D. H. Farms Co.

National Labor Relations Board - Board Decisions

Sep 20, 1973

206 N.L.R.B. 111 (N.L.R.B. 1973)

D. H. FARMS CO. 111
D. H. Farms Co. and United Dairy Workers, Local 83,
.Retail, Wholesale and Department Store Union
(AFL-CIO). Case 7-CA-8604
September 20, 1973
SUPPLEMENTAL DECISION AND ORDER
By CHAIRMAN MILLER AND MEMBERS FANNING
AND PENELLO
On July 9, 1971, the National Labor Relations
Board granted a Motion for Summary Judgment and
issued a Decision and Order' in the above-entitled
proceeding, finding that, by refusing to bargain with
the Union, certified by the Board in Case 7-RC-
11046 on March 5, 1971, the Respondent had engaged
in unfair labor practices within the meaning of Sec-
tion 8(a)(5) and (1) of the National Labor Relations
Act, as amended, and ordering that Respondent bar-
gain with the certified union.
Thereafter, in an opinion dated August 11, 1972,2
the United States Court of Appeals for the Sixth Cir-
cuit denied enforcement of the Board's Order, on the
ground that summary judgment was not warranted
since Respondent's postelection affidavit submitted
to the Regional Diru-^tor as prima facie evidence to
support its objections to the election raised "substan-
tial and material factual issues concerning the eligibil-
ity of laid-off employees on the date of the election."
The court remanded to the Board for a hearing on the
eligibility question and on November 2, 1972, the
Board reopened the case and directed that a hearing
be held. On February 26, 1973, Administrative Law
Judge Thomas C. Wilson, issued the attached Deci-
sion finding, in effect, that the 19 laid-off employees
in question had a reasonable expectancy of recall on
September 23, 1970, when the election was held.
Thereafter, Respondent filed exceptions and a sup-
porting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and the decision of the Sixth Circuit Court of Appeals
and adopts only so much of the Administrative Law
Judge's rulings and findings as is consistent with the
following:
1 192 NLRB 53.
2 N.L.R.B. v. D. H Farms Co., 465 F.2d 1230.
A. Background
The election petition in Case 7-RC-11046 was filed
on July 10, 1970, for an election among the produc-
tion and maintenance workers of Respondent's facili-
ty at 2755 Tooley Road, Howell, Michigan. On
August 3, 1970, a preelection hearing was conducted
by the Regional Director at which the eligibility ques-
tion was litigated and on August 24, 1970, an election
was directed, including as eligible the 19 laid-off em-
ployees. The election on September 23, 1970, resulted
in 10 votes being cast for Petitioner, 18 votes against
Petitioner, and 20 votes being challenged by the Em-
ployer on grounds of their eligibility status. On Sep-
tember 24, 1970, the Regional Director wrote the
Employer requesting the submission of "all affidavit
and other documentary evidence . . . which you be-
lieve makes appropriate reconsideration" on the eligi-
bility question. On October 15, 1970, the Employer
submitted an affidavit which asserted that the Em-
ployer, after the preelection hearing, but before the
date of the election, determined that it did not expect
to recall the laid-off employees for at least 1 year. In
a report Qf October 9, 1970, the Regional Director
overruled challenges to the election, having refused
the Employer's request for a new hearing on the eligi-
bility question, and on February 26, 1971, the ballots
of the challenged voters were counted, the revised
tally of votes showing 29 for and 19 against the Peti-
tioner. The Union was subsequently certified on
March 5, 1971.
B. Findings of Fact
Respondent, D. H. Farms Co., manufactures disc
reagents which are inserted into clear plastic or plas-
tic-like magazines, along with weights, springs, and
caps to form a complete product. D. H. Farms manu-
factures this product only for its parent corporation,
Difco Laboratories Inc., which is responsible for mar-
keting the product, and which obtains said product
only from D. H. Farms. The latter makes the product
upon receiving work orders from Difco. It would ap-
pear that a stock or inventory is maintained, and that
some time elapses between production and sales be-
cause of the need for Food and Drug Administrative
and perhaps other approval of the product. However,
there is a direct relation between orders received by
Difco from customers and work orders given by Difco
to D. H. Farms.
Respondent commenced operations in the latter
part of 1967. There were 35 unit employees in June
1968,45 by June 1969, and approximately 70 by Janu-
ary 1970. Approximately 42 unit employees were
laid off on July 8, 1970, and were informed by the
206 NLRB No. 22
112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
office manager that, if sufficient work came in, they
would be recalled. This was the first significant layoff
since Respondent's inception of operations. Shortly
thereafter, new work orders were issued from Difco
and approximately 16'of the 42 laid-off employees
were recalled, prior to the election on September 23,
1970.
Respondent introduced what were characterized as
"consumption" figures for each of the years 1968,
1969, and 1970, indicating the monthly and yearly
total of magazines, weights, and springs "consumed"
in operations for those years. In 1968, 1,195,528
magazines were consumed; 1,170,965 in 1969; and
1,388,592 in 1970. For the year 1970 up to the date of
the election, the figure approximated 1,188,000. In all
years more magazines were consumed than weights
and springs. Whether this was due to persistent quali-
ty problems with the magazine was not indicated.
Weights consumed were 609,693 in 1968; 1,079,060 in
1969; and 1,238,200 in 1970. Springs consumed were
1,000,313 in 1968; 1,079,060 in 1969; and 1,238,200 in
1970. Since the product includes all these items, maga-
zines, weights, and springs, the maximum product of
any year should approximate the total of the item
least consumed for that year. Thus, the product
should have approximated 609,693 in 1968, 1,079,060
in 1969, and 1,238,200 in 1970. In the absence of
actual sales figures for the years in question, and we
note that Respondent has avoided reliance on actual
sales figures, Respondent's figures, both as to level of
employment and consumption of parts, suggest the
likelihood of an expansion in operations from late
1967 to the time of the layoff in July 1970. A history
of expanding operations would be more suggestive of
the likelihood of recall than would a pattern of de-
cline. Respondent asserts, however, in the face of its
own figures, that its work level remained essentially
stable, except for problems with a magazine mold in
the last half of 1969 and continuing until March 1970,
when these problems were corrected.
Adding Respondent's consumption figures for the
approximately 10-month period attributable to the
quality control problem, we find that Respondent
consumed 1,130,574 magazines and 1,026,797 weights
and springs during that period. If weights and springs
are -consumed only when placed in magazines to form
a product, and Respondent's testimony would so indi-
cate, the conclusion is irresistible that Respondent
produced at an all-time high level for this period in
spite of the quality control problem. Respondent's
contention that its operations had remained at a sta-
ble level seems dubious in the light of these figures.
Respondent's efforts continued at a high level in
April, May, and June, 1970, prior to the layoff, total-
ing 529,339 magazines and 547,392 weights and
springs. Respondent asserts that this extra effort con-
tinued after the quality control problem was resolved
in March in order to make up orders which could not
be filled while it was having a problem with the mold.
Yet Petitioner's production was increased, not dimin-
ished, during the period when the quality control
problem was supposed to have been at its worst. Why
would there have been any back orders from that
period unless business had increased tremendously
above the increased level of production that apparent-
ly had occurred? Respondent's reliance on an ambig-
uously described quality control problem seems to us
a device to obfuscate the otherwise palpable outlines
of an expanding operation.
C. Respondent 's "Newly Discovered" Evidence
We are in agreement with the Administrative Law
Judge that for the most part witness Savitskie 's testi-
mony was merely repetitive . However Savitskie testi-
fied that he had checked the figures on consumption
of materials and the number of employees then em-
ployed a week prior to the election . Figures as to
consumption of materials and current employment
level just prior to the election would be , in our view,
reflective of the layoff, but would not be necessarily
indicative as to whether it was permanent or tempo-
rary. Savitskie also checked work on hand and work
orders, finding that there were no back orders. This
information merely bears out the economic basis for
the layoff, which is undisputed . This did not necessar-
ily mean that future orders would not be forthcoming.
At the time of the layoff, July 8, 1970 , for example,
there were no back orders . However , additional or-
ders were received subsequently and 16 employees
had to be recalled before the date of the election.
In concluding that the layoff was permanent Difco
Production Manager Robert relied on a computer
printout of orders for a past 3-month period , as well
as hearsay reports of falling sales , partially due to
customer complaints and inferior product quality.
These factors are consistent with economic motivia-
tion for the layoff which had already occurred. How-
ever, this did not establish that the layoff was
permanent as opposed to temporary.
We share the impatience of the Administrative Law
Judge with Respondent 's conclusory testimony and
note that Respondent had available to it sales figures
upon which presumably its predictions of future em-
ployment expectancy were made ; yet those figures
were not offered . In the absence of figures or some
form of supporting evidence Respondent 's testimony
amounts to little more than a bald assertion that there
was no reasonable expectancy of recall , which, being
self serving, is not entitled to significant weight.
D. H. FARMS CO. 113
D. Conclusions
Since we have regarded some of Respondent's testi-
mony as "newly discovered" since the August 3, 1970,
hearing , we have considered the record as a whole.
The critical question which we must decide is
whether the 19 laid-off employees in question enjoyed
a reasonable expectancy of recall on the date of the
election, September 23, 1970. This question, as we
have noted, depends on objective factors ,3 including
the past experience of the employer, the employer's
future plans , and the circumstances of the layoff, in-
cluding what the employees were told as to the likeli-
hood of recall .4 Here, the employees could expect to
be recalled, the Employer expresses an intention of
keeping laid-off employees on a recall list , and nearly
half the employees were actually recalled . There was
no evidence of a continued decline of sales, a phasing
out of a line of production , or termination of part of
the business . The Employer had experienced a history
of increased production and employment without any
prior layoffs of consequence . We find that the said 19
employees enjoyed a reasonable expectancy of recall.
Accordingly,, we reaffirm our prior decision and
order set forth at 192 NLRB 53.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended , the National Labor Rela-
tions Board hereby reaffirms its prior decision ' issued
July 9, 1971 (192 NLRB 53), and orders that Respon-
dent, D. H. Farms Co ., Howell, Michigan, its offi-
cers, agents , successors , and assigns , shall take the
action set forth in said Decision.
3 Sierra Lingerie Company, 191 NLRB 844.
4 Nordam, Inc., 173 NLRB 1153.
SUPPLEMENTAL DECISION
THOMAS S . Wi soN, Administrative Law Judge : Pursuant
to the following opinion of the United States Court of Ap-
peals for the Sixth Circuit decided and filed on August 11,
1972:
Phillips, Chief Judge.
This case is before the court on the application of the
National Labor Relations Board for enforcement of its
bargaining order against D. H.. Farms _Co. (the compa-
ny), reported at 192 NLRB No. 15 . The Board found
that the Company violated § 8(a)(5) and (1) of the Act
by refusing to bargain with the Union, which had been
certified by the Board as the exclusive representative of
the Company 's employees.. Reference is made to the
reported decision of the Board for a detailed recitation
of the facts.
On August 8, 1970 , there was a pre-election hearing
on the issue of whether some 24 employees who had
been laid off July 8 , 1970, were eligible to vote. On
August 24 , the Regional Director issued a decision and
direction of election wherein he concluded that these
employees had a "reasonable expectation of recall
within a reasonable time in the future " and therefore
were entitled to vote.
At the representative election held September 22,
1970, 19 of the 24 laid-off employees appeared and
voted under challenge by the Company. Of the unchal-
lenged votes ten were for the Union and 18 against.
After the challenged ballots were counted the vote was
29 for the Union and 19 against. The Regional Direc-
tion thereupon certified the Union as exclusive repre-
sentative of all employees in the unit for purposes of
collective bargaining.
The General Counsel filed a motion for summary
judgment . The Company requested denial of the mo-
tion for summary judgment and requested a hearing on
new evidence, which it contended was previously un-
available, pertaining to the eligibility of the laid-off
employees . The affidavit of the plant manager, which
was filed in support of a hearing, is made Appendix A
to this opinion . The Board denied the request for a
hearing, granted summary judgment and entered the
bargaining order.
We agree with the Board that, in the absence of
newly discovered or previously unavailable evidence or
special circumstances, a respondent in a proceeding
alleging a violation of § 8(a)(5) is not entitled to reliti-
gate issues which could have been litigated in a prior
representation proceeding. . . . We also agree that the
eligibility of employees who are not working on the day
of the election, including those on layoff , must be de-
termined from the facts as' they existed on the day of
the election. . . . We do not agree , however, with the
contention that the, affidavit, Appendix A, is vague or
conclusory. To the contrary , we hold that the affidavit
asserts facts requiring a hearing and that the Board
erred in granting the motion of the General Counsel,
for summary judgment. . . . The decision of the Re-
gional Director was based upon facts as they existed at
the time of the preelection hearing August 8, 1970, and
not as of the date of the election September 22. Under
the facts and circumstances of this case , it is our opin-
ion that the affidavit , Appendix A, and the Company's
request for review raised substantial and material fac-
tual issues concerning the eligibility of laid-off employ-
ees on the date of the election . Summary judgment
therefore was improper.
Enforcement of the bargaining order based on the16
summary judgment is denied . The case is remanded to
the Board for a hearing. [Citations and footnote
omitted.]
The Board by Order dated November 2, 1972, ordered a
hearing on this remand to be heard by an Administrative
Law Judge in accordance with said decision and thereafter
"To prepare and serve on the parties a decision containing
findings of fact, conclusions of law , and recommendations
based upon the evidence received."
114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Pursuant to notice, a hearing on such issues was held
before me in Detroit, Michigan, on December 12, 1972., All
parties appeared at the hearing, were represented by coun-
sel, and were afforded full opportunity to be heard, to pro-
duce and cross-examine witnesses, and to introduce
evidence material and pertinent to the issue. At the, conclu-
sion of the hearing oral argument was waived. Briefs have
been received from General Counsel, Respondent, and the
Union on January 26, 1973.
Upon the entire record in the case and from my observa-
tion of the witnesses, I make the following:
FINDINGS OF FACT
On August 8, 1970, the Regional Director ordered a hear-
ing on the issue raised by Respondent as to whether the 24
employees suddenly laid off by Respondent on July 8, 1970,
had a "reasonable expectation of recall to employment
within the near future." The private parties were then repre-
sented by the same attorneys as appeared at the instant
hearing.
At that hearing Respondent produced its plant manager,
Leonard J. Savitskie, who testified that these 24 employees
had been told at the time of the layoff on Wednesday, July
8, 1970, that "Due to the lack of business they would not
be needed at this time" but that "if sufficient work came in,
[Respondent] would call them." Savitskie also testified that
on July 8 1 he "suddenly" had discovered that Respondent
was "out of work" and had, therefore, ordered the layoff of
34 of Respondent's complement of some 70 employees. He
also testified that an individual named Burnett almost im-
mediately thereafter gave him some orders to fill so that on
Friday, July-10, and Monday, July 14, he recalled eight of
these laid-off employees. Savitskie further testified that he
received his production orders from Burnett but that be-
yond that he knew nothing about the sales end of
Respondent's business. In fact, according to his testimony,
he knew nothing about this individual Burnett beyond the
fact that he was "the boss" and made out Savitskie's pay-
checks. Savitskie rounded out his testimony by stating that,
as of that time, August 8, he did not have any expectation
of recalling the remaining laid-off employees within the next
6 months.
Upon this testimony, as noted in the court's opinion, the
Regional Director held, contrary to Savitskie's testimony,
that these laid-off employees did have a "reasonable expec-
tation of recall." Respondent appealed this decision of the
Regional Director to the Board which denied the appeal.
As noted, the election was then held on September 23
with 19 of the 26 laid-off employees voting ballots which
were challenged as ineligible voters by Respondent. On Sep-
tember 24 the Regional Director requested evidence from
Respondent on the question of the eligibility of the chal-
lenged voters. The aforementioned affidavit dated October
5, 1970, of Leonard J. Savitskie was the sole evidence pre-
sented by Respondent in answer to this request. The Re-
gional Director thereupon denied the challenges and
ordered the challenged ballots counted with the results not-
1 All dates herein are in the year 1970 unless otherwise specified.
ed in the opinion, Respondent appealed that decision of the
Regional Director to the Board which, in turn, denied
Respondent's appeal. The Union was certified on March 5,
1971.
At the instant hearing Savitskie was once again
Respondent's main witness. He added one element not re-
ferred to in his previous testimony or in his affidavit of
October 5 which was that, about a week prior to the election
of September 23, he and Burnett had been called to the
office of Respondent's attorney and instructed to call a
Michael Robert, allegedly the production manager of Difco
and manager of Research Engineering, to determine if the
employees laid off on July 8 had any reasonable expectation
of recall. Savitskie made this telephone call and received a
negative response from Robert. Otherwise Savitskie's testi-
mony here was a mere reiteration of his testimony at the
hearing on August 8. There was no explanation as to why
Savitskie could not have telephoned Robert prior to the
August 8 hearing as well as on or about September 16.
Michael Robert also testified at the instant hearing. He
proved to be the manager of Research Engineering who for
10 years had worked for Difco and for the past 2 years,
beginning shortly after September 23, had been in charge of
production control of Difco. Robert's "boss" and the man
who also signed his checks was the same individual [David?]
Burnett who apparently had something to do with Difco as
well as with Respondent but, according to the testimony,
had no title and/or titles which Robert knew about. Origi-
nally Robert had described Burnett as his "courier" for the
taking of orders from him to Respondent. Robert acknowl-
edged that Savitskie had telephoned him about a week be-
fore the September 23 election saying that he had been
requested to get the aforementioned information for Bur-
nett and the attorney and had also asked for "some idea"
of Respondent's workload for the ensuing year. As a result
of this telephone call Robert took a "computer print out"
from the Difco computer which would tell on a 3-month
basis "where we were below a specific stock level" on a
product. As a result of this investigation Robert reported to
Savitskie that he could see no increase in production at all
and actually foresaw a decrease because "our share of the
market had fallen and fallen rapidly," apparently because
the word was getting out that "our" quality was inferior.2
Robert acknowledged he had nothing to do with the sales
for Difco or for Respondent. He did know that Respondent
had a quality control problem in the latter part of 1969
which had been solved about March 1970. Further Robert
acknowledged that he did not "bother" to bring the comput-
er printout on which he relied to the hearing.
[David?] Burnett, although the admitted "boss" of both
Savitskie of the Respondent and Robert of Difco through
whom all of Respondent's products were sold, remained a
mystery. He did not testify. As such "boss" of both Savitskie
and Robert, it would seem that Burnett would know more
about the situation at Respondent on September 23, 1970,
than either Savitskie or Robert. Thus it appears a fair infer-
ence, which I draw, that, if called as a witness, Burnett's
testimony would have been unfavorable to the Respondent.
2 It was not clear whether "our share" referred to Difco or to Respondent
or to both.
D. H. FARMS CO. 115
None of the evidence presented at the instant hearing was,
"newly discovered or previously, unavailable or [amounting
to] special circumstances." All of it had been previously
litigated at the prior representation case on August 8 and
again reiterated in the Savitskie affidavit of October 5. At
some time litigation must come to an end. This seems to be
that time.
The only new fact adduced at the instant hearing-and
that by way of an offer of proof due to the fact of the
agreement that it was not evidence admissible under the
court's limited remand-was that none of the laid-off em-
ployees had been reinstated by Respondent at the date of
the hearing although one of them was about to be.
Conclusions
I conclude that there was no change in the reasonable
expectation of recall of the employees laid off on July 8
between August 8, 1970, and September 23, 1970.
RECOMMENDATION
I, therefore, recommend that the Board reaffirm its deci-
sion of July 9, 1971, and of November 9, 1971.