Benchmark Industries

National Labor Relations Board - Board Decisions

Apr 20, 1984

269 N.L.R.B. 1096 (N.L.R.B. 1984)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Benchmark Industries, Inc. and Amalgamated Cloth-
ing and Textile Workers Union, AFL-CIO,
CLC. Case 26-CA-10197
20 April 1984
DECISION AND ORDER
BY MEMBERS ZIMMERMAN, HUNTER, AND
DENNIS
On 3 October 1983 Administrative Law Judge
Mary Ellen R. Benard issued the attached decision.
The Respondent filed exceptions and a supporting
brief.
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 brief and has
decided to affirm the judge's rulings, findings,' and
conclusions and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and hereby orders that the Respondent,
Benchmark Industries, Inc., Burnsville, Mississippi,
its officers, agents, successors, and assigns, shall
take the action set forth in the Order.
I In fn. 7 of her decision, the judge reported that the court of appeals
"enfd. in part" the Board's decision in Armitage Sand & Gravel, 203
NLRB 162, 166 (1973). The citation should read "enforcement denied in
pertinent part 495 F.2d 759 (6th Cir. 1974)."
In affirming the judge's conclusion that the Union did not waive its
right to bargain over the effects of the Respondent's decision to cease op-
erations and terminate its employees, we find it unnecessary to rely on
Respondent's conduct in Cases 26-CA-9011, 26-CA-9527, and 26-CA-
9633, which are currently pending before the Board. We rely instead on
the judge's factual findings that the Respondent did not formally notify
the Union of its decision and that the Union did not learn of Respond-
ent's decision until an employee showed the Union's organizer a copy of
the termination notice enclosed with her final paycheck. Under these cir-
cumstances, including Respondent's refusal to bargain pending its test of
certification before the Fifth Circuit, we find the Respondent's waiver ar-
gument to be without merit. See Peat Mfg. Co., 261 NLRB 240 fn. 2
(1982).
DECISION
STATEMENT OF THE CASE
MARY ELLEN R. BENARD, Administrative Law Judge.
The original charge in this case was filed on May 6,
1983,1 by Amalgamated Clothing and Textile Workers
Union, AFL-CIO, CLC, herein called the Union, against
Benchmark Industries, Inc., herein called Respondent.
On June 20 a complaint issued alleging, in substance, that
the Union is the certified representative of Respondent's
employees in an appropriate bargaining unit, and that by
I All dates herein are 1983 unless otherwise indicated.
269 NLRB No. 185
terminating all its employees and ceasing operations at its
Burnsville, Mississippi, facility without prior notice to
the Union or affording it an opportunity to negotiate and
bargain as to the effects of Respondent's conduct, Re-
spondent violated Section 8(a)(5) and (1) of the National
Labor Relations Act. Respondent has denied the com-
mission of any unfair labor practices.
A hearing was held before me at Memphis, Tennessee,
on August 8. Following the hearing the General Counsel
and Respondent filed briefs, which have been considered.
On the entire record in the case and from my observa-
tion of the witnesses and their demeanor, I make the fol-
lowing
FINDINGS AND CONCLUSIONS
I. THE BUSINESS OF RESPONDENT
Respondent is a corporation and maintained a place of
business in Burnsville, Mississippi, where it was engaged
in the manufacture of clothing for some period of time
prior to April 11. Respondent annually, in the course and
conduct of its business operations, sold and shipped from
its Burnsville facility products, goods, and materials
valued in excess of $50,000 directly to points outside the
State of Mississippi and purchased and received at the
same facility products, goods, and materials valued in
excess of $50,000 directly from points outside the State
of Mississippi. The complaint alleges that Respondent is
an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act. Respondent
admits that prior to April 11 it sold and shipped and pur-
chased and received goods and materials in the amounts
alleged in the complaint. However, Respondent alleges
that it has not been engaged in interstate commerce
within the meaning of the Act since that date and intro-
duced evidence that on July 11 its president and corpo-
rate secretary executed a statement of intent to dissolve
the corporation. Thus, according to Respondent, the
Board has no jurisdiction over it.
For the reasons discussed below, I find no merit to
Respondent's contentions. I therefore find that Respond-
ent is an employer engaged in commerce within the
meaning of the Act, and that it will effectuate the poli-
cies of the Act to assert jurisdiction herein.
II. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning
of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Refusal To Bargain
The Union was certified as the collective-bargaining
representative of Respondent's production and mainte-
nance employees on June 22, 1981. Respondent thereaf-
ter refused to bargain with the Union on grounds that
the certification was invalid and, consequently, on De-
cember 21, 1981, the Union filed a charge in Case 26-
CA-9491 alleging that Respondent's refusal to bargain
violated Section 8(a)(5) and (1) of the Act. The Regional
Director issued a complaint in that case and, subsequent-
1096
BENCHMARK INDUSTRIES
ly, the General Counsel filed a Motion for Summary
Judgment with the Board. On June 17, 1982, the Board
issued its decision in Benchmark Industries Inc., grant-
ing the motion for summary judgment and ordering Re-
spondent to recognize and bargain with the Union. On
November 4, 1982, the Board filed an application for en-
forcement of its order with the United States Court of
Appeals for the Fifth Circuit, and oral argument in that
proceeding was set for September 26. In the meantime,
on October 22, 1982, Administrative Law Judge William
A. Gershuny issued a decision in Cases 26-CA-9011, 26-
CA-9527, and 26-CA-9633, in which he found that Re-
spondent had violated Section 8(aX5) and (1) of the Act
by unilaterally discontinuing its previous policy of pro-
viding employees with a meal and a 5-pound ham at
Christmas, but that Respondent had not committed cer-
tain other violations of Section 8(aXl) and (3) of the Act
as alleged by the General Counsel. Those cases are cur-
rently pending before the Board.
It is undisputed that, at least as of the time of the hear-
ing in the instant matter, Respondent has persisted in its
refusal to bargain with the Union.
On April 11, Respondent's facility burned down. It is
undisputed that the building was totally destroyed, and
that, as of the date of the hearing, Respondent had not
resumed operations at that location. In consequence, Re-
spondent terminated all of its employees, estimated by
Danny Forsyth, an organizer for the Union, as number-
ing approximately 400. Forsyth credibly testified s that a
week or two after the fire an employee gave him a copy
of a notice which had been given to her with her last
paycheck. Forsyth further credibly testified that prior to
his receipt of this notice there had been no conversations
with any officials of Respondent about the closing of the
plant, the termination of the employees, or severance pay
for them. The notice, which is on Respondent's letter-
head, reads as follows:
NOTICE TO ALL EMPLOYEES
The cause of the fire that completely destroyed our
plant on April 11, is not yet known. All materials,
equipment and records have been lost in the blaze.
Obviously, we are unable to operate without our
physical plant. Regrettably, all employees have been
terminated for lack of work. Unfortunately, we are
unable to continue you [sic] group health and acci-
dent coverage, after April 30, 1983. However, those
who wish to convert their Phoenix Mutual Life In-
surance may do so by completing and forwarding
the request form.
Those of you who have not yet found other em-
ployment should apply for unemployment compen-
sation. We have notified the Employment Office
that each of you is immediately eligible to draw un-
employment money.
' 262 NLRB 247.
3 Forsyth appeared to be a candid witness who testified with good
recollection and I credit him. In any event, Respondent did not call any
witnesses and Forsyth's testimony is not controverted by any other evi-
dence.
I want to thank all of you for your past service to
Benchmark and wish you well in the future.
Yours truly,
BENCHMARK INDS. INC.
JACK BYRAM
PLANT MANAGER
Forsyth credibly testified that to his knowledge the
Union had not made any effort to contact Respondent to
request bargaining concerning the effects of the fire and
the consequent closing of the plant.
B. Analysis and Conclusions
The complaint alleges that Respondent violated Sec-
tion 8(aX5) and (1) of the Act by refusing to bargain
with the Union about the effects of its decision to close
the plant following the fire. As the Board has stated:
[I]t is . . . well established that, even under the cir-
cumstances of a complete cessation of business, the
employer is obligated to afford the union an oppor-
tunity to discuss the impact and effect of the closing
on bargaining-unit employees.4
Respondent concedes the general principle that an em-
ployer is obligated to bargain about the effects of a deci-
sion to terminate its operations and that it refused to bar-
gain with the Union after the fire, but contends that in
the instant case its failure to bargain was excused. Specif-
ically, Respondent asserts that it had no obligation to
bargain because (1) the Board has no jurisdiction over it
inasmuch as the facility was destroyed by a fire, there
are no employees, and the corporation is in the process
of dissolution; (2) the Board's certification of the Union
is currently being contested before the United States
Court of Appeals for the Fifth Circuit; (3) inasmuch as
the fire completely destroyed the facility, "bargaining
about the effects of ceasing operations and terminating
the employees would have been futile, impractical and a
waste of time"; and (4) the Union waived any right to
bargain about the effects because it failed to contact Re-
spondent after the fire and request bargaining.
1. The jurisdiction question
Respondent contends that, because the plant was not
operating as of the dates that the charge was filed and
the complaint issued, it is not engaged in commerce
within the meaning of the Act. However, in American
Gypsum Co., 231 NLRB 1291, 1298 (1977), the Board
adopted the finding of the administrative law judge that
there was no merit to respondent's argument that be-
cause it was shut down during the period when the
unfair labor practices were alleged to have occurred it
was not engaged in commerce at that time and there was
no legal or statutory basis for asserting jurisdiction. In so
finding, the administrative law judge stated:
Merryweather Optical Co, 240 NLRB 1213, 1215 (1979). (Footnote
omitted.)
1097
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I am persuaded that Respondent's position is
without merit by reason of the consequences which
would flow from a holding sustaining said position.
The Board has long asserted jurisdiction based
solely upon the annual monetary standards which
are admittedly met herein. If Congress or the Board
intended that the Act were not to apply to an em-
ployer meeting said standards merely because it was
not operating at the time the unfair labor practices
were committed, it would follow that any time an
employer was shut down (whether for seasonal,
economic, or other reasons) it, as well as a labor or-
ganization involved with it, would be free to ignore
the provisions of the Act. I am convinced that nei-
ther the courts nor the Board would accept such an
interpretation of the intent of Congress in passing
the Act and it would certainly not effectuate the
purposes of the Act to so interpret it.
I find that the same reasoning applies in the instant case,
and I therefore conclude that the fact that Respondent
ceased its operations after April 11 does not warrant a
finding that the Board has no jurisdiction in this proceed-
ing. 5
2. The pending litigation before the court of appeals
Respondent contends that, because the United States
Court of Appeals for the Fifth Circuit is currently con-
sidering the Board's application for enforcement of the
decision reported at 262 NLRB 247, it is not obligated to
bargain with the Union at this time. However, it is well
settled that an employer is not entitled to refuse to bar-
gain with the certified representatives of its employees
while it litigates the validity of that certification in the
courts of appeals. 6 Indeed, as the Board observed in
John Cuneo, Inc., 257 NLRB 551, 552 (1981): "Section
10(g) of the Act provides that the commencement of
proceedings under Section 10(e) or (f), which provide[s]
for court review of Board orders, 'shall not, unless spe-
cifically ordered by the court, operate as a stay of the
Board's order."' Accordingly, I find no merit to Re-
spondent's contention that collateral litigation of the va-
lidity of the certification in the court of appeals justifies
its refusal to bargain.
3. Whether bargaining in these circumstances would
have been futile
Respondent contends that there is no point to ordering
bargaining about the effects of closing the plant against
an employer that no longer exists. However, the Board
has long held that "[i]t is well settled that mere discon-
tinuance in business does not render moot issues of unfair.
labor practices alleged against a respondent."7 With re-
8 Respondent further contends that the Board has no jurisdiction in
this matter because the conduct by Respondent alleged to be unlawful
occurred after the fire. However, although Respondent was not at that
time operating the plant, it was still in existence as a corporation. Ac-
cordingly, I find no merit to this argument.
6 Peat Mfg., Ca, 261 NLRB 240, 242 (1982), cases cited therein.
7 East Dayton Tool d Die Co., 239 NLRB 141 (1978), citing Armitage
Sand & Gravel, 203 NLRB 162, 166 (1973), enfd. in part 495 F.2d 759
(6th Cir. 1974).
spect to the contention that bargaining in these circum-
stances would be futile, although Respondent was not
operating at the time of the hearing, and although it has
filed a statement of intent to dissolve, there is no indica-
tion that it has completely gone out of business or that it
might not resume operations either by rebuilding the
plant that burned down or at another location. Further-
more, although the plant was destroyed, it is possible
that Respondent will receive proceeds from such sources
as insurance policies or sale of its rights to the site of the
plant. Thus, funds may become available which the
Union could argue should be used in part to provide sev-
erance benefits to the employees. Accordingly, I cannot
agree with Respondent's contention that there is nothing
to bargain about.
4. The waiver issue
It is undisputed that following the fire the Union made
no attempt to contact Respondent and request bargaining
about the effects of the closing of the plant. Respondent
contends that the Union's failure in this regard consti-
tutes a waiver of any right to bargain about the effects of
the termination of operations.
Respondent cites Print-Quic, 262 NLRB 857 (1982), for
the proposition that the obligation to request bargaining
about the effects of a management decision is on the
Union and that by failing to assert that right the Union
waives it. Of course, Respondent correctly cites the gen-
eral principle. However, the Board has held that where a
respondent has generally refused to recognize or bargain
with the representative of its employees until the court
of appeals enforces a Board order directing it to do so, it
would be futile for the union to request bargaining and
thus its failure to make such a request is justified."
In the instant case, it is undisputed that Respondent
has steadfastly refused to bargain with the Union at any
time since the 1981 certification. Thus, Respondent did
not bargain with the Union in compliance with the
Board's 1982 order, and, although Administrative Law
Judge Gershuny's 1982 decision is currently pending
before the Board, there was apparently no contention in
that case that Respondent had in fact bargained with the
Union. In these circumstances, I conclude that it would
have been futile for the Union to request bargaining over
the effects of the fire and consequent termination of em-
ployees and, thus, its failure to make such a request did
not constitute a waiver of its right to bargain.
Having found that Respondent failed to bargain with
the Union over the effects of the closing of the business,
and having found no merit to Respondent's defenses, I
conclude that by failing and refusing to bargain with the
Union over the effects of the decision to cease its oper-
ations and terminate the employees, Respondent has vio-
lated Section 8(a)(5) and (1) of the Act.
On the basis of the above findings of fact and on the
entire record in this case, I make the following
a Pear Mfg. Co., supra.
1098
BENCHMARK INDUSTRIES
CONCLUSIONS OF LAW
I. Benchmark Industries, Inc. is an employer engaged
in commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
2. Amalgamated Clothing and Textile Workers Union,
AFL-CIO, CLC, is a labor organization within the
meaning of Section 2(5) of the Act.
3. All production and maintenance employees at Re-
spondent's Burnsville, Mississippi, location, including
production employees, repair employees, shipping em-
ployees, timeworker employees, bundle worker employ-
ees, quality control employees, the regular part-time
shipping employees, mechanics, and janitors, but exclud-
ing all office clerical employees, guards, and supervisors
as defined in the Act, constitute a unit appropriate for
the purposes of collective-bargaining within the meaning
of Section 9(b) of the Act.
4. The Union has, since June 22, 1981, been the certi-
fied representative for purposes of collective-bargaining
of the employees in the unit described above.
5. By ceasing its operations and terminating all its em-
ployees without affording the Union an opportunity to
bargain over the effects of such action, Respondent has
engaged in unfair labor practices within the meaning of
Sections 8(a)(5) and (1) and 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in unfair
labor practices, I shall recommend that it be ordered to
cease and desist therefrom and to take certain affirmative
action designed to effectuate the purposes of the Act.
The General Counsel requests that the remedy include
an order to Respondent to bargain with the Union about
the effects of ceasing its operations and a requirement
that Respondent place all the terminated employees on a
preferential hiring list and offer them reinstatement in the
event it resumes operations. In support of this proposi-
tion the General Counsel cites National Terminal Baking
Corp., 190 NLRB 465 (1971). In that case, respondent
shut down its operations after two trucks were stolen
and the administrative law judge, affirmed by the Board,
found that inasmuch as the decision to close was due to
pressing economic necessity, and there was no way to
bargain about the effects of the closing before it oc-
curred, the union was never in a position of strength at a
time when such bargaining could have taken place and
there was thus no reason to issue a backpay award.
However, the administrative law judge did recommend
that respondent be required to place the terminated em-
ployees on a preferential hiring list. I find that rationale
persuasive and will therefore recommend a similar
remedy. Accordingly, I shall recommend that Respond-
ent be ordered to bargain with the Union, upon request,
about the effects of the closing of the plant and the ter-
mination of the employees, and that Respondent be re-
quired to place the terminated employees on a preferen-
tial hiring list in the event it resumes operations and, at
that time, offer reinstatement to those employees.
In view of the fact that there is apparently no place
left in the plant for a notice to be posted, and since, in
any event, all the employees were terminated, I shall rec-
ommend that Respondent be ordered to mail notices to
the terminated employees.
On the foregoing findings of fact and conclusions of
law and on the entire record in this proceeding, I issue
the following recommended g
ORDER
The Respondent, Benchmark Industries, Inc., Burns-
ville, Mississippi, its officers, agents, successors, and as-
signs, shall
1. Cease and desist from
(a) Refusing to bargain with Amalgamated Clothing
and Textile Workers Union, AFL-CIO, CLC, with re-
spect to the effects on its employees of its decision to
close its plant in Burnsville, Mississippi, and terminate its
employees.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of their
rights to engage in or refrain from engaging in any or all
of the activities specified in Section 7 of the Act.
2. Take the following affirmative action which is nec-
essary to effectuate the policies of the Act:
(a) Upon request, bargain with the Union with respect
to the effects on unit employees of Respondent's decision
to close its Burnsville, Mississippi, plant and terminate
the employees.
(b) Place the names of all its terminated employees on
a preferential hiring list, and, in the event its plant re-
opens, offer them reinstatement, without prejudice to
their seniority or other rights.
(c) Mail exact copies of the attached notice marked
"Appendix"' ° to Amalgamated Clothing and Textile
Workers Union, AFL-CIO, CLC, and to all employees
who were employed by Respondent at its Burnsville,
Mississippi, plant as of April 10, 1983. Copies of said
notice, on forms provided by the Regional Director for
Region 26, after being signed by Respondent's represent-
ative, shall be mailed immediately upon receipt as herein
directed.
(d) Notify the Regional Director in writing within 20
days from the date of this Order what steps Respondent
has taken to comply.
9 If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
'o If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
1099
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportunity to
present evidence and state their positions, the National
Labor Relations Board found that we have violated the
National Labor Relations Act, as amended, and has or-
dered us to post this notice.
The Act gives employees the following rights:
To engage in self-organization
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice
To engage in activities together for the pur-
pose of collective bargaining or other mutual aid
or protection
To refrain from the exercise of any or all such
activities.
WE WILL NOT refuse to bargain with Amalgamated
Clothing and Textile Workers Union, AFL-CIO, CLC,
about the effects of our decision which affect the em-
ployment status of our employees who are represented
by the above-named labor organization.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of the
rights guaranteed them in Section 7 of the Act.
WE WILL, on request, bargain with the Union with re-
spect to the effects of our decision to close our Burns-
ville, Mississippi, plant and terminate the employees.
WE WILL place the names of our employees who were
discharged as a result of our decision to close the Burns-
ville, Mississippi, plant on a preferential hiring list in the
event we resume our operations and, at that time, offer
reinstatement to these employees without prejudice to
their seniority or other rights.
BENCHMARK INDUSTRIES, INC.
1100