briefed" Gladden on the status of operations when Gladden could
be reached by telephone in the morning, but Gladden issued no orders other than the basic
instructions of January 1.
u Based upon the credible testimony of Neville, as corroborated in part by Ellis and
by documentary evidence. Neville, as general superintendent, was high in the manage-
ment of Texas Gas and a key witness. His demeanor and composure on the stand lent
conviction to his testimony. Respondent, while attacking Neville's veracity, did not offer
refutation to much of his specific testimony. Gladden, Cating, Woolfolk, Krueger, nor
Plant Superintendent Albritton was called to testify. Quinn testified generally that his
only duties at Winnie concerned the spending of money and approval of bills before pay-
ment , that his job was to observe but to have nothing to do with the operation or with
the direction of the work force. Respondent's General Manager Sutherland testified that
Quinn was Instructed that his sole responsibility at the Winnie plant was to observe the
operations and report to him , Sutherland ; at the same time he was to approve cash ex-
penditures , as he did regarding other plants of Respondent. It is significant, however,
that Quinn was no mere observer but held the post of area superintendent of Respond-
ent's eastern division , and further, unlike the situation at Winnie, there was no contrac-
tor operating the other plants under Quinn's purview. To the extent of conflict with the
findings above, the testimony of Quinn and Sutherland is not credited.
UNION TEXAS PETROLEUM, ETC. 859
Union. Thus, Traffic Manager Herrington, after he was hired by Respondent on
January 1, regularly gave orders to the rackmen and pumpers for the loading and
unloading of tank cars, trucks, and barges, and issued other instructions relating to
the handling of shipments in and out of Winnie. The rackmen were also given
orders by Respondent's sales staff at the Houston office.
On February 11, Respondent terminated the operating agreement insofar as it
covered functions of Texas Gas regarding the natural gas pipeline system, and immedi-
ately took into its employ most, if not all, of the personnel in the pipeline operation.25
On February 14, effective at 4 p.m., the remainder of the operating agreement was
terminated by Respondent. Significant events which occurred prior to 4 p.m. on
February 14 are covered in the section immediately below.
3. The shutdown and terminations on February 14
On February 14, at 6 a.m., Woolfolk telephoned Neville at his home with instruc-
tions to summon all supervisory personnel, engineers, and office employees to
Neville's office at the plant for a meeting at 8 a.m., and to have all maintenance
employees stand by in the shops and not begin any work until further notice. About
8 a.m., Texas Gas was notified by hand-delivered letter from Respondent that the
operating agreement and its services as "independent contractor" were terminated
effective with the end of the day shift at 4 p.m., that day. Texas Gas, so far as
appears, had received no prior notice of the termination.20
At 8 a.m., as arranged, the meeting took place in Neville's office, conducted by
Sutherland and Woolfolk. Sutherland announced that the plant would be shut down
that day, and that all those present (and presumably others in like jobs) would be
placed on Respondent's payroll 27 as of 4 p.m. at their same positions and salaries.28
Maintenance employees were to be sent home immediately and would be paid for the
day. Woolfolk told Personnel Director Cating to assist Ellis in getting these employ-
ees out of the plant. Instructions were given, particularly by Woolfolk, as to the
manner of shutting down. An "ordinary" type shutdown was to be accomplished,
without depressurizing and draining the equipment.29 Each unit was to be closed
down separately, following which the particular operators of the unit would be
promptly sent from the plant. Portions of the operations were to be left in service;
e.g , the No. 1 engineroom, one boiler, the compressor room, and the loading rack.
Operating Foreman Krueger was instructed to put the shift foremen on a schedule of
two 12-hour shifts, they were not to touch any of the equipment until the rank-and-
file employees left the plant. Asked whether the hourly paid employees would have
a chance to resume employment, Sutherland said there would be no employment
office at the plant at that time, and Respondent "probably would restaff the plant
with Union Texas personnel." He also stated that the employees may be given
letters of recommendation if they asked for them.
Pursuant to the instructions at the meeting,30 the partial shutdown of the Winnie
refinery and Port Neches terminal was carried out. By 2 p.m., all hourly paid
As of February 8, there were 31 hourly paid employees , 7 office clericals, and 12
supervisors in the pipeline department.
=Thereafter , it was agreed that Texas Gas would be paid its fees for 15 days follow-
ing February 14, in view of Respondent's failure to give Texas Gas the 15 - day advance
written notice provided in the operating agreement.
r+ Including five office employees who worked at the Winnie plant. Office clericals at
the Houston office had been hired on January 1, supra.
21 Sutherland testified that he specifically indicated that the employment of these people
would be temporary and that individual interviews would be given in the next 30 days
regarding the possibility of permanent employment with Respondent. There is no further
evidence whether such interviews were conducted , or whether any of those hired on Feb-
ruary 14 were not retained on a permanent basis as a result of such interviews. No
corroborating witnesses were produced. This testimony of Sutherland is not credited.
29 The type of shutdown which was ordered required about 5 hours, and would take about
8 hours to restore to full operation . If the vessels had to be drained and depressurized,
however, the procedure would have required 48 hours to shut down and a like period to
restore. Normally , draining and depressurizing are necessary in order to perform repairs
on a particular unit.
80 Sutherland testified that he made it clear at the February 14 meeting that he and
Woolfolk were not giving any orders but were acting merely in an "advisory" capacity.
Not only is this testimony uncorroborated by any of the large number of persons who
attended the meeting and were available to Respondent , but it is patently refuted by the
entire course of events on February 14, as testified in detail by Neville and Ellis. More-
over, in the manner the meeting was handled, even the "advice " of Sutherland and Wool-
860 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employees were out of the plant, and their employment permanently severed effective
at 4 p.m.31 They were not given the "due and proper notice" of termination as pro-
vided for in the operating agreement.32
Under instructions from Sutherland, during the day on February 14, no telephone
calls were permitted into or out of the plant except on Quinn's approval; the guards 33
stationed at the plant entrances were ordered not to allow anyone into the plant; and
the terminated employees were not permitted to reenter the plant to obtain their
personal propery, which was later arranged to be taken out to them.34
The Winnie plant supervision had no previous indication of a planned shutdown.
Prior to February 14, in the knowledge of Neville and Ellis, there had been no prepa-
ration at the plant for new construction or any extensive overhaul.
Concerning the reasons for the shutdown on February 14, Respondent President
Marshall testified 35 that Respondent had gotten far enough with its engineering and
projections for converting the plant to a petrochemical operation that it was ready
to begin the initial steps; that negotiations with Fluor had progressed sufficiently for
Respondent to proceed with its plans; and that Respondent wanted to start with the
petrochemical conversion "just as quickly" as it could, essentially to cut off an
unprofitable operation.3°
After the shutdown and departure of the hourly paid employees on February 14,
the shift foremen and other supervisors, working 12-hour shifts, undertook the func-
tions of operating the plant units which remained in service. Maintenance work was
also performed by supervisors, at least until the Fluor personnel began arriving the
latter part of February In the evening of February 14, about 14 employees from
Respondent's other plants reported at Winnie These new arrivals were placed in
training to work with the supervisors. 37 4 were referred to the Port Neches terminal,
where operations were resumed, and the remainder assigned to operate the function-
ing plant equipment. After about 10 days, the 12-hour shifts of the supervisors were
abandoned; however, it does not appear when, if at all, these supervisors ceased to
perform former rank-and-file duties There is no evidence that the 14 new employ-
ees 38 were thereafter relieved from duty at the Winnie plant.39
folk would take on the force of an order, especially after they had first announced the
hiring by Respondent of all those present I am convinced that Sutherland was shaping
his testimony in accordance with his judgment on the legal issues at stake in a deliberate
effort to relieve Respondent of responsibility for its actions taken before 4 p m. on
February 14.
`a The average tenure of these employees at the plant and terminal was in excess of
10 years.
3a Texas Gas ultimately agreed to and did pay the employees 1 week's terminal pay to
lieu of notice
33 Four additional guards were brought in by Respondent.
sa I reject Sutherland 's testimony that these measures were taken to prevent any false
information concerning the shutdown to escape from the plant , and because Respondent
"very shortly" expected employees of Fluor to be arriving at the plant. (The first small
contingent from Fluor did not appear at the plant until February 26.) He did not state
as a reason the fact that personnel from other plants of Respondent would be arriving
at the plant that day to take over many of the jobs vacated.
35 Chief Engineer Niadert was not consulted about the decision to shut down at this
time, nor is there any showing that in this instance Technical Director Ekholm was
consulted
3 Marshall explained that the Winnie plant had not made money for some years and
was carried basically by the natural gaslines Such information is not reflected in the
comprehensive analysis of the Winnie facilities before the Allied Chemical board of direc-
tors in October 1962, as described supra, which indicates rather that Texas Gas was
engaged in substantially profitable operations
37 Plant Superintendent Albritton was made training director and instructed to set up
a training program for the Respondent's employees coming to from other plants
38 Sutherland testified that at a later time ( from March until June ) he began the proc-
ess of employing operators for the Winnie plant-"other than the ten men that he kept
there "
3 Note is taken of the staff memorandum to Respondent, dated December 4, supra, which
contains the report that "As a result of the strike at the Winnie plant [under Texas Gas
in 1961] and subsequent operations with a minimum work force (supervisory personnel
only ) several detailed staffing studies were made . These are presently being summarized
and will be forwarded to Mr. Sutherland when completed " Neville testified that the only
other occasion for the use of foremen in 12-hour shifts and of pullman cars at the plant
( see infra ) was during the 1961 strike.
UNION TEXAS PETROLEUM, ETC. 861
4. Events after February 14
On February 15 and 16, additional employees came in from Respondent's other
plants. Including those on February 14, a total of about 40 to 50 outside employees
of Respondent had been brought to the Winnie plant. They had come from
Respondent's plants in West Texas and Louisiana, carrying substantial amounts of
luggage and personal equipment, and were housed mainly in two pullman cars which
Respondent had delivered to a siding at the plant 40 However, about noon on
February 17 (Sunday), Respondent suddenly altered its plans and issued orders that
the additional employees who had come in after February 14 be sent back to Respond-
ent's plants from which they originated. Sutherland explained to Neville that "it was
a mix-up . . . somebody jumped the gun and got them in too early, so they were
sending them out. They might get into trouble by having the men there so early." 41
Sutherland testified as follows: It was originally planned in December to staff the
Winnie plant, to be taken over in a completely shutdown condition, with about 35 of
its own operators, who were available as a surplus from each one of Respondent's 14
plants throughout the country.42 Proceeding with this plan, on February 14, after
the partial shutdown was accomplished, Sutherland sent for the 35 men to report to
the Winnie plant. On Sunday, February 17, a further evaluation was made by
Respondent of the status of the engineering -v'Trk, and a decision was reached to
move into a "full and extended shutdown of the Winnie facilities " Thereupon,
Sutherland decided to reduce the group to a skeleton force sufficient to operate only
the boiler, loading rack, and the compression and dehydration facilities. He sent
the remainder of the 35 operating employees back to their home plants, keeping
at Winnie the 10 "senior" operators 43 On cross-examination, Sutherland denied that
it was Respondent's intention to use the 35 men to operate the plant. He firmly
stated that they were brought in only to shut down the plant.44 On this latter state-
ment, Sutherland is quite effectively contradicted 45
Dated February 20, but executed some time thereafter, Respondent's maintenance
contract with Fluor was entered into for a period of 1 year, unless earlier terminated
by Respondent on 30 days' notice.46 Generally, described, the contract covered
40 Ellis estimated the total number of arrivals as between 40 and 50. Neville, the gen-
eral superintendent, testified that a separate group of 14 arrived on Februaiy 14 (which
they clearly did and were promptly assigned to work), and that 30 to 35 additional people
came in during the next 2 days. Sutherland appeared to fix the total number in terms of
35 operating employees He stated, however, that it was after the shutdown on Feb-
ruary 14 that he sent word for the 35 men to report to the plant. In any case, under
Sutherland's version, there were at least an additional four consisting of the pumpers at
Port Neches, Niedert, for Respondent, briefly offered that there were as many as 30 to 35
new arrivals at the plant at one time No documentary evidence was introduced on the
point. Much of the testimony referred to "people" who arrived, and the difference be-
tween the minimum Sutherland total of 39 and the minimum Neville total of 49 may con-
ceivably be reconciled by the number of salaried personnel, e g, inspectors and engineers,
who came at the same time as the employees
41 Undenied by Sutherland.
"Except for one plant in Montana, all operating plants appear to be located in Texas
and Louisana. Respondent's Oklahoma facilities were not described. Sutherland stated
that the total number of hourly paid employees at the 14 plants as of the hearing date
was 215, ranging from 10 to 40 at each plant, and as of January 1, there were an addi-
tional 20.
'3 Sutherland failed to mention the four new arrivals who continued to be employed as
pumpers at the Port Neches terminal.
"At this point Sutherland testified that the 35 men were at Winnie to fight fires, drain
the equipment to avoid a freeze-up because of weather conditions, or do "anything else
that was necessary while maintaining the delivery of gas to our pipeline customers "
45 E.g , Quinn testified he was told by Sutherland that the 35 employees were to be used
as "operating personnel " Niedert, Respondent's chief engineer, testified that he "heard
around the plant" that these people were "brought in for training to be operators for the
plant." Neville testified that Sutherland and Quinn informed him that the purpose of
these new employees was to operate the plant
46 Negotiations with Fluor antedated December 1962, as reflected in the staff memoran-
dum to Respondent dated December 4 referring to the "Pace Work." On February 6,
Respondent wrote to Elmo Pace of Fluor that it accepted, subject to certain conditions,
Fluor's "Proposal" of December 10, as amended, in later discussions. One of the condi-
tions was that there be a "mutually satisfactory basis for obtaining the necessary labor"
for the job. The letter requested advice as to when Fluor would execute "the labor
agreement" and would then be ready "to activate this project."
862 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent's "plant facilities ," including the pipelines , and provided for "routine
maintenance, emergency work, janitorial services, turnaround work and other miscel-
laneous services for plant maintenance." Compensation was on the basis of re-
imbursement of costs-plus-fixed fees. Fluor executed a labor contract, dated
February 20, with various international craft unions. On February 26, the first
workers of Fluor came to the plant. There were 10 such workers in the first week,
and thereafter the number averaged about 70. Fluor hired 10 of the pipefitters and
electricians formerly employed at Winnie but none of the maintenance employees
represented by the Union. Maintenance-Construction Supervisor Ellis 47 testified
that, until his employment ceased on April 23, practically all work done by Fluor
was "routine maintenance," not involving new construction,48 and work of the type
and skill which had normally been performed by the Texas Gas maintenance depart-
ment. Chief Engineer Niedert stated essentially that the only difference in the
maintenance functions after February 14 was in the greater size of the crew and
quantity of work 49
After February 14, for a time, the plant stopped making certain refinery products,
e.g., gasoline, kerosene, and butanes, but continued such processes as removing con-
densates from the natural gas which was pumped into the sales pipelines. However,
all these products, taken from storage, were continued to be shipped to the customers,
and to supplement its inventory, Respondent itself purchased gasoline and trucked it
into the plant.
At no time was the plant completely shut down Beginning about March 14, solely
for the purpose of inspecting the condition of equipment, e.g., reboilers and con-
densers, certain units were individually drained and depressurized 50 and, where
defects were found, the unit remained shut down until repaired.51 Niedert testified
that Respondent did not originally anticipate that a total shutdown of such equipment
would be necessary after February 14.
A summary of maintenance expenditures under Fluor from February through
June 3 indicates that of about $240,000 expended for materials and labor, only
$25,300 represented preliminary expenses for petrochemical conversion. And "Cap-
ital Expenditures" in the sum of $333,000, completed or nearing completion during
this period, are evidently the costs of repairing defective equipment and installing
automated controls, and are not identified as relating to petrochemical conversion.
Niedert's testimony establishes that the bulk of the work done by Respondent during
this time would likely have been done by Texas Gas, with no design for petrochemical
changes.52 Texas Gas had been pursuing an expansion program of its own from
October 1961, which in some features were parallel to the program being put into
effect by Respondent 53
Respondent projects that its entire program for petrochemical conversion will be
completed by February 1964. Although by far the greater amount of construction
work and capital expenditure is planned for this coming period (subsequent to the
hearing date on June 28), there is admittedly no contemplation of any further shut-
down for installation of equipment.
On June 3, Respondent started to bring various units "on stream," but not in full
operation. As of the hearing date, there were 33 hourly personnel at the plant and
47 Ellis ' job after February 14 was to assist Cating, former personnel director , in overall
supervision of maintenance , and representing Respondent in coordinating the work of
Fluor . Cating was not called.
Ellis indicated that when he left the plant on April 23 there was no work underway
for petrochemical conversion to his knowledge , except that one particular unit was
"pending."
48 Prior to February 14, when emergency maintenance or overhaul work exceeded the
capacity of the regular crew , the excess work was regularly subcontracted out.
60 Engineer Niedert's clear, detailed testimony . In view of the evidence of what was
involved in draining and depressurizing, Neville's brief indication that it was begun on
February 15 is found to be in error.
51 This was apparently the equivalent of the "turnaround" process, which was set up
under Texas Gas on a routine basis by the engineering department . "Turnaround" was
performed by taking a unit out of operation by draining and depressurizing in order to
conduct a thorough inspection for any deterioration or corrosion.
ea With regard to the planned upgrading of the gasoline produced , Ekholm indicated
that there had been virtually no change made from Se ptember 1962 until the time of the
hearing.
M In addition , a document in evidence , dated November 1962, which is a prepared fore-
cast by Texas Gas of maintenance and operating expenditures for 1963, encompasses many
of the projects which Respondent described as having been done or planned for the future.
UNION TEXAS PETROLEUM, ETC. 863
4 pumpers at the Port Neches terminal. The products being produced in June, and
theretofore, were basically the same as those produced by Texas Gas. It was esti-
mated that the first petrochemicals wholly produced in the plant will not be forth-
coming until the final quarter of 1963.54
5. Respondent's hiring procedures; the mental tests
On February 22, Respondent sent a letter to the terminated employees (represented
by the Union) inviting them to write for employment applications. The letter stated,
inter aka, that with the modifications planned, Respondent expected to have sub-
stantially fewer jobs when the plant reopened than were available under Texas Gas;
that it planned to give consideratio-, to employees at Respondent's other plants, but
also wanted to consider the former Texas Gas employees, and that interviewing for
this purpose would begin shortly after April 1. All but four of the recipients of this
initial letter replied, seeking employrr ent. Respondent then forwarded employment
application forms. Those in the maintenance department when terminated on Febru-
ary 14 were given no consideration even if, as in the case of some, they also had
experience with Texas Gas in full-lime operating jobs; (some were also regularly
used as relief operatois). Thereafter, Respondent sent letters to employees acknowl-
edging receipt of their employment applications and arranging appointments for
"interviews" in April-"assuming that you are still interested in the possibility of
employment with us at our Winnie plant." Apparently, as part of the interviewing
procedure, the remainirg applicants were required to take (1) the Wonderlic person-
nel test, purporting to test general knowledge, reasoning, and mental ability; (2) the
Miller mechanical insight test, 1 e., aptitude tests; and (3) the Humm-Wadsworth
temperament scale, a "personality measure." 55 By letter dated May 6, Respondent
indicated an offer of employment to certain applicants, subject to their passing a
"routine pre-employment physical."
The mental tests were given, during approximately the same period, to two groups
of "applicants," i.e., the former Texas Gas employees, who were tested at the Winnie
plant; and Respondent's employees from other plants, who were tested at one plant
in Abilene, Texas, and another in Louisiana.56 None of the other Texas Gas person-
nel hired by Respondent were given these tests. In a letter dated April 12, Ford of
the Psychological Service Institute, reported to Sutherland on the test results. Of 56
Texas Gas hourly employees who took the tests, 22 passed and 34 failed. Of 35
"applicants" from Respondent's other plants, 21 passed and 14 failed. As to the 14
who failed, Ford's recommendation that they be retained in their older assignments
was ostensibly followed by Respondent. There is no evidence that the 35 employees
of Respondent who took the tests were from the same group of 40 to 50 brought in
to the Winnie plant from February 14 to 17, or included the 14 employees who con-
tinued on after February 17.51
Respondent has argued, without evidence, that operation of a petrochemical plant
requires a higher degree of versatility and natural talent, and in recognition thereof
the mental tests were given. However, Respondent Vice President Teverbaugh
6* Wilkenson , Respondent 's director of sales , estimated that, when Respondent's con-
version program is completed , about 65 percent of the total output will be in petrochemi-
cals. He testified that under Texas Gas ( and presumably until the hearing dates in June),
88 percent of the production was in "energy products ," so that under his definitions about
12 percent was in petrochemicals . By contrast , Respondent ' s engineer witnesses , Niedert
and Ekholm , testified that no petrochemicals were produced by Texas Gas or as yet by
Respondent . And President Marshall, in apparent conflict, testified that in part the plant
was now ( in June ) converted to petrochemicals.
55 The content and results of the Humm-Wadsworth test were not made available as
evidence for the stated reason by Respondent that there was a commitment with the owner
of the test to keep it confidential.
w Sutherland for Respondent and William C. Ford ( Ph.D.) of Psychological Service In-
stitute had earlier discussions , prior to March 14, concerning the purpose of the tests, and
by agreement between them set the minimum standards for passing . The tests were con-
ducted and scored by a staff member of the institute , but testimony for Respondent with
respect thereto was given by Ford
7 Sutherland had testified that the operating employees who came to Winnie beginning
February 14 were culled from each of the 14 other plants of Respondent around the coun-
try. Credible testimony shows that these employees actually came from West Texas and
Louisiana . Indeed, the tests for the entire group were given at two plants at the latter
locations.
864 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
acknowledged that the tests were conducted principally as a basis for making selec-
tions as between the two classes of "applicants" for the jobs available. Moreover, the
evidence does not support the facile assertion of Respondent that higher skills and
greater versatility were required-at least beyond those already possessed by the
experienced Texas Gas operating employees. Indeed, as noted, a training program to
operate the existing equipment had to be set up for the employees brought in from
Respondent's other plants Nor can I find on this record that the tests, particularly
the Humm-Wadsworth personality test, validly demonstrated anything probative of
the abilities of those tested or that the tests were other than a facade and subterfuge.
In the same connection, there is undenied testimony by Neville that Sutherland told
him early in April that "the union boys" would be given physical and mental or
psychological tests "that probably would eliminate a whole lot of them."
Teverbaugh had prepared for the hearing a compilation, admitted by stipulation,58
showing the "interviewing and hiring steps" followed by Respondent respecting the
72 terminated Texas Gas employees named in the complaint. In final result, only 11
of these were hired, of the 37 hourly paid employees on Respondent's payroll in
June.55
Respondent's compilation indicates the following disposition of the Texas Gas
employees:
1. 11 are currently employed.
II. 2 were offered employment but failed to pass the physical.
III. 1 declined offer of employment.
IV. 4 failed to respond to Respondent's initial letter of February 22.
V. 1 was interviewed but drafted before he could complete "employment
process."
VI. 1 was interviewed but obtained other employment before he completed
"employment process" and asked not to be considered further.
VII. 1 was scheduled for interview but failed to appear.
VIII. 27 failed to pass "employment test."
IX. 15 were "interviewed but disqualified on other grounds such as absen-
teeism, health, position for which they were applying either filled by
other applicants or eliminated and the like."
X. 8 were "interviewed but not hired because they were applying for main-
tenance work."
XI. 1 "maintenance employees; therefore applications were not solicited." 60
An analysis of this document, especially when measured against other evidence in
the record, reveals a number of patent flaws and inconsistencies. Particularly as
regards items VIII and IX, I am left with the clear impression that the reasons stated
were fabricated post facto to accommodate the actual hiring results. As originally
prepared, item VIII showed a total of 32 failing the test. (Psychological Service
Institute reported that 34 had failed.) Respondent argued that it did not rely on the
results of the personality test.61 Respondent corrected item VIII at the hearing,
removing five names (Farris L. Bourque, N. D. Cooper, J. L. Lindsey, Wm. Van-
Norstrand, and Arnold 0. Mitchell), and placing them in item IX. It had been
revealed that these five had passed the Wonderlic and mechanical aptitude tests and
58 The document, as Respondent's Exhibit No 67, was received in evidence at record
page 769. The failure in the transcript specifically to note the admission of this exhibit
is hereby corrected.
"Earlier in the hearing , Sutherland had testified that Respondent currently had 33
hourly employees at the plant, plus 4 pumpers at the Port Neches terminal. Of the 37,
he flatly testified that a total of only 22 came from Respondent's other plants, including
the 4 at the terminal, and that none were entirely new employees. Implicitly, the later
document introduced would reflect 26 transferees from other plants, as against 11 former
Texas Gas employees, currently employed ; and the 26 exceeded by 5 the number who passed
the mental tests. Moreover, the 33 at the plant presumably were intended to include some
nonoperating employees , such as rackmen.
00 McClure, who also had 3 years' experience at Texas Gas in operations, wrote Re-
spondent actually seeking an operating job but was not sent an application
61 Ford, of the testing institute, who was asked by Respondent's counsel whether he had
been "informed" that the personality test had been disregarded by Respondent, answered
that he had "found that out the last day or two" (of the hearing ), but later stated he did
not "know" what Respondent did I do not accept this testimony of Ford as evidence
of the tact
UNION TEXAS PETROLEUM, ETC. 865
that , as was later stipulated , they had failed the personality test.62 Mitchell was the
chairman of the Union's "Workmen's Committee"; 63 Lindsey was a present member
and VanNorstrand a former member of the committee. The personnel files of these
five employees, from both Texas Gas and Respondent,64 were introduced in evi-
dence.65 In the personnel file of each , a summary slip prepared by Respondent for
its own use at the hearing indicates these five employees were not hired because they
had "failed test ." The same slip also reveals special comments made by Respondent
concerning past union and concerted activities of these employees . 66 Each of these
five employees had received highly commendatory letters of recommendation fol-
lowing the terminations of February 14.67 The other 10 employees in item IX had
as a whole passed the Wonderlic and aptitude tests with unusually high marks (their
scores on the personality test were not revealed ). It is more than passing strange
that they were thus permitted to progress to the stages of being "interviewed" and
given the various mental tests and then disqualified on the vague, unsubstantiated,
and, I find , incredible grounds stated . The impression which Respondent sought to
create at the hearing was that Texas Gas employees were fairly tested on a par with
certain employees of its other plants . Indeed, if Respondent was going to handpick
the few Texas Gas employees whom it finally hired, there was simply no reason for
putting the employees through the elaborate obstacle course of the applications , inter-
viewing, and mental and physical tests-clearly unlike the handling of the other
Texas Gas personnel it hired. Quite apparently , the purpose was camouflage and
deception.
6. Elements relating to Section 8(a) (5) allegations
The Board certifications and the Union's collective -bargaining contract with Texas
Gas indicate , and I find, that the historical appropriate bargaining unit consisted
of-
All production , operating , and maintenance employees at the plant at Winnie,
Texas, and operating and maintenance employees at the docksite, Port Neches, Texas,
excluding all plant protection employees, professional employees, maintenance pipe-
fitters, their leadermen and their helpers , pipefitting welders, their leadermen and
62 Since 29 of the Texas Gas "applicants " had passed the Wonderlic and aptitude tests
and 22 had passed all tests, these were 5 out of the 7 who had failed the personality test.
6The basic negotiating and grievance committee of employees at the plant.
"A form record of their " interview " appears in each of their files. It is noted that
they were asked the "minimum wage acceptable" and they indicated willingness to accept
less than their Texas Gas wage. It may be fairly assumed that other Texas Gas inter-
viewees responded similarly and that Respondent was not offering the same wage these
employees had previously been paid.
65 The personnel files of the other 10 employees in category IX who were "disqualified
on other grounds ," etc, were not introduced nor were the files of any of the other Texas
Gas employees involved.
66 The notations were that Bourque had filed certain grievances ; that Lindsey had
"applied for unemployment during the strike" ( at Texas Gas in the fall of 1961 ), and in
June 1959 , had taken a leave of absence to attend union business ; that Mitchell took a
grievance to arbitration and received $1,259 in backpay , had applied for unemployment
during strike , had "allegedly threatened to stomp `hell ' out the plant superintendent in-
dicating this type of flareup was frequent ," and in June 1959 had taken a leave of absence
to attend union business , and that VanNorstrand was "Member of union committee "
67 As authorized by Sutherland at the 4 a.m. staff meeting on February 14, supra. A
total of 45 such letters of recommendation had been written for the Texas Gas hourly
employees who requested them. Included are letters for 7 of the 10 navies listed in
category IX above. Each department head had prepared the recommendation as to his
own men, with the help in some cases of the personnel director , and all were signed by
Neville, as general superintendent , beginning February 19 and running into April. Neville
relied principally on the reports of the supervisors and he himself believed in each case
that the employee was entitled to the recommendation based upon his current status as
to performance and efficiency . All the letters were written under Respondent 's letter-
head, except three dated on and after March 7, which carried the name of Texas Gas
In March, Woolfolk had instructed Neville to change the letterhead because of objections
made by Respondent 's legal department . In terminating Neville on May 15, Sutherland
told him that it was because he had signed those letters , and that the legal department
"blew their top," and said it would be a "bombshell " because these letters would affect
"this unfair labor practice teasel."
796-027-66-v of 153-56
866 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
their helpers, maintenance electricians, their leadermen and their helpers, instrument-
men, their leadermen and their helpers, office clerical employees, administrative and
executive employees, confidential employees, foremen, and supervisors as defined in
the Act.
- Documentary evidence of the Union's dues records and the checkoff of dues by
Texas Gas for December, January, and early February shows dues paid by 69 employ-
ees in the unit, of 74 on the payroll as of February 8. Accordingly, it is established
that the Union actually represented a majority of employees in the bargaining unit-
at least until the termination of the Texas Gas operating agreement on February 14.
On January 1, the Union wrote to Respondent, in part as follows:
When the Union heard that your Company was purchasing the business, this
Union sent Texas Gas Corporation a formal request by telegram that it negoti-
ate immediately with this Union covering the matter and that any sale of the-
stock or assets of Texas Gas Corporation be made subject to the terms of the
collective-bargaining agreement and provide that the purchaser or purchasers of
the stock or assets be required to assume the obligation under the collective-
bargaining agreement.
Although Texas Gas Corporation promised to meet and negotiate on the mat-
ter before any sale was made, it failed to do so. Therefore this Union had no
opportunity to negotiate on the terms of the sale of the business to your
Company....
. even if your Company were not legally bound by the terms of the cur-
rent collective-bargaining agreement, this Union hereby notifies you that this
Union represents a large majority of the employees in the above-stated bargain-
ing unit. The Union, therefore, requests that you meet with it immediately
(this week, if possible) and either sign an acknowledgment that your Company
and this Union are bound by the terms of the current bargaining agreement, or
to negotiate a new agreement covering the employees in the stated bargaining
unit. If there is any doubt that this Union does not [sic] represent a majority
of the employees in the stated bargaining unit, this Union is prepared to prove
its majority status by card check or otherwise.
On January 11, Respondent replied, in pertinent part, that it presently has no
employees at the Winnie plant, although at a later date it plans "to take maximum
advantage of the utilization of our present employees in the final staffing of this
facility"; that Texas Gas is operating the facility as an independent contractor for
Respondent; that the Union has a contract with Texas Gas still in effect and is cur-
rently engaged in collective bargaining; and that there is no business to discuss and
therefore no purpose in Respondent meeting with the Union.
On February 14, the Union sent Respondent a wire stating, in substance, that
despite Respondent's actual control over the employees at the plant since January 1,
Respondent has refused to honor its duty to bargain with the Union, as requested;
that the Union learned "today" of the decision "to close all or part of the plant
immediately and contract out work which could be done by many of your employees
at the plant"; and that the Union requests a meeting at once to bargain "concerning
the necessity of any partial or total shutdown, concerning the assignment of work
during any such shutdown," and "concerning the wages, hours, working conditions
and recall rights" of the employees represented by the Union.
On February 18, Respondent answered the Union in effect by referring to its
previous letter of January 11, and by rejecting the Union's request.
Following the December 22 meeting with the unions at the plant, discussed
supra,68 Texas Gas had further meetings with the Union: On January 3, the pur-
pose was to advise the unions of the sale and the title passing to Respondent on
January 1 and that the operating agreement was finalized and in effect for a maxi-
mum of 3 months. On January 10, the principal purpose was to discuss several
grievances which had been carried over from December. On February 7, as well
as at the meetings in January, the parties discussed, but failed to agree, on a proposal
of the unions for a 5-percent wage increase under an area pattern.69 On February 18,
68 At the meeting of December 22, the Union also proposed modification of the collective-
bargaining agreement to include a provision that sale of the Texas Gas facilities be made
subject to the agreement and the purchaser be required to assume all the obligations under
the agreement The proposal was rejected.
89 The Union had formally reopened the collective-bargaining contract for renegotiation
concerning the 5-percent pattern increase.
UNION TEXAS PETROLEUM, ETC. 867
after protest had been made by individual employees, Texas Gas met with the
union representatives and agreed to pay the employees an extra week's pay as a
consequence of the failure to give them notice of termination.
Although Respondent apparently contends that Texas Gas fully negotiated termi-
nal issues with the Union, it is not Respondent's position that Texas Gas, as its agent,
had bargained with the Union on Respondent's behalf. It should be clear that Texas
Gas is not a respondent in this complaint. While the evidence taken does not estab-
lish that Texas Gas did fulfill its bargaining obligations, neither does it establish that
it did not, since the question of a violation by Texas Gas cannot be considered as
having been litigated in this case.
E. Concluding findings
Elements in the evidence taken as a whole overpoweringly point to an unlawful
and discriminatory design of Respondent, in succeeding to the Winnie plant, of
deliberately terminating and refusing to employ the hourly paid employees repre-
sented by the Union, so as not to be encumbered by an obligation to deal with the
Union, inter alia: (a ) The long experience of these employees in operating and
maintaining a refinery, particularly this refinery, having a functional integration with
the natural gas pipeline system and the Port Neches terminal; and the absence of
such experience on the part of the employees brought in by Respondent from its
other plants, none of which is a refinery (or a petrochemical plant). (b) The let-
ters of recommendation showing the hourly paid employees were competent and
qualified, and the evidence that Respondent's legal department became alarmed that
these letters would affect Respondent in the instant proceeding. (c) The nonunion
situation at Respondent's other 14 operating plants. (d) Respondent's specific exclu-
sion from the purchase transaction of all employment contracts, including the exist-
ing collective-bargaining agreements (and then hiring substantially all the former
personnel, with the significant exception of those represented by the Union). (e)
Respondent's failure to show any plausible or credible reason, as I find, for entering
into the operating or alleged independent contractor agreement with Texas Gas on
January 1, and for not directly undertaking operation of the plant itself with the
existing personnel. (f) Respondent's hiring on January 1 of the administrative, sales,
and office personnel at the Houston location, and the truckdrivers and traffic com-
plement at the Winnie plant; on February 11, of substantially the entire pipeline
department of some 50 people; and on February 14, of the existing office, engineering,
and supervisory forces at the plant. All the foregoing were unrepresented by a union.
In these extensive hirings, none was subjected to the mental tests as were the union-
represented hourly paid employees. (g) The summary manner in which Respond-
ent on February 14 accomplished the shutdown and terminations of the hourly paid
employees. (h) The 40 to 50 employees summoned from its other plants to be
trained for work at Winnie, without reason for this wholesale transfer except (as
found infra) to replace and bar the union-represented employees. (i) Respond-
ent's attenuated procedures in taking employment applications of union-represented
employees calculated to discourage and eliminate as many as possible. (j) Submit-
ting screened applicants from among the union-represented employees to aptitude
and personality tests as a guise or show of impartial selection in a competition between
Respondent's employees from other plants and the group represented by the Union.
(k) The actual results of the tests, showing an inordinate and inexplicable disparity
in the number of Respondent's employees who were given passing scores as com-
pared with the union-represented employees. Respondent's employees who failed the
tests and were not hired at Winnie were retained in its employ elsewhere, whereas
many of the union-represented employees, with high test scores, were nevertheless,
belatedly, refused employment for various artificial reasons supposedly based on
their employment records with Texas Gas. (1) The evidence that Respondent in
making the selections from among the union-represented employees eliminated, on
pretextuous grounds, present and past members of the union workmen's committee
and took particular cognizance of the employees' past concerted and union activities
while employed with Texas Gas. (m) The ultimate employment of only 11 of the
union-represented group, of 37 hourly paid employees on Respondent's payroll in
June, indicating effective destruction of the Union's majority in the original unit of
some 72 employees.
The situation is such as would call for clear grounds of justification from Respond-
ent. As principal defense for its various actions related herein, Respondent lays
great stress uoon its two-ram for _etrochemical conversion of the Winnie plant.
868 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
However, as the overall evidence demonstrates, this approach scarcely serves to
meet the direct issues involved. No such transformation of the plant-or more
especially of the work functions of the affected employees-took place or is in the
making, as Respondent sought to impress. At no point, up to the time of the hearing
and as projected thereafter, were any of the Texas Gas employees rendered unquali-
fied for their same jobs by reason of the asserted program for petrochemical con-
version.70 On February 14, when the partial shutdown and the alleged discrimina-
tory terminations were effected, there was clearly available work for all the hourly
paid employees in both the operating and the maintenance classifications.
It is evident that Respondent had laid careful plans predating its actual purchase
of the Winnie plant as to the manner it would proceed with operations and staffing.
Its consistent aim was to take over the plant in a shutdown state. By its actions on
February 14, it sought to, and did, accomplish an interim shutdown condition so
that it would not be deemed the employer of the existing hourly paid employees at
the plant. It was then ready to move in with its prepared personnel from other
plants. As he revealed, Sutherland had set these plans in motion to the point where
most or all such outside personnel had arrived at the plant by February 17. The
inferences are compelling that Respondent had partially shut down on February 14
with the intention of promptly resuming full operations, at least for an indefinite
time, staffing the operating, loading rack and terminal functions with employees from
its other plants to be trained by the Winnie plant supervisors, and handling routine
maintenance with supervisors and other available help until the Fluor people came
in. The clear fact is that outside employees of Respondent (numbering 40 to 50)
were sent for and did arrive, prepared for an indefinite stay. The initial contingent
was put to work. As to the remainder, from the evidence that "some one jumped
the gun, and got them in too early," etc., it is apparent that in any event Respondent
had originally intended to use these men at the time in operating the plant. How-
ever, as indicated by Sutherland and by the events, a sudden and unexpected deci-
sion was made by Respondent on February 17 "to extend the shutdown," and as a
consequence those employee arrivals after February 14 were summarily sent back to
their plants, because Respondent "might get into trouble by having the men there so
early." As it turned out, operations were maintained on a limited basis until about
June 3, when fuller operations were resumed with a permanent staff of 37 hourly per-
sonnel. Only after penetrating inspections had been made, starting about March 14,
was it discovered that much of the refinery equipment was in bad condition. It
is clearly shown that most of the repair work done by Respondent until June 3 was
unrelated to petrochemicals, involved change or overhaul of deteriorated equipment,
and consisted mainly of work which was planned and would probably have been
performed by Texas Gas itself absent the sale to Respondent. At the time of the
hearing, the major field construction work had not yet begun but was planned to be
started shortly; nevertheless, it was made plain that operations would continue there-
after without any further shutdown.
For Respondent's part, the subject of the approximately 40 to 50 employees it
brought in from its other plants on and after February 14 is left vague. Sutherland,
who has been discredited elsewhere, gave the only detailed testimony in the matter
for Respondent. No documentary evidence was introduced, nor corroboration
offered from any of the particular 40 to 50 employees. How they were selected, for
how long, their rate of pay, their preparations and instructions, were not shown. Par-
ticularly in light of the other evidence in the case, it would surpass credulity to
accept Sutherland's explanation that these were regular operating employees who
constituted a surplus taken from each of Respondent's 14 other plants (in which there
was a total of 235 employees in all hourly classifications). No attempt was made
to reconcile the placement of these employees in the nonoperating jobs; e.g., rackmen
and terminal pumpers. Nor, without supporting evidence of a better quality, is
Sutherland's somewhat revealing statement acceptable that these employees were
maintained as surplus as part of Respondent's acquisition program in which it pur-
chased and similarly staffed a new plant in each of the past 10 years.71 Any concept
of sound business practice would dictate strongly against the maintenance, for a rela-
tively long and indefinite period, of such a large number of surplus employees for the
purpose indicated by Sutherland, especially as they had to be trained at Winnie to
perform the necessary work. I believe it certainly no coincidence that of all the vari-
70 From the probative evidence, the "program" is more accurately described as a plan
to improve the existing operations by producing higher octane gasoline and by recovering
aromatic chemicals.
71 As earlier noted, Allied Chemical acquired Texas Gas with its 14 plants in April 1962.
UNION TEXAS PETROLEUM, ETC. 869
ous categories of personnel at the acquired facilities, Respondent chose to transfer
to Winnie only this special contingent from its other plants to fill the jobs of the
terminated operating employees, and that Respondent went to the considerable lengths
it did to set up this elaborate and expensive transfer operation. Perforce, the infer-
ence to be drawn is that the availability and use of these 40 to 50 employees are
attributable solely to a purpose of Respondent of getting rid of the union-represented
employees at Winnie.
A fair assessment of all the evidence establishes that Respondent possessed and exer-
cised in a substantial degree control over the manner and means of the day-to-day
performance under the operating agreement. Based upon the "total situation," and
applying accepted criteria,72 it is concluded, therefore, that Texas Gas was not an
independent contractor under the Act, and that Respondent was legally the employer
or coemployer of the hourly paid employees in question during the period of the oper-
ating agreement from January 1 to February 14. In the circumstances, the reitera-
tions in various documents that Texas Gas was an independent contractor are of no
avail. The detailed factors have already been described and need only be sum-
marized: (a) Respondent's motive, as I find, for entering into the operating agree-
ment was to avoid taking over the operation itself at an inappropriate time when,
among other things, it was not ready with its own restaffing plans. (b) The operat-
ing agreement broadly qualifies the discretion of Texas Gas to operate and maintain
the subject facilities by the provisions-"as requested by Company by prior instruc-
tions" and "in a condition satisfactory to Company." These provisions were left
vague (I believe, deliberately), and are given meaning only by the actual practice
of the parties from the outset in having Quinn installed on the premises, as Respond-
ent's official representative, making decisions on virtually all matters of consequence,
which decisions the plant supervision was required to follow by the blanket order
of Texas Gas top management. (c) The operating agreement in practical effect was
terminable at will-as indeed it was terminated at Respondent's will, without giving
effect to the provision for 15 days' notice. (d) All money expenditures, other than
payroll, were directly in Respondent's control. In the operation of an entire plant
of this kind, where routine maintenance and repair regularly required the purchase of
materials, supplies, and equipment, such control of the purse strings was vital. (e) The
number of hourly paid employees in each job classification and the salaries and wage
rates were limited by Respondent to the situation existing before the operating agree-
ment. The effect, in part, would tie the hands of Texas Gas in collective bargaining
with the plant unions. (f) The overall operations conducted by Texas Gas prior to
the operating agreement could not realistically be severed by Respondent managing
the administrative, sales, marketing, shipping, and (on February 11) the pipeline
activities, without Respondent exerting control over the plant operations purportedly
delegated to Texas Gas. Admittedly, Respondent directly supervised during this
period the work of the rackmen and truckdrivers at the plant and the pumpers at Port
Neches. These functions were clearly embraced by the operating agreement. More-
over, the 10 rackmen and 4 pumpers were included in the bargaining unit, so that
Respondent was directly acting as employer of union-represented employees. (g)
Respondent furnished all equipment, materials, tools, and premises. Texas Gas was
paid strictly a fixed fee. Texas Gas put up no risk capital and had no latitude what-
soever to make decisions which would govern its own profit or loss. Indeed, no
supervision or management was furnished by Texas Gas above the plant level. Plant
operations were wholly conducted by General Superintendent Neville subject to
instructions from Respondent's official representative, Quinn. Further, Texas Gas
was in the process of liquidating; it was no longer engaged in an independent busi-
ness which would continue. (h) As Respondent was the new owner, and the oper-
ating agreement was for a brief period, Respondent was aware that any indicated
desires on its part would naturally have a controlling impact on Texas Gas personnel.
(i) The fact and extent of Respondent's control is graphically demonstrated by its
actions on February l4-while the operating agreement was in effect. Without
notice, it took command of the plant, summoned a general meeting, hired the Texas
Gas supervisors, engineers, and administrative staff, shut down the plant, terminated
the hourly paid help represented by unions, and issued a variety of other significant
orders.
Upon the record as a whole, I conclude that on February 14 Respondent, as their
actual employer or coemployer, discharged the 72 hourly paid employees because of
42 See, e.g., Denton Truck Lines, Inc., 143 NLRB 1372, N.L R B v Nu-Car Carriers,
Inc, 189 F 2d 756 (CA. 3), cert. denied 342 US. 919; National Van Lines, Inc v.
N.L R.B., 273 F. 2d 402 (C.A. 7).
870 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
their union membership.73 It must be borne in mind that complaints of this kind
are normally supportable only by circumstances and circumstancial evidence.74
Here, it is plain that the terminations were effected as a direct consequence of
Respondent's calculated and fixed resolve to eliminate the preexisting unionized situa-
tion at the newly acquired Winnie plant, thereby avoiding a bargaining obligation
with the Union when it took over operation of the plant. Accordingly, Respondent
violated Section 8(a)(3) of the Act, as alleged.75 Essentially the same result would
follow without the finding that Texas Gas was not an independent contractor, since
it is clear in any event that (a) the Texas Gas hourly paid employees were applicants
for employment with Respondent, and as such employees under the Act,76 (b) they
were qualified employees for whom there were available jobs after February 14, and
(c) they were denied employment for the same discriminatory motive above
described.77
As I am of the opinion that the operating agreement was a sham, and that absent
Respondent's discriminatory refusal to employ the Texas Gas hourly paid employees,
they would have directly been placed on Respondent's payroll beginning January 1,
I find that Respondent, by its letter of January 11 and conduct thereafter, unlawfully
refused to bargain with the Union as the proven majority representative of these
employees in the appropriate unit, thereby violating Section 8(a)(5) of the Act.78
Respondent further violated Section 8(a) (5) generally in refusing to bargain with
the Union upon its request of February 14, and specifically in failing to notify and
consult with the Union concerning the decision to subcontract the maintenance and
repair work to Fluor (ie., the contract entered into with Fluor subsequent to Febru-
ary 20).79 Under Board precedent, to support the latter violation found it is imma-
terial whether or not the subcontract was discriminatorily motivated. Nonetheless,
it is my view that specific resolution of this point would serve at least a clarifying
purpose. The principal difficulty resides in the evidence that an average of 70 Fluor
workers were used-from March until the hearing in June. This fact would ordi-
narily be indicative of a need from the outset for a maintenance crew much larger
than could be feasibly handled by the maintenance compliment of 27 employees under
Texas Gas. In all other respects, the Fluor work done during this period was essen-
tially routine maintenance of the character normally performed by the Texas Gas
maintenance employees. And, normally under Texas Gas, maintenance and repair
were subcontracted out when necessary, but only as a temporary supplement to the
regular crew. It has already been established that Respondent was unlawfully moti-
vated to oust the union-represented Texas Gas employees, including those employed
in maintenance work. Respondent has set certain forces in motion which carry
prima facie discriminatory implications; and the evidence, even from certain of its
own witnesses, refutes the defenses advanced in justification for its actions. Further
circumstances to be taken into account are, viz: None of the 14 union-represented
maintenance employees was employed by Fluor, although 10 of the 13 electricians
78 Although Respondent's payroll of February 8 reflected 74 hourly paid employees in
the bargaining unit, the complaint alleges that Respondent on February 14 discrimina-
torily terminated 72 named employees Accordingly, it is assumed that the complaint
lists all such employees on Respondent's payroll as of February 14.
74 N.L.R.B. v. Link-Belt Company, 311 U.S. 584, 597; Amalgamated Clothing Workers
of America, AFL-CIO (T.I.L. Sportswear Corporation) v. N.L.R B., 302 F. 2d 186, 190
(C.A.D C.).
75 E.g, New England Tank Industries, Inc., 133 NLRB 175 enfd. 302 F. 2d 273 (C.A.
1), cert. denied 371 U.S. 875; Piasecki Aircraft Corporation, 123 NLRB 348, enfd. 280
F. 2d 575 (C.A. 3), cert. denied 364 U.S. 933.
76 Phelps Dodge Corp. v. N.L R.B., 313 U S. 177; Utah Construction Co, 95 NLRB
196, 203.
77 Piasecki Aircraft Corporation, supra.
78 Cf. Piasecki Aircraft Corporation, ibid. Even assuming, under other circumstances;
that the hourly paid employees were not technically employees of Respondent for pur-
poses of Section 8(a) (5) from January 1 until 4 p.m. on February 14, a bargaining order
against Respondent would appropriately lie as a remedy for the Section 8(a) (3) viola-
tion, inter alia, to deprive Respondent of any advantage gained in violating the Act for the
reasons that it did. Id; Editorial "El Impartial" Inc. v. N.L.R.B., 278 F. 2d 184 (C.A. 1).
79 Town & Country Mfg. Co., Inc., at al. v. N.L.R.B., 316 F. 2d 846 (C.A. 5), enfg. 136
NLRB 1022; Fiberboard Paper Products Corp. v. N.L.R.B., 322 F. 2d 411 (C.A D.C.),
enfg. 138 NLRB 550; and, e.g., Mayer B. Cohen, et al., d/b/a Riverside Wholesale Dis-
tributors, 142 NLRB 580.
UNION TEXAS PETROLEUM, ETC. 871
and pipefitters were hired.80 Respondent refused to consider the union-represented
maintenance employees for any work with Respondent, even though some of these
employees had qualifying experience with Texas Gas in capacities other than main-
tenance. The bulk of the repair work done before June 3 became necessary only
after Respondent first discovered in March serious conditions of deterioration in the
plant equipment. Undoubtedly, a substantial part of the Fluor crew of 70 devoted
itself to such repair work. And it is not improbable that Texas Gas would have dis-
covered the same conditions and made the repairs, engaging subcontractors only to
the extent that the work could not be handled by the regular maintenance crew. The
Fluor subcontract, terminable on 30 days' notice, appears primarily to embrace rou-
tine maintenance, emergency work, janitorial services, and turnaround work; i.e., the
usual type of maintenance done by the Texas Gas group. In addition, the contract
embraced virtually all the Winnie facilities purchased by Respondent, including the
pipelines, and it does not otherwise appear that the work of Fluor was confined to
the Winnie plant proper. On the other hand, there is no indication that the Texas
Gas maintenance department performed work outside the Winnie refinery. The sub-
contract would also well serve Respondent's purpose in breaking up the existing
appropriate unit. In light of all these considerations, I find that Respondent entered
into the Fluor subcontract to the exclusion of the union-represented maintenance
crew for the same discriminatory reasons that it barred from employment the pro-
duction and operating employees represented by the Union.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, occurring in connec-
tion with the operations of 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 Respondent has engaged in certain unfair labor practices, I will
recommend that it cease and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act. In view of the nature of the unfair
labor practices committed, i.e., discrimination against employees which "goes to the
heart of the Act," the commission by the Respondent of similar and other unfair
labor practices may be anticipated. Therefore, a cease-and-desist order in its broad
form is warranted and will accordingly be recommended.81
It has been found that Respondent discriminatorily terminated on February 14
the 72 hourly paid employees named in the Appendix (not published). However, as
appears herein, Respondent subsequent to February 14 may have been economically
justified in temporarily laying off or terminating some of its operating employees
because of reduced operations. These are matters essentially to be handled in the
compliance stage of the proceeding. For such purpose, certain findings and factors
are specifically noted for consideration: The Texas Gas maintenance employees
would have worked all during the period subsequent to February 14 at least to the
date of the hearing in June. After February 14, Respondent continued to use, in
operating the plant, at least 14 replacement employees from its other plants and
supervisors performing rank-and-file work. From Niedert, Respondent's witness, it
is established that it was not until about March 14 that inspections, with depressuriz-
ing and draining, were undertaken leading to the first legitimate curtailment of opera-
tions to repair the deteriorated equipment discovered. Therefore, it is found that all
the Texas Gas production and operating employees would, absent discrimination,
have worked until at least March 14. About June 3, there was a resumption of
operations, in part, with 37 hourly employees, including 11 of the Texas Gas employ-
ees. No further shutdown is contemplated, although major construction work was
planned to begin in about July.
Under the circumstances, it shall be recommended that Respondent offer to the
72 employees listed in the Appendix, who were unlawfully terminated on February 14
and who have not been recalled for employment, immediate and full reinstatement
10 As earlier shown, Respondent conditioned the award of a subcontract to Fluor on
the existence of a "mutually satisfactory basis for obtaining the necessary labor" for
the job.
sz N.L.R.B. v. Express Publishing Company, 312 U.S. 426; N.L.R.B. v. Entwistle Mfg.
Co., 120 F. 2d 532 (C.A. 4).
872 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to their former or substantially equivalent positions, without prejudice to their senior-
ity and other rights and privileges, and in the event that there is insufficient work for
all such employees, to dismiss, if necessary, all persons who were hired or transferred
after the discriminatory terminations on February 14. If there is not then sufficient
work for the remaining employees and those to be offered reinstatement, all avail-
able positions shall be distributed among them without discrimination against any
employee because of union or concerted activities, in accordance with a system of
seniority or other nondiscriminatory basis. Respondent shall place the discrimina-
tees, if any, for whom no employment is available after such distribution, on a prefer-
ential list, with priority in accordance with a system of seniority or other nondis-
criminatory basis, and thereafter offer them reinstatement as such employment
becomes available and before other persons are hired for such work. It shall also
be recommended that Respondent make whole the named employees for any losses
they may have suffered because of Respondent's discrimination, by payment to each
of them a sum of money equal to the amount that he normally would have earned
but for the discrimination. In the appropriate cases, the offer of reinstatement, or
placement on a preferential list, will serve to cut off backpay liability. The backpay
is to be computed on a quarterly basis in the manner established by the Board in
F. W. Woolworth Company, 90 NLRB 289, 291-294, and shall include the payment
of interest at the rate of 6 percent per annum to be computed in the manner set forth
in Isis Plumbing & Heating Co., 13 8NLRB 716. It will also be recommended that
Respondent preserve and, upon request, make available to the Board or its agents, all
payroll records, social security payment records, timecards, personnel records and
reports, and all other records necessary and useful to detemine the amount of back-
pay due and the rights of reinstatement under the terms of this Recommended Order.
It has been found that Respondent refused to bargain generally with the Union, on
and after January 11, following the Union's bargaining request. It shall therefore be
recommended that Respondent be required, upon request, to bargain with the Union
as the representative of its employees in the appropriate unit, after offering reinstate-
ment to the discriminatees pursuant to the Section 8(a)(3) remedial order recom-
mended above. Although alleged, no finding has been made that Respondent refused
to bargain with the Union concerning the shutdown and terminations on February 14,
as the remedy in any event would be the same as that recommended above for the
Section 8(a)(3) violations. However, it has been further found that Respondent
violated Section 8(a) (5) by unilaterally subcontracting its maintenance work with-
out fulfilling its bargaining obligation with the Union on the subject. It shall there-
fore be recommended that Respondent cease and desist from unilaterally subcontract-
ing unit work without notifying and consulting the designated bargaining agent. It
has been recommended that the maintenance employees discriminated against be
ordered reinstated under the Section 8(a)(3) remedy. In accordance with the
Board's policy in the Town & Country case, supra, in order to adapt the remedy "to
the situation which calls for redress," it shall be recommended that Respondent be
ordered to restore the status quo ante by abrogating its maintenance contract with
Fluor and reinstituting the maintenance department as it existed prior to Febru-
ary 14.82 Respondent may, of course, lawfully subcontract its maintenance work
after its obligation has been satisfied as a result of good-faith bargaining with the
Union.
CONCLUSIONS OF LAW
1. Respondent is an employer within the meaning of Section 2(2) of the Act and
is engaged in commerce within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning of Section 2(5) of the
Act.
3. By discriminating in regard to the hire and tenure of employment of 72 employ-
ees because of their membership in the Union, Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Section 8(a)(1) and (3)
of the Act.
4. All production, operating, and maintenance employees at the plant at Winnie,
Texas, and operating and maintenance employees at the docksite, Port Neches, Texas,
excluding all plant protection employees, professional employees, maintenance pipe-
fitters, their leadermen and their helpers, pipefitting welders, their leadermen and
their helpers, maintenance electricians, their leadermen and their helpers, instrument-
men, their leadermen and their helpers, office clerical employees, administrative and
82 As shown, Respondent's subcontract with Fluor is terminable at any time upon 30 days'
notice.
INT'L BROTHERHOOD, ELECTRICAL WORKERS, LOCAL 728 873
executive employees , confidential employees , foremen , 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.
5. At all times material , and particularly since January 1, 1963 , the Union has
been the exclusive representative of all the employees in the - aforesaid appropriate
unit for the purpose of collective bargaining within the meaning of Section 9(a) of
the Act.
6. By refusing and failing to bargain with the Union , upon its request, and by
unilaterally subcontracting its maintenance operations without first notifying and con-
sulting with the Union as the exclusive representative of the employees in the afore-
said 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.
7. By the foregoing conduct, the Respondent has also interfered with, restrained,
and coerced its employees in the exercise of rights guaranteed them in Section 7 of
the Act, and has thereby committed unfair labor practices within the meaning of
Section 8 (a) (1) of the Act.
8. The aforesaid unfair labor practices are unfair labor practices within the mean-
ing of Section 2(6) and (7) of the Act.
[Recommended Order omitted from publication.]
International Brotherhood of Electrical Workers of Fort Lauder-
dale, Florida, Local 728, AFL-CIO and Ebasco Services, Incor-
porated. Case No. 12-CD-50. June 29, 1965
DECISION AND ORDER QUASHING
NOTICE OF HEARING
This is a proceeding pursuant to Section 10 (k) of the National Labor
Relations Act, as amended, following a charge filed by Ebasco Serv-
ices, Incorporated, herein called Ebasco, alleging that International
Brotherhood of Electrical Workers of Ft. Lauderdale, Florida, Local
728, AFL-CIO, herein called IBEW, in violation of Section 8(b) (4)
(D) of the Act, had engaged in and induced the employees of Ebasco
to engage in a strike for the purpose of forcing and requiring Ebasco
to assign particular work to employees represented by the Respondent
IBEW rather than to employees represented by Local Union No. 719
of the United Association of Journeymen and Apprentices of the
Plumbing and Pipe Fitting Industry of the United States and Canada,
AFL-CIO, herein called Plumbers. A hearing was held before Hear-
ing Officer James L. Jeffers, on August 17 and 18, 1964. All parties
appeared at the hearing and were accorded full opportunity to be
heard, to examine and cross-examine witnesses, and to adduce evidence
bearing upon the issues. The rulings of the Hearing Officer made at the
hearing are free from prejudicial error and are hereby affirmed.
Briefs were filed by all parties and have been duly considered.
Pursuant to the provisions of Section 3 (b) of the Act, the National
Labor Relations Board has delegated its powers in connection with
this proceeding to a three-member panel [Members Fanning, Brown,
and Jenkins].
153 NLRB No. 68.