Columbia City Freight Lines

National Labor Relations Board - Board Decisions

Jun 28, 1984

271 N.L.R.B. 12 (N.L.R.B. 1984)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Columbia City Freight Lines, Inc. and Teamsters
National Freight Industry Negotiating Commit-
tee, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of
America. Case 25-CA-14823
28 June 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 3 August 1983 Administrative Law Judge
Elbert D. Gadsden issued the attached decision.
The General Counsel filed exceptions and a sup-
porting 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
record in light of the exceptions and brief and has
decided to affirm the judge's rulings, findings, and
conclusions as modified and to adopt the recom-
mended Order as modified.
The judge concluded that the Respondent did
not violate Section 8(a)(1) and (5) of the Act by
failing or refusing to bargain with the Union about
its decisions to close its Hammond and South
Bend, Indiana terminals and to transfer the work
from those terminals to its main terminal in Colum-
bia City, Indiana.' We agree with the judge's con-
clusion, but we do so for the following reasons.
The Board recently held in Otis Elevator Co.,2
that management decisions which affect the scope,
direction, or nature of the enterprise are excluded
from the limited manadatory bargaining obligation
of Section 8(d). As the Board stated in Otis Eleva-
tor, the critical factor in determining whether a
management decision is subject to mandatory bar-
gaining is "the essence of the decision itself, i.e.,
whether it turns upon a change in the nature or di-
rection of the business, or turns upon labor costs;
not its effect on employees nor a union's ability to
offer alternatives." 3 Applying that analysis to the
facts of the instant case, we find that the Respond-
ent's decision to close two of its three terminals
and consolidate the work at the third terminal
turned not upon labor costs but upon a significant
change in the nature and direction of the business
I The judge concluded, and we agree, that the Respondent violated
Sec. 8(a)(1) and (5) by failing to afford the Union an opportunity to bar-
gain about the effects of its decisions to close the two terminals. Al-
though the judge stated he was applying the remedy provided in Trans-
marine Navigation Corp., 170 NLRB 389 (1968), for this violation, the lan-
guage of his recommended Order does not fully conform to the remedy
used in Transmarine. We shall modify the recommended Order accord-
ingly.
2 269 NLRB 891 (1984).
s Id. at 892.
271 NLRB No. 5
and therefore was not subject to mandatory bar-
gaining.
As found by the judge, until mid-July 1982 the
Respondent maintained truck terminals at Ham-
mond, South Bend, and Columbia City, Indiana.
The employees at each terminal were represented
by a different Teamsters Local: Local 142 at Ham-
mond, Local 364 at South Bend, and Local 414 at
Columbia City. All of the relevant collective-bar-
gaining agreements expired 31 March 1982. 4 As of
June 1982, the Respondent had met once with the
Charging Party, Teamsters National Freight Indus-
try Negotiating Committee, in separate negotiations
for a successor agreement.
On 9 July the Respondent notified Local 142 in
writing that effective 12 July "[a]ll work presently
being handled by Hammond, Indiana terminal will
be transferred to the South Bend operations" and
that all Hammond personnel would be offered a
nonpaid transfer to South Bend. The Respondent's
letter also described how South Bend would
"become a break bulk terminal," and further stated:
By consolidating the two operations, (Ham-
mond and South Bend) CCFL will be able to
provide better service which is necessary in
order to compete in todays [sic] market. In ad-
dition CCFL will eliminate duplicate cost in
overhead, reduce milage [sic] cost, maximize
fuel usage, maximize equipment utilazation
[sic], and eliminate the duplication of coverage
between terminals.
Minimum projected savings will be in excess
of $170,000.00
The letter also contained attachments indicating
various cost savings associated with the consolida-
tion of operations, including: labor/revenue factors,
loss ratios, terminal savings, and operational flexi-
bility.
In a letter dated 6 September, the Respondent
advised the South Bend employees of a "change of
operations," i.e., the closing of the South Bend ter-
minal, and stated:
The decision itself has nothing to do with pro-
ductivity of the South Bend people, but entire-
ly on the loss of revenue once generated by
O&M [Respondent's main customer in South
Bend] through cartage and interline.
In this letter the Respondent also offered the South
Bend employees the opportunity to transfer to Co-
lumbia City. Local 364's business agent, Warnock,
received a copy of the letter from one of the Re-
' All dates refer to 1982 unless otherwise indicated.
12
COLUMBIA CITY FREIGHT LINES
spondent's officials about a week before the South
Bend terminal was closed.
The judge found that the Respondent's decision
to close its Hammond and South Bend terminals
resulted in a major shift in the direction of the Re-
spondent's business, involving a substantial alter-
ation and capital restructuring of its operation. He
further found that this substantial change of the
Respondent's business operations removed the deci-
sions from the scope of the Respondent's mandato-
ry bargaining obligation. In making these findings,
the judge relied primarily on Kingwood Mining
Co.," and General Motors Corp.6 Further, although
finding that the record failed to explicitly show
that the Respondent's reasons for closing the termi-
nals were economic, the judge inferred the Re-
spondent's economic motivation from the fact that
it earlier had requested separate bargaining with
the Union and from the fact of the closings them-
selves. He therefore found under First National
Maintenance Corp. v. NLRB,7 that the Respond-
ent's economically motivated partial closing "out-
weighs any incremental benefit the Union might
have derived from participating (bargaining) in
making the decisions."
As indicated above, Otis Elevator, which was de-
cided under the guidance of First National Mainte-
nance, now provides the method of analysis for de-
termining whether management decisions are sub-
ject to mandatory bargaining. Thus, looking at the
essence of the Respondent's decision to close two
of its terminals, it is clear that the decision did not
turn on labor costs, albeit labor costs may have
been one factor in the Respondent's decision. In
fact, the record indicates that in closing the Ham-
mond terminal the Respondent was seeking to
reduce costs, eliminate duplication in costs and
service, and maximize usage of equipment and fuel.
Moreover, in closing the South Bend terminal, the
Respondent also was reacting to the loss of a major
customer. As a result of the closings, the Respond-
ent's trucking operations were consolidated at one
location. These facts establish that the decisions at
issue here, no matter what they are labeled or how
they are categorized, clearly turned on a funda-
mental change in the nature and direction of the
Respondent's business.
Accordingly, since we conclude under Otis Ele-
vator that the Respondent had no duty to bargain
about its decision to close the two terminals, we
affirm the judge's dismissal of this portion of the
complaint.
210 NLRB 844 (1974).
191 NLRB 951 (1971).
452 U.S. 666 (1981).
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent, Columbia City Freight Lines, Inc., Co-
lumbia City, Indiana, its officers, agents, successors,
and assigns, shall take the action set forth in the
Order as modified.
1. Substitute the following for paragraph 2(a).
"(a) Pay the former employees of the Respond-
ent's Hammond and South Bend terminals backpay
at the rate of their normal wages when last in the
Respondent's employ from 5 days after the date of
this Order, until the occurrence of the earliest of
the following conditions: (1) the date the Respond-
ent bargains to agreement with the Union over the
effects of the decisions to close the Hammond and
South Bend terminals; (2) a bona fide impasse in
bargaining; (3) the failure of the Union to request
bargaining within 5 days of this Order or to com-
mence negotiations within 5 days of the Respond-
ent's notice of its desire to bargain with the Union;
or (4) the failure of the Union to bargain in good
faith; but in no event shall the sum paid to any of
these employees exceed the amount they would
have earned as wages from the dates on which the
Respondent closed the terminals to the time they
secured equivalent employment elsewhere, or the
date on which the Respondent shall have offered
to bargain, whichever occurs sooner; provided,
however, that in no event shall this sum be less
than these employees would have earned for a 2-
week period at the rate of their normal wages
when last in the Respondent's employ."
2. Substitute the attached notice for that of the
administrative law judge.
MEMBER DENNIS, concurring.
I agree with my colleagues that the management
decisions in issue here were not manadatory sub-
jects of bargaining. Several factors influenced the
Respondent's decisions, including a desire to
reduce costs, to eliminate duplication of service,
and to maximize usage of equipment and fuel. In
addition, the Respondent was reacting to the loss
of a major customer when it decided to close the
South Bend terminal. The decisions were based on
factors over which the Union had little or no con-
trol. To the extent that labor costs were a factor, it
was at best an insignificant consideration in the Re-
spondent's decisions. I therefore conclude that the
Respondent's decisions were not amenable to reso-
lution through collective bargaining and agree that
this portion of the complaint should be dismissed.
See my concurrence in Otis Elevator Co., 269
NLRB 891 (1984). I also agree with my colleagues
13
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that the Respondent violated the Act by failing to
bargain about the effects of its decisions.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT refuse to bargain collectively in
good faith with Locals 142, 364, and 414, Interna-
tional Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, with re-
spect to the effects on unit employees of our clos-
ing the Hammond and South Bend terminals.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL, on request, bargain in good faith with
Locals 142, 364, and 414 of the Union with respect
to the effects of our decision on unit employees as
a result of closing our Hammond and South Bend
terminals, including any disputes with respect to
rates of pay, wages, hours, or other terms and con-
ditions of employment, and reduce to writing any
agreement reached as a result of such bargaining.
WE WILL pay the former employees of the Ham-
mond and South Bend terminals backpay at the
rate of their normal wages when last in our employ
from 5 days after the date of the Board's Order,
until the occurrence of the earliest of the following
conditions: (1) the date we bargain to agreement
with the Union over the effects of the decisions to
close the Hammond and South Bend terminals, (2)
a bona fide impasse in bargaining; (3) the failure of
the Union to request bargaining within 5 days of
the Board's Order or to commence negotiations
within 5 days of notice by us of a desire to bargain
with the Union; or (4) the failure of the Union to
bargain in good faith; but in no event shall the sum
paid to these employees exceed the amount they
would have earned as wages from the dates on
which we closed the terminals to the time they se-
cured equivalent employment elsewhere, or the
date on which we shall have offered to bargain,
whichever occurs sooner; provided, however, that
in no event shall this sum be less than these em-
ployees would have earned for a 2-week period at
the rate of their normal wages when last in our
employ.
COLUMBIA CITY FREIGHT LINES,
INC.
DECISION
STATEMENT OF THE CASE
ELBERT D. GADSDEN, Administrative Law Judge.
Upon a charge of unfair labor practices filed on Septem-
ber 1, 1982, by Teamsters National Freight Industry Ne-
gotiating Committee, International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of
America (the Union) against Columbia City Freight
Lines, Inc. (Respondent) the Regional Director for
Region 25 issued a complaint on October 28, 1982.
In essence, the complaint alleges that Respondent laid
off unit employees at its Hammond and South Bend, In-
diana terminals, transferred work previously performed
by such unit employees to its other terminal, and closed
its Hammond and South Bend terminals; that Respondent
took the aforedescribed action without affording the
Union or the respective locals, either reasonable notice
of such decisions, or an opportunity to bargain about the
decisions or the effects of the decisions, and that by
doing so, Respondent has failed and refused to bargain
collectively with the Union as representatives of its em-
ployees, in violation of Section 8(a)(5) and (1) of the Act.
Respondent filed an answer on November 8, 1982, in
which it denied that it has engaged in any conduct in
violation of the Act as set forth in the complaint.
The hearing in the above matter was held before me in
Fort Wayne, Indiana, on March 23, 1983. Prior to the
hearing, Respondent advised the Regional Office for
Region 25 that it would not appear, and it did not in fact
appear in person or through representation. A brief has
been received from counsel for the General Counsel
which has been carefully considered.
Upon the entire record in this case and from my obser-
vation of the witnesses, I make the following
FINDINGS OF FACT
1. JURISDICTION
At all times material herein, Respondent is and has
been a corporation duly organized under, and existing by
virtue of, the laws of the State of Indiana. Respondent
maintained its principal office and place of business at
Columbia City, Indiana, as well as its facility in Ham-
mond, Indiana, until July 12, 1982, and its facility in
South Bend, Indiana, until September 13, 1982, where it
is, and has been continuously engaged in the business of
transporting freight and providing and performing relat-
ed services.
During the 12-month period ending August 31, 1982,
Respondent, in the course and conduct of its business op-
erations derived gross revenues in excess of $50,000 from
the transportation of freight and commodities from the
State of Indiana directly to points outside the State of In-
diana. During the same period, Respondent, in the
14
COLUMBIA CITY FREIGHT LINES
course and conduct of its business operations performed
services valued in excess of $50,000 in States other than
the State of Indiana.
Also, during the 12-month period ending December
17, 1982, a representative period, Respondent in the
course and conduct of its business operations purchased
and received at its Columbia City and/or Hammond, In-
diana, and/or South Bend, Indiana terminals, goods and
materials valued in excess of $50,000 directly from States
other than the State of Indiana.
The complaint alleges, Respondent stipulates, and I
find on evidence adduced at the hearing, that Respond-
ent is engaged in commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
11. THE LABOR ORGANIZATION INVOLVED
The complaint alleges that the Union is a labor organi-
zation within the meaning of the Act, but Respondent
contends that it is without sufficient knowledge as to
whether or not the Union is a labor organization.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background Facts
Respondent operated a local cartage and warehousing
operation for the transportation of freight. In carrying
out its operation, it maintained truck terminals in Ham-
mond, South Bend, and Columbia City, Indiana. Truck-
drivers from its Hammond terminal would make pickup
deliveries throughout the Chicago area, bringing such
freight back to the terminal where it would be loaded on
other trucks for further distribution throughout northern
Indiana and other points to which Respondent had rights
to deliver.
B. Respondent's Relationship with Local Unions 142,
364, and 414
Respondent and Local 142 had a collective-bargaining
agreement from 1979 until it expired on March 31, 1982.
Don Sawochka was secretary-treasurer of Local 142, in
Gary, Indiana. He represented Respondent Hammond,
Indiana employees for purposes of collective bargaining,
concerning wages, rates of pay, and hours of employ-
ment.
Freeman Bushe Jr. is secretary-treasurer of Local 414
and he undisputedly testified that in such capacity he
admits employees to membership who in turn participate
in the affairs of the Local; that Local 414 exists for the
purpose of processing employee grievances and repre-
senting employees for collective bargaining concerning
wages, rates of pay, and hours of employment. Bushe
was subcommittee chairman of the Teamsters National
Freight Industry Negotiating Committee (TNFINC) as
of June 8, 1962, when he succeeded Sawochka. In his ca-
pacity he was authorized to negotiate with Respondent
on behalf of Local 364 and 414 of Columbia City, Indi-
ana.
Robert Warnock Jr. is business agent of Local 364 and
he undisputedly testified that in such capacity he repre-
sented employees at Respondent's South Bend, Indiana
terminal. In that capacity he admits employees to mem-
bership and represents employees in processing griev-
ances and labor disputes regarding wages, rates of pay,
and hours of employment.
The Columbia City terminal served as the main termi-
nal office. Respondent was bound by the collective-bar-
gaining agreement with the Union (Teamsters Local 142)
covering the Hammond terminal, the collective-bargain-
ing agreement with Teamsters Local 364 covering the
South Bend terminal, and an agreement with Teamsters
Local 414 covering the Columbia City terminal. All of
the agreements expired on March 31, 1982.
The following employees of the Respondent constitute
a unit appropriate for the purpose of collective bargain-
ing within the meaning of Section 9(b) of the Act:
All local cartage drivers employed at the Respond-
ent's Hammond, Indiana terminal, who are covered
by the collective bargaining agreements described in
subparagraph 6(e) of the complaint herein, and:
All employees of the Respondent, including those
employed at the Respondent's South Bend, Indiana
terminal, who are covered by the collective bar-
gaining agreements described in subparagraph 6(e)
of the complaint herein.
Additionally, Respondent has recognized the respec-
tive local unions and the respective local unions have
represented the respective above-described unit employ-
ees as more fully described in paragraphs 5(b)-(c) and
6(b)-(f) of the complaint herein.
Based on the foregoing uncontroverted evidence of
record, I conclude and find that Locals 142, 414, and
364, International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, are, and have
been at all times material herein, labor organizations
within the meaning of Section 2(5) of the Act.
The record does not contain any evidence to support
Respondent's affirmative defenses as set forth in its
answer to the complaint, and such affirmative defenses
are hereby dismissed as requested by counsel for the
General Counsel. Counsel for Respondent's motion to
correct the transcript as indicated in his brief is also
granted.
When Respondent came into the area in Indiana in
1979, it extended recognition to Local 142 and an exist-
ing collective-bargaining agreement which expired
March 31, 1982. Although the collective-bargaining
agreement with Respondent had been negotiated by the
Teamsters National Freight Industry Negotiating Com-
mittee (TNFINC), a multiemployer negotiating commit-
tee, prior to Respondent extending recognition to Local
142, when the contract was reopened for negotiations,
Respondent, who was formally a member of Trucking
Management Incorporated until late 1981, along with
several other employers, requested separate negotiations
rather than remain a part of the multiemployer unit. On
conclusion of the National Master Negotiations, Re-
spondent and the other companies which requested sepa-
rate negotiations were represented by a subcommittee of
various Teamsters assigned to negotiate with each em-
ployer. Don Sawochka, secretary-treasurer of Local 142,
15
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was made chairman of the subcommittee assigned to ne-
gotiate with Respondent. As such, the negotiating sub-
committee met on one occasion and Sawochka communi-
cated with Respondent by telephone on several occa-
sions thereafter, before he withdrew from the committee
to work with Local 414 and Local 364 of the Indiana
conference. He was succeeded by Freeman Bushe of
Local 414 as chairman of the committee.
While serving as chairman of the committee,
Sawochka did not receive any information that Respond-
ent was going to close the Hammond terminal. If he or
Local 142 had received such notification from Respond-
ent, he was authorized to at least discuss concessions or
suggest alternatives to Respondent's action. He would
have been able to do the same thing in his capacity as
subcommittee chairman of TNFINC.
Respondent's South Bend terminal was a local cartage
operation, picking up and delivering freight within a
radius of 75 miles. The majority of the work was per-
formed for other carriers with Respondent splitting the
difference between itself and other carriers. Respondent
had a collective-bargaining agreement with Local 364 at
its South Bend terminal.
C. Respondent Unilaterally Laid Off its Hammond
and South Bend Employees and Closed both
Terminals
The record shows that the Union had requested Re-
spondent to bargain on several occasions and that Re-
spondent met with the separate bargaining committee on
one occasion concerning negotiations for a new contract
to succeed the contract which expired March 31, 1982.
The record does not contain any evidence that the par-
ties engaged in good-faith bargaining until an impasse
was reached. Instead, the evidence shows that on July 9,
1982, Respondent, without affording the Union an op-
portunity to discuss and bargain, notified Local Union
142 for the first time, that effective Monday, July 12,
1982, Respondent would lay off employees at the Ham-
mond terminal and transfer all unit work to its South
Bend, Indiana terminal. Unit employees were offered an
opportunity to transfer and some of said employees did
elect and were transferred to the South Bend terminal.
The Union (Local 142) did not have an opportunity to
bargain about Respondent's decision or the effects of its
decision making the transfers.
The record evidence further shows that before the
Hammond terminal was closed by Respondent, business
agent for Local 364, Robert Warnock, was given a letter
(G.C. Exh. 8) by an executive of Respondent, Jim King,
who asked Warnock to sign for it. The letter, dated Sep-
tember 6, 1982, advised by implication the closing of the
South Bend, Indiana terminal. Warnock suggested to
King that there might be alternatives and since Bushe
would be getting the people at Local 414 in Fort Wayne,
they should all sit down and talk about it. King replied,
there was absolutely no negotiations, this was it. War-
nock stated that before he received the letter, he had not
had an opportunity to bargain about the decision or the
effects of the closing of the South Bend terminal or
about the transfer of employees from South Bend to the
Columbia City terminal. However, some employees did
transfer to the Columbia City terminal, as did Clarence
Hocker. Employees affected by the closing of the South
Bend terminal were Dean Baker, Clarence Hocker,
Robert Hocker, Joseph R. Karascon, Charles Klein Jr.,
Eldon E. Miller, R. James P. Meyers, Kenneth L. Sahli,
Eugene D. Sherer, and Jerry L. Wilson. Warnock said if
Local 364 had received timely notice of the closing it
had authority to negotiate concessions or alternatives to
the closing and the effects of the closing. He further
stated that Jim King told him that Ogden and Moffitt
constituted 80 percent of Respondent's work in South
Bend.
Subcommittee chairman and representative of Local
414, Bushe, learned about the Hammond and South Bend
closings after the fact through the locals. He said he had
no prior knowledge of the closings of Hammond or
South Bend, or of the transfer of any work from either
terminal to Columbia, and he had not had an opportunity
to bargain about the closings, transfer of work, or the ef-
fects of either. He had authorization to negotiate conces-
sions on behalf of both locals, if an opportunity to do so
had occurred. After he became chairman of the subcom-
mittee, Respondent refused the Union's several requests
to bargain.
Freeman Bushe Jr. was recalled and identified General
Counsel's Exhibits 10, 9(B), and 9(A), in that order. Gen-
eral Counsel's Exh. 9 is a consolidated statement of earn-
ings from Columbia City Freight Lines, Inc. He stated
he received the statement in the mail last week, which he
had requested in December 1982. The document is the
profit-and-loss statement from Respondent.
Analysis and Conclusions
Although Respondent gave its Hammond and South
Bend terminal employees an opportunity to transfer to its
Columbia City terminal, in reality it gave the employees
and the Union a fait accompli.
Even though the contract had expired on March 31,
1982, before Respondent closed its terminals, the Board
has long held that "An employer is under a duty to bar-
gain with the chosen representative of his employees
concerning matters affecting their wages, hours, and
terms and conditions of employment and cannot unilater-
ally change established employment conditions without
bargaining, regardless of the existence or nonexistence of
a collective-bargaining agreement." Winn-Dixie Stores,
147 NLRB 788, 789 (1964). The Board also said "The
Union had a statutory right to be notified in advance of
the proposed action and to be given an opportunity, if it
so desired, to consult and negotiate with the Respondent
about the need for elimination of unit jobs and the possi-
bility of alternate approaches that might avoid such
action" or, "about steps that might be taken to minimize
the effects upon employees of the proposed action."
It is clear that Respondent in the instant proceeding
did not in either case, give advance notice or afford the
Union an opportunity to discuss or bargain with it about
its decision to close, or about the effects of closing, its
terminals before implementing its decisions to do so.
However, since the Board issued its decision in the
above-cited Winn-Dixie Stores case, the Supreme Court
16
COLUMBIA CITY FREIGHT LINES
has held that Section 8(d) of the Act limits subjects of
mandatory bargaining to "issues that settle an aspect of
the relationship between the employer and employees."
The Court further stated that other decisions such as the
order of succession of layoffs and recalls, production
quotas, and work rules, are almost exclusively "an aspect
of the relationship between employer and employee."
Chemical Workers v. Pittsburgh Glass Co., 404 U.S. 157,
178 (1971).
The Supreme Court has further defined the limitation
on subjects of mandatory bargaining by pointing out that
some management decisions, such as choice of advertis-
ing and promotion, product type and design, and financ-
ing arrangements, have only an indirect and attenuated
impact on the employment relationship; and that a deci-
sion, involving a change in the scope and direction of the
enterprise, is akin to the decision whether to be in busi-
ness at all, "not in [itself] primarily about conditions of
employment, though the effect of the decision may be
necessary to terminate employment." Fibreboard Corp. v.
NLRB, 379 U.S. 203, 223 (1964); Teamsters Local 24 v.
Oliver, 358 U.S. 283 (1959).
Thus the question is raised in the instant case as to
whether Respondent was under a duty pursuant to Sec-
tion 8(d) of the Act, to bargain in good faith with the
Union over Respondent's decision to close, and the effect
of its having closed the Hammond and South Bend ter-
minals, since both closings eliminated jobs of employees.
The General Counsel contends that Respondent was
under a duty to bargain with the Union on both, the de-
cision to close and the effects of the closing. In support
of this position, the General Counsel cites Bob's Big Boy
Restaurants, 264 NLRB 1369 (1982).
In this regard, it is noted that as early as 1965, the Su-
preme Court held that "an employer has the absolute
right to terminate his entire business for any reason he
pleases" "a partial closing is an unfair labor practice
under Section 8(a)(3) if motivated by a purpose to chill
unionism in any of the remaining plants of the single em-
ployer and if the employer may reasonably have foreseen
that such closing would likely have that effect . . . or,
that employer action which has a foreseeable conse-
quence of discouraging concerted activities generally
does not amount to a violation of Section 8(a)(3) in the
absence of a showing of motivation which is aimed at
achieving the prohibited effect." Textile Workers v. Dar-
lington Co., 380 U.S. 263, 268, 275, 276 (1965).
However, it is particularly noted that the record in the
instant case does not contain any allegation or evidence
that Respondent's decisions to close its terminals were
motivated by a purpose to chill unionism in its remaining
Columbia City terminal, or that Respondent may reason-
ably have foreseen its actions would likely have such an
effect. At most, Respondent's actions might have had
foreseeable consequences of discouraging concerted ac-
tivities generally, but no evidence was introduced as the
law requires, showing a motivation by Respondent to
achieve such an unlawful effect. In the absence of such
evidence I do not find that Respondent's closing of the
Hammond and South Bend terminals constituted an
unfair labor practice, in violation of Section 8(a)(3) of
the Act. Textile Workers v. Darlington Co., supra.
More specifically, on June 22, 1981, the Supreme
Court held that, although Section 8(d) of the Act re-
quires an employer to bargain about the effects of a deci-
sion to close or partially close such an operation, the de-
termination depends on whether the "employer's eco-
nomic reasons outweighs the incremental benefit that
might be gained through the union's participation in
making the decision." First National Maintenance Corp. v.
NLRB, 452 U.S. 666 (1981).
In First National Maintenance Corp., supra, the em-
ployer, pursuant to contract, was engaged in providing
housekeeping, cleaning, maintenance, and related serv-
ices to commercial enterprises. Because it was losing
money, the employer, without affording the union an op-
portunity to bargain, notified the union and all employ-
ees employed at a building covered by one of the em-
ployer's contracts, that they were laid off and the con-
tract for that work terminated. The termination eliminat-
ed a number of employees' jobs. The employer therein
also refused the union's request to bargain about its deci-
sion. The Court held that the employer was required to
bargain about the effect of its decision to terminate the
contract with one of its customers for economic reasons.
However, in holding that the employer was not required
to bargain about its management decision terminating the
contract with said customer because it was a partial clos-
ing, the Court said "the harm likely to be done to an em-
ployer's need to operate freely in deciding whether to
shut down part of its business purely for economic rea-
sons outweighs the incremental benefit that might be
gained through the Union's participation in making the
decision, and we hold that the decision itself is not part
of 8(d)'s 'terms and conditions' ... over which Con-
gress has mandated bargaining."
In Bob's Big Boy Restaurants, cited and relied on by
counsel for the General Counsel, the Board held that the
employer's shutdown of its shrimp processing operation
constituted a subcontracting of the shrimp processing
work, rather than a partial closing of its food preparation
business, and as such, was not a major shift in the direc-
tion of its main business (food preparation), a substantial
capital restructuring or investment as was the case in
Kingwood Mining Co., 210 NLRB 844 (1974), and General
Motors Corp., 191 NLRB 951 (1971), and the operation
was not substantially altered. Consequently, subcontract-
ing the shrimp processing operation pursuant to a sub-
contracting agreement was not a sufficiently substantial
change so as to remove the decision to do so from the
scope of employer's mandatory bargaining obligation.
It is readily observed however, that the facts in Bob's
Big Boy Restaurants are distinguishable from the facts in
the instant case, where Respondent did not subcontract
work to a third party, but instead, closed its Hammond
and South Bend terminals and transferred the work
therefrom to its main Columbia City terminal, which per-
formed the same work. Under these circumstances, I
find, pursuant to the Board's analysis in Bob's Big Boy,
supra, that Respondent's decision to close its Hammond
and South Bend terminals resulted in a major shift in the
direction of Respondent's main business operations
(transportation of freight), a substantial alteration and
17
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
capital restructuring of its operation. Kingwood Mining
Co., supra, and General Motors Corp., supra. Additional-
ly, I further conclude and find that Respondent's deci-
sion resulted in a change of its business operation that
was sufficiently substantial to remove its decisions from
the scope of Respondent's mandatory bargaining obliga-
tion.
Moreover, while the evidence of record fails to explic-
itly show that Respondent's reasons for closing the Ham-
mond and South Bend terminals were economic, it may
be reasonably inferred from the fact that Respondent re-
quested separate bargaining rather than continue with
multiemployer (TNFINC) bargaining, and from the fact
of the closings itself, that both terminals were not suffi-
ciently profitable to Respondent. As such, Respondent's
partial closing of its freight transportation business
purely for economic reasons, outweighs any incremental
benefit the Union might have derived from participating
(bargaining) in making the decisions. First National Main-
tenance Corp. v. NLRB, supra. Assuming arguendo, how-
ever, that Respondent's reasons for closing the terminals
were not economic, its decisions were nonetheless not
subject to mandatory bargaining, since the decisions
were for a partial closing, and the law is well settled that
"an employer has an absolute right to close his entire
business for any reason he pleases." Textile Workers v.
Darlington Co., 380 U.S. at 268. As the Court said in Fi-
breboard, 379 U.S. at 223, such decisions are akin to deci-
sions closing the entire operation.
Consequently, since Respondent is obligated to bargain
with the duly designated bargaining representative union
of its employees about the effects of closing the Ham-
mond and South Bend terminals, failing to do so, and
unilaterally closing the terminals prior to affording the
Union an opportunity to bargain with it in respect there-
to, Respondent has failed and refused to bargain in good
faith, in violation of Section 8(a)(1) and (5) of the Act.
Inasmuch as the complaint alleges Respondent violated
Section 8(a)(1) and (5) of the Act by failing or refusing
to bargain with the Union about its decisions laying off
employees and closing the Hammond and South Bend
terminals, said allegation should be dismissed for the
foregoing reasons and authority discussed herein.
IV. THE REMEDY
Having found that Respondent has engaged in unfair
labor practices within the meaning of Section 8(a)(1) and
(5) of the Act, we shall order that it cease and desist
therefrom and take certain affirmative action necessary
to effectuate the policies of the Act.
It having been found that Respondent interfered with,
restrained, and coerced its employees in the exercise of
their Section 7 rights, by refusing to bargain with the
duly designated union representative of employees, con-
cerning the effects on employees as a result of its closing
the Hammond and South Bend terminals, Respondent
has failed and refused to bargain with the Union in viola-
tion of Section 8(a)(l) and (5) of the Act. The recom-
mended Order will provide that Respondent cease and
desist from engaging in such conduct.
Because of the character of the unfair labor practices
herein found, the recommended Order will provide that
Respondent cease and desist from or in any like or relat-
ed manner interfering with, restraining, and coercing em-
ployees in the exercise of their rights guaranteed by Sec-
tion 7 of the Act. NLRB v. Entwistle Mfg. Co., 120 F.2d
532, 536 (4th Cir. 1941).
CONCLUSIONS OF LAW
1. Columbia City Freight Lines, Inc., Respondent
herein, is an employer engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
2. Locals 142, 364, and 414, International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, herein called the Union, are and have been at
all times material herein, labor organizations representing
Respondent's employees within the meaning of Section
2(5) of the Act.
3. The appropriate unit is:
All truckdrivers, helpers, dockmen, warehousemen,
checkers, power lift operators, hostlers and such
other employees formally at Respondent's Ham-
mond, Indiana terminal, as may be presently or
hereafter represented by the Union, engaged in
local pickup, delivery and assembling of freight
within the area located within the jurisdiction of the
Local Union, not to exceed a radius of 25 miles, and
all employees of Respondent, including those em-
ployees formally employed at the Respondent's
South Bend, Indiana terminal, who are covered by
the collective bargaining agreements described in
subparagraph 6(e) of the complaint, as amended
herein.
4. By unilaterally laying off its employees in two of its
terminals, closing both terminals, and transferring the
work therefrom to its main terminal, Respondent has
failed and refused to bargain about the effects of its deci-
sions on employees, in violation of Section 8(a)(l) and
(5) of the Act.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed'
ORDER
The Respondent, Columbia City Freight Lines, Inc.,
Columbia City, Indiana, its officers, agents, successors,
and assigns, shall
1. Cease and desist from
(a) Failing and refusing to bargain collectively with
the duly designated representative union of its employ-
ees, with respect to the effects on employees from the
closings of its terminals.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of rights
guaranteed by the Act.
I 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.
18
COLUMBIA CITY FREIGHT LINES
2. Take the following affirmative action which is
deemed necessary to effectuate the policies of the Act.
(a) Pay the former employees of Respondent's Ham-
mond and South Bend terminals their normal wages for
the period beginning with the date of this Order, until
the occurrence of the earliest of the following condi-
tions: (I) the date Respondent bargains to agreement
with the Union over the effects of the decisions to close
its Hammond and South Bend terminals, (2) a bona fide
impasse in bargaining; (3) the failure of the Union to
commence negotiations within 5 days of receipt of Re-
spondent's notice of its desire to bargain with the Union;
or (4) the failure of the Union to bargain in good faith.2
(b) Preserve and, on request, make available to the
Board or its agents for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records nec-
essary to analyze the amount of backpay due each of the
terminated Hammond and South Bend terminal employ-
ees under the terms of this Order.
(c) Upon request bargain with Locals 142, 364, and
414, International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, as the collec-
tive-bargaining representative of the employees in the
2 This is the Board's accepted remedy for 8(aXS) violations involving
failure to bargain over effects. See, e.g., Royal Plating Co., 160 NLRB
990 (1966); Transmarine Navigation Corp.. 170 NLRB 389 (1968); Inter-
state Tool Co., 177 NLRB 686 (1969),
above-described appropriate unit respecting the effects of
the decisions to close the Hammond and South Bend ter-
minals, respecting rates of pay, wages, hours, or other
ternks and conditions of employment, and reduce any
agreement reached to writing.
(d) Post at its Columbia City terminal, Columbia City,
Indiana, copies of the attached notice marked "Appen-
dix." 3 Copies of said notice, on forms provided by the
Regional Director for Region 25, after being signed by
Respondent's authorized representative, shall be posted
by Respondent immediately upon receipt and maintained
for 60 consecutive days in conspicuous places including
all places where notices to employees are customarily
posted. Reasonable steps shall be taken by Respondent to
ensure that said notices are not altered, defaced, or cov-
ered by any other material.
(e) Notify the Regional Director in writing within 20
days from the date of this Order, what steps Respondent
has taken to comply.
IT IS FURTHER ORDERED that the complaint be and it
hereby is, dismissed insofar as it alleges violations of the
Act not found herein.
3 If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
19