Butler Chemical Co.

National Labor Relations Board - Board Decisions

Sep 12, 1956

116 N.L.R.B. 1041 (N.L.R.B. 1956)

BUTLER CHEMICAL COMPANY 1041
Butler Chemical Company, successor to Gulf Chemical Company
and Oil , Chemical and Atomic Workers International Union,
AFL-CIO. Case No. 39-CA-483. September 12, 1956
ORDER
On August 17, 1956, the Board issued Proposed Findings of Fact,
Proposed Conclusions of Law, and Proposed Order in the above-en-
titled proceeding, providing for the filing of exceptions within twenty
(20) days therefrom. No statement of exceptions has been filed with
the Board, and the time for such filing has expired.
Pursuant to Section 10 (c) of the National Labor Relations Act, as
amended, the Board hereby adopts as final the said Proposed Findings
of Fact and Proposed Conclusions of Law and makes the following
Order :
IT IS HEREBY ORDERED that the Respondent, Butler Chemical Com-
pany, successor to Gulf Chemical Company, Galena Park, Texas, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from :
(a) Refusing to bargain collectively with Oil, Chemical and Atomic
Workers International Union, AFL-CIO, as the exclusive representa-
tive of all its production and maintenance employees, excluding all
clerical employees, technical employees, guards, and supervisors as
defined in the Act, with respect to wages, rates of pay, hours of em-
ployment, and other conditions of employment.
(b) In any like or related manner interfering with, restraining,
or coercing its employees in the exercise of the rights guaranteed by
Section 7 of the Act.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Upon request bargain collectively with Oil, Chemical and
Atomic Workers International Union, AFL-CIO, as the exclusive
representative of all the employees in the bargaining unit hereinabove
described, with respect to wages, rates of pay, hours of employment,
and other conditions of employment, and, in the event that an under-
standing is reached, embody such understanding in a signed agreement.
(b) Post at its plant at Galena Park, Texas, copies of the notice at-
taehed hereto marked "Appendix." 1 Copies of said notice, to be
furnished by the Regional Director for the Sixteenth Region, shall,
after being signed by a representative of the Respondent, be posted
I In the event that this Order is enforced by a decree of a United States Court of Appeals,
there shall be substituted for the words "Pursuant to a Decision and Order" the words
"Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order."
116 NLRB No 158.
40,5448-57-vol. 116--67
1042 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by the Respondent immediately upon receipt thereof and maintained
by it for a period of sixty (60) consecutive days thereafter in con-
spicuous places, including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by the Respond-
ent to insure that said notices are not altered, defaced, or covered. by
any other material.
(c) Notify the Regional Director for the Sixteenth Region in
writing, within ten (10) days from the date of this Order, what steps
the Respondent has taken to comply herewith.
By direction of the Board :
FRANK M. KLEILER,
Executive Secretary.
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to an Order of the National Labor Relations Board, and
in order to effectuate the policies of the National Labor Relations Act,
we hereby notify our employees that :
WE WILL bargain collectively upon request with Oil, Chemical
and Atomic Workers International Union, AFL-CIO, as the ex-
clusive representative of all the employees in the bargaining unit
described below, with respect to wages, rates of pay, hours of
employment, and other conditions of employment, and, if an
understanding is reached, embody such understanding in a signed
agreement. The bargaining unit is:
All production and maintenance employees, excluding all cleri-
cal employees, technical employees, guards, and supervisors as
defined in the Act.
WE WILL NOT refuse to bargain collectively with said Union, or
in any like or related manner interfere with, restrain, or coerce
our employees in the exercise of the rights guaranteed by Section
7 of the Act.
BUTLER CHEMICAL COMPANY, SUCCESSOR TO
GULF CHEMICAL COMPANY,
Employer.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 consecutive days from the date
hereof, and must not be altered, defaced, or covered by any other
material.
BUTLER CHEMICAL COMPANY 1043
PROPOSED FINDINGS OF .FACT, PROPOSED CON-
CLUSIONS OF LAW, AND PROPOSED ORDER
STATEMENT OF THE CASE
Upon a charge duly filed by Oil, Chemical and Atomic Workers In-
ternational Union, AFL=CIO, herein called the Union, a copy of which
was served on the Respondent on March 19, 1955, the General Counsel
of the National Labor Relations Board, herein called, respectively,
the General Counsel and the Board, through the Regional Director for
the Sixteenth Region (Fort Worth, Texas), issued his complaint om
November 7, 1955, against Butler Chemical Company, successor to,
Gulf Chemical Company, herein called, respectively, the Respondent
and Gulf, alleging that the Respondent had engaged in and was en-
gaging in-unfair labor practices affecting commerce within the mean-
ing of Section 8 (a)' (5) and (1) and Section 2 (6) and (7) of the Na-
tional Labor Relations Act, as amended, 61 Stat. 136, herein called the
Act. Copies of the complaint, together with the notice of hearing,.
were duly served upon the Respondent and the Union.
With respect to the unfair labor practices, the complaint alleged in
substance that : (1) On January 25,1952, the employees of Gulf selected
the Union as their collective-bargaining representative, and the Union
has been their representative at all times since then; (2) on November
1,.1954,'the, Respondent took possession of Gulf and has operated it
since then; and (3) on or about November 10, 1954, and at all times
thereafter, the Respondent'has refused to bargain collectively-with'the
Union.
On November 21, 1b55, the Respondent filed its answer to the com-
plaint., denying that it was the successor to Gulf and that the Union
was the designated collective-bargaining representative of its em-_
ployees, and interposing as its affirmative defense that :
Respondent alleges that the Oil, Chemical and Atomic Workers
International Union, CIO at one time was selected by a majority
of the employees of the Gulf Chemical Company as their bargain-
ing agent but in this connection Respondent alleges that the em-
ployees of Butler Chemical Company have never selected any
person or labor organization as their representative nor has any
duly authorized representative of its employees ever demanded
or requested of the Respondent to bargain collectively in respect
to rates, pay, wages, etc.
Pursuant to notice, a hearing was held in this case on December 14
and 15, 1955, before Sydney S. Asher, Jr., a Trial Examiner duly
designated by the Chief Trial Examiner. All parties were repre-
sented by counsel and were afforded full opportunity to be heard, to
examine and cross-examine witnesses, to introduce relevant evidence, to
1d44 DECISIONS OF NATIONAL ' LABOR RELATIONS BOARD
argue orally upon the recordand' to file briefs. Follow'ng' the
hearing, a brief was filed with the Trial Examiner by- the Respondent.
In this brief, the Respondent stated that Gulf "had a labor contract
with Oil, Chemical and Atomic Workers International Union, CIO,
as- the duly, -certified bargaining agent for the employees of" Gulf.
The brief argued, however, that the contract was not binding upon the
Respondent because of.the "peculiar change of ownership"; that the
Respondent questioned the Union's status as bargaining representative
of its employees on this ground in good faith; that the Union had
sought a checkoff, not negotiations; and that, because of the lapse of:
time since the Union was certified in 1952, a new election should be
held.
On January 31, 1956, the Trial Examiner issued his Intermediate-
Report, finding that the Respondent had not engaged in any unfair
labor practices and recommending that the complaint be dismissed in
its entirety, as set forth in the,copy of the Intermediate Report at-
tached hereto. ' More specifically, the Trial Examiner found that :
(1) The union which had been certified in 1952 was Oil Workers In-
ternational Union, CIO, herein called the Oil Workers; (2) in March
1955, the Oil Workers merged with United Gas, Coke and Chemical
Workers of America, CIO, herein called the Gas Workers, to form
the Union (although there was no reference thereto in this proceeding,
the Trial Examiner relied upon information in the "Directory of Na-
tional and International Labor Unions in the United States, 1955, U. S.
Department of Labor Bulletin No. 1185, at page 35") ; (3) as the certi-
fication followed a consent election, the Regional Director was author-
ized by the Board's Rules and Regulations to amend the certification,-
but had not done so; (4) the Trial Examiner could not amend the
certification by substituting the Union's name for that of the Oil
Workers, nor do essentially the same thing by considering the certifica-
tion as proof of the Union's majority status; and (5) the remaining
evidence as to membership, after the merger, was not sufficient to estab-
lish that the Union represented a majority of the employees., In
view of this disposition, the Trial Examiner did not resolve the ques-
tion of the Respondent's successorship, the issue with which the
litigation was chiefly concerned.
Thereafter, the General Counsel and the Union filed exceptions to
the Intermediate Report.
On February 6, 1956, immediately after receipt of the Intermediate
Report, the Union filed with the Regional Director a motion to amend
certification. The Regional Director, on February 27, 1956, issued a
notice to show cause why such motion should not be granted. No re-
sponse to the notice having been received, the Regional Director, on
March 13, 1956, issued an order amending certification of representa-
tives. On March 15,1956, the General Counsel filed a motion with the
BUTLER CIEMICAL , COMPANY ;1045
.Board which ( 1) pointed , out that at no time prior,to or during the
hearing had anyone questioned the change in name of the Union;
(2) stated that the certification had been, amended without objection;
and (3 ) urged the Board to reopen the record and receive the amended
certification as new evidence . On March 16, 1956, the Executive Sec-
,retary of the Board notified'the parties that they might submit to the
'Board, on or before March 26; 1956, a statement of position regarding
the General Counsel's motion. The Union , in its reply, concurred
with the motion . No response was received from the Respondent.
Under these circumstances , we hereby grant the General Counsel's
'motion to reopen the record to receive in evidence the amended certi-
fication. As no objection to its receipt has been filed, it is hereby in-
corporated as part of the record in this case.'
On August 8, 1956, the Board issued its Supplemental Decision and
Order in National Carbon Company , a Division of Union Carbide
and Carbon Corporation (Edgewater Works ), 116 NLRB 488, in
which it found that the Gas Workers and the Oil Workers consoli-
dated on March 4, 1955; to form the Union ;- concluded that the Union
was a continuance of its constituent unions with regard to their
collective -bargaining rights and obligations ; amended the certification
originally issued by the Board to the Gas Workers by substituting the
name of the Union for that of the Gas Workers ; and directed the
respondent therein to bargain collectively with the Union.
In view of the direct bearing of that decision upon the issues herein,
we shall review the present record in the light of that decision.
However , as both that decision and the amended certification postdate
the Intermediate Report, and the Trial Examiner failed to resolve
issues which were litigated in this proceeding , and are deemed mate-
rial to a resolution of this case , we shall, pursuant to Section 102.48 (b)
of National Labor Relations Board Rules and Regulations , Series 6,
as amended , issue Proposed Findings of Fact, Proposed Conclusions
of Law, and Proposed Order. Pursuant to Section 102.46 of said
Rules and Regulations , any party may, within twenty ( 20) days from
the date of these Proposed Findings of Fact, Proposed Conclusions of
Law, and Proposed Order, file exceptions thereto with a supporting
brief. Should any party desire to argue orally before the Board,
request therefor must be made in writing to the Board simultaneously
with the statement of any exceptions filed.
The Board has reviewed the rulings made by the Trial Examiner at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Interme-
di ate Report, the exceptions of the General Counsel and the Union, and
the entire record in the case, and finds merit in the exceptions for the
reasons hereinafter set forth.
1 Cf. Seyfert Foods Company, 109 NL1IB 800, 808.
1046 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
.Upon the entire record in this case , the Board makes the following :
PROPOSED FINDINGS OF FACT 2
I. THE BUSINESS OF THE RESPONDENT
The Respondent is a Texas corporation engaged in the manufacr
ture, sale, and distribution of phosphate rock, with its principal office
and place of business at Galena Park, Texas. During 1955, the Re-
spondent purchased raw materials valued at in excess of $100,000,
which were shipped to it from points outside the State of Texas, and
sold finished products valued at in excess of $100,000, which were
shipped by it to points outside the State.
We find that the Respondent is engaged in commerce within the
meaning of the Act and that it will effectuate the purposes of the Act
to assert jurisdiction herein.
H. THE LABOR ORGANIZATION INVOLVED
Oil, Chemical and Atomic Workers International Union, AFL-
CIO, is a labor organization admitting to membership employees of
the Respondent.
III. TIIE UNFAIR LABOR PRACTICES
A. The Union's successorship
As indicated above , the issue as to the Union 's successorship to the
certified , contractual status of the Oil Workers was not raised by the
parties but by the Intermediate Report. The complaint alleged that
the Union was the certified bargaining representative of the Respond-
ent's employees ; the Respondent 's answer admitted that the Union
was the organization selected by the employees of Gulf which formerly
operated the Respondent's plant; at no time • during the hearing did
the Respondent question the Union 's status as the organization which
had been certified as the representative of the Gulf employees; after
issuance of the Intermediate Report the Respondent filed no response
to the Regional Director 's notice to show cause why the certification
should not be amended , nor to the Executive ' Secretary 's inquiry with
regard to the General Counsel 's motion to reopen the record to receive
the amended certification in evidence . The parties , therefore, in ef-
fect stipulated to the continuation in the Union of the status acquired
by,the Oil Workers . Furthermore , the Board does not deem it nec-
essary to redetermine a union's representative status, once established,
whenever it merges or consolidates with another union , changes its
name or affiliation , or makes other administrative or structural
'The facts set forth herein are based upon uncontradicted testimony, unimpeached
documentary evidence, and findings of the Tiial Examiner in the Intermediate Report
to which no exception has been taken.
BUTLER CHEMICAL COMPANY 1047
changes.3 The Intermediate Report has raised the issue, however,
and we shall therefore discuss and dispose of it.
The Board's original Decision and Order in the National Carbon
case,4 issued on December 30, 1954, required the respondent therein to
bargain with the Gas Workers. After the case had been submitted
to the United States Court of Appeals for the Sixth Circuit, the Board
was apprised that the Gas Workers and the Oil Workers had con-
solidated to form the organization referred to herein as the Union.
At the Board's request, the court remanded the proceeding so that the
Board might determine what effect this consolidation had on its bar-
gaining order.
The Board reopened the hearing to take evidence on this matter.
Thereafter, in a supplemental decisions containing a detailed analysis
of the consolidation and its effect, the Board concluded that the Union
was, for bargaining purposes, a continuation of its two constituent
unions, and that it had therefore succeeded to their bargaining rights
and obligations. Accordingly, the Board amended the certification
which it had previously issued to the Gas Workers for that respond-
ent's employees by substituting the name of the Union, and amended
its order to require that that respondent bargain with the Union.
The present case involves the same consolidation. As set forth
above, the parties to this proceeding have never questioned the Union's
successorship, and there is no indication of employee objection to the
consolidation. Moreover, the certification has been amended, without
objection, by substituting the name of the Union for that of the Oil
Workers. Under all the circumstances, we find that the Union is a
continuance of the Oil Workers, and that it has, as in National Carbon,
succeeded to the representation rights acquired among the employees
involved by its constituent union, the Oil Workers.
B. The Respondent's successorship 6
George A. Butler, president of the Respondent at the time of the
hearing, testified that he was president of Gulf from its inception in
1949 or 1950 until he resigned in the summer of 1953 because his posi-
tion as a secured creditor of Gulf created a diversity of interest. In
December 1953, as set forth in the Intermediate Report, Butler fore-
closed his second mortgage, and obtained title to the Gulf properties
"National Carbon Company , 116 NLRB 488; The Pacific Telephone and Telegraph
Company, 113 NLRB 478 , 518; Cochran Co, Inc ., 112 NLRB 1400, 1408 ; N. L. R. B. v.
Harris-Woodson Co, Inc, 179 F 2d 720 , 722 (C A . 4) ; Continental Oil Co v. N L. R B,
113 F. 2d 473 , 477 (C. A 10) ; Cadillac Automobile Company of Boston, 90 NLRB 460;
Missouri Service Company, 87 NLRB 1142.
4110 NLRB 2184
G 116 NLRB 488.
'The Trial Examiner did not pass upon the question of the Respondent 's successorship
to Gulf in view of his disposition of the case on other grounds . The matter was fully
litigated at the hearing , however, and the Intermediate Report sets forth much of the
evidence adduced on this question.
1048 DECISIONS OF` NATIONAL LABOR RELATIONS BOARD
at the -foreclosure `sale. In accordance with his agreement with the
second mortgage note holders, Butler then: formed Gulf Chemical
Corporation, Inc., for the sole purpose of taking title to the Gulf
properties. That corporation, of which Butler was president and
sole stockholder, leased the properties to Gulf and agreed to advance
a certain sum of money to the lessee. Butler advanced this money
to the, corporation, was given a note for it, and the corporation in turn
advanced it to Gulf, the lessee.' Butler testified that he did not recall
whether or not the corporation in turn took a note from Gulf, but he
thought the corporation "probably just carried it as an open account."
In October 1954, Butler learned that Gulf had no raw materials on
hand and no inventory of finished products, and was in such financial
straits that it was preparing to close the plant and cease operations on
Saturday, October 23. On Monday, October 25, Butler, "as an indi-
vidual," took possession of the properties and, under the trade name
of George Butler, d/b/a Butler Chemical Company, continued the
plant operations.' He retained about two-thirds of the staff which had
been employed by Gulf.' There was, during this period of individual
operation,' no lease or other formal agreement between Butler as an
individual and the corporation, which held title to the property.
Early in 1955, Butler discontinued operating the plant as an indi-
vidual, and changed to a corporate operation. He adopted the name
Butler Chemical Company as his customers were familiar with it
because of his operations as George Butler, d/b/a Butler Chemical
Company. Butler testified that Butler Chemical Company, the Re-
spondent herein, is the same company; with only the name changed,
as Gulf Chemical Corporation, Inc., which he had formed after the
foreclosure sale in December 1953. This corporation, however, had
title only to the property, but no interest in the plant's materials or
inventory of finished products. When Butler changed the Respond-
ent's name to Butler Chemical Company, he made a "very casual"
' The individual who physically handled such transactions as the transfer of funds by.
Butler to the corporation was Butler 's private secretary at the law firm of Butler , Binion,
Rice & Cook , who was paid by the law firm
8 The date October 25, 1954 , is based upon testimony of Butler and others , and upon
the November 3, 1954 , statement issued by Gulf to its unsecured creditors and noteholders,
which is set forth in the Intermediate Report, and which stated, among other things, that
Butler took possession of the property and plant on October 25 In a letter to the
Board's Regional Office dated April 2 , 1955, however , signed by Butler as president of
Butler Chemical Company , lie stated , in part , as follows -
The 'Butler Chemical Co is now operating the properties heretofore owned and
operated by Gulf Chemical Company, which is a bankrupt Butler Chemical Co. took
possession and started operations last November 1st as the largest creditor of Gulf
Chemical Company
It might be noted that although this letter bears the case caption referring to the Re-
spondent as "Butler Chemical Company, successor to Gulf Chemical Company," the letter
makes no denial of, nor reference to, the alleged successorship
O The employees had been warned that the plant might close Some had found other
jobs and left The record does not indicate whether Butler discharged any of the Gulf
employees.
BUTLER CHEMICAL COMPANY 1049
accounting of raw materials and finished products in order to set up
the company books.
Jack Binion, one of Butler's law partners, who represented the
Respondent at the hearing herein,10 stated that either he or Butler
was president of the Respondent since the formation of this corpora-
tion in December 1953. Butler testified, however, that he believed he
had been president the entire time, but that, if there was a period when
he did not have the title, he was nevertheless at all times "the boss."
Despite the changes in management, there was evidently a continu-
ing responsibility for debts." For example, on January 1, 1955, while
l utler was operating as an individual, he personally paid the interest
due to the first mortgage holder. He testified that he thought the
current taxes were paid at the end of 1954, that certain State and
county taxes which had been in default for 3 or 4 years were paid,
and that negotiations were in progress as to certain local taxes which
were past due. Moreover, the creditor situation which had existed
between Gulf and Butler continued to exist between the Respondent
and Butler.
The processes, equipment, and products of Gulf have been virtually
unchanged under the Respondent's management of the plant. The
same number of employees are currently employed-about 30 at the
time of the hearing-as were employed by Gulf. Dial Murphy, a
union representative, testified, without contradiction, that he under-
stood 22 of the present employees of the Respondent were formerly
employed by Gulf.
In view of the fact that the Respondent is producing virtually the
same products, at the same plant, and with substantially the same
employees as Gulf did, and in view of Butler's role throughout all
the changes which occurred, we find that the Respondent is the alter
ego of Gulf.12 We find no merit in the Respondent's contention that
it was not a successor to Gulf because it did not follow Gulf, but took
over from Butler individually. Butler was "the boss" in control at
io Binion signed the agreement for consent election in 1952 as attorney for Gulf.
"Butler's letter of April 2, 1955, to the Regional Office, referred to above, after men-
tioning the efforts to make a composition with Gulf 's creditors and to get the first mortgage
renewed and extended , went on to state that :
There are several years of ad valorem and Galena Park school taxes that are
unpaid. If all of the above things are worked out, these taxes will probably be paid
and will be , of course , if the plant continues in operation.
z, N. L. R B. v. Weissman Company, 170 F. 2d 952 (C A. 6), cert. denied 336 U. S.
972, Ohio Hoist and Mfg . Co v. N. L R . B, 217 F . 2d 652 ( C A. 6), reversed on other
grounds ; J TV. Rex Company, 115 NLRB 775.
It is clear, from all the facts of the present case, that the Respondent is not entitled
to exemption from liability on the ground that it constituted a bona fide successor under
the doctrine of Symns Gi ocer Co , et al., 109 NLRB 346 In that case, the Board created
an exception in favor of a bona fide successor who had in no way been previously impli-
cated in its predecessor's unfair labor practices . In view, however , of Butler 's control
of the plant and of the bargaining negotiations at all times material herein, we find that
the Respondent is not a bona fide successor within the meaning of Symns Grocer . Cf Oriole
ifotor Coach Lines, Inc., 114 NLRB 808, California Footwear Company, 114 NLRB 765.
1050 DECISIONS OF 'NATIONAL- IiABOR 4REIJATfONS BOARD
all times,' whether he ran - the plant under a cof•porate" name, with
himself or a law partner or someone else as president; or an it under
his individuttil name. The Respondent, as the alter ego of Gulf; there-
fore' was under the same duty to recognize and bargain collectively
with the representative of its employees as Gulf had.13 -
C. The refusal to bargain
1. The appropriate unit
The parties- stipulated to the appropriate unit in ,the consent-elec-
tion proceeding, and no question has been raised in the present pro-
ceeding as to its continued appropriateness. Accordingly, we find
that all production and maintenance employees at the Respondent's
Galena Park, Texas, plant, excluding all clerical employees, technical
employees, guards, and supervisors as defined by the Act, constitute a
unit appropriate for the purposes of collective bargaining within the
meaning of Section 9 (b) of the Act.
2. The majority
The Trial Examiner found that the record did not contain ade-
quate evidence to establish the Union's representation of a majority
of the employees in the appropriate unit. As he did not find successor-
ship, and as the certification had not yet been amended, he turned to
the Union's dues cards which were in evidence: These cards showed
that less than a majority had paid dues after the union consolidation in
March 1955.
This is no indication, however, of the extent of the Union's member-
ship. The union constitution and bylaws provide that, payment of
dues will not be required of members whom the Union cannot ade-
quately represent. E. C. Wade, the local union president, testified
that this policy was applied to the Respondent's employees, and that,
beginning in November 1954, as the Union was "not able to service
them," it "didn't charge them the dues, but kept them current."
Furthermore, we have found that the Union was, on and after
March 4, 1955, the successor to the Oil Workers, which was the cer-
tified, contractual representative of the Respondent's employees. The
Board has held that an employer's obligation to recognize and bargain
with a contracting union continues throughout the effective period
of the contract.14 Contrary to the Trial Examiner, therefore, we find
is See N . L R B. v Albert Armato , and Wire & Sheet Metal Specialty Co , 199 F. 2d 800
C. A 7), which holds that "The very nature of a certification of a -union as bargaining
agent for a group of employees impels the conclusion that a mere change in employers does
not operate to destroy the effectiveness of the certification "
There is, therefore , no merit in the Respondent's contention that it new election should
be directed because of the changes in the name and structure of the Respondent.
14 California Footwear Company , 114 NLRB 765, and cases cited therein.
- BUTLER CHEMICAL COMPANY 1051
that the General Counsel was not required, under the circumstances
of this case,,to reestablish the Union's current majority status. Ac-
cordingly, we find that the Oil Workers was, on November 10, 1954,
and thereafter until March 4, 1955, and that the Union was, on
March 4, 1955, and at all material times thereafter, and now is, the
exclusive representative of the Respondent's employees in the above-
described appropriate unit for the purposes of collective bargaining
within the meaning of Section 9 (a) of the Act.
3. The refusal to bargain
a. The collective-bargaining agreement
Following its certification on February 4, 1952, the Oil Workers
entered into a collective-bargaining agreement with Gulf on February
4, 1952. This agreement provided that it was effective from February,
4, 1952, to August 4, 1952, and was iiutomatically renewable annually
absent a 60-day notice. A separate memorandum of understanding,
also executed on February 22, 1952, provided for a checkoff of union
dues upon written authorization of the employees.
In January 1954, the parties executed an amendment to their agree-
ment. The amendment described the parties in the caption thereof
as "GULF CHEMICAL COMPANY and/or ITS SUCCESSORS"
and "OIL WORKERS INTERNATIONAL UNION, CIO Con-
tracting for and on Behalf of Its LOCAL UNION NO. 227." It
also provided that the agreement should "reflect after Gulf Chemi-
cal `and/or its Successors,' " and changed the effective dates to cover
the period from January 18, 1954, to July 18, 1954. The automatic
renewal provision was not changed. There is no contention that notice
to amend or terminate was ever given in accordance with this provision.
The original agreement and the memorandum of understanding were
signed, for the employer, by Sam P. Robinson, who was then the gen-
eral manager, while the 1954 amendlneut was signed by Otto B.
Schoenfeld, then the president. All the agreements were executed by
Dial Murphy as an international representative of the Oil Workers;
Murphy was a district director of the Union at the time of the hearing.
All the agreements were also signed by members of a Workmen's Com-
mittee and by representatives of the local. E. C. Wade signed all
of them as president of Local 227 of the Oil Workers; after the
consolidation, Wade was president of Local 4-227 of the Union.15
b. The Respondent's re fisal to honor the agreement
In November 1954, the Respondent failed to transmit the monthly
checkoff suns due in accordance with authorizations signed by the em-
is As described in the supplemental decision in National Carbon, 116 NLRB 488, the
locals were virtually unaffected by the consolidation , one of the few changes being the
prefixing of a district number to the local number.
1052 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ployees.lg As a result, Wade went to the plant, accompanied by J. E.
Melton, who was secretary-treasurer of the local union before and
after the consolidation, and who was a local union representative at
the time of the hearing. They saw Mr. Gee, who was plant manager
at the time, and asked him why the November checkoff remittance had
not been received. Gee explained that Gulf had been replaced by
"Butler Chemical Company." 17 When Wade replied that there was
an outstanding union contract which he expected to have honored,
Gee said he would take the matter up with Butler.
A week or two later, Wade and Melton met with Butler. He told
them, according to Melton's testimony, that "he was not reluctant to
bargain with the union ... but at this time he felt like it would be a
waste of his time and also our time to get down to contractual matters
when he was there to see if the plant would be a failure or a money-
making proposition." Wade and Melton replied that they expected,
in the meantime, "to be recognized and to be able to bargain with the
company in the matter of grievance." Butler impressed the union
representatives as "very sincere," and they came away with the impres-
sion that he would bargain with them when his financial position was
more secure.
On December 21, 1954, Wade, by registered letter, requested a meet-
ing with Butler or his representatives to negotiate a contract "with re-
spect to wages, hours and other conditions of employment." 18 Butler
replied, on his law firm stationery, under date of January 3, 1955, that
he was operating the plant as an individual, and that "If I decide to
keep the plant open I will likely convert the operation to that of a
corporation," and concluded as follows :
I hope, from this letter, that you will not get the idea that I am
trying to in any manner side step or avoid meeting you for nego-
tiations. It just seems to me it is impractical to have such a
meeting until we determine whether the plant will continue
operations and who is going to operate it.
Thereafter, Murphy tried several times to get in touch with Gee,
but was unable to reach him. On March 16, Murphy filed charges
with the Board alleging an unlawful refusal to bargain. He with-
"The last checkoff remittance in the amount of $76 was made on October 8, 1934, for
union deductions on the payroll ending October 3, 1954 The accompanying letter in-
dicated that 19 employees had deductions made, 1 pursuant to a new authorization, and
that 2 employees had withdrawn their membership (luring the period covered. The
preceding September remittance of $80 and August remittance of $100 covered 20 and 25
employees, respectively. The letter covering the September remittance made no reference
to the reduced number , nor does the record indicate shether it was due to withdrawals
from membership or to terminations of employment
17 The plant was being operated at the time by George Butler, d/b/a Butler Chemical
Company.
Is It is clear, from the entire record, that the Union was seeking to maintain its status
as the bargaining representative of the employees , we therefore find no merit in the
Respondent 's contention that the Union was seeking only the checkoff.
BUTLER CHEMICAL COMPANY 1053
drew these charges when the January letter was received from Butler.
He telephoned Butler, informed him of the withdrawal of the charges,
but protested the refusal to check off union dues. Butler said he
would discuss the matter with the plant manager. He added, ac-
cording to Murphy's uncontradicted testimony, "If the financial con-
dition improved, that he was not opposed to the union and would cer-
tainly discuss negotiations with us."
On March 16, 1955, which was after the consolidation of the Oil
Workers and the Gas Workers to form the Union, and after the Re-
spondent began operating the plant under its present name, the Union
filed the charges herein. On April 2, 1955, in reply to a letter of
March 18 from the Regional Director, Butler wrote, on law firm sta-
tionery, in part as follows :
I told the Union secretary (I think his name is Wade) that
... whenever these very serious financial problems were solved
... would be the time to set down and try to talk about Union
negotiations. I think this is a simple solution and is by no means
a dodge of my responsibility of negotiating with the Union.
You may know that over the years both Mr. Binion of this firm
and I have had plenty of negotiations with Union officials... .
Murphy called John Hinkle, who was then the plant manager, a
few times in May and June, and requested that the parties enter into
collective-bargaining negotiations. On June 6, 1955, Hinkle told
Murphy; -according to the latter's testimony, that "the condition of
the Company had not improved, but in addition to that, it had wors-
ened. . . ." Hinkle also told Murphy at this time that Binion "would
handle all future matters with the union." There was some delay
before Murphy and Binion could meet because of litigation in which
the latter was involved. When they did meet in Binion's office on
June 18, Binion stated that although he "had been assigned to handle
relations between the Union and between the Company," he had been
too occupied with litigation to confer adequately with company of-
ficials. Therefore, when Murphy proposed effectuation of the out-
standing contract for a period of 4 months, and negotiations thereafter
for a new contract, Binion replied that he would have to confer with
officials of the Respondent. On July 14, Murphy and Melton met again
with Binion. He informed them that, because of the Respondent's
financial situation, the Respondent would not consent to "put the
agreement -back into effect." The union representatives then re-
quested (1) recognition of the Union as bargaining representative,
(2) checkoff of dues for employees who had previously authorized
the checkoff and had not since resigned from the Union, and (3) the
right to discuss grievances with the Respondent. Binion replied that,
if they would wait 10 days, he would confer with officials of the Re-
spondent, and "I will see if I can get what you are asking for."
1054 DECISIONS OF NATIONAL LABOR -RELATIONS BOARD
Thereafter , Murphy tried ' several times to get in touch with Bitiion,
but was unable to reach him. He' testified that he knew Binion was
occupie&at the time in impeachment litigation involving a' city official
as the matter was receiving considerable publicity . Negotiations were
never resumed.
At no time " during the various meetings and communications did
the Respondent question the appropriateness of the unit established
in the consent-election proceeding . Butler admitted in his testimony
that he had never questioned the Union 's majority, and stated that he
had not given the matter "much consideration" because of his con-
cern with the plant 's financial problems .19 When Wade and Melton
told him there was a union contract , Butler, according to his testimony,
"said I had never seen the labor contract . I assumed they had one,
but I never had seen it." .
'.. c., Smnmary and conclusions
We have found above that the Union , as the continuance of the Oil
Workers, was the certified, contractual bargaining representativve of
the employees here involved , and that the Respondent , as the suc-
cessor-to Gulf, had the same obligation that Gulf had to recognize and
bargain with the representative selected by the employees.
As we have also pointed out, on and after November 10, 1954, the
certified, contractual representative was seeking to win recognition,
effectuation of the outstanding contract, or negotiation of a new
contract2 ° The Respondent refused to grant any of these requests.
Its refusals were not based upon the union consolidation; on the con-
trary, it agreed that the Union was the organization - selected by the
Gulf employees . Nor did it base its refusals upon , doubt as to 'the
Union's representation of a majority of employees in an appropriate
unit. The Respondent on 1 or 2 occasions made some reference to the
changes that had occurred in its name and management , but the prin-
cipal reason which it advanced for refusing to honor the outstanding
contract or to negotiate a new one was its financial plight. The' with-
drawal of recognition on such grounds , however, was a clear violation
of its duty to bargain. The Respondent 's financial problems no'more
justified terminating the collective -bargaining relationship than did
the various changes that occurred in regard to the Respondent and
the Union . Indeed, a bargaining representative can fulfill one of its
10 J L' Ding, who has been employed at the plant for about 5 years, and who signed all
the collective-bargaining agreements as a member of the workmen's Committee, testified
oval present, "asked how manythat Rmion, during one of the conleicnces at which King
union people we had'at the time I 'told him that all of the people that were out
then e were still union members
20 In vies- of the outstanding collective -bargaining contract , the Respondent 's refusal to
bargain, and all the circumstances of this case, we find no merit in the Respondent's
contention that a new election should be directed because of the lapse of time since the
certification in 1952, or because of the changes that occurred in the Respondent's designa-
tion and stiff cture
(BUTLER CHEMICAL -COMPANY 1055
most important functions on.belialf of the employees it represents at a
time when a reduction in employment becomes necessary. In the
^eseht- situation, -for examhle,^ the ''bargaining representative could
have -negotiated with regard" to which employees would 'be re- "
tained, which- laid off'-which, recalled and in ' what' order, and other
problems created by a teliiporary curtai]nient 'of operations. The
contracting parties. had apparently intended that-such matters should
be' negotiated as the contract 'provides that "Any condition of em-
ployment not covered hereby that' arises during the term of this agree-
ment shall be resolved by negotiations between the parties on a fair
and reasonable basis, taking into full consideration operational re-
quirements and business necessities." - - - -
The testimony'-of the union representatives clearly indicates that
they were willing to negotiate "on a fair and reasonablebasis," and to
take into "full consideration' the Respondent's "operational require=
ments and business necessities."' The Respondent, however, refused to
negotiate until its financial problems'had been resolved and it was con-
fident that the plant, would continue to operate. As indicated above,
to withhold or withdraw recognition of a bargaining representative
on such grounds is a violation of the duty to bargain required by the
Act. ' ' ' - . '
The Respondent'tisserts, in defense of its refusal to bargain because
of financial vicissitudes, that it acted in good faith. We have no
reason to doubt, and apparently the Union did not doubt, the Re-
spondent's good faith in'this' 'regard. Nevertheless, the Respondent
had a duty to bargain with the employees' representative, and it could
not elect to ' observe or disregard this duty on the basis of economic
expedience, even in good faith 21
Accordingly, we find that the Respondent, on November 10, 1954,
and at all times thereafter, refused'to bargain with the certified, con-
tractual bargaining representative of its employees in violation of Sec-
tion 8 (a) (5) and (1) of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
We find that the activities of the Respondent set forth in section III,
above, occurring in connection with the operations of the Respondent
described in section I, above, acid in the attached Intermediate Re-
port, have a close, intimate, 'and substantial relation to trade, traffic,
and commerce among the several. States, and tend to lead to labor
disputes 'burdening or obstructing commerce and the free flow of
commerce. -
21 See Taylor Forge and Pepe 117orAs , 113 NLRB 6 93, where the Board said . "The overall
good faith of the Respondent is not a relevant consideration where 'the Respondent's con-
duet is -in itself -a violation of the Act ." See also Wooster Division of Borg-Warner
Corporation, 113 NLRB 1288, 1291.
1056 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
V. THE PROPOSED REMEDY
Having found that the Respondent has engaged in certain unfair
labor practices, we shall order it to cease and desist therefrom and to
take affirmative action which will effectuate the policies of the Act.
Having found that the Respondent has refused to bargain collec-
tively with the Union as the exclusive representative of its employees
in the appropriate unit, we shall order it to bargain collectively with
the Union, upon request, and, if an understanding is reached, embody
such understanding in a signed agreement.
Because of the Respondent's good-faith belief that it was not re-
quired to bargain during the period in question, and because of the -
absence of any indication that danger of the commission of other un-
fair labor practices is to be anticipated from the Respondent's conduct
in the past, the Respondent will not be ordered to cease and desist from
the commission of any other unfair labor practices.
Upon the basis of the foregoing findings of fact, and upon the entire
record in this case, the Board makes the following :
PROPOSED CONCLUSIONS OF LAW
1. Butler Chemical Company is the successor to Gulf Chemical
Company as the Employer of 'the employees at the Galena Park, Texas,
plant.
2. Oil Workers International Union, CIO, was a labor organization
within the meaning of Section 2 (5) of the Act.
3. Oil, Chemical and Atomic Workers International Union, AFL-
CIO, is a labor organization within the meaning of Section 2 (5) of
the Act, and is the successor to Oil Workers International Union,
CIO, as the collective-bargaining representative of the Respondent's
employees in the unit described below.
4. All production and maintenance employees at the Respondent's
Galena Park, Texas, plant, excluding clerical employees, technical
employees, guards, and supervisors, constitute a unit appropriate for
the purposes of collective bargaining within the meaning of Section
9 (b) of the Act.
5. Oil Workers International Union, CIO, was, on November 10,
1954, and thereafter until March 4, 1955, and Oil, Chemical and
Atomic Workers International Union, AFL-CIO, was, on March 4,
1955, and at all material times thereafter, and now is, the exclusive
representative of all the employees in the unit described above for
the purposes of collective bargaining within the meaning of Section
9 (a) of the Act.
6. By refusing, on November 10, 1954, and thereafter until March
47 1955, to bargain collectively with Oil Workers International Union,
CIO, and by refusing , on March 4, 1955, and at all times thereafter,
BUTLER CHEMICAL COMPANY 1057
to bargain collectively with Oil, Chemical and Atomic Workers Inter-
national Union, AFL-CIO, as the exclusive representative of all the
employees in the unit described above, the Respondent has engaged in
and is engaging in unfair labor practices within the meaning of Sec-
tion 8 (a) (5) of the Act.
7. By said refusal to bargain, the Respondent has interfered with,
restrained, and coerced its employees in the exercise of the rights
guaranteed in Section 7 of the Act, and thereby has engaged in and
is engaging in unfair labor practices within the meaning of Section
8 (a) (1) of the Act.
8. The aforesaid unfair labor practices are unfair labor practices
affecting commerce within the meaning of Section 2 (6) and (7) of
the Act.
[Text of Proposed Order omitted from publication.]
MEMBER MURDOCK took no part in the consideration of the above
Proposed Findings of Fact, Proposed Conclusions of Law, and Pro-
posed Order.
INTERMEDIATE REPORT
This proceeding involves charges that Butler Chemical Company , successor to
Gulf Chemical Company ,' Galena Park, Texas, herein called the Respondent, has
at all times since on or about November 10, 1954 , refused to bargain collectively
with Oil, Chemical and Atomic Workers International Union, AFL-CIO,a the
Charging Party, herein called the Union , as the representative of its employees in
an appropriate unit, although the Union was the representative of the said employees
and requested ' such bargaining . It is alleged that this conduct violated Section 8
(a) (1) and ( 5) of the National Labor Relations Act, as amended (61 Stat. 136),
herein called the Act. After the issuance of a complaint by the General Counsel 3
and the filing of an answer by the Respondent , a hearing was held before me on
December 14 and 15, 1955 , at Houston , Texas. All parties were represented and
participated fully in the hearing . The Respondent filed a brief , which has been
considered.
Upon the entire record in the case, and from my observation of the witnesses, I
make the following:
FINDINGS OF FACT
1. THE JURISDICTION OF THE BOARD
The Respondent is a Texas corporation engaged in the manufacture , sale, and
distribution of phosphate rock , with its principal office and place of business at
Galena Park, Texas . The parties stipulated that , from some time in January 1955
until the hearing , the Respondent purchased raw material valued at in excess of
$ 100,000, which was shipped "to the plant" from points outside the State of Texas.
It was further stipulated that during the same period, the Respondent sold finished
products valued at in excess of $100,000, which was shipped "from its plant" to
points outside the State.
The Board has established jurisdictional standards ; some apply to intrastate enter-
prises and others to multistate enterprises .. The record in the instant case does not
'The words "successor to Gulf Chemical Company" appear in the caption of the
complaint . Whether the Respondent is in fact the successor to Gulf Chemical Company
is an issue herein
2 The AFL and the CIO having merged, the identification of the affiliation of the Union
is amended accordingly
3 The designation General Counsel includes the General Counsel of the National Labor
Relations Board and his representative at the hearing
403448- i7-vol 116--68
1Q58 DECISIONS OF NATIONAL , LABOR RELATIONS BOARD
reveal . whether the Respondent , is an intrastate or a multistate enterprise. The
Board will assert jurisdiction over an intrastate enterprise which annually "produces
or :handles goods and ships such -'goods out of State . valued at $50;000 or
more.'-' t ,The stipulation described above , shows that, if projected to a full 12-
month '•period , the Respondent annually produces and ships ' out of Texas goods
valued at in excess of $ 115,000. ' : Accordingly , if 'the Respondent maintains no es-
tablishments outside the , State of Texas , the Board 's jurisdictional criteria have been
met.
On, the other hand, the Board's jurisdictional criteria for , multistate ' enterprises
require that the particular establishment involved-here the Respondent 's Galena
Park, Texas , plant-meet the foregoing standard or that the "direct outflow" of the
entire enterprise amount to $250,000 or more annually or that the "indirect outflow"
of the entire enterprise amount to $1,000,000 or more annually .5 If the Respondent
is 'a multistate enterprise , it cannot meet any of the above standards , unless the
stipulation is interpreted to mean that the Galena Park plant alone annually produces
and ships out of Texas goods valued at $50,000 or more. On this point the stipula-
tion is ' somewhat vague, using only the words "its plant." I deem it reasonable to
assume, however , 'that the reference is to the Respondent 's Galena Park plant. Ac-
cordingly , the jurisdictional standards have here been met whether the Respondent
is an intrastate or a multistate enterprise . It is therefore found that , at 'all times
since about January 1955 , the Respondent 's Galena Park plant has been engaged in
commerce within the meaning of the Act and that it would effectuate the policies of
the Act for the Board to assert jurisdiction over its operations.6
II. THE LABOR , ORGANIZATION INVOLVED
Oil,'Chemical and Atomic Workers International Union, ' AFL-CIO, has been, at
all times since its inception in March 1955 , a labor organization within the meaning
of Section 2 (5) of the Act.
III THE UNFAIR LABOR PRACTICES
A. Sequence of events
On January 9, 1952, Oil Workers ` International Union , CIO, herein called the Oil
Workers, filed with the Board a petition seeking representation rights for the produc-
tion and maintenance employees at the Galena Park, Texas , plant of Gulf Chemical
Company, herein called Gulf, with ' certain exclusions .'i On the same day, Gulf
and the Oil Workers executed a consent -election agreement The Oil Workers won
the-election by a vote of 23 to 0. Thereafter , on February 4, 1952, the Regional
Director certified the Oil Workers as the bargaining representative of the employees
of Gulf in the unit. On February 22, 1952, the Oil Workers and Gulf signed two
contracts 8, governing the working conditions of Gulf's Galena Park employees.
One of these provided , among other things , that upon an empicyee 's written request
Gulf would check off the union dues of the employee and remit this money to the
Oil Workers. These contracts , with changes not here material , were renewed from
time to time and were still in force late in October 1954 when , as will hereafter
appear, Gulf ceased operations at Galena Park.
George A. Butler was president of Gulf from about 1950 until 1953 . He resigned
in the summer of 1953 because 'at that time he became the holder of a second
mortgage secured on the premises and equipment of Gulf's Galena Park plant In
1953, the mortgage was in default, and in addition Gulf owed approximately
$80,000 to unsecured creditors . Butler met with Gulf's unsecured creditors on
sevexal occasions and, although there was no formal composition of creditors, an in-
formal arrangement was reached , which provided : Butler was to foreclose his mort-
gage and then to transfer title to the property (subject, of course, to the first mort-
gage ) to a corporation to be formed . At the same time, Butler was to advance
* Jonesboro Grain Drying Cooperative , 110 NLRB 481 , 483-84
e Jonesboro Grain Drying Cooperative , supra, at 484
°The finding regarding the Respondent 's operations since January 1955 does not pre-
clude examination of the merits of unfair labor practices alleged to have been committed
prior to that (late Calei e Mining Company , 97 NLRB 950, 9.51-52; and Sunset Lumber
Products , 113 NLRB 1172 Compare National Ga,.< Company, 99 NLRB 273 , 276, enft
denied 215 F. 2d 160 (C A 8) See also City Window Cleaning Company, 114 NLRB
906. and Cadillac Marine it Boat Company , 115 NLRB 107
Case No 39-RC-409 ( not reported in punted volumes of P,onid Decisions and Orders)
s The agreements were executed by the Oil Workers conti.icting for and on behalf of its
Local Union No 227, herein called the local
BUTLER CHEMICAL- COMPANY '1059
$65,000 to the corporation secured by -a new, second mortgage:- The'corporation in
turn would lease the premises to Gulf for 18 months and would advance $65,000 to
Gulf for capital improvements, providing that Gulf would -agree ' to -apply " all its
earnings to the payment of unsecured creditors. • . In consideration, the unsecured
creditors agreed not to interfere with the use of the $65j000 by Gulf for capital im-
provements, and to withhold action to collect.their debts for 18 months In accord-
ance with this arrangement, Butler foreclosed his second mortgage on the premises,
obtained title thereto, and incorporated the Respondent corporation (then named
Gulf Chemical Corporation, Inc.) of which he was the president and sole stock-
holder. Butler then transferred title to the premises to the Respondent, and ad-
vanced more than $100,000 to the Respondent. As security for this loan,' the
Respondent executed a new second mortgage to Butler. The Respondent then exe-
cuted an 18 months ' lease to Gulf and advanced the funds to Gulf. Gulf continued
operations on the premises as lessee. At this time Otto B. Schoenfeld was president
of Gulf, Sam P. Robinson was its general manager, and Floyd Gee was its, office
manager Robinson left Gulf's employ during the summer of 1954.
On October 21 or 22, 1954, Butler was notified by Gulf's management that they
were "cleaning up the plant and' ,getting ready to close it." Butler went to the Gulf
plant and ascertained that there was no raw material ;on hand and no inventory of
finished products. The employees of Gulf, about 30 in number, had, been notified
that the plant would close at the end of the week and that they should not come back
the -following Monday On the follownig. Monday, October 25, 1954, Butler "as
an individual" took possession of the property .previously,-occupied by Gulf, and
continued to operate the plant with approximately two-thirds of the employees
previously employed by Gulf With regard to his legal right to take such possession,
Butler testified: "Well, several people, including lawyers, called me up and asked
me what right I had to take possession, and you know what I told them? I, told
them that I was a common trespasser, that I was there to preserve and protect that
property " Butler operated the plant thereafter as "George Butler, d/b/a Butler
Chemical Company," and was registered as such under the State assumed name
Statutes On November 3, 1954, Gulf issued the following statement
To- Unsecured Creditors and Noteholders of Gulf Chemical Company,
On Saturday, October 23, 1954, Gulf Chemical, Company found itself with-
out inventory or finished product, without capital to continue the operation
of the plant at Galena Park, without funds to pay the gas and power bills, and
the current payroll. This situation has come about after spending, since Janu-
ary 1, 1954, approximately $75,000.00 on plant improvements and a cash
operating loss since such date of approximately $100,000.00, which sum in the
approximate amount of $175,000.00 was advanced by George A. Butler.
Gulf Chemical Company prepared the plant for closing on October 23, 1954,
and the insurance carriers and the First Mortgage Holder and the Second
Mortgage Holder, George A. Butler, 31st Floor Gulf Building, Houston;, Texas,
have been so advised.
We understand that on Monday morning, October 25th, 1954, George A.
Butler took possession of the property and plant in Galena Park commonly
referred to as the Gulf Chemical Plant, for and on-behalf of the Second, Mort-
gage Noteholders, which was then in default, and that on such date the'First
Mortgage Notes, in the amount of $275,000.00 were also,in default.' ,
We are sorry to further advise you that in our opinion there are no assets
.to be distributed or paid to unsecured creditors.
GULF CHEMICAL COMPANY.
NOVEMBER 3, 1954.
The Oil Workers did not receive the dues checkoff remittance- from Gulf which
was due in November. To find out why, E. C. Wade, president of the Oil Workers
local. and J. E. Melton, the local's secretary-treasurer, went to the plant and con-
feTred with Gee on November 10, 1954.i0 Wade asked Gee why the' union dues
had not been deducted from the paychecks of the employees 'and- remitted to the
Oil Workers Gee replied that he had no authority to withhold union dues because
"the Gulf Chemical Company is no longer Gulf Chemical Company., It's, Butler
Chemical Company." He then handed to Wade and Melton a,copy of the notice dated
"17 Vernon's Civil Statutes of Texas, Annotated, Art 5924-5927
'^Butlei testified that from October 25, 1954, until late April or early Ma3,1955, Gee
acted as plant manager I accordingly find that Gee's; remarks on fNoveniber 10. 1934,
ssere attributable to Butlei
Schoenfeld apparently left the plant when Tiutler took over
1060 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
November 3, 1954, set forth above. Wade responded that the Oil Workers had a
contract and expected "them" to honor it . Gee then stated that he would have
to take the matter up with Butler.
Within 1 or 2 weeks after this conversation, Wade and Melton spoke to Butler
at the plant . Wade and Melton identified themselves as representatives of the Oil
Workers' local, and pointed out that the Oil Workers had a contract covering the
employees of Gulf. They then asked why Gee had not honored the checkoff pro-
visions of the contract. Butler replied that he had never seen the, contract but would
take`the matter up with Gee. He further informed Wade and Melton that, although
he was not adverse to a union, he considered it a waste of time to talk about union
matters or contract negotiations at that time, as the plant had serious financial diffi-
culties and he did not know how long it would remain in operation. He added that
if and when it was determined that the plant would continue to operate , that would
be the appropriate time to negotiate a contract. Wade and Melton replied that they
would be glad to help make the business a success but in the meantime they expected
to be recognized and to bargain regarding grievances.
Following this conversation , Butler instructed Gee to prepare slips authorizing
the Respondent to check off union dues and further directed that union dues would
be checked off for any employee who signed such a slip. What happened after that
is not entirely clear. Apparently, however, Gee prepared such slips and a number
of employees signed them or identical slips prepared under Wade's direction. Ac-
cording to J. L. King, an employee of the Respondent, approximately 15 or 20
employees signed such slips, which King then delivered to Nolan Lowery, assistant
superintendent of the plant . Butler, however , denied knowledge that any such slips
had been signed. The Respondent has never checked off the union dues of any
employee.
On December 21, 1954, Wade, as president of the local, sent a registered letter to
Butler which read , in part , as follows:
The Oil Workers International Union, C. I. 0., represents a majority of the
production and maintenance employees, exclusive of supervisory, clerical and
plant protection employees of the Company's plant at Galena Park, Texas.
I am requesting that you set a date for a meeting consisting of yourself or
your representatives and myself, and a committee chosen by your employees
for the purpose of negotiating a contract between the Oil Workers International
Union, C. I. 0., and the-Company with respect to wages, hours and other condi-
tions of employment.
On January 3, 1955, Butler replied to Wade's letter, in part, as follows:
Presently I am operating the plant as an individual and whether I will con-
tinue to do so has not yet been determined. I believe that some time during
the month of January I will determine whether it is practicable to try to keep
the plant open. If I decide to keep the plant open I will likely convert the
operation to that of a corporation which will then be in permanent operation
of the plant. We hope it will be appropriate at that time for that company to
meet with you. Until that is decided, it seems to me it is impractical, both from
the standpoint of your time and mine, that we go into this matter.
The last time I saw you, you asked me about withholding dues from the
pay checks of the employees for the Union. I told you I would take it up with
the employees. We sent a notice to the employees that if they would like to
have us withhold the dues to advise us and we would do so. The last time I
checked; which was a few days ago, although the notice went out some time
ago, we had not received a request from any employee to withhold Union dues
for delivery to you.
I hope, from this letter, that you will not get the idea that I am trying to in
any manner side step or avoid meeting you for negotiations. It just seems to
me that it is impractical to have such a meeting until we determine whether the
plant will continue operations and who is going to operate it.
Wade did not receive this letter until January 4, 1955. On that day, before the
letter was received, Dial Murphy, an international representative of the Oil Workers,
filed with the Board charges alleging that the Respondent had failed to bargain
in violation of Section 8 (a) (1) and (5) of the Act." On January 7, 1955, after
receiving Butler's letter, the Oil Workers withdrew these charges. On the same day,
Murphy telephoned to Butler and informed him that the charges had been withdrawn
after the receipt of his letter of January 3. Murphy nevertheless protested Gee's
11 Case No. 39-CA-468
BUTLER CHEMICAL COMPANY 1061
refusal to check off union dues . Butler replied that he would discuss the matter
with Gee. He stated that whether the plant would remain in operation was un-
certain because the financial picture was not encouraging. He added that he was not
opposed to the union and that if financial conditions improved , he would enter
into negotiations with the union.
On January 31, 1955, Butler turned the plant^over to the Respondent, which at the
same time adopted its present name. The Respondent has continued to operate the
plant since then.
Early in March 1955 the Oil Workers merged with the United Gas, Coke and
Chemical Workers of America, CIO, to form the Union.12 On March 16, 1955,
the Union filed the instant charges. On April 2, 1955, Butler wrote to a field examiner
of'the Board, apparently in response to an inquiry, in part, as follows:
I told the Union secretary (I think his name is Wade) that it seemed to me
to be a waste of his time as well as mine to talk about Union matters when no
one knew how long the plant would be operating; that whenever these very
serious financial problems were solved and it would appear that the plant
would remain as a place of employment and operate the business for which it
was constructed, that after such was determined would be the time to set down
and try to talk about Union negotiations. I think this is a simple solution and
is by no means a dodge of my responsibility of negotiating with the Union.
On May 21, 1955, Murphy (now as an international representative of the Union)
made a telephone call to John H. Hinkle, Jr., who had become the Respondent's
plant manager late in April or early in May 1955. The conversation was abortive,
because of a mechanical breakdown in the plant. Murphy called Hinkle again on
May 24 and asked him about the prospect of getting into collective bargaining.
Hinkle replied that the Respondent's financial condition was precarious and the
kiln was "in bad shape" from a mechanical breakdown which had occurred a few
days earlier. He added that it would be pointless for the parties to enter into
negotiations.
Murphy again telephoned to Hinkle on June 6, and was informed that Jack Binion,
Esq., the Respondent's attorney, would handle all future matters with the Union.
,On June 18, Murphy and Binion conferred in Binion's office. Murphy requested
that the contract between the Oil Workers and Gulf be recognized by the Respondent
for a 4-month period, and after that negotiations could commence looking toward a
new contract. Binion replied that the matter would have to be deferred until he had
an opportunity to confer with officials of the Respondent. Another meeting was
therefore arranged. On July 14 Murphy and Melton met with Binion. Binion
informed Murphy and Melton that because of the Respondent's financial situation
and the uncertainty of operation, the Respondent would not consent to "put the
agreement back into effect." Murphy and Melton then asked for (1) recognition of
the Union as the bargaining agent of the employees at the plant; (2) checkoff of
union dues for employees who had previously had their dues checked off and who
had. not since resigned from the Union; and (3) the right to confer with the Respond-
ent regarding grievances. After pointing out that the Respondent's failure to check
off union dues had cost the Union approximately $1,000, Murphy stated that the Union
'was not concerned about these back dues but only that the checkoff should be
reinstituted. Binion replied that if the Union's representatives would give him about
10 days he would see if he could get what they were asking for. He added that he
did not want anyone threatening to shut down the plant. To this Murphy answered
that so far as he knew there had never been any strike at the plant. Binion agreed
to confer with officials of the Respondent and then to get in touch with Murphy.
Thereafter, Binion became involved in litigation concerning other clients and Murphy's
attempts to contact him were unsuccessful.
B. The appropriate unit
The parties agree, and`I•' find, that all production and maintenance employees at
the Respondent's Galena Park, Texas, plant, excluding clerical employees, technical
employees, guards, and supervisors, constitute a unit appropriate for the purposes of
collective bargaining within the meaning of Section 9 (b) of the Act. This corre-
sponds to the unit of Gulf's employees for whom the Oil Workers was certified by
the Board.
1= Directory of National and International Labor Unions in the United States, 1955,
U S Depai tnient of Labor Bulletin No 1185, at page 35.
1062 DECISIONS OF: NATIONAL LABOR, RELATIONS BOARD"
CC: The Union's majority status
The complaint alleges and, the answer denies- that at all timed since February 4„
1952,' the Union has been the exclusive bargaining representative of the employees
in the unit described above. In support of his contention that the Union represents
the majority of employees in the unit, the General Counsel relies upon the Oil
Workers' certification of February 4, 1952, and upon certain dues `payment records
kept by the Oil Workers.
It is well-settled that, a certification creates a presumption (rebuttable if the
certification, is more than a year old) of the majority status of the certified union. 13
But here in relying upon the certification to prove majority status, the General-
Counsel is met at the outset, with a formidable obstacle, namely the fact that the
Oil Workers, not the Union, was certified as the bargaining agent for Gulf's em-
ployees: In effect, considering the Oil Workers' certification as proof of the Union's
majority status would entail a virtual amendment of the certification, by substituting
the Union's name therein for that of the Oil Workers. Whether or not such an amend-
ment should.be made depends, it seems to me, upon the answer to the question:
Have the nature, structure, policies, and purposes of the certified union been
modified to such a degree' that it no longer remains the same organization it was
before the merger? This can only be properly determined by evaluating the terms
and conditions of the merger agreement, after due notice to all parties and opportunity
to present evidence and to be heard on the matter.
Under somewhat similar, but distinguishable, circumstances the Board in J. W,
Dickey, et al., 14 found the certification to be proof of the Union's majority status,
but there following the merger .the Regional Director, after issuing a rule to show
cause, had amended the certification. Of this the Trial Examiner, with,Board ap-
proval, observed:
There is a conclusive presumption . . that the Regional Director had before
him the facts . in connection with the change in-name of the certified unit
when he permitted the amendment of the certification. 15
In the instant case the parties, by their own voluntary agreement, have lodged in the
Regional Director the exclusive authority to amend the certification. For where,-as
here, a consent-election agreement has been executed, only the Regional Director may
amend a certification, and his action in this respect is final 16 It follows that I have
no power to strike the Oil Workers' name from the certification and substitute therefor
the Union's name. Nor may f do essentially the same thing in another form by
considering the Oil Workers' certification as proof of the Union's majority status.
In addition to the certification, the General Counsel relies upon the Oil Workers'
dues records as proof of the Union's majority status. It will be assumed without
deciding that these records show that a majority of employees in the unit paid
dues to the Oil Workers before the merger. But examination of them indicates that
only 5 employees 17 in a unit of 20 or 30 paid dues to the Union after the merger.18
Hence these records, like the certification, are subject to the question whether the
merger substantially changed the Oil Workers' identity. On the record before me,
I cannot therefore accept them as proof of the Union's majority status. In my
opinion, the General Counsel has not shown by a preponderance of the evidence that
m Celanese Corporation of America, 95 NLRB 664, 672. See also Ray Brooks v.
N L R. B , 348 U S. 96
i* 108 NLRB 561.
15 IInd, page 576 The Court of Appeals for the Sixth Circuit in Dickey v. N L. R B.,'
217 F. 2d 652, reversed the Board on this point and held the amendment of the certifica-
tion invalid because the employees in the unit had never selected the merged union as
their bargaining representative. With all respect for the court, I am constrained to follow
the Board's decision in the case until the Supreme Court has ruled otherwise. Compare
N L R B v Harris-l oodson Co, Inc, 179 F 2d 720 (C A 4), and Continental Oil
Company v. N L R B , 113 F. 2d 473, 477 (C A. 10), each of which involved merely
change of name and affiliation, rather than merger
ie Rules and Regulations of the Board, Series 6, as amended, Section 102 54 (a) as
amended September 24, 1952, 17 F R. 8503
17 James Brown (3-21-55), Samuel E Loftin (3-24-55), Dalton McGuire (3-21-55),
L J Martin (3-16-55), and Eldridge J. Richard (3-23-55).
is In November 1954 the Oil Woi kers adopted a policy of continuing to carry former
employees of Gulf as members in good standing without requiring them to pay union dues.
This policy was not specifically communicated to the members, but there is some indication
that the members might have known of it
UNITED BROTHERHOOD O1, CARPENTERS, ETC. 1063
the Union represented a majority of the employees in the unit at any time.
Accordingly, I will recommend that the complaint be dismissed, without prejudice to
the right of any party to apply to the Regional Director for an amendment of the certi-
fica•tion. In view of this disposition of the case it is unnecessary to decide whether the
certification of Gulf's employees applies likewise to the Respondent's employees.
Upon the foregoing findings of fact, and upon the entire record in the case, I make
the following:
CONCLUSIONS OF LAW
1. Butler Chemical Company is engaged in commerce within the meaning of
Section 2 (6) and (7) of the Act.
2. Oil, Chemical and Atomic Workers International Union, AFL-CIO, is a
labor organization within the meaning of Section 2 (5) of the Act.
3. All production and maintenance employees at the Respondent's Galena Park,
Texas, plant, excluding clerical employees, technical employees, guards, and super-
visors, constitute a unit appropriate for the purpose of collective bargaining within
the. meaning of Section 9 (b) of the Act..
4. The Respondent has not engaged in any unfair labor practices within the mean-
ing of Section 8 (a) (1) and (5) of the Act.
[Recommendations omitted from publication.]
United Brotherhood of Carpenters and Joiners of America,
AFL-CIO, and its Agent, Cecil Shuey ; Local 60, United Broth-
erhood of Carpenters and Joiners of America , AFL-CIO, and
its Agents, Chester Bereman and Paul Bear ; and Carpenters
District Council, United Brotherhood of Carpenters and
Joiners of America , AFL-CIO, and its Agent R . R. Smith and
Wendnagel & Company. Case No. 35-CI)-24. September 12,
1956
DECISION AND DETERMINATION OF DISPUTE
STATEMENT OF THE CASE
This proceeding arises under Section 10 (k) of the Act, which
provides that, "Whenever it is charged that any person has engaged
in an unfair labor practice within the meaning of paragraph (4) (D)
of Section 8 (b), the Board is empowered and directed to hear and
determine the dispute out of which such unfair labor practice shall have
arisen...."
On April 14, 1956, Wendnagel & Company, herein called Wend-
nagel, filed with the Regional Director for the Ninth Region a charge,
amended on April 30 and May 3, 1956, alleging that United Brother-
hood of Carpenters and Joiners of America, AFL-CIO, and its Agent,
Cecil Shuey; Local 60, United Brotherhood of Carpenters and Join-
ers of America, AFL-CIO, and its Agents, Chester Bereman and
Paul Bear; and Carpenters District Council, United Brotherhood of
Carpenters and Joiners of America, AFL--CIO, and its Agent R. R.
Smith, herein called the Carpenters, have engaged in and are engag-
ing in certain activities proscribed by Section 8 (b) (4) (D) of the Act.
116 NLRB No. 132.