Arrow Automotive Industries, Inc.

National Labor Relations Board - Board Decisions

Jun 25, 1987

284 N.L.R.B. 487 (N.L.R.B. 1987)

ARROW AUTOMOTIVE INDUSTRIES 487
Arrow Automotive Industries, Inc. and Local 1596,
International Union, United Automobile, Aero-
space & Agricultural Implement Workers of
America, UAW. Case 1-CA-18577
25 June 1987
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
JOHANSEN AND BABSON
On 16 August 1982 Administrative Law Judge
Joel A. Harmatz issued the attached decision. The
Charging Party and the General Counsel filed ex-
ceptions and supporting briefs and the Respondent
filed cross-exceptions. The Charging Party and the
General Counsel filed answering briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions only to the extent consistent with this
Decision and Order.
The question to be decided here is whether the
Respondent violated Section 8(a)(5) and (1) by fail-
ing to bargain with the Union before deciding to
close its strike-besieged Hudson, Massachusetts
plant and to transfer the work permanently to its
Spartanburg, South Carolina plant. We agree with
the judge that the Respondent had a mandatory
duty to bargain about its decision to close the
Hudson plant and to relocate the work to one of its
other plants. We disagree, however, with his con-
clusion that the complaint should be dismissed be-
cause the Respondent met its bargaining obligation.
The Respondent is a multiplant enterprise en-
gaged in the remanufacture, sale, and distribution
of automotive parts. Each of the Respondent's
plants primarily produces for customers in the geo-
graphic area where it is located. The Union repre-
sented employees at the Respondent's Hudson,
Massachusetts plant, whose market was the North-
east. In 1980, the Respondent's other operating re-
gional plants were in Spartanburg, South Carolina;
Morri1ton, Arkansas; and Vernon, California.
On 22 October 1980 the parties conunenced bar-
gaining for a new collective-bargaining agreement
to succeed the one due to expire on 30 November
1980 The Union pressed proposals for: an annual
65-cent across-the-board wage increase; a substan-
tial increase in truckdrivers' overall compensation;
retention of Blue Cross-Blue Shield health insur-
ance with the Respondent assuming all premium
costs; an extension of health insurance coverage to
retirees and employees entitled to workers' corn-
pensation; several additional holidays and vacation
days; an increase in monthly pension payments
from $2.45 to $5 over the 3 years of the contract;
and increasing both the term of disability benefit
coverage from 13 to 26 weeks and the amount of
the monthly benefit by $10 per year. The Respond-
ent itself counteroffered: a yearly 45-cent across-
the-board increase; some improvements in truck-
driver compensation and vacation benefits; and an
increase in monthly pension payments from $2.45
to $3.45 over the contract's term.
The contract negotiations focused on the issue of
health insurance, including the Respondent's pro-
posal to shift from a Blue Cross-Blue Shield plan to
a plan underwritten by Prudential. After nine bar-
gaining sessions with little movement, the Hudson
plant employees struck on 1 December 1980. The
Hudson plant ceased operating and the Respond-
ent's Spartanburg plant serviced the struck plant's
customers.
After two fruitless bargaining sessions during the
strike, the employees met on 2 March 1981 1 and
voted to reject the Respondent's latest contract
proposals. Also in early March, Respondent Execu-
tive Vice President Ledbetter asked the Respond-
ent's attorney, Watson, how long the negotiations
with the Union could "keep going as it is." Ledbet-
ter stated that he wanted something done and that
closing the Hudson plant was a consideration.
When Watson later informed Ledbetter that the
Respondent's offer had been rejected, Ledbetter in-
dicated that he was serious about wanting to close
the plant. During this same period, Ledbetter asked
Vice President Koontz to look into the question of
closing the Hudson plant. (Koontz had earlier
made an informal study in 1978 concerning the
closing of the plant which had never been dis-
cussed by the board of directors.) On 9 March the
Respondent sent the Union the following telegram:
THIS IS TO NOTIFY YOU THAT THE EMPLOYER,
ARROW AUTOMOTIVE INDUSTRIES, INC.,
HEREBY WITHDRAWS ALL OF ITS CONTRACT
PROPOSALS PREVIOUSLY MADE. AT THIS TIME,
THE EMPLOYER NOW HAS UNDER CONSIDER-
ATION A DECISION WHETHER OR NOT TO CON-
TINUE OPERATIONS AT ITS HUDSON, MA FACILI-
TY. BEFORE A DECISION IS MADE IN THIS
REGARD, THE EMPLOYER SOLICITS YOUR INPUT
AND SUGGESTIONS. FOR THIS PURPOSE WE RE-
QUEST A MEETING AT YOUR EARLIEST CON-
VENIENCE ON OR BEFORE TUESDAY, MARCH 24,
1981.
1 All dates hereafter refer to 1981.
284 NLRB No. 57
488 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
The Respondent and the Union met on 23
March. At the meeting, Union Representative Cec-
caroni suggested that the Respondent not close the
plant and asked Watson why the plant was to be
closed. Watson attributed the proposed closing to
economic reasons, noting that the plant had lost
$1,092,000 in calendar year 1980. The parties then
broke into caucuses, during which the Union pre-
pared a new 3-year contract proposal. When the
meeting resumed, the Union orally submitted its
new proposal. This proposal placed the Union in
effective accord with the Respondent's withdrawn
proposals for: general wage increases (the Union
reduced its demand by 20 cents); truckdriver com-
pensation (the Union accepted the Respondent's
terms); vacations and holidays (the Union aban-
doned its demands for additional days); health in-
surance carrier (the Union agreed to a Prudential
plan); health insurance coverage (the Union aban-
doned demands for retiree and worker compensa-
tion coverage); and initial health insurance premi-
um copayment rates. Measured again by reference
to the proposal withdrawn by the Respondent on 9
March, the Union continues to differ in its propos-
als for (1) pension benefit increases; (2) accident
and sickness benefit increases; (3) the elimination of
any deductible from a health insurance plan; and
(4) the Respondent's assumption of a pro rata share
of any health insurance premium increases. The
Union did not indicate that its new proposals were
a - final offer.
After Ceccaroni made his presentation, Watson
twice asked him if that was all he had to present in
answer to the Respondent's 9 March telegram.
Both times Ceccaroni stated yes. Watson did not
comment about the adequacy of the Union's ' pro-
posals, nor did he indicate at any time during this
meeting what cost concessions might be needed to
avoid closing the Hudson plant. Watson ended the
meeting by stating that the Respondent would get
back to the Union in a couple of days with the de-
cision.
On 25 March the Respondent's board of direc-
tors decided to close the Hudson plant and to relo-
cate the work permanently at its Spartanburg plant.
The parties stipulated that the board made its deci-
sion strictly for the economic reasons of declining
sales and escalating production costs. Production
costs referred mainly to labor costs, especially the
cost of health insurance, which was more expen-
sive at the Hudson plant than at the Spartanburg
plant. The minutes of the directors' meeting, in-
cluded in the record by stipulation, reaffirm these
decisional factors. They also refer to a discussion
of "the impact of shut-down costs at Hudson and
start-up costs at the new plant in Santa Maria,"
stating that "since the cost impact of shutting down
Hudson is a net saving, the California situation is
not relevant to the decision regarding Hudson." In
addition, the minutes state that after the directors
formally voted to close the Hudson plant, they dis-
cussed the possibility of using this plant's equip-
ment at other plants and "deemed appropriate" the
transfer of equipment "where useful and economi-
cally advisable," but "no final decision was made."
The Respondent notified the Union by telegram
dated 25 March of its decision to close the plant
and requested a meeting to bargain over the effects
of the closing. The following day, the Union de-
manded that the Respondent bargain with it over
whether the Hudson plant was to be closed and
stated that it had certain information requests and
proposals to present on the subject.
During the first half of 1980, the Respondent had
decided to replace its facility in Vernon, California,
with a plant in Santa Maria, California, the plant
referred to in the minutes of the directors' meeting.
The Respondent had purchased the necessary land
and construction had started on the new plant,
with completion scheduled for late 1981. Subse-
quent to closing the Hudson plant, the Respondent
decided to transfer 85 percent of the equipment
from that plant to the Santa Maria facility.
The judge found that the Respondent had a duty
to notify and bargain with the Union over its deci-
sion to close and relocate the Hudson plant oper-
ations. He distinguished this duty, however, from
the usual duty applicable to other mandatory sub-
jects of bargaining. He found that the Respondent
did not have a duty to bargain to impasse over the
decision, only the lesser duty to notify the Union
and to afford it the opportunity to be heard about
the closing of the Hudson plant. He also noted that
impasse had been reached earlier in the bargaining
for a new contract and concluded that the 'Union
had failed to convince the Respondent on 23
March that it was seriously interested in bargaining
about the decision to close the plant. Accordingly,
the judge recommended dismissing the complaint
in its entirety.
The first issue to be considered is whether the
Respondent had a mandatory duty to bargain about
its decision to close and relocate the Hudson plant
operations. In Otis Elevator Co., 2 the Board held
that bargaining about a management decision will
be mandatory only when that decision turns on
direct modification of labor costs and not on a
change in the basic direction or nature of the enter-
prise.3
2 269 NLRB 891 (1984).
3 Id. at 893.
ARROW AUTOMOTIVE INDUSTRIES

489
Here, the circumstances surrounding the Re-
spondent's decision to close the Hudson plant and
permanently transfer the work to the Spartanburg
plant were as follows: (1) The Hudson plant had
been losing money since 1977, had lost over $1 mil-
lion the previous year, and was losing more money
in 1981 because of the strike. (2) Although the
northeast market was declining, the major reason
for the Hudson plant's losses was escalating labor
costs. (3) According to the Respondent's calcula-
tions, the Union's wage proposals alone would
have increased those costs by hundreds of thou-
sands of dollars a year. (4) The northeast market
was being serviced more efficiently and with lower
labor costs at the Spartanburg plant. (5) The Re-
spondent raised the issue of closing and transfer in
direct response to the Union's rejection of its con-
tract proposal on March 2. Under these circum-
stances, we find that the Respondent's decision to
close the Hudson plant and to transfer work per-
manently to the Spartanburg facility was a direct
consequence of its frustration with the lack of
progress in resolving economic issues, particularly
health insurance costs, in contract negotiations
with the Union.
The Respondent has failed to substantiate its
claim that other factors determined its decision to
close the Hudson plant or made that decision a
major change in the scope or direction of the Re-
spondent's business. In particular, we reject the
contention of a linkage between the Hudson shut-
down and the opening of the Santa Maria plant.
The record does not support this assertion. The
Respondent had made a commitment to open the
Santa Maria facility long before it had decided to
close the Hudson plant, and there is no evidence to
indicate that the continuation of the Santa Maria
project was in any way contingent on a decision to
close the Hudson plant. The Santa Maria plant
merely replaced the Respondent's Vernon, Califor-
nia facility. In fact, the minutes of the 25 March
board of directors' meeting reflect a concern only
that the Hudson plant closing not have an adverse
effect on the startup costs of the new plant. Fur-
ther, although most of the Hudson plant equipment
was subsequently transferred to the Santa Maria
plant, the decision to do so was not made until
some time after 25 March. Finally, the Hudson
plant closing did represent a consolidation of the
Respondent's operations from four to three plants,
but there was no departure from its existing system
of regional production and sale of the same prod-
uct line.
We conclude that the decision to close the
Hudson facility and to relocate the work to the
Spartanburg plant turned upon labor costs and did
not involve the scope, direction, or nature of the
Respondent's business. Accordingly, we find that
the Respondent's decision was a mandatory subject
of bargaining.4
Having found that the Respondent had a manda-
tory duty to bargain, we next need to determine
what that duty entailed. Contrary to the judge, we
do not draw a distinction between the bargaining
obligation in dispute and the general obligation to
bargain to impasse prior to making unilateral
changes.
It is well established that absent extenuating cir-
cumstances, an employer must bargain to impasse
prior to implementing a unilateral change in man-
datory subjects of bargaining. 5 In applying this
rule, the Board has not differentiated among the
various mandatory subjects of bargaining. It would
be anomalous indeed if we were to permit an em-
ployer, by raising the issue of plant closing in re-
sponse to the Union's demands on mandatory eco-
nomic bargaining subjects, to relieve itself of a pre-
vious duty to bargain to impasse. The cases relied
on by the judge to support his conclusion that an
employer is not obligated to bargain to impasse in
plant closing or relocation situations are inappo-
site. 6 They are concerned with the issues of ade-
quate notice by an employer or adequate action by
a union within the context of the general bargain-
ing obligation defined above.
Under the rule stated above, the Respondent was
required to bargain to impasse over its decision to
close the Hudson plant and to transfer the work to
the Spartanburg plant unless exceptional extenuat-
ing circumstances existed. There is no evidence of
such circumstances. Consequently, we find that the
Respondent had a duty to bargain to impasse
before making its decision.
Having found that the Respondent was required
to bargain to impasse, we now consider the last
issue—whether impasse had been reached prior to
the Respondent's decision on 25 March to close the
plant and relocate the work. Whether there is gen-
uine impasse in a particular situation turns on the
entire collection of facts in each case. The Board in
Taft Broadcasting Co., 163 NLRB 475, 478 (1967),
stated:
Whether a bargaining impasse exists is a matter
of judgment. The bargaining history, the good
4 Members Johansen and Babson agree with this conclusion because it
is consistent with the Supreme Court's opinion in First National Mainte-
nance Corp. v, NLRB, 452 U.S. 666 (1981), and because it is consistent
with any of the views expressed in the Board's decision in Otis Elevator.
5 NLRB v. Katz, 369 U.S. 736 (1962).
6 W G. Best Homes Corp., 253 NLRB 912 (1980); Love's Barbeque Res-
taurant No. 62, 245 NLRB 78 (1979), and Lange Co., 222 NLRB 558
(1976).
490 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
faith of the parties in negotiations, the length
of negotiations, the importance of the issue or
issues as to which there is a disagreement, the
contemporaneous understanding of the parties
as to the state of negotiations are all relevant
factors to be considered in deciding whether
an impasse in bargaining existed.
Applying the foregoing standard to the instant
case, we find that the parties had not yet reached
impasse. Although bargaining was apparently an
impasse prior to 9 March, the Respondent's inter-
jection of the possibility of closing of the Hudson
plant produced substantial bargaining concessions
by the Union. The Respondent demonstrated a lack
of complete candor in subsequent discussion. Only
one negotiating session was held concerning the
possibility of closing the Hudson plant. This possi-
bility, with the resultant job loss, was of paramount
importance to employees and warranted a sufficient
opportunity to discuss the various options available
and the economic considerations involved. No such
discussion occurred. In response to the Respond-
ent's statement that it was considering closing the
Hudson plant, the Union on 23 March substantially
modified its proposal to the Respondent on wages,
benefits, and health insurance. The Union gave no
indication that its revised proposals were final. The
Respondent failed to make any proposals, to com-
ment about the Union's concessions, or to inform
the Union that there would not be another oppor-
tunity to negotiate. In sum, just as the Union had
made substantial concessions in an attempt to meet
the Respondent's concerns about labor costs and to
break the bargaining deadlock which had provoked
the Respondent to consider closing the Hudson
plant, the Respondent peremptorily foreclosed fur-
ther negotiations prior to impasse.
For all the reasons stated above, we fmd that
bargaining had not reached impasse when the Re-
spondent decided to close the Hudson plant and to
relocate the work permanently to the Respondent's
Spartanburg plant. Accordingly, we find that the
Respondent violated Section 8(a)(5) and (1) by
making that decision.
THE REMEDY
Having found that the Respondent has engaged
in certain unfair labor practices within the meaning
of Section 8(a)(5) and (1) of the Act, we shall
order that it cease and desist therefrom and take
certain affirmative action designed to effectuate the
policies of the Act.
In support of exceptions, the General Counsel
and Charging Party argue that the appropriate
remedy would be an order directing the Respond-
ent to reopen the Hudson plant. We find on these
particulars that to do so would be unduly burden-
some and is unnecessary to effectuate the policies
of the Act. 7 We fmd that these policies will be suf-
ficiently fulfilled by utilization of a make-whole
remedy for this economically motivated, unlawful
unilateral decision to close. 9 Pursuant to this
remedy, we shall order the Respondent to recog-
nize and bargain with the Union, on request, about
its decision to close the Hudson plant and to trans-
fer work permanently to its Spartanburg plant. In
order to recreate as nearly as possible the situation
at the time the Respondent should have bargained,
and to make unit employees at the Hudson plant
whole for losses suffered as a result of the unlawful
failure to bargain, we shall order the Respondent
to pay employees their normal wages from 25
March 1981,9 the date of the Hudson plant's clos-
ing, until the earliest of the following conditions
are met: (1) the parties reach mutual agreement
about the plant closing and work-transfer decision;
(2) good-faith bargaining results in a bona fide im-
passe; (3) the Union fails to request bargaining
within 10 days of this Decision and Order; or (4)
the Union subsequently fails to bargain in good
faith. 1 ° Of course, if the Respondent decides to
reopen the Hudson plant and offers to reinstate the
above employees to their same or substantially
equivalent positions, its liability will cease as of
that date. Backpay shall be based on the earnings
which these employees normally would have re-
ceived during the applicable period less any net in-
terim earnings, and shall be computed in the
manner set forth in F. W. Woolworth Co., 90 NLRB
289 (1950), with interest to be computed in the
manner prescribed in New Horizons for the Retard-
ed, 283 NLRB 1173 (1987).
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, the National Labor Relations Board
orders that the Respondent, Arrow Automotive In-
dustries, Inc., Farmingham, Massachusetts, its offi-
cers, agents, successors, and assigns, shall
1. Cease and desist from
7 See Dextra Industries, 273 NLRB 1660 (1985); Great Chinese Ameri-
can Sewing Co., 227 NLRB 1670 (1977).
8 National Family Opinion, 246 NLRB 521 (1979); Winn-Dixie Stores,
147 NLRB 788 (1964).
9 The fact that unit employees were on strike on 25 March does not
affect the remedy because it clearly would have been futile for them to
request reinstatement after the closing. In any event, the striking employ-
ees did unconditionally offer to return to work by telegram dated 8
April. The Respondent's backpay liability would at least begin with this
date.
" As indicated in fn. 11 of the judge's decision, there is no issue in this
case concerning the Respondent's obligation to bargain about the effects
of its decision to close the Hudson plant and to transfer work to the
Spartanburg plant Our Order shall not be construed to mandate bargain-
ing about this subject.
ARROW AUTOMOTIVE INDUSTRIES
491
(a) Refusing to bargain collectively and in good
faith with Local 1596, International Union, United
Automobile, Aerospace & Agricultural Implement
Workers of America, UAW, as the exclusive repre-
sentative of its employees in the appropriate unit
set forth below, concerning the decision to close
the Hudson, Massachusetts plant and to relocate
the work permanently to its Spartanburg, South
Carolina plant. The appropriate unit is:
All production and maintenance employees in-
cluding group leaders and truck drivers em-
ployed by the Respondent in its Hudson plant,
but excluding quality control auditors, office
clerical employees, salesmen, confidential em-
ployees, guards, watchmen, professional em-
ployees and supervisors as defined in the Act.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) On request, bargain with the Union as the ex-
clusive representative of the employees in the
above-described appropriate unit with respect to
the decision to close the Hudson plant and transfer
the work to the Spartanburg plant and, if an under-
standing is reached, embody the understanding in a
signed agreement.
(b) Pay the terminated Hudson plant employees
their normal wages in the manner and for the
period set forth in the remedy section of this deci-
sion.
(c) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to facilitate the de-
termination of the amounts due each of the termi-
nated Hudson plant employees.
(d) Mail copies of the attached notice marked
"Appendix" to all the Respondent's employees
employed at its Hudson plant in the appropriate
unit at the time of the closing.
(e) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
11 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board"
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to mail a copy of this notice to
all employees who were employed by us at our
Hudson, Massachusetts plant the time it closed on
25 March 1981.
WE WILL NOT refuse to bargain collectively and
in good faith with Local 1596, International Union,
United Automobile, Aerospace & Agricultural Im-
plement Workers of America, UAW as the exclu-
sive representative of our employees in the appro-
priate unit set forth below, concerning the decision
to close the Hudson plant and relocate the work to
our Spartanburg, South Carolina plant. The appro-
priate unit is:
All production and maintenance employees in-
cluding group leaders and truck drivers em-
ployed by us at our Hudson plant, but exclud-
ing quality control auditors, office clerical em-
ployees, salesmen, confidential employees,
guards, watchmen, professional employees and
supervisors as defined in the Act.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL, on request, bargain in good faith with
the Union as the exclusive bargaining representa-
tive of all employees in the above-described appro-
priate unit with respect to our decision to close the
Hudson plant and transfer the work to our Spartan-
burg plant, including any disputes with respect to
the effectuation of the remedy set forth in the De-
cision and Order of the National Labor Relations
Board and, if an understanding is reached, embody
it in a signed agreement.
WE WILL pay the terminated Hudson plant em-
ployees their normal wages in the manner and for
the period required by the Decision and Order of
the National Labor Relations Board.
ARROW AUTOMOTIVE INDUSTRIES,
INC.
Anthony D. DaDalt, Esq., for the General Counsel.
James F. Smith, Esq. (Constangy, Brooks & Smith), of At-
lanta, Georgia, and Paul E. Stanzler, Esq. (Burns & Le-
vinson), of Boston, Massachusetts, for the Respondent.
492 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Judith A. Scott, Esq., of Detroit, Michigan, for the
Charging Party.
DECISION
STATEMENT OF THE CASE
JOEL A. HARMATZ, Administrative Law Judge. This
proceeding was heard in Boston, Massachusetts, on
March 2 and 3, 1982, on the unfair labor practice charge
filed on,April 16, 1981, and a complaint issued on June
18, 1981, which, as amended, alleged that Respondent re-
fused to bargain in good faith by failing to negotiate with
the Union with respect to its decision to transfer work
from its Hudson, Massachusetts plant to its Spartanburg,
South Carolina plant, and by declining to furnish the
Union certain information requested by the Union and
necessary and relevant to the performance of the Union's
function as collective-bargaining representative. 1 In its
duly filed answers, Respondent denied that any unfair
labor practices were committed. 2 Following close of the
hearing, briefs were filed on behalf of the General Coun-
sel, the Charging Party, and the Respondent.
On the entire record in this proceeding, 3 including my
opportunity to engage in direct observation of the wit-
nesses while testifying and their demeanor, and after con-
sideration of the posthearing briefs, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent is a Massachusetts corporation engaged in
the remanufacture, sales and distribution of automotive
parts. At times material, Respondent had engaged in
It was alleged in pars. 13(a) through (g) of the complaint that certain
information requested by the Union was not provided by the Respondent,
in violation of the obligation to bargain in good faith. Although the Gen-
eral Counsel maintains its position that the mformation was not delivered
in timely a fashion, the parties, for purposes of this proceeding, stipulated
that on June 25, 1981, and thereafter, the Union obtained sufficient infor-
mation to satisfy the requests referred to in pars. 13(a) through (g) of the
complaint. Based thereon, an all-party request to amend the complaint by
deletion of par. 13 was granted by me.
2 The complaint as originally issued on June 18, 1981, included an alle-
gation in par. 10 to the effect that "the Union requested Respondent to
negotiate with respect to its decision to close the Hudson plant." On Feb-
ruary 4, 1982, that paragraph was amended to recite that "the Union re-
quested Respondent to negotiate with respect to Its decision to transfer
work from the Hudson plant to the Spartanburg, South Carolina plant."
In its amended answer to the complaint, Respondent urged that this
amendatory action by the Regional Director was invalid and that the
General Counsel thereby sought to circumvent the Supreme Court's deci-
sion in First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981). In
addition, it is argued that the amendment produces a distinct cause of
action barred by Sec. 10(b) of the Act. For reasons fully stated at the
hearing, which need not be repeated here, it is my view that the instant
case of action was maintainable under either of the supporting factual al-
legations. Each version was sufficient to apprise Respondent of the un-
lawful conduct with which it was charged. Thus, the amendment was
viewed by me as providing a dispensable form of additional specificity
that in no way influenced the contemplated scope of litigation under the
Supreme Court's decision in First National Maintenance Corp., supra. The
claim that the new allegation was barred by 10(b) is for this and other
reasons lacking in merit. See, e.g., NLRB v. Dinion Coil Co., Inc., 201
F.2d 484 (2d Cir. 1952).
3 The General Counsel and Respondent have moved to correct the of-
ficial transcript of proceedings in numerous respects. Consistent there-
with, and as tecollection confirms, the motions are granted to the extent
indicated on Appendix attached thereto. [Omitted from publication.]
such operations from its plants located in Spartanburg,
South Carolina; Morri1ton, Arkansas; Santa Maria, Cali-
fornia; and the primary location involved here Hudson,
Massachusetts. In the course and conduct of the oper-
ations, it is a fair inference and I fmd that Respondent
annually purchases and receives as its plants goods and
materials valued in excess of $50,000 shipped directly
from points located outside the States in which they are
located and ships goods and materials valued in excess of
$50,000 directly in interstate commerce.
The complaint alleges, the answer admits, and I find
that Respondent is, and has been an employer engaged in
commerce within the meaning of Section 2(6) and (7) of
the Act.
H. THE LABOR ORGANIZATION INVOLVED
The complaint alleges, the answer admits, and I fmd
that Local 1596, International Union, United Automo-
bile, Aerospace & Agricultural Implement Workers of
America, UAW is, and has been at all times material, a
labor organization within the meaning of Section 2(5) of
the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues
This case arises from an employer's implementation of
an economically founded decision to close a unionized
plant and to terminate employees at the location while
transferring product operations from that facility to an
existing nonunion plant. Issue is taken whether the Em-
ployer was obliged to bargain in good faith with respect
to such a "decision" under the concept endorsed by the
United States Supreme Court in Fibreboard Paper Prod-
ucts v. NLRB, 379 U.S. 203 (1964), as the General Coun-
sel and Charging Party contend, or whether, as Re-
spondent argues, no such obligation existed when consid-
ered in the light of the Court's more recent pronounce-
ment in First National Maintenance Corp. v. NLRB, 452
U.S. 666 (1981). Beyond this legal issue is the factual
question, if such a duty is found to exist, whether Re-
spondent bargained in good faith prior to implementation
of its closedown decision.
B. The Basic Facts
Respondent's Hudson, Massachusetts plant was estab-
lished in 1968. It was the oldest of Respondent's produc-
tion facilities. Production and maintenance employees at
the facility had been represented by the Union since 1971
on the basis of a certification issued by the National
Labor Relations Board. Respondent and the Union,
thereafter, had entered into successive collective-bargain-
ing agreements, the most recent of which expired on No-
vember 30, 1980. Prior thereto, contract renewal negotia-
tions opened on October 22, 1980. Agreement could not
be reached. On March 25, 1981, the Union was notified
that the Hudson plant would be closed.
On April 16, 1981, the Union filed unfair labor prac-
tice charges alleging that Respondent in this respect
failed to meet its statutory bargaining obligations.
ARROW AUTOMOTIVE INDUSTRIES 493
By way of background it is noted that Respondent is a
multiplant enterprise. At the time of the Hudson shut-
down, it functioned through plants located in Spartan-
burg, South Carolina; Morrilton, Arkansas; and Santa
Maria, California. These latter plants have never been
unionized. They are engaged in production of identical
product lines which parallel those formerly produced at
Hudson. Pursuant to Respondent's distribution and mar-
keting practices, each of its respective plants primarily
produce for customers in the separate geographic area in
which they are located.
Prior to announcement of the closedown decision, the
parties met in contract renewal talks, without success, on
nine separate occasions prior to December 1, 1980, and
on February 25, 1981, with few changes of substance in
the position of the parties during the interim. 4 On this
latter occasion, the Union was informed that the Compa-
ny was not certain as how long it could keep its most
recent contract proposal on the table, and that the Com-
pany was considering two alternatives; namely, resuming
operations at the strike-bound Hudson facility utilizing
permanent replacements, or closing that plant permanent-
1y.5
Thereafter, a meeting of the union membership was
conducted on March 2, 1981, enabling employees to vote
on acceptance or rejection of the Employer's last con-
tract offer. The offer was rejected. The Company was
notified of this development during the same week. Ac-
cordingly, the strike, which from its inception effectively
curtailed production at Hudson, continued.6
According to the credited testimony of Watson, in
early March he had a conversation with James Ledbet-
ter, Respondent's executive vice president, bearing on
the unsettled state of the negotiations. Ledbetter in-
quired, "How long can this damn thing keep going on as
it is," and then informed Watson that he wanted some-
thing done and that closing of the plant was a consider-
ation. Later, when Watson informed Ledbetter that the
Employer's contract offer had been rejected, Ledbetter
indicated that "he was serious about wanting to close the
plant." In consequence, as a first step toward that end,
4 A complete company proposal had been made on November 30,
1980. That, together with the original union proposal made on October
22, 1980, were on the table as of February 25, 1981. Yet, while the strike
continued at that time, little movement had been shown on the part of
the Union. Indeed, Frank Ceccarom, the Union's chief spokesman in the
negotiations and a subregional Director of the UAW, conceded that at
the February session the Union failed to liberalize its prior demands. In
the course of that meeting, the Company reoffered a previously with-
drawn concession bearing upon safety shoes and prescription safety eye-
glasses conditioned on the Union's immediate acceptance of the contract.
6 The above is based on the credited testimony of Scott P. Watson, an
attorney with the law firm of Constangy, Brooks & Smith. Watson acted
as chief spokesman for the Respondent in these negotiations. In this re-
spect, he was corroborated by Robert Holzwasser. Although an attempt
to corroborate was made through the testunOny of Pamela Armstrong,
personnel manager at the Hudson plant, I regard her testimony as unreli-
able because I was not convinced that it was based on independent recol-
lection. Ceccarom's denial that any such statement was made was not be-
lieved.
6 The Hudson plant serviced Respondent's market in the northeast
sector of the United States. During the strike, customers in that area
were serviced from the Spartanburg facility, with orders of Hudson cus-
tomers simply transferred, for production at Spartanburg.
Watson drafted a telegram that was sent to the Union on
March 9, 1981, and provided as follows:
THIS IS TO NOTIFY YOU THAT THE EMPLOYER,
ARROW AUTOMOTIVE INDUSTRIES, INC., HEREBY
WITHDRAWS ALL OF ITS CONTRACT PROPOSALS PRE-
VIOUSLY MADE. AT THE TIME, THE EMPLOYER NOW
HAS UNDER CONSIDERATION A DECISION WHETHER
OR NOT TO CONTINUE OPERATIONS AT ITS HUDSON,
MA FACILITY. BEFORE A DECISION IS MADE IN THIS
REGARD, THE EMPLOYER SOLICITS YOUR INPUT AND
SUGGESTIONS. FOR THIS PURPOSE WE REQUEST A
MEETING AT YOUR EARLIEST CONVENIENCE ON OR
BEFORE TUESDAY, MARCH 24, 1981.7
On March 23, the meeting contemplated by said the
telegram was held. Attending on behalf of the Company
were Watson, Armstrong, and Robert Holzwasser, Re-
spondent's new products director. The Union was repre-
sented by Ceccaroni, Vincent O'Fria, the president of
Local 1596, Attorney Judith Scott, and Robert O'Byck,
an International representative of the UAW. At the
outset O'Byck and Scott were not present. After a delay,
however, Ceccaroni expressed a willingness to meet in
their absence. Watson agreed after receiving assurances
that Ceccaroni would act as Union's spokesman. The
meeting was opened when Federal Mediator James
Arthur read the March 9 telegram. Ceccaroni was then
questioned about the Union's response, whereupon he
simply suggested that the Company not close the plant.
At this juncture, Watson asked if he had anything further
to say. Ceccaroni responded in the negative, but did in-
quire about the Company's reason for closing. When
Watson indicated that it was "for economic consider-
ations," Ceccaroni said "This is a good point in time to
stop and wait for the experts to arrive." Watson agreed
but noted that the Hudson plant showed a loss of
$1,092,000, in calendar year 1980. At this juncture, the
parties recessed until the arrival of Attorney Scott and
International Representative O'Byck. Upon their arrival,
the Union requested a caucus. The session then resumed
with Ceccaroni informing the Company that the Union
had prepared a 3-year contract proposal. He presented
the proposal orally, there was some discussion in this re-
spect, and Watson took notes. On conclusion of the
Union's presentation, Watson asked Ceccaroni if that was
all he had to present in response to the March 9 tele-
gram. The former responded in the affirmative. The
question was repeated by Watson and answered in identi-
cal fashion. The meeting ended when Watson informed
Ceccaroni that the Company would get back with him in
a couple of days with our decision."
7 See G.C. nth. 2, App. A According to the testimony of David
Koontz, financial vice president of the Respondent, he was asked by Led-
better during the first week of March to prepare an economic evaluation,
calling for establishment of a distribution center for the New England
area to replace the Hudson plant. Koontz completed this report and
made it available to members of the board of directors on March 9.
The foregoing is based on the credited testimony of Watson Watson
was corroborated by Robert Holzwasser and Pamela Armstrong in all
material respects. Their testimony was accepted over that of Ceccaroni
and Wilfred Lambert, an employee member of the negotiating committee.
Continued
494 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Thereafter, on the morning of March 25, Respondent's
board of directors convened and elected to accept a rec-
ommendation made by management that the Hudson op-
eration be closed. In connection therewith, authority was
conferred on management executives to do such acts and
things in connection with the shut down as each of them
may deem appropriate to carry out the mandate of this
vote." No final decision was made concerning the dispo-
sition of equipment, but it was deemed appropriate to
transfer and utilize the machinery and equipment in other
plants if economically advisable. 9 Consistent therewith
Respondent, through its attorney, immediately sent a
telegram to the Union, informing as follows:
REGARDING ARROW AUTOMOTIVE INDUSTRIES, INC.,
HUDSON MASS. AFTER CAREFUL CONSIDERTAION OF
THE UAW'S INPUT AND SUGGESTIONS DURING OUR
MEETING OF MARCH 23, 1981, AT THE BOSTON, FMCS
OFFICES, THE EMPLOYER HAS MADE THE DECISION
TO CLOSE ITS HUDSON, MASS. PLANT FACILITY. EM-
PLOYER REQUEST A MEETING AS SOON AS POSSIBLE
FOR THE PURPOSE OF DISCUSSING THE EFFECT OF
SUCH CLOSING ON THE BARGAINING UNIT EMPLOY-
EES INVOLVED. SUGGEST SUCH MEETING BE HELD
THURSDAY, 3-26-81 OR FRIDAY, 3-27-81.
By telegram of March 26, 1981, the Union registered its
protest, in the following terms:
IN RESPONSE TO YOUR TELEGRAM OF 3-25-81 UAW
STATES AS FOLLOWS:
1. OUR DISCUSSION AND THE UAW PROPOSAL OF 3—
25-81 EXPRESSLY BASED ON OUR UNDERSTANDING
THAT ANY DISCUSSION REGARDING THE POSSIBLE
CLOSING OF THE HUDSON PLANT WAS TEMPORARILY
SET ASIDE IN THE HOPE OF RESOLVING THE CUR-
RENT CONTRACT IMPASSE IN THE NORMAL COLLEC-
TIVE BARGAINING ARENA
2. FACED WITH THE COMPANY'S REJECTION OF THE
UAW 3-23-81 PROPOSAL UAW NOW DEMANDS IMME-
DIATE BARGAINING OVER WHETHER OR NOT THE
PLANT IS TO BE CLOSED. WE HAVE CERTAIN INFOR-
MATION REQUESTS AND, PROPOSALS TO PRESENT ON
THIS SUBJECT. THE COMPANY HAS NOT YET MET ITS
LEGAL OBLIGATION IN THIS AREA
3. IF THE COMPANY DECIDES TO CLOSE THE PLANT
FOLLOWING GOOD FAITH NEGOTIATIONS OVER THE
DECISION WHETHER OR NOT TO CLOSE, WE WILL
THEN DEMAND BARGAINING OVER THE IMPACT OF
THE CLOSING ON OUR MEMBERSHIP. WE HEREBY
I did not believe that in the initial confrontation of the parties, Ceccaroni
asked Watson to put the plant closing aside and afford the Union a
chance to caucus to draft a 3-year proposal, which the Union would rec-
ommend be ratified. In this respect, the version adduced from Respond-
ent's witnesses impressed me as more logical and consistent, which was
aided to an extent by Lamberes concession that the idea that the Union
present a new contract proposal originated with Mediator Jim Arthur.
Lambert's further acknowledgement that Ceccaroni was dubious about
makmg such proposal suggests that Ceccarom probably did not broach
that possibility to the Company until after consulting with Attorney Scott
and International Representative O'Byck. It will be recalled that the par-
ties had recessed prior to arrival of Scott and O'Byck.
9 See G.0 Exh. 2, App B.
CONFIRM A NEGOTIATION SESSION FOR FRIDAY
MARCH 27 81 10AM AT FEDERAL MEDIATION IN
BOSTON.
The parties again met on March 27, 1981. The Union
reiterated its demand for bargaining with respect to the
shutdown decision and, in support thereof, requested in-
formation arguably relevant thereto. The Respondent at
that juncture declined to furnish the requested informa-
tion." As for the closedown decision itself, Respond-
ent's refusal to bargain further was reiterated by Wat-
son's declaration that the decision to close Hudson "was
irrevocable." Nonetheless, On inquiry by the Union's at-
torney, Watson stated that he could not at that time
inform the Union whether work formerly performed at
Hudson was going to be transferred. He also denied
knowledge about the manner in which the Company
would dispose of Hudson's machinery and equipment."
C. Concluding Analysis
I. The basic bargaining obligation
As a general proposition, the statutory obligation to
bargain in good faith requires notice to and consultation
with exclusive representative prior to management's im-
plementation of changes in "wages, hours and other
terms and condition of employment" as that standard ap-
pears in Section 8(d) of the Act. Bargaining concerning
subjects falling within those terms is mandatory even if
motivated economically and provoked by considerations
unrelated to union activity. In this proceeding there is
evidence that Respondent may have fulfilled its statutory
obligation to bargain in good faith before deciding to
close the Hudson plant. However, before entertaining
that question, a threshold issue exists whether Respond-
ent held a statutory duty to do so; a question which
turns on whether such a decision was within "wages,
hours and other terms and conditions of employment
"wages, hours and other terms and conditions of employ-
ment," hence subjecting management's ability to act Uni-
laterally to statutory constraints. It is noted initially that
the critical language in Section 8(d) is not to be con-
strued literally. "Congress deliberately left the words
'wages, hours and other terms and conditions of employ-
ment' without further defmition for it did not intend to
deprive the Board of the power further to defme those
terms in light of specific industrial practices." 12 Two
major decisions of the Supreme Court address the scope
of this statutory standard as it influences *hat otherwise
might be termed management prerogatives. In Fibreboard
Paper Products v. NLRB, 379 U.S. 203 (1964), it was held
that a decision to contract out work of employees in a
bargaining unit is is mandatory subject of collective bar-
gaining in circumstances where management's decision
was founded on purely economic considerations. Thus,
" The information was not provided to the Union until June 25, 1981.
" The Company acknowledged its obligation to bargain about the
impact of its decision on Hudson employees The parties met again for
this purpose on May 21 and June 26. There is neither allegation nor claim
that Respondent violated its statutory bargaining obligation in this re-
spect.
12 First National Maintenance Corp v. NLRB, 452 U.S. 666, 675 (1981).
ARROW AUTOMOTIVE INDUSTRIES 495
the withdrawal of unit work through subcontracting was
viewed as within the mandatory subjects covered by
Section 8(d) of the Act, with the Court stating at 379
U.S. at 213-214 as follows:
The facts of the present case illustrate the propri-
ety of submitting the dispute to collective negotia-
tion. The Company's decision to contract out the
maintenance work did not alter the Company's
basic operation. The maintenance work still had to
be performed in the plant. No capital investment
was contemplated; the Company merely replaced
existing employees with those of an independent
contractor to do the same work under similar con-
ditions of employment. Therefore, to require the
employer to bargain about the matter would not
significantly abridge his freedom to manage the
business.
. . . Yet, it is contended that when an employer
can effect cost savings in these respects by contract-
ing the work out, there is no need to attempt to
achieve similiar economics through negotiation with
existing employees or provide them with an oppor-
tunity to negotiate a mutually acceptable alterna-
tive. The short answer is that, although it is not
possible to say whether a satisfactory solution could
be achieved national labor policy is founded upon
the congressional determination that the chances are
good enough to warrant subjecting such issues to
the process of collective negotiation.
In 1981, that holding was afforded a further perspec-
tive when the Court in First National Maintenance, supra,
concluded that an employer was free to take unilateral
action and to deny the employee representative an op-
portunity to consult with respect to a decision whereby a
segment of its overall operation was terminated. Viewing
such management action as materially distinct from the
Court's 1964 treatment of subcontracting, the Court
stated as follows:
We conclude that the harm likely to be done to an
employer's need to operate freely in deciding
whether to shut down part of its business purely for
economic reasons outweighs the incremental benefit
that might be gained through the union's participa-
tion in making the decision, and we hold that the
decision itself is not part of § 8(d)'s "terms and con-
ditions," . . . over which Congress has mandated
bargaining."
The diverse results in Fibreboard and First National
Maintenance were not lacking in common underpinnings.
Both involved economically oriented management deci-
sions that impacted adversely on the employees. Thus,
these elements will not alone foretell what presently
might be deemed as within or without Section 8(d). In-
stead', the inquiry must focus on competing interest high-
lighted by the Court in First National Maintenance
through the following statement:
13 452 LT S. at 686.
Congress did not explicitly state what issues of
mutual concern to the union and management it in-
tended to exclude from mandatory bargaining.
Nonetheless, in view ,of an employer's need for un-
encumbered decisionmaking, bargaining over man-
agement decisions that have a substantial impact on
the continued availability of employment should be
required only if the benefit, for labor-management
relations and the collective bargaining process, out-
weighs the burden placed on the conduct of the
business."
Thus, contrary to the Respondent, partial closedown
decisions will remain subject to Section 8(d) if the bene-
fit for the collective-bargaining process outweighs the
burden placed on the conduct of the business. The inter-
ests of management were afforded primacy under the
facts before the Court in First National Maintenance.
There, the employer involved was obligated to perform
maintenance at a number of locations including a nursing
home. It hired its personnel separately for each custom-
er, and did not transfer employees between locations. Its
employees at the nursing home were newly organized,
but prior to union certification at that location, the em-
ployer, in view of an ongoing dispute with the nursing
home (Greenpark) over the maintenance fee and other
matters, notified the latter of its desire to cancel the con-
tract. Later, the employer again notified the nursing
home that it would cancel its contract unless the mainte-
nance fee was increased. The nursing home declined and
the employer terminated the contract, thus ending its op-
eration at that location, requiring the discharge of its em-
ployees.
Justification for the view that interests served by col-
lective bargaining would not take precedence over man-
agement discretion on such facts was articulated by the
Court as follows:
In order to illustrate the limits of our holding, we
turn again to the specific facts of this case. First, we
note that when petitioner decided to terminate its
Greenpark contract, it had no intention to replace
the discharged employees or to move that operation
elsewhere. Petitioner's sole purpose was to reduce
its economic loss, and the union made no claim of
anti union aniumus. In addition, petitioner's dispute
with Greenpark was solely over the size of the
management fee Greenpark was willing to pay. The
union had no control or authority over that fee.
The most that the union could have offered would
have been advice and concessions that Greenpark,
the third party upon whom rested the success or
failure of the contract, had no duty even to consid-
er. These facts in particular distinguish this case
from the subcontracting issue presented in Fibre-
board. Further, the union was not selected as the
bargaining representative or certified until well after
petitioner's economic difficulties at Greenpark had
begun. We thus are not faced with an employer's
abrogation of ongoing negotiations or existing bar-
14 452 U.S. at 679.
496 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
gaining agreement. Finally, while petitioner's busi-
ness enterprise did not involve the investment of
large amounts of capital in single locations, we do
not believe that the absence of "significant invest-
ment or withdrawal of capital," General Motors
Corp., GMC Truck & Coach Div., 191 NLRB at 952,
is crucial. The decision to halt work at this specific
location represented a significant change in petition-
er's operations, a change not unlike opening a new
line of business or going out of business entirely.15
This use of language limitation would seemingly pre-
clude interpretation that compulsory bargaining was
ruled out absolutely, regarding all partial shutdowns re-
gardless of form. However, weight must also be accord-
ed to the Court's expressed concern that the law develop
under conditions affording predictability to managers:
The concept of mandatory bargaining is premised
on the belief that collective discussions backed by
the parties' economic weapons will result in deci-
sions that are better for both management and labor
and for society as a whole. . . . This will be, how-
ever, only if the subject proposed for discussion is
amenable to resolution through the bargaining proc-
ess. Management must be free from the constraints
of the bargaining process to the extent essential for
the running of a profitable business."
An employer would have difficulty determining be-
forehand whether it was faced with a situation re-
quiring bargaining or one that involved economic
necessity sufficiently compelling to obviate the duty
to bargain. If it should decide to risk not bargaining,
it might be faced ultimately with harsh remedies
forcing it to pay large amounts of backpay to em-
ployees who likely would have been discharged re-
gardless of bargaining.. . .17
To that end there is evidence that First National Mainte-
nance adopted an absolute, per se approach, but utilized
language of limitation to confirm that its holding per-
tained solely to shutdowns that are accompanied by
abandonment of a segment of the employer's oper-
ations. 18 In other words Fibreboard remains viable prece-
dent with respect to business decisions that curtail an
employer's work force where there is no concommitant
elimination of goods and services produced or operations
incidental thereto. That management action within this
latter category remained subject to compulsory bargain-
ing was evident from the Court's exclusion from the
scope of its holding, as follows:
15 452 U.S. at 687, 688.
16 452 U.S. at 678, 679,
17 452 U.S. at 684, 685.
18 First National Maintenance was not the first case in which statutory
requirements were relaxed m circumstances where elimination of work
was accompanied by a partial "going out of business." An important dis-
tinction was drawn on this very basis m Textile Workers v. Darlington
MA: Co., 380 U.S. 263, 273, between subcontracting and runaway shop
situations and other management action in which profit is no longer pos-
sible on the eliminated busmess operation.
In this opinion we of course intimate no view as to
other types of management decisions, such as plant
relocation, sales, other kinds of subcontracting, au-
tomation, etc., which are to be considered on their
particular facts. . . .19
Plant relocation, subcontracting, automation, consolida-
tion, and other forms of unit work transfer may as an in-
cident result in complete shutdown of an operating facili-
ty. Yet they have common attributes important to the
suitability of collective bargaining as a means of avoiding
job loss. Thus, through measures of this sort, manage-
ment retains the product line or service in question as
part of its overall operation, but, more often than not,
seeks to achieve greater efficiency solely through dis-
placement of its own employees by means less costly or
labor intense. Thus, unlike permanent elimination of a
product, business lines or service, as was the case in First
National Maintenance, competitive labor costs are inher-
ently relevant, if not controlling, with respect to such de-
cisions. In other words, enforced participation of the
statutory representative with respect to the latter pre-
sents a far greater possibility of amicable accommodation
than when there is a total or partial going out of busi-
ness. Accordingly, First National Maintenance is not
viewed as absolutely excluding any and all closedown
decisions from the scope of mandatory collective bar-
gaining. By restricting the holding to shutdowns, which
are incidential to and coextensive with a "going out of
business," the action by the Supreme Court is reconcila-
ble with both Fibreboard and the Court's declaration in
First National Maintenance itself that traditional interpre-
tations of Section 8(d) be preserved with respect to plant
closedowns if simply resulting from relocation, subcon-
tracting, automation, consolidation, or transfers of unit
work, in which the scope of the operation remains un-
changed, but represented employee interests are seriously
impeded.2°
Consistent with this interpretation, 21 it is concluded
that First National Maintenance is of no solace to Re-
19 452 'U.S at 686 fn. 22.
It is difficult to rationalize this class of management judgments, as
being "akin to the decision whether to be m business at all." 452 U.S. at
677.
21 Independent research fads to disclose that the Board, to date, has
expressed a view as to the scope of First National Maintenance Cf. Park-
Ohio Industries, 257 NLRB 413 (1981) (interplant transfer of unit work);
and Eastern Market Beef Pmcessing Corp., 259 NLRB 102 (1981) (dis-
criminatory shutdown and transfer of work in violation of Section
8(a)(3)). These cases, cited by the General Counsel and Charging Party,
fail to disclose otherwise and are superfluous. Entitled to no greater
weight is the Respondent's reliance on the action of the Board m Brock-
way Motor Trucks v. NLRB, 656 F 2d 32 (3d Cir. 1981). While that case
was pendmg on review, the Board consented to the entry of a decree de-
nying enforcement of a pending 8(a)(5) and (1) order, which, in turn, was
based on an employer's failure to bargain over its decision to shutdown
part of its business purely for economic reasons. That step was taken by
the Board in view of the supervening decisions by the Supreme Court in
First National Maintenance. However, there is no conflict between such a
disposition and the interpretation afforded First National Maintenance
herein. Brockway involved the shutdown of a service and distribution fa-
cility, incidental to a decision by management to abandon in the local
market area that segment of its business. Accordingly, Brockway is
viewed as distinguishable on material grounds To the same effect is
Continued
ARROW AUTOMOTIVE INDUSTRIES 497
spondent herein. Thus, at the time of the Hudson close-
down, Respondent had at least two other plants engaged
in identical production operations. Pursuant to Respond-
ent's established distribution policy, each plant primarily
produced for the customers in specific and seperate geo-
graphic areas in which they were located. Orders from
Hudson's customers during the strike were transferred
to, and the plant's market was serviced from, Respond-
ent's Spartanburg plant. By virtues of the closedown, this
temporary measure became permanent. However, after
March 1981, the work force at Spartanburg was aug-
mented by 100 jobs. Thus, Respondent did not abandon
its Northeast market, customers, or product line, but
simply serviced that market through consolidated, ex-
panded operations at a different facility.
In concluding that Fibreboard is controlling and that
closure of the Hudson plant was a mandatory subject of
bargaining, it is further noted that Respondent's decision
did not arise in a context of urgency or in circumstances
where delayed implementation through collective bar-
gaining would necessarily impose a hardship on the
Company. As indicated, because of the strike, operating
costs were not accumulating at Hudson, and the North-
east market was already being serviced from. the Spartan-
burg plant. From the standpoint of disposition of equip-
ment, 2 2 real property, 2 3 and administration, 24 the deci-
sion, when objectively viewed, appears to have been to-
tally executory when made and not subject to any form
of final commitment for a considerable period of time
thereafter. Also of significance, it would seem, is the fact
that the decision involved here was provoked solely by
what Respondent characterizes as the "Union's intransi-
geance" during the contract renewal negotiations.
Indeed, on this record, Respondent is in no position to
deny that the unresolved state of negotiations, the ongo-
ing strike, and its own view as to the Union's bargaining
posture represented "the catalyst for the action." It is
true that Respondent urges that the closedown was justi-
fied by factors independent of these union-related consid-
erations. Nonetheless, the precipitant cause was conced-
ed and the economic advantages cited by Respondent
were merely derivative benefits. Indeed, most of these
considerations involved economics in existence and read-
ily available to Respondent's managers well in advance
NLRB v. Robin American Corp., 667 F.2d 1170 (5th Cir. 1982). In that
case, the court, pointing to the supervening decision in First National
Maintenance, simply deleted from a Board order provisions requiring the
employer to cease and desist from "closing any department or discontinu-
ing any operation or type of work without notifying and bargaining with
the aforenamed imion." Consistent with the views expressed herein, such
an order was broad enough to include nonmandatory subjects of bargain-
ing. Respondent also cites NLRB v. Gibraltar Industries, 653 F.2d 1091
(6th Cir. 1981), a case decided only 5 weeks after the Supreme Court
handed down First National Maintenance. Although Gibraltar tends to
support the view that shutdown-production transfer decisions are not
subject to a duty to engage in advance notification, the Board's nonad-
herence to that view is evident from its petitions, first, for rehearing, and
than for rehearing en banc.
22 Eighty-percent of the equipment was transferred to the Santa Maria
plant, 5 percent was sold, 10 percent put in storage, and 5 percent was
scrapped. See G.C. Exh. 2, p.4, stipulation 27.
23 Respondent leased the plant from an entity owned by members of
the Holzwasser family.
24 The administrative headquarters remained at Hudson until moved to
Framingham, Massachusetts, on September 15, 1981.
of the negotiations which opened in October 1980. 25 In
sum, to bring into true focus the impact of collective bar-
gaining on Respondent's action, one need only consider
the sequence of events furnishing the foreground of its
decision. Thus, undisputed testimony established that at
the negotiation session of February 23, 1981, the Compa-
ny actively pursued agreement to the point of making
concessions conditioned on union acceptance of its com-
plete proposal. That proposal was taken by the Union to
the membership on March 2, 1981. On March 9, 1981,
after Respondent was notified that its proposal had been
rejected, it shifted the topic for negotiation to possible
plant closure. The sole supervening event was employee
rejection of the last offer. According to my interpreta-
tion, the issue concerning continued operation at the
Hudson location was presented to the Respondent's
board of directors on March 27 solely because of the un-
resolved state of the contract negotiations, and the direc-
tors would not have acted on any of these historic and
preexisting economic considerations had that not been
the case. The dispute herein was one which would seem
"ideally suited" to resolution through collective bargain-
ing. Accordingly, it is concluded that Respondent was
under a duty to afford advance notification and an op-
portunity to bargain to the Union before closing the
Hudson plant.
2. Bargaining as to the closedown
As indicated, the Union's first information about a pos-
sible shutdown did not come in the form of a fait accom-
pli. By virtue of Respondent's telegram of March 9, the
Union was given both advance notice and Opportunity to
be heard with respect to the issue. This was followed by
a single negotiating session that was held on March 23.
At that time, the Union's position on the telegram was
solicited by Respondent's representative. However, it
does not appear that the Union, in the 2 weeks, that fol-
lowed the March 9 telegram, structured its strategy in
specific terms. Eventually, however, it did respond, but
did so in form of a contract proposal. Respondent's bar-
gaining representatives listened, took notes, and inquired
about certain elements thereof. Prior to the close of the
session, the Union was questioned twice as whether it
had anything further to add. Twice the Union responded
in the negative. Thereafter, Respondent was informed
that its answer would be forthcoming. On March 25, the
Company, through its board of directors, elected to per-
manently close the Hudson plant, and informed the
Union that its contract proposal had been rejected.
25 It is difficult to imagine that on March 27, 1981, the board of direc-
tors was startled with the revelation that as the Hudson equipment was
valued at an estimated $900,000, its utilization of the Santa Maria plant
would offset capital expenditures and hence the debt required to finance
that new facility. Respondent's managers are also charged with long-held
knowledge that the Spartanburg plant operated at a higher profit ratio
than the Hudson plant, that in recent years sales had ' declined in the
northeast and that the Hudson plant had sustained lossess in the past. Al-
though it is possible that the directors were not certain prior to the strike
that Spartanburg could produce satisfactorily for the northeast market,
this consideration would have emerged well prior to consideration of a
possible shutdown at Hudson
498 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
The question that arises is whether the consultation af-
forded by Respondent sufficed under standards of good-
faith collective bargaining. Board precedent regarding
the quality of bargaining necessary to satisfy the 8(d) ob-
ligation in connection with economically oriented man-
agement decisions is less than clear. It would seem, how-
ever, that an accommodation of employee interest to tra-
ditional management prerogatives would be preserved
only if obligations exacted from employers in this area of
the law afford opportunity to enhance the competitive'
economic posture of represented employees, while doing
as little damage as possible to the freedom of manage-
ment to run the business. Pursuant to such a guideline,
the possibility is diminishesd that Fibreboard will confer
on labor organizations "a power that might be used to
thwart management's intentions in a manner unrelated to
any feasible solution the Union might propose."26 Under
such a view, "Dnjanagement . . . [will] be - . . [subject
to] . . . the constraints of the bargaining process,"27
only to the extent necessary to "promote the fundamen-
tal purpose of the Act by bringing a problem of vital
concern to labor and management within the framework
established by Congress as most conducive to industrial
peace." 28 The Board has recognized the need to avoid
an undue infringement of management authority in the
area. Thus in Ozark Trailers, 161 NLRB 561, 568 (1966),
the Board stated as follows:
The argument has been made [that] to compel an
employer to bargain about a decision to relocate or
terminate a portion of its business would significant-
ly abridge his freedom to manage the business. In
the first place, however, as we have pointed out
time and time again, an employer's obligation to
bargain does not include the obligation to agree, but
solely to engage in full and frank discussion with
the collective bargaining representative in which a
bona fide effort will be made to explore possible al-
ternatives, if any, that may achieve a mutually satis-
factory accomodation of interest of both the em-
ployer and the employees. If such efforts fail, the
employer is wholly free to make and effectuate his
decision. Hence, to compel an employer to bargain
is not to deprive him the freedom to manage his
business.
Thus, unlike principles applicable in the context of man-
agement implementation of a negotiated term during ini-
tial or contract renewal bargaining, "impasse" is not pre-
requisite to management action in this area." Indeed, it
has been said that in connection with decisions of the
type involved herein, the employer need merely "notify
the representative and afford the opportunity to discuss
that decision and to consider alternative proposals." See
Lange Co., 222 NLRB 558, 563 (1976); Love's Barbeque
26 452 U.S. at 683.
27 452 U.S. at 678.
28 452 U.S. at 678.
29 Cf. Columbia Records, 207 NLRB 993 (1973), in which in dictum an
administrative law judge stated that an employer was privileged to close
its recording studio "only after bargaining to an impasse."
Restaurant No. 62, 245 NLRB 78, 113 (1979). 3° A duty
of "diligence" is imposed on labor organizations to en-
force its representational rights in such a context. See
American Bus Lines, 164 NLRB 1055, 1056 (1967). "The
employer's obligation is merely to give the Union an op-
portunity to persuade . . . ." W G. Best Homes Coq.,
253 NLRB 912, 920 (1980). And finally as stated by the
Supreme Court itself in Fibreboard, supra, 379 U.S. 214:
While "the Act does not encourage a party to
engage in fruitless marathon discussions at the ex-
pense of frank statement and support of his posi-
tion," Labor Board v. American Nat. Ins. Co., 343
U.S. 395, 404, it at least demands that the issues be
submitted to the mediatory influence of collective
negotiations. As the Court of Appeals pointed out,
"[i]t is not necessary that it be likely or probable
that the union will yield or supply a feasible solu-
tion but rather that the union be afforded an oppor-
tunity to meet management's legitimate complaints
that its maintenance was unduly costly."
The opportunity to bargain extended by Respondent
herein might be viewed as less than a model of indulgent
candor. For, Respondent did not volunteer that Hudson
production was being considered for transfer to Spartan-
burg, did not detail the economic benefits to be gleaned
from closing, and did not inform the Union specifically
that the latter's proposal delivered at the March 23 ses-
sion would be the last considered by management before
making the decision. While it might be observed in com-
plete honesty that the Union herein was not afforded the
time and information required to engage in meaningful
bargaining, its own inaction ought be considered before
subjecting Respondent to stringent restraints. Indeed,
through preparation and inquisitiveness on the part of
the Union, any shortcomings in its opportunity to consult
might have been averted. Considering the seriousness of
the issue, the Union's stance at the negotiations failed to
convey a genuine will on its part to submit the close-
down issue to the "mediatory influence of negotia-
tions."31 It is significant in this respect that the Union
8° CT. Wotn-Dixie Stores, 243 NLRB 972 (1979) (wage increase during
contract negotiations). Management decisions to close a segment of oper-
ation not tied to contract negotiations, on the other hand, lack the ele-
ments of bypass and direct dealing. Furthermore, the exacerbating effects
on contract issues may only be averted by requiring "impasse" before im-
plementation of a negotiated term. As stated in this regard in NLRB a
Katz, 369 U.S. 736 (1972), that:
Unilateral action by an employer without prior discussion with the
union does amount to a refusal to negotiate about the affected condi-
tions of employment under negotiation, and must of necessity ob-
struct bargaining, contrary to the congressional policy It will often
disclose an unwillingness to agree with the union. It will rarely be
justified by any reason of substance. [369 U.S. at 747.]
Contrary to arguments made on behalf of the complaint, the bargaining
over a new contract which preceded the March 9 telegram did not inten-
sify Respondent's obligation in this proceeding. Prior thereto, no conces-
sions had been made by the Union since the onset of the strike. At that
juncture, the focal point legitimately shifted from the contractual issues
to the question of whether business operations would continue at the
Hudson location. There being no contention or allegation that prior to
March 9 Respondent was guilty of bad faith, upon rejection by the Union
of the Employer's February 25 proposal, a bona fide impasse was again
reached.
21 379 U.S. at 214.
ARROW AUTOMOTIVE INDUSTRIES 499
had been afforded 2 weeks to prepare a counterproposal
in support of continued operations at Hudson, but it was
obvious that none had been prepared in advance of the
session. Indeed, when addressed as to its response to the
March 9 telegram, the Union simply stated that the plant
should not be closed. Eventually, at the suggestion of a
Federal mediator, the Union drafted a new contract pro-
posal, its first since October 22, 1980. This gesture would
obviously be taken as an effort to shift the focus from
dealing with the March 9 telegram on its own terms to a
resumption of contract negotiation. When the back-
ground is considered, Respondent could rightfully
assume that the Union was jockeying for time, still
sought improved conditions of work, and was not of a
mind to propose the kind of economic concessions that
would warrant continued operation at Hudson. Thus, the
negotiating history shows that the March 23 session had
been preceded by lengthy contract talks in which the
Union merely submitted a single comprehensive propos-
al. Indeed, on December 1, 1980, when the Union struck,
an outstanding offer by the Employer was rejected, and
during the next 3 months before notification of the possi-
ble closure on March 9, 1981, the strike continued. The
Union made no significant effort to break the impasse.
Not a single concession appears to have originated from
its side of the table during this period. From all appear-
ances, the Union had bargained hard and firmly in quest
of its demands for a new contract, a stance which con-
tributed to an atmosphere of impasse which foreshad-
owed the March 23 meeting. The Union's somewhat
grudging effort to place the closedown issue into a nego-
tiating posture that had proven protracted and fruitless
during the previous 5 months imposed no further obliga-
tion on Respondent. Having received the Union's pro-
posal, Respondent was under no obligation to embark
further on step-by-step venture of unpredictable duration
to discover how much the Union was willing to pay to
preserve the plant.
Although the issue is not free from doubt, it is my
opinion that opportunity having been extended to the
Union to be heard with respect to the possible close-
down decision, the Union was charged with responsibil-
ity to take the initiative and act with immediacy in con-
vincing the employer that the most economically advan-
tageous course was preservation of the status quo. Al-
though Respondent could have manifested more pa-
tience, the issue is what the statute requires, and having
given the Union the opportunity to be heard, manage-
ment thereafter was free to make a determination based
on what it viewed as the most efficacious course. Ac-
cordingly, I fmd that the Respondent did not violate
Section 8(a)(5) and (1) of the Act by failing to consult in
good faith with the Union before the deciding to close
the Hudson plant.32
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. Respondent did not fail to notify and consult with
the Union concerning its decision to close the Hudson
plant and relocate the work of that facility to its existing
plant in Spartanburg, South Carolina, so as to violate
Section 8(aX5) and (1) of the Act.
[Recommended Order omitted from publication.]
32 the General Counsel and Charging Party contend that Respondent
was guilty of subjective bad faith in connection with the clösedown deci-
sion I take this as the substantive equivalent of a claim that Respondent
was actuated in this respect by a motive proscribed by Section 8(aX3) of
the Act. Hence, the argument is no more than an effort to "back door"
an issue which was neither alleged nor argued at any time prior to the
close of the hearing. Indeed, their claim can not be reconciled herein
with the "purity of motive" implicit in the stipulation by all parties that
the instant closedown was economically motivated. In any event, Re-
spondent was not afforded advance notice of the issue and the matter was
not subject to litigation fairly and in a fashion permitting inferences on a
fully developed record.