Bostrom Division, Uop Inc

National Labor Relations Board - Board Decisions

Oct 31, 1984

272 N.L.R.B. 999 (N.L.R.B. 1984)

UOP INC 999
Bostrom Division, UOP Inc and Independent Union
of Bostrom Employees Cases 30-CA-7415 and
30-CA-7503
31 October 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 27 January 1984 Administrative Law Judge
Bruce C Nasdor issued the attached decision The
General Counsel and the Charging Party filed ex
ceptions and supporting briefs and the Respondent
filed an answering 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 briefs and has
decided to affirm the judge s rulings findings and
conclusions as modified and to adopt the recom
mended Order
The judge concluded that the Respondent did
not violate Section 8(a)(1) (3) and (5) of the Act
by failing to bargain with the Union before it
closed two plants in Milwaukee Wisconsin and
consolidated its operations in its Cudahy Wiscon
sin and Piedmont Alabama facilities and subcon
tracted certain wood and foam manufacturing op
erations The judge further concluded that the Re
spondent did not violate Section 8(a)(5) of the Act
by refusing to provide information requested by
the Union We agree with the conclusions of the
judge for the reasons set forth below
In our recent decision in Otis Elevator Co 269
NLRB 891 (1984) we determined that management
decisions which affect the scope direction or
nature of the enterprise are excluded from the lim
ited mandatory bargaining obligation of Section
8(d) of the Act As we stated in Otis the critical
factor in determining whether a management deci
sion is subject to manadatory bargaining is the es
sence of the decision itself i e whether it turns on
a change in the nature or direction of the business
or turns on labor costs not its effect on employees
nor a union s ability to offer alternatives Id at
892 Applying that analysis to the facts of the in
stant case we conclude that the Respondent s deci
sions to close its Milwaukee Wisconsin plants and
consolidate operations in its Cudahy Wisconsin
and Piedmont Alabama plants and to subcontract
its wood and foam manufacturing operations
turned on a significant change in the nature and di
rection of the business and therefore were not sub
ject to mandatory bargaining
The Respondent manufactures seats for construe
tion equipment agricultural vehicles and trucks
As found by the judge until May 1982 1 the Re
spondent s operations in the vicinity of Milwaukee
Wisconsin consisted of two plants in the city of
Milwaukee and one in Cudahy Wisconsin The Re
spondent also operates a plant in Piedmont Ala
bama The three plants in the Milwaukee area were
covered by a collective bargaining agreement be
tween the Respondent and the Union which ex
pired on 31 October 1983 The employees of the
Piedmont plant were unrepresented by any labor
organization
Between 1980 and 1982 the Respondent suffered
heavy financial losses amounting to millions of
dollars annually due to a severe drop in truck
sales In January 1982 the Respondent and the
Union began discussions on the need to increase
productivity at its Milwaukee plants These discus
sions continued through April and on 28 May the
Respondent informed the Union that it was consid
enng closing either or both of its plants in the city
of Milwaukee The Respondent offered to discuss
with the Union both the possible closure of the
plants and the effects if any on the employees
concerned
The Respondent and the Union met twice in
June to discuss the possibility of closing the Mil
waukee plants The Respondent informed the
Union that a substantial increase in employee pro
ductivity was the only alternative to closing that
was available to the parties After meeting with its
membership the Union agreed that the employees
would attempt to improve productivity However
on 8 July the Respondent informed the Union that
the improvement in productivity was insufficient to
offset the costs of the Respondent s continued op
eration of the Milwaukee plants and that the Re
spondent would close the plants and relocate the
work to its Cudahy Wisconsin and Piedmont Ala
bama plants
On 12 July the Respondent notified the Union
that it was considering subcontracting the wood
and foam operations performed in its Milwaukee
plants and invited the Union to discuss this possibil
ity The Respondent and the Union met on 29 July
and the Union took the position that the Respond
ent was not permitted to move work absent the
Union s consent At another meeting on 12 August
the Respondent notified the Union that it was pro
ceeding with its plans to close the Milwaukee
plants and transfer the work to its Cudahy and
Piedmont facilities
All dates are in 1982 unless otherwise indicated
272 NLRB No 153
1000

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Respondent and the Union met again on 25
August The Union proposed that the Respondent
cease the subcontracting of unit work The Re
spondent advised the Union that the subcontracting
of its wood and foam operations had begun and
that the Respondent would not discontinue this
subcontracting even assuming orders for its prod
ucts would increase In late August or early Sep
tember the Respondent closed its Milwaukee
plants and consolidated the remaining work in its
Cudahy and Piedmont plants
On 14 September the Union filed a grievance on
the closing of the Milwaukee plants the transfer of
work to Piedmont the consolidation of work and
the subcontracting On 3 December while the
grievance was pending before an arbitrator the
Union wrote to the Respondent and requested ap
proximately 31 categories of information regarding
the economic justifications for the Respondent s de
cisions to close its plants consolidate work and
subcontract On 10 December the Respondent in
formed the Union that it would not provide the in
formation requested by it 2
The judge concluded that the Respondent s deci
sion to close its Milwaukee plants and subcontract
its wood and foam operations were based on sound
business judgment aimed at restoring economic via
May to the enterprise and not at avoiding payment
of contractual wage rates In reaching this conclu
sion the judge relied on the Respondent s severe
financial losses and its examination of its oper
ations which revealed that the Milwaukee plants
were too large and old to be efficiently used by the
Respondent and that the Respondent s foam oper
ations were obsolete and could not be replaced due
to prohibitive costs In addition the judge noted
that the Respondent s woodworking operation re
quired excessive utilization of space for the minimal
number of man hours per year devoted to the oper
ation and that subcontracting resulted in further ef
ficiencies associated with the subcontractor s prox
imity to the Piedmont facility at which the bulk of
the wood is utilized Finally the judge noted that
the Respondent s labor costs remained the same as
a substantial portion of the work formerly per
formed at the Milwaukee plants was consolidated
in the Cudahy plant which is covered by the Re
spondent s collective bargaining agreement with
the Union and that the Respondent would have
made the same decisions irrespective of the extent
In refusing to provide the requested information the Respondent
noted that the Union had subpoenaed the identical information in the
pending arbitration proceeding and that the arbitrator was then consider
mg the Respondent s motion to quash the subpoena The Respondent in
formed the Union that it viewed the Union s information request as an
attempt to circumvent the arbitrator s consideration of the Respondent s
motion
to which labor costs could have been reduced
through negotiations with the Union
As indicated above Otis Elevator which was de
cided under the guidance of First National Mainte
nance Corp v NLRB 452 U S 666 (1981) now
provides the method of analysis for determining
whether management decisions are subject to man
datory bargaining Thus looking at the Respond
ent s decisions to close its Milwaukee plants to
consolidate work in its Cudahy and Piedmont
plants and to subcontract its foam and wood oper
ations it is clear that the decisions did not turn on
labor costs although such costs were a factor in
the Respondent s decisions Rather the record indi
cates that in closing the Milwaukee plants and sub
contracting the wood and foam operations the Re
spondent was attempting to restore its enterprise to
economic viability by reducing operating costs
eliminating duplication of work costs and services
and responding to the deteriorating quality of its
product caused by obsolete equipment These facts
establish that the decisions at issue here no matter
what they are labeled or how they are categorized
clearly turned on a fundamental change in the
nature and direction of the Respondent s business
Accordingly we conclude that the Respondent
had no duty to bargain about its decisions to close
the Milwaukee plants relocate the work to the
Cudahy and Piedmont plants and subcontract the
wood and foam operations In addition based on
our conclusion that the Respondent s decisions
were not subject to mandatory bargaining we con
dude as we did in Otis 3 that the Respondent was
not obligated to provide the Union with informa
tion related to the economic justification for the
decisions 4
ORDER
The recommended Order of the administrative
law judge is adopted and the complaint is dis
missed
MEMBER DENNIS concurring in the result
I agree with my colleagues that the Respondent s
decisions to close two facilities transfer some work
to another facility and subcontract the remainder
were not mandatory subjects of bargaining Several
3 See Otis at 894
4 In view of our determination we find it unnecessary to pass on the
Judge s conclusion that the Union s information request was a sham de
signed to avoid the arbitrator s consideration of the Respondent s motion
to quash the Union s subpoena for identical information in the arbitration
proceeding pending at the time of the Union s request Further we do
not agree with the judge s conclusion that the Respondent s alleged obit
potion to supply the information was satisfied by its compliance with the
General Counsel s subpoena duces tecum in the hearing in this case be
cause that information was given to the General Counsel and not to the
Union
UOP INC 1001
factors influenced the Respondent s decisions in
eluding the realization that its equipment was obso
lete and could not be replaced due to prohibitive
costs the realization that its facilities were too
large and old to be efficient and a desire to reduce
operating costs To the extent that labor costs were
a factor it was at best an insignificant consider
ation in the Respondent s decisions I therefore
conclude that the Respondent s decisions were not
amendable to resolution through collective bargain
ing and agree that the complaint should be dis
missed See my concurrence in Otis Elevator Co
269 NLRB 891 (1984) 1
1 The judge suggested that the Respondent s subcontracting decision
is best left to the arbitrator s decision but he recommended dismissing
the complaint in its entirety Apparently the judge did not in fact recom
mend deferring In any event no party s exceptions urge that the Board
defer
DECISION
STATEMENT OF THE CASE
BRUCE C NASDOR Administrative Law Judge This
case was tried at Milwaukee Wisconsin on May 16 and
June 21 1983 Based on charges filed on November 11
and December 16 1982 an order consolidating cases
consolidated complaint and notice of hearing issued on
December 29 1982 The consolidated complaint alleges
that Bostrom Division UOP Inc (Respondent) violated
Sections 8(a)(1) (3) and (5) and 8(d) of the National
Labor Relations Act (the Act)
On the entire record including my observation of the
demeanor of the witnesses and after due consideration of
the briefs I make the following
FINDINGS OF FACT
I JURISDICTION
Respondent has offices and places of business at 133
West Oregon Street (the Oregon facility) and 200 South
Second Street (the Pittsburgh facility) located in Mil
waukee Wisconsin 3326 East Laton Avenue in Cudahy
Wisconsin and Piedmont Alabama where it has been
engaged in the manufacture and sale of transportation
seating
During the past calendar year Respondent in the
course and conduct of its business operations sold and
shipped goods valued in excess of $50 000 directly to
points located outside the State of Wisconsin
The Respondent is now and has been at all times ma
tenal an employer engaged in commerce within the
meaning of Section 2(2) (6) and (7) of the Act
II THE LABOR ORGANIZATION '4
Independent Union of Bostrom Employees (the Union)
is a labor organization within the meaning of Section
2(5) of the Act
III THE ALLEGED UNFAIR LABOR PRACTICES
A The Issues
1 Whether Respondent closed its Pittsburgh and
Oregon Street facilities transferred work to its Pied
mont Alabama plant and subcontracted foam and wood
operations in order to avoid the wage and benefit costs
of the collective bargaining agreement
2 Whether Respondent failed to meet its bargaining
obligations under Sections 8(a)(5) and 8(d) of the Act
before it consolidated operations at its Cudahy facility
transferred work to its Piedmont facility and subcon
tracted foam and wood operations
3 Whether Respondent violated Sections 8(a)(5) and
8(d) of the Act by its refusal to furnish information rele
vant and necessary to the processing of a grievance in
preparation for arbitration
B The Facts
Respondent manufactures seats for construction equip
ment agricultural vehicles and trucks Prior to May
1982 Respondent s operations in Milwaukee Wisconsin
consisted of three facilities The Oregon Street facility in
Milwaukee contained four floors which included the
business offices and the production and shipping areas
As of May 1982 approximately 40 to 45 employees were
employed at this facility The Oregon Street facility op
erated one shift from 6 30 a m to 2 30 p m The Pitts
burgh Street operation had four floors housing manufac
turing operations with approximately 10 to 12 employ
ees The other facility in the metropolitan Milwaukee
area was located in Cudahy where it operated on one
floor with 135 employees The additional facility was lo
cated in Piedmont Alabama
The facilities in Milwaukee produced various compo
nents utilized in the same product and the Cudahy oper
anon was the main shipping facility The seats manufac
tured in Piedmont were of a different design from those
produced in the Milwaukee area
The plants located in the Milwaukee area were coy
ered by a collective bargaining agreement between Re
spondent and the Independent Union of Bostrom Em
ployees the Charging Party herein It is a 3 year con
tract with an expiration date of October 31 1983 The
prior contract was for the period 1977 to 1980 The em
ployees at the Piedmont operation are unrepresented by
any labor organization
In January 1982 Respondent and the Union corn
menced discussions on the need to increase plant produc
tivity Six letters relating to productivity were exchanged
between February 25 1982 1 and March 18 Several
meetings were held in March and April to consider the
need to improve productivity On May 28 Ralph E
Seaton Respondent s vice president and general manag
er informed the president of the Union that Respondent
was considering closing either the Pittsburgh Street or
the Oregon Street plants or both This notification was in
writing and Seaton offered to discuss the situation and to
All dates are in 1982 unless otherwise specified
1002 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
negotiate the possible decision to close as well as the ef
fects if any on the employees involved
On June 10 Respondent representatives a rid union rep
resentatives met to discuss the possibility of closing the
facilities and transferring work to other locations Re
spondent advised the Union that the only alternative to
closing was a substantial increase in productivity The
Union was encouraged to suggest alternative solutions
After the meeting union representatives met with the
membership to inform them what had transpired and the
membership passed a motion that they would try harder
to meet production standards set by Respondent so as to
increase the overall productivity
The parties held a second meeting on either June 24 or
25 The Union advised Respondent that the unit employ
ees would fully cooperate in increasing productivity Re
spondent stated that the Union had only a few more days
to improve productivity before a decision to close the
plants would be made Production was reviewed daily
following this meeting On July 8 the Union was noti
fled by Respondent that the improvement in productivity
was insufficient to offset the costs of continued operation
at the Pittsburgh and Oregon Street facilities and the
plants would be closed and the work relocated
On July 12 the Union was informed that Respondent
was considering the possibility of subcontracting the
wood and foam operations and the Union was invited to
discuss the possibility of subcontracting
The parties met again on July 29 and the Union took
the position no work could be moved absent its consent
The Union requested certain information concerning Re
spondent s plans regarding the Oregon and Pittsburgh
Street facilities Respondent acceded to this request in a
hand delivered letter dated August 2
The parties met again on July 29 and after this meet
mg the union membership authorized its bargaining corn
mittee to negotiate an agreement regarding the closing of
the two facilities and the transfer of work to Cudahy and
Piedmont At a meeting held on August 12 Respondent
informed the Union that it was going ahead with its
plans to close the facilities and transfer the work but
continued to be willing to discuss the situation
The parties met again on August 25 The Union pro
posed that subcontracting of union work cease Respond
ent advised the Union that the subcontracting of the
molded foam and wood operations was permanent and
would not revert back to Respondent even if orders
picked up In late August or early September Respond
ent closed the Pittsburgh Street and Oregon Street loca
tions As a result of the closing down and the consolida
tion into the Cudahy plant six positions were eliminated
As a result of the transfer of operations to Piedmont
four positions were eliminated and the subcontracting of
the foam and wood operations resulted in the elimination
of 12 positions
On September 7 by a hand delivered letter Respond
ent informed the Union that it was forced to review the
possibility of removing the Viking line (a product line)
from the Milwaukee area Respondent in this letter offers
to meet with the union committee to discuss the situa
tion provide relevant information and to negotiate the
possible decision as well as its effects on the employees
involved As a reason for this possibility Respondent
states that the continuing decline of its business and other
economic conditions indicate that the decision should be
made by early October 1982
The parties met concerning removal of the Viking line
on September 14 and 21 and October 7 8 and 12
At the September 14 meeting Respondent inquired of
the Union as to whether it would consider nullifying the
present contract and negotiating a new one to which the
Union responded negatively Respondent and the Union
exchanged proposals and counterproposals relative to the
possible transfer of the Viking line None of the propos
als or counterproposals was acceptable Implementation
of the removal of the Viking line was never effectuated
The Union filed a grievance on the closing of the Mil
waukee plants the transfer of work to Piedmont the
consolidation and the subcontracting
The issues were scheduled to be heard by an arbitrator
on November 30 On the afternoon of November 29 the
Union served Respondent a six page subpoena duces
tecum requesting 35 categories of information to be pro
\in:led the next day At the hearing Respondent objected
to the subpoena and refused to respond to it Arbitrator
George R Fleischh withdrew the subpoena on February
1 1983 Prior to the arbitrator s ruling the Union on
December 3 wrote to Respondent requesting the same
information Respondent refused to furnish the mforma
tion To date the arbitrator has not heard evidence going
to the merits of the grievance An almost identical sub
poena was issued by counsel for the General Counsel in
advance of the instant hearing Respondent provided all
of the information and the Union and counsel for the
General Counsel were given an afternoon and evening to
review the documents
i Conclusion and Analysis,
Milwaukee Spring 265 NLRB 206 (1982) is presently
before the Board 2 which was granted permission to
withdraw it from the Seventh Circuit Court of Appeals
where it was pending enforcement That case was in the
Los Angeles Marine Hardware Co 235 NLRB 720 (1978)
line of cases Therefore we are left to a certain extent in
a void although certain general principles are extant
It is clear and there is testimony to the effect that
there was a severe drop nationwide in heavy truck sales
thereby directly affecting Respondent s sales Respondent
suffered severe financial losses and the pattern continued
into 1983 Documentary evidence 3 reflects that Respond
ent was losing millions of dollars annually
Respondent examined the capacity of its various
plants and realized that space was being consumed con
spicuously Moreover equipment was obsolete which
gave rise to customer complaints due to an inferior prod
uct New equipment was out of the question because of
the enormous expenditures required Thus subcontract
mg was Respondent s sole option The issue of subcon
tracting in my view is best left to the arbitrator s deci
sion in view of the history of good faith bargaining and
r
2 Oral argument was held on September 20 1983
3 R Exhs 1 through 4
UOP INC 1003
lack of antiunion motivation The Board encourages utili
zation of the collective bargaining process
Respondent made a similar decision with respect to its
wood operation The expenditure for making a new
wood facility operative far outweighed the amount of
man hours per year expended in this area and the space
required Therefore the woodwork was subcontracted to
a facility in Georgia located near Piedmont where the
bulk of the wood was utilized
When the Oregon Street and Pittsburgh Street plants
were closed Respondent also transferred some oper
ations to Piedmont The evidence reflected also that
these operations involved very few man hours A
number of these operations from these plants were con
solidated into the Cudahy facility It is noted that
Cudahy had the same collective bargaining agreement as
the Oregon and Pittsburgh Street plants Accordingly
the labor costs were identical
In my opinion based on the totality of the evidence
Respondent s acts were not predicated on avoiding con
tractual wage rates but rather were based on what it
considered sound business judgment as a means to be
coming economically viable Any savings in labor costs
would naturally flow from Respondent s moves These
savings were an element of various resultant factors but
not the sole motivation for Respondent s acts There is a
cause and an effect Low productivity was one cause A
savings in labor costs was one effect This does not auto
matically violate Section 8(a)(5) of the Act
The unrefuted testimony of Vice President and Gener
al Manager Seaton is that if the Union had taken one half
of its wages it would not have affected Respondent s de
cision Nor if Respondent had doubled the work going
to Piedmont would the decision have changed
Respondent encouraged its employees to improve their
productivity but what improvement there was did not
serve to sustain Respondent economically
In my opinion Respondent was willing to negotiate
the decisions and their effects and in fact did so negoti
ate Apparently union representatives were never pre
pared to negotiate and the testimony reflects a dearth of
proposals by the Union
Regarding the 1 1 th hour subpoena Respondent was
within its rights to object and the arbitrator so ruled
The December 3 letter was a sham meant to avoid what
the Union could reasonably have anticipated would be
the arbitrator s ruling
Finally Respondent made the information available in
response to counsel for the General Counsel s timely sub
poena thereby meeting its obligation
Based on the above I will therefore recommend that
the 8(a)(1) (3) and (5) and, 8(d) allegations in the corn
plaint be dismissed 0
CONCLUSIONS OF LAWe
1 Respondent is engaged in commerce within the
meaning of Section 2(6) and (7) of the Act
2 The Union is a labor organization within the mean
ing of Section 2(5) of the Act
3 The llegations of the complaint that Respondent
has engaged in conduct violative of Sections 8(a)(1) (3)
and (5) and 8(d) of the Act have not been supported by
substantial evidence
On these findings of fact and conclusions of law and
on the entire record I issue the following recommend
ed 4
-s
ORDER
It is recommended that the complaint be dismissed in
its entirety 1
4 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
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